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Technology / Cloud

Tech financials in brief: Alphabet, Google in results revamp, Amazon shares tumble as profits miss estimates, Microsoft beats forecasts with cloud

Alphabet, the parent company of Google, will separate its fourth quarter 2015 financial results into two segments, Google and ‘Other Bets’, as part of its efforts to make Alphabet a ‘reality‘.

The company will first announce the results of Google, which will include main internet products such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome and Google Play, and hardware products Chromecast, Chromebooks and Nexus.
Google will retain technical infrastructure and newer efforts like Virtual Reality.

‘Other Bets’ will have Access/Google Fiber, Calico, Nest, Verily (formerly Google Life Sciences), GV (formerly Google Ventures), Google Capital, X (formerly Google [X]) and other initiatives.

The financial results will be published on 1 February.

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Alphabet said in a statement: "Nothing is being taken away from our consolidated reporting. We will continue to show Google advertising revenues and TAC broken out by Sites and Network and we will continue to share monetisation metrics (click and CPC growth) in aggregate as well as separately for Sites and Network."

Meanwhile, Amazon Microsoft and NetSuite announced their quarterly results yesterday.

Amazon posted a record fourth quarter with a 22% increase in net sales to $35.7bn, compared with $29.3bn in fourth quarter 2014.

Net income was $482m or $1 per diluted share, compared with $214m or $0.45 per diluted share, last year.

The annual net sales for 2015 increased 20% to $107bn, compared with $89bn in 2014, while the net income was $596m or $1.25 per diluted share, compared with net loss of $241m or $0.52 per diluted share.

Amazon Web Services (AWS), a Amazon subsidiary providing cloud infrastructure, brought in $2.4 billion in revenue for the fourth quarter of 2015. That’s a 69.37 percent year-over-year increase.

Amazon founder and CEO Jeff Bezos said: "Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift. This year, we pass $100bn in annual sales and serve 300 million customers.

"And still, measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like Day 1."

Fire TV continues to be the top streaming media player in the US, and the $50 Fire tablet the most sought after product on Amazon.com.

Prime membership increased 51% worldwide and 47% in the US, while Prime Video doubled its streaming customers from Q4 2014.

However, the online retailer’s shares plunged by 13% to $551.50, as the results fell short of estimates. At $551.50, the value is still 80% more than the past 12 months.

Contrary to Amazon, Microsoft’s results beat analyst expectations with its revenue in Intelligent Cloud increasing 5% to $6.3bn. Azure revenue grew 140% in constant currency with Azure premium services growing nearly three times from last year.

Microsoft CEO Satya Nadella said: "Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas.

"Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices."

Total revenue, however, fell 10.1% to $23.80bn.

Revenue from More Personal Computing declined 5% to $12.7bn. A prominent decline was in its Phone revenue by 49%, which was due to a strategy change announced in July 2015, the company said.

Xbox Live monthly user base reached a record 48 million with 30% growth year-over-year.

Another player in the cloud space, NetSuite also released operating results for its fourth quarter and fiscal year ended December 31, 2015.

Beating analyst estimates, total revenue for the fourth quarter of 2015 was $206.2 million, representing a 31% increase over the prior year. Total revenue for the year was $741.1 million, a year-over-year increase of 33%.

Cash flow from operations was $100.4 million for the year, an increase of $25.5 million, or 34%, over the prior year.

"NetSuite delivered record revenue and powerful record customer growth as thousands of next-generation leaders like Snapchat, mid-size organizations like Lucky Brand, and global enterprises such as American Express Global Business Travel reimagine their business in the cloud on NetSuite," said Zach Nelson, CEO of NetSuite.

"In 2016, the wind is at NetSuite’s back as the world transitions from a time just a couple years back, when few believed that businesses would run mission critical core business applications in the cloud, to today when companies in many industries can’t get there fast enough."

 


Photo: courtesy of Google Inc.
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Vinod

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