Google Cloud has hit a $10 billion annual revenue run rate, Google said Monday as its parent company Alphabet reported fourth quarter fiscal 2019 results. The growth in Cloud, up 53 percent year-over-year, was driven by significant growth in the Google Cloud Platform (GCP).
“The growth rate of GCP was meaningfully higher than that of Cloud overall, and GCP’s growth rate acclerated from 2018 to 2019,” Sundar Pichai, CEO of Alphabet and Google, said on Monday’s conference call.
Google offered these details as part of the new, expanded revenue disclosures in its financial reports. In addition to Cloud, the company is now disclosing revenue specifically from Search and YouTube ads.
For Q4 2019, Google Cloud brought in $2.614 billion, up from $1.709 billion a year prior. For the full fiscal 2019, the cloud business brought in $8.918 billion, up from $5.838 billion in 2018 and $4.056 billion in 2017.
GCP growth was led by Google’s infrastructure offerings and its data and analytics platform, CFO Ruth Porat said. “We also saw a strong uptake of our multi-cloud Anthos offering,” she said. Meanwhile, ongoing growth in G Suite continued to reflect growth in both SMB and enterprise segments.
The number of cloud deals over $50 million more than doubled year-over-year, Pichai said. He highlighted major customers, such as Wayfair and Lowe’s. Lufthansa Group is using Google’s AI solutions to develop new tools to improve air travel operations, while the US Postal Service chose Google Cloud AI to improve business processes and customer experience. Google also recently signed a 10-year agreement with Sabre to help them improve operations and develop new airline and hospitality services.
“We are increasingly doing much larger deals,” Pichai said. “These deals can span beyond Cloud as well.”
As an example, Pichai continued, an automotive company could work with Google across Cloud, Android Auto and in some cases Waymo, the self-driving vehicle business that spun off from Google. In an area like health care, a customer may want to leverage the industry expertise found across Google and Alphabet.
“When people engage with us on Cloud, they’re interested in a bigger digital transformation, across the board,” Pichai said.
Under the direction of Thomas Kurian, Google Cloud is focused on six verticals across 21 markets, and Google is investing aggressively in the effort, Porat stressed. The company is on track to triple its Cloud salesforce over three years, and it’s expanding its product offerings and compliance certifications.
In terms of Alphabet’s overall Q4 results, diluted earnings per share came to $15.35 on revenue of $46.075 billion, up 17 percent year-over-year.
Analysts were expecting earnings of $12.59 per share on revenue of $46.94 billion.
For the full fiscal 2019, Google reported diluted EPS of $49.16 on revenues of $$161.86 billion, up 18 percent year-over-year.
“Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet,” Pichai said in a statement. “I’m really pleased with our continued progress in Search and in building two of our newer growth areas — YouTube, already at $15 billion in annual ad revenue, and Cloud, which is now on a $10 billion revenue run rate.”
Advertising brought in the most revenue for Google, accounting for $37.934 billion in Q4 and $134.81 in FY 2019.
Google Search and other ad revenue (excluding YouTube) brought in $27.185 billion in Q4, up from $23.32 billion a year prior. For the full year, revenue was $98.115 billion, up from $85.296 billion in 2018 and $69.81 billion in 2017.
Q4 revenue for YouTube ads was $4.717 billion, up from $3.605 billion a year prior. Full year revenue from the segment came to $15.149 billion, up from $11.155 billion in 2018 and $8.15 billion in 2017.
Alphabet’s moonshot “Other bets” category brought in $172 million in sales in Q4 and $659 million for the full year.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
