Google's cloud revenue continues to climb but the tech giant is now revealing its losses in the cloud segment as part of its promise to provide more revenue data, including operating segments, for Google Cloud.
For Q4 2020, Google Cloud -- which includes Google Cloud Platform (GCP) and Google Workspace (formerly G Suite) -- brought in brought in revenue of $3.83 billion on losses of $1.24 billion.
For the full fiscal 2020, the cloud business brought in $13.06 billion, up 47% year-over-year from $8.92 billion in 2019 and $5.84 billion in 2018.
On a call with analysts, Google CEO Sundar Pichai said GCP growth contributed "meaningfully" to the growth rate of cloud overall.
"In addition, our backlog grew to nearly $30 billion, up from $19 billion in Q3, nearly all attributable to cloud," Pichai said. "We continue to invest strongly in the business given the momentum we are seeing. These investments in our go-to-market organization have helped us win larger deals including several billion-dollar deals in 2020. Deals over $250 million more than tripled in the same period."
Also of note, Google said it's getting longer lives out of its servers:
In January 2021, we completed an assessment of the useful lives of our servers and network equipment and determined we should adjust the estimated useful life of our servers from three years to four years and the estimated useful life of certain network equipment from three years to five years.
As for the rest of Alphabet's Q4 results, the tech giant reported a net income of $15.2 billion, up from $10.6 billion a year ago, on earnings of $22.54 per share. Diluted earnings per share came to $22.30 on revenue of $56.9 billion, up 23% year-over-year. On average, Wall Street was looking for Q4 earnings of $15.99 per share with $53.1 billion in revenue.
For the full fiscal 2020, Google reported diluted EPS of $59.15 on revenues of $182.5 billion. Shares of Alphabet were up over 5% after hours.
As usual, Google Services revenues attributed most of Q4 sales, with $52.8 billion in revenue, and advertising continues to generate the most revenue for Google. In Q4, Google ad revenues came to $46.2 billion, compared to $37.934 billion in Q4 2019. Google specified in its financial report that Google Services revenue includes products and services such as ads, Android, Chrome, hardware, Google Maps, Google Play, Search, and YouTube.
Google Search and other ad revenue (excluding YouTube) increased during the quarter, with sales climbing to $31.9 billion in Q4. Revenue for YouTube ads rose significantly year-over-year, from $4.71billion in 2019 to $6.88 billion in 2020.
"Our strong fourth quarter performance, with revenues of $56.9 billion, was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year," said Alphabet CFO Ruth Porat. "Google Cloud revenues were $13.1 billion for 2020, with significant ongoing momentum, and we remain focused on delivering value across the growth opportunities we see."
In Alphabet's moonshot "Other bets" category, revenue came to $196 million while the operating loss reached to $1.13 billion. Google said its headcount at the end of the fourth quarter was 135,301.