The tech giant reported a net income of $5.3 billion, or $7.56 per share.
Non-GAAP earnings were $9.36 per share on a revenue of $26.1 billion, up 22 percent year-over-year, when including traffic acquisition costs (TAC).
Wall Street was looking for earnings of $9.67 per share with $25.3 billion in revenue.
Net revenue excluding TAC was expected to be $25.18 billion.
Alphabet delivered $21.25 billion in revenue excluding TAC.
Google revenues counted for most of Q4 sales with $25.8 billion in revenue, up from $22.3 billion the previous quarter. The Google umbrella covers the company's enterprise cloud, software and data management products. On the earnings webcast, Google CEO Sundar Pichai said 2016 was the year that AI and intelligent computing became "central to who we are as a company and the products that we built."
"We had more than 350 launches powered by machine learning across areas like search, Maps, messaging and Google Play," he added.
Google doesn't break out sales numbers for its hardware, but in Q4 the tech giant released two major product lines: the Pixel phone and Google Home. Pichai said he was "thrilled" with the reception of the new products and that the company is committed to expanding its hardware offerings for the long term.
Advertising remains a steady revenue source for Alphabet. The company's total advertising revenue was up 17 percent to $22.4 billion. Aggregate cost-per-click fell 15 percent, but aggregate paid clicks were up 36 percent compared to the same quarter a year ago.
In the Other Bets category, which houses Nest and Fiber, Alphabet's healthcare-driven initiatives and other speculative projects or 'moonshots,' Alphabet posted revenue of $262 million over the quarter, with operating losses reaching $1.1 billion. Last quarter, losses in this category totaled $865 million.
"Our growth in the fourth quarter ... was led by mobile search and YouTube," said Alphabet CFO Ruth Porat, in prepared remarks. "We're seeing great momentum in Google's newer investment areas and ongoing strong progress in Other Bets."
Looking forward toward the first quarter, Wall Street is expecting non-GAAP earnings of $9.34 per share with $23.71 billion in revenue.