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.
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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.