Alphabet Q4 2024 Earnings Overview

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• Key Financial Metrics (FY2024):
  • Revenue: $350.0 B (+14% YoY).
  • Net Income: $100.1 B (+35.7% YoY approx from previous year's $73.8B) [cite: 1, 1.5].
  • EPS (Diluted): $8.05(vs. $5.80 in 2023).
  • Operating Margin: 32.1% (vs. ~26.5% in 2022, improved from 2023).
  • Net Profit Margin: 28.6%.
  • Q4 2024 Growth: Revenue $96.47 B (+12% YoY), Net Income $26.5 B (+28% YoY).

Why It Matters: Strong 2024 performance shows Alphabet's core ad business resilience and the positive impact of Cloud growth and cost discipline on profitability, reaffirming its financial strength.

• Performance Analysis (FY2024 & Q4 2024):
  • Drivers: Rebound in Search advertising (travel, retail), strong YouTube ad growth (+14% in Q4), continued Google Cloud momentum (+30% in Q4), and benefits from cost controls implemented in early 2023.
  • Management Guidance (for Q1 2025 & FY 2025): Expected continued double-digit revenue growth in Q1 2025. Announced a significant $75 B capital expenditure plan for 2025, primarily for AI and Cloud infrastructure. Management emphasized long-term AI opportunities justify the spend.
  • Analyst Reactions & Sentiment: Q4 results beat expectations. While bullish on long-term prospects ("Buy" consensus), the high 2025 capex guidance raised near-term margin concerns, leading to some stock pressure in early 2025.

Why It Matters: Analysis highlights the strength across key segments (Search, YouTube, Cloud). Heavy investment plans signal Alphabet's commitment to leading in AI and Cloud, prioritizing long-term growth potentially at the expense of near-term margin expansion.

• Financial Trends:
  • Historical EPS/Revenue: Revenue nearly doubled and net income nearly tripled from 2019-2024. After a 2022 moderation, growth re-accelerated in 2023-2024. Margins recovered to above pre-pandemic levels.
  • Key Financial Ratios (Approx. recent):
    • P/E Ratio (TTM): ~19.5x - 20.1x.
    • PEG Ratio: ~0.51x.
    • Current Ratio: ~1.84.
    • Quick Ratio: ~1.66.
  • Free Cash Flow: Robust, estimated ~$67 B in 2024, easily covering ~$62 B buybacks and $7.4 B dividends.

Why It Matters: Long-term trends show consistent growth and high profitability. Strong FCF generation provides flexibility for large investments and significant capital returns, underpinning financial stability. Valuation appears reasonable relative to growth.