Alphabet Posts Record Results, Announces 20 for 1 Stock Split

Alphabet has posted a stunning set of quarterly and annual results, as Google enjoys a bumper financial performance during the past year.

Its financial performance beat Wall Street expectations, sending its share price higher, as Google’s benefited from a 33 percent in advertising revenues during the past year.

The results come after tough year for many organisations due to the global Coronavirus pandemic. Google has had to deal with its own internal problems, and in December the firm announced that Google staff refusing to be vaccinated would be eventually fired.

Financial performance

It is clear examining Alphabet’s financial results that despite the pandemic and inflation pressures, Google has enjoyed a strong performance during the past year.

For the fourth quarter ending 31 December Alphabet posted a net profit of $20.6bn, up from $15.2bn in the same year-ago quarter.

Quarterly revenues rose to $75.3bn from $56.9bn in the previous year-ago three month period.

Google’s advertising revenue came in at $61.24 billion for the quarter, up 33 percent from $46.2 billion in the same period a year earlier.

For the full year Alphabet posted net profit of $76bn, compared with a net profit of $40.3bn in 2020.

Full year sales meanwhile rose to $257.6bn from $182.5bn in the previous year.

“Our deep investment in AI technologies continues to drive extraordinary and helpful experiences for people and businesses, across our most important products,” said Sundar Pichai, CEO of Alphabet and Google.

“Q4 saw ongoing strong growth in our advertising business, which helped millions of businesses thrive and find new customers, a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business continuing to grow strongly,” said Pichai.

Google added roughly 6,500 full-time staff during the past year, swelling Google’s total headcount to 156,500 staffers.

Stock split

During the earning report, Google also announced a 20-for-1 stock split, that will go into effect in July this year.

Apple and Tesla have done the same in recent years.

Splitting the stock in this manner will lower the price of each share, which is a tactic companies utilise when a share is priced in the thousands of dollars.

Alphabet share price has doubled in less than two years, and the new split will make it more affordable for a greater number of people.

A single Alphabet share is currently trading at $2,982 (up 8 percent from yesterday’s close of trading.

Alphabet intends to split the Class A, Class B and Class C shares of the stock, according to the earnings statement, subject to shareholder approval.

Each shareholder at the close of business on 1 July will receive, on 15 July, 19 additional shares for each share of the same class of stock they own.

It was back in in 2012 when Google announced a 2-for-1 stock split, that saw the addition of a third class of shares, Class C, with no voting rights.

When Google went public in April 2004, it had Class A shares, which carried one vote per share, and Class B shares, which were held closely by founders and early investors and carried 10 votes.

The company maintained this stock structure when it underwent its 2015 rebrand to Alphabet.