Alphabet, Google's parent company, reported sales of $96.47 billion (140.22 trillion won) and a net income of $2.15 (3,125 won) per share for the fourth quarter of last year (October to December) on the 4th (local time).
Sales increased by 12% from a year earlier but were slightly lower than the Wall Street analyst consensus estimate of $96.56 billion compiled by market research firm LSEG. Earnings per share exceeded the estimate of $2.13.
Gross profit was $26.54 billion, more than a 28% increase compared to the previous year.
By institutional sector, YouTube ad revenue was $10.47 billion, exceeding the estimate of $10.23 billion.
However, Google's cloud revenue was $11.96 billion, falling short of the estimate of $12.19 billion.
Cloud revenue increased by 30% from a year earlier, but it was lower than the third quarter's growth rate of 35% and also fell short of Wall Street's expected growth rate of 32.3%. Google's ad revenue, including search, rose to $72.46 billion, an increase of about 10%.
Alphabet stated that it plans to invest more funds in the institutional sector, including artificial intelligence (AI), this year.
Sundar Pichai, Alphabet's Chief Executive Officer (CEO), noted, "We are confident about future opportunities" and added, "We expect to invest about $75 billion (109 trillion won) in capital expenditure this year to accelerate our growth."
This figure is 25% higher than the market estimate of $59.73 billion and larger than the investment plans of Facebook's parent company Meta Platforms, which range from $60 billion to $65 billion this year.
Anat Ashkenazi, Google's Chief Financial Officer (CFO), said during a conference call with investors after the earnings report that "$16 billion to $18 billion of this expense is expected to occur in the first quarter," noting that overall expenditure will primarily be used for technical infrastructure related to servers, data centers, and more.
Google also added that it expects an increase in personnel in key investment areas this year, such as AI and cloud.
Regarding the Chinese AI startup DeepMind, which has made waves in the U.S. tech industry, CEO Pichai said, "First of all, I think they have an amazing team," adding, "They have achieved very good results."
He also explained that Google's Gemini flash model is "one of the most efficient models currently available, including DeepMind's V3 and R1."
At the end of last year, Google unveiled the latest version of Gemini, '2.0'. The flash model is a lighter version of the Gemini product line, which includes models based on parameter sizes such as ultra, pro, and NANO, and was introduced from version 1.5.
He continued, "The rise of more affordable AI globally will ultimately increase AI adoption," asserting that "Google is well-equipped to further advance AI technology with its base of billions of users."
Additionally, he noted that there will be more innovations in Google search this year, stating, "The more we make it easier for users to interact and ask follow-up questions, the greater the opportunity for significant growth."