[HN Gopher] Google Announces Fourth Quarter and Fiscal Year 2023...
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Google Announces Fourth Quarter and Fiscal Year 2023 Results [pdf]
Author : samspenc
Score : 87 points
Date : 2024-01-30 21:04 UTC (1 hours ago)
(HTM) web link (abc.xyz)
(TXT) w3m dump (abc.xyz)
| samspenc wrote:
| Summary from the release for Q4: - Revenue
| increased from $76B to $86B (13% increase) - Operating
| income increased $18.1B to $23.7B - Net income increased
| $13.6B to $20.7B - Diluted EPS increased $1.05 to $1.64
| etamponi wrote:
| Okay so why is GOOG -4% in after hours this time? :)
| sillysaurusx wrote:
| The market can remain irrational something something.
|
| Besides, it's a good opportunity. If it's down, the stocks
| are on sale. I still regret not buying Meta when the markets
| were crashing last time.
| mydogcanpurr wrote:
| I don't know if it's the actual reason, but they missed ad
| revenue expectations according to Yahoo.
|
| https://finance.yahoo.com/news/stock-market-today-nasdaq-
| fal...
| atorodius wrote:
| Hm there it says
|
| Revenue, excluding traffic acquisition costs: $72.32
| billion vs. $70.97 billion expected ($63.12 billion in Q4
| 2022)
|
| Adjusted earnings per share: $1.64 vs. $1.59 expected
| ($1.05 in Q4 2022)
|
| Cloud revenue: $9.19 billion vs. $8.95 billion expected
| ($7.32 billion in Q4 2022)
|
| Ad revenue: $65.5 billion vs. $65.8 billion expected
| ($59.04 billion in Q4 2022)
|
| I hope that 0.3 is not the reason for that slip haha
| boomfunky wrote:
| There could be other factors in play like the recent
| volatility in Netflix within the same sector, as well as
| the upcoming FOMC meeting tomorrow causing increased
| fear. Markets aren't always as accurate and efficient as
| some believe, and stock prices always become more
| volatile around earnings.
| jsnell wrote:
| All those other factors would have been priced in at the
| end of the day. The only new information since then would
| have been the earnings release. If the absolute numbers
| are better than expected, then maybe it's the relative
| numbers (as compared to Microsoft who also released
| earnings) that are worse than expected?
| pie420 wrote:
| Also keep in mind that the "expected" are not the actual
| expected, but rather "publicly expected numbers that are
| freely given out and therefore useless". Investment firms
| have private expected numbers that are far more accurate,
| the publicly given out ones are designed to manipulate
| retail investors.
| boomfunky wrote:
| Completely true, it would be a combination of both.
| Clearly it didn't meet a lot of expectations indicated by
| the selloff, but selling could also be aggravated by a
| sell day in the Nasdaq/XLC and high impact economic
| events on the horizon. This is all conjecture from me, I
| am by no means a market expert, just offering a way to
| rationalize the above comment on how a good/"not that
| bad" earnings report can still result in a stock having a
| large selloff.
| matwood wrote:
| Google missing on ad revenue is like Apple missing on
| iPhone revenue. It's even worse for Google because it's a
| larger part of their business. Is the miss a blip or a
| signal of a slowing ad market or are LLMs eating into
| their business? Hard to know, but that's the concern.
| Grazester wrote:
| LLM is not doing anything given that Bing's growth since
| adding chat-gpt has been negligible.
| VikingCoder wrote:
| Ad revenue: $65.5 billion vs. $65.8 billion expected
| ($59.04 billion in Q4 2022)
|
| Right, they got $300 million less than _expected._
|
| Which means they only got 99.544072948% of what the
| analysts expected.
|
| That means they missed analyst expectations by
| 0.455927052%.
|
| Not for total Revenue. Not for EPS. Not for net income.
| Not for diluted EPS. For the one category, Ad Revenue.
|
| Resulting in a 6% after-market drop.
|
| 0.455927052% miss. 6% drop.
|
| I think it's entirely possible that people focus too much
| on short term metrics and not enough on long-term growth.
| crowcroft wrote:
| Almost definitely the case that people are disappointed
| in the ad revenue.
|
| GCP is growing to be a meaningful part of Google's
| revenue, but the actual profit at Google is almost
| entirely ad revenue. If that is a miss, and on the
| horizon we see AI disrupting search and increased
| competition in digital video advertising then what does
| that mean for the future of Google?
|
| I think that's probably being a bit pessimistic, but
| that's probably the argument.
| christkv wrote:
| Considering the massive amount of ads on YouTube now
| there seems to be something amiss. Are the ad rates going
| down?
| methodical wrote:
| Without being an expert in these matters it could be that
| while the earnings were good they may have already been
| "priced in"[0], so if the earnings weren't quite as high as
| expected or particular areas of revenue have contracted
| unexpectedly[1] then it could cause the price to move
| downwards. It could also be a result of larger market
| fluctuations, as a lot of larger F100 companies have also
| gone down by a similar amount today[2]. Any one of these
| factors or a combination of them together is likely the cause
| of the stock price movement seen today.
|
| [0] https://www.kotaksecurities.com/articles/it-is-priced-in-
| wha...
|
| [1] https://finance.yahoo.com/news/alphabet-misses-
| expectations-...
|
| [2] https://www.investors.com/market-trend/stock-market-
| today/do...
| VirusNewbie wrote:
| I think this happens every quarter.
| BillSaysThis wrote:
| After hours trading is also usually more volatile than
| regular hours, check in the morning and see where $GOOG
| actually opens.
| DannyBee wrote:
| In the 18 years i've been at GOOG, what direction the stock
| moves post-earnings is always random, and then talking heads
| try to post-facto rationalize it.
|
| I've seen Google blow away earnings and all expectations and
| be down 10%, and completely miss expectations and pop up 5%.
| asdajksah2123 wrote:
| Because expectations were higher?
| wtf_is_up wrote:
| Typically, that happens when forward guidance given on the
| call does not meet expected forward guidance.
| FredPret wrote:
| For a distributed decision-making method like the market,
| there is no single reason.
|
| Every buyer and seller has their own price and own reason for
| it.
| ardel95 wrote:
| The absolute performance isn't very important for the stock
| price. What matters way more is the performance vis-a-vis
| market expectations. So in this case, the market was
| expecting something better (or there was some other guidance
| in the report that spooked investors).
| dboreham wrote:
| Two things:
|
| 1. "sell on the news"
|
| 2. results vs "expectations"[1]
|
| "expectations" is a weird Wall St concept where some small
| number of people who don't necessarily know much get to
| invent a set of numbers for the company results in the
| future. Then a bunch of other people who know even less
| believe/pretend that those expectations mean something, and
| will buy/sell the stock accordingly when the actual results
| are revealed. Yes Kabuki Theater. Actually it's about as
| bogus as software project planning/management, so perhaps all
| fields have similar made up nonsense. Hopefully not the
| people designing bridges. Or airplanes. Oh wait...
| jwr wrote:
| I highly recommend reading the excellent book "Financial
| Intelligence" if anyone wants to actually interpret these
| numbers.
|
| Having read the book, the section "Change in Useful Lives of
| Our Server and Network Equipment" immediately caught my eye.
| It's a classic maneuver.
| tra3 wrote:
| This caught my eye, total employees
|
| - 2022: 190,234
|
| - 2023: 182,502
|
| Total increase in revenue of 10 billion.
|
| Not sure what conclusion to draw from this, but being a software
| engineer I found employment count interesting. Though 5% change
| in head count seems hardly major.
| eitally wrote:
| I wonder how the TVC headcount has changed y/y. They don't
| publish that data.
| candiddevmike wrote:
| That doesn't include the army of contractors they have/had that
| were laid off.
| bqmjjx0kac wrote:
| Clearly, those 8000 employees were producing -$10,000,000,000
| per year.
| shermantanktop wrote:
| Math checks out. Imagine what happens when they lay off 800k!
| hiddencost wrote:
| A Google SWE costs the company around $750k average, fully
| loaded cost. So if those were all SWEs, $6B/yr isn't an
| unreasonable estimate.
| saiya-jin wrote:
| Well, if total average costs per employee for G would be very
| roughly 1 million, there you have it. I think it may be half of
| that if at all, but it impacts the increased revenue
| significantly in any case.
| awa wrote:
| Costs do not impact revenue only profits.
| blahpro wrote:
| I agree with the sentiment, but costs do impact revenue
| when those costs represent an investment in something that
| can be used to increase revenue, like employees.
| awa wrote:
| +1. Employees can generally boost revenues (if used
| correctly).
|
| The post I was replying to was implying that cutting
| employees boosted revenues somehow.
| tomcar288 wrote:
| I guess a significant number of employees are just working
| really hard on things that don't matter. When every single
| thing that needs working on is already being worked on, a lot
| of people are going to be doing busy work. There was a post by
| Stevie Yeggie where he talked about working at google. he
| looked really hard to find a new project to lead but absolutely
| everything was already being worked on, he found. eventually he
| just couldn't see himself leading or doing meaningful work
| there and quit.
|
| the lesson here, i think is that there are limits to how much
| can be done, without moving into new industries and spreading
| horizontally.
| ehsankia wrote:
| But isn't that just bad management / prioritization? Isn't
| the solution to just shuffle people to more useful projects
| instead of firing them? Especially at a company that hires
| general engineers who can work on any project, and also at a
| company that has a lot of internal tooling which makes
| ramping up new engineers slow and tedious.
|
| They'll probably grow back to 190k within a few months, but
| those 8k new hires will probably take months if not a year to
| fully ramp up.
| tomcar288 wrote:
| the problem is there's not enough high value projects to
| do. to much labor, too many employees and too much funding
| relative to the number of projects that actually bring
| value.
|
| Because all the high value stuff(high ROI stuff) is already
| done or already being worked on. all that's left is low ROI
| projects which take up huge amounts of time but bring
| little value. employees and managers know they generate
| little value, so they end up doing more of them to
| compensate which makes the problem even worse as there's
| less and less high value stuff to do.
|
| there's just too few opportunities, hence the need to
| expand into new industries.
| feoren wrote:
| Of course there are enough high-value projects to do. You
| just need to be willing to experiment, expand
| horizontally, and let your employees go out on a limb
| with new ideas; something that no corporate leadership
| anywhere has ever been willing to do. They didn't run out
| of valuable problems to solve, they just have shit-ass
| worthless leadership just like every other (public)
| corporation in America.
| matwood wrote:
| You're pointing to poor leadership which isn't an uncommon
| refrain coming from people who know Google.
| KeplerBoy wrote:
| Good luck finding useful projects for 180k people. That's
| just a ridiculous amount of people and projects.
| username135 wrote:
| There are more than just SWE's employed at google.
| Custodial, food service, administration, operations, HR,
| etc...
| ojbyrne wrote:
| A lot of those are going to be contractors employed by
| agencies.
| hypothesis wrote:
| Just wait, they will outsource to "AI agencies".
| VirusNewbie wrote:
| I don't think you realize how many products Google has.
| Cruise had ~ 4k employees at its peak. Waymo is just one
| tiny project in Google. Splunk had 8000 employees, GCP
| has a competitor to it. Bigquery is a competitor to
| Snowflake, who has around 5,000 employees. Databricks had
| 4k employees, which GCP also has a competitor to. This is
| just a fraction of the software just in _cloud_.
| KeplerBoy wrote:
| I do realize Google has a lot going on. They have to, to
| keep all these people even remotely busy.
| QuercusMax wrote:
| In my org at the Goog, we didn't have any layoffs, but we
| also aren't expecting any new headcount any time soon.
| Projects that need more staff are expected to cannibalize
| it from other projects under the same VP.
|
| I feel like this is actually a good way of doing things,
| and wish Google did this more broadly. Just think if
| everyone who would have been laid off was instead
| transferred to a project that needs their skills, or given
| training to move into a role that's needed. Can you imagine
| what type of employee loyalty and morale that would
| engender?
| epolanski wrote:
| Google used to be exactly like that up to a decade ago.
| Talent was considered core for the org so you would be
| relocated rather than cut off.
|
| Values shifted with the focus on earnings and growth
| getting less impressive.
| skybrian wrote:
| The key word is "meaningful" and that's going to vary
| depending on the employee's interests. I transferred a few
| times at Google. When I looked at internal job listings,
| there were lots of jobs that I didn't want to do.
|
| I suspect that many good jobs went to people who learned
| about them in some way other than official job postings.
| (This is generally true.)
| bloppe wrote:
| You don't just multiply employees x time = revenue. Google
| develops IP, systems, and processes over the course of years
| which pay out on long time scales. You would probably start
| feeling the financial effects of these layoffs in a couple
| years, and continue feeling them basically forever.
| gamepsys wrote:
| To me it shows that Google doesn't know how to generate
| significant revenue with those eight thousand people. I am
| worried it indicates Google is running out of good bets and has
| limited future growth.
|
| Of course, the counter argument is that technology allows
| Google to do more with less people. I am not convinced by this
| argument, because Google's competition has about the same
| ability to do more with less people. If you can improve
| individual productivity than why not scale that across more
| people.
|
| To summarize, this indicates to me that Google is reducing
| their value on human capital.
| asdajksah2123 wrote:
| I think this is just unwinding from overhiring during the
| pandemic.
|
| - 2021: 156,500
| shermantanktop wrote:
| 2021: Yay! Crazy hiring!
|
| 2023: What?!?! Laying off a fraction of recent hires? The
| world is ending!!
|
| Obviously this sucks for the laid-off, but...you don't need a
| very long memory to put this in perspective.
| QuercusMax wrote:
| More than a fraction of recent hires. I had long-tenured
| teammates (10+ years) who were let go, for no particular
| reason.
| shermantanktop wrote:
| Sure, it's not LIFO, and this churn can be a nasty way to
| get rid of the expensive oldsters. But as a percentage,
| the bigger companies are generally still well above 2020
| staffing levels.
| saos wrote:
| I reckon they'll be a deeper cut
| wtf_is_up wrote:
| > The company added that for 2023, it's taken charges related
| to employee severance of $2.1B, with $1.2B in exit charges
| taken for the last three months of the year. It's also
| continuing work to optimize global office space.
|
| https://seekingalpha.com/news/4060311-alphabet-falls-4-as-ad...
| quatrefoil wrote:
| Revenue increase of 10 billion is about 3%, essentially
| tracking inflation.
| summerlight wrote:
| Short term revenue gain (2~3 years) can be all done by
| "optimizing" core ads businesses but that's not sustainable for
| a decade. The real question is how to build a longer term
| growth potential for Alphabet, and probably more than half of
| the employees are working on less certain business areas to
| figure it out.
| voytec wrote:
| > 190,234 (...) 182,502 (...) 5% change in head count seems
| hardly major.
|
| I hate how we accepted treating people as percentages and
| seeing 7732 people losing their employment as an irrelevant
| "5%" with "hardly major" label slapped on top.
| resolutebat wrote:
| Google Cloud made $864M in profit in a single quarter, more than
| ever before.
|
| Google Bets lost $86 _3_ M in the same period, much less than
| ever before.
| jeffbee wrote:
| I wonder if that is good news. You can look at it either as
| they slowed how much money they pour into the moonshots
| incinerator, or they stopped investing in potential unicorn
| lines of business.
| Kluggy wrote:
| I think they have proved that it's a incinerator at this
| point.
| jeffbee wrote:
| Well, a lot of the money goes into Waymo which is just
| ramping into revenue service. With the filing they
| submitted last week, they want to serve all of Silicon
| Valley and all of Los Angeles County, which is more than an
| order of magnitude expansion in their market. Waymo might
| be a real investment and not just an emergency profit
| reducer.
| disillusioned wrote:
| Waymo _might_ be the sole survivor here... they are
| ABSOLUTELY trying their damndest with it. It's remarkable
| to not go a single day without seeing a driverless Waymo
| doing its thing. (I live in Central Phoenix, they're
| _everywhere_.)
|
| The core concept is being proven pretty well, in markets
| with good weather and good roads at least... whether they
| can achieve some sort of critical mass that allows them to
| recoup any of the investment, even on a single capitalized
| vehicle... who knows. I've heard each Jag costs ~$250k
| fully loaded... that's a lot of ~$14-on-average trips
| before breakeven, and obviously the trips aren't free.
|
| That all being said, riding in one feels like the actual
| future, and if they close in on this first-mover advantage
| and keep on keeping on, and strengthen their Uber
| integration, and open in more and more markets... there's a
| real chance they establish themselves and make this thing
| actually capture a significant portion of the trip economy.
|
| That being said, it's not generalized, so opening markets
| is expensive because they're all individually trained for
| each mile of road in the market, I expect they'll be
| functionally useless in bad winters (but that's not a
| dealbreaker, per se), and those operating expenses remain
| high. Though I do expect we'll begin to see those lower,
| now that they're so deep into the proof of the concept.
| (They're finally starting highway driving here in PHX,
| which is really the last hill to climb.)
| Workaccount2 wrote:
| I always imagined Google licensing the tech as opposed to
| spinning up a fully fledged national taxi service.
| clhodapp wrote:
| Interesting. I could imagine Uber mortgaging their whole
| market cap to acquire Waymo as a lifeline to staying
| relevant in the long term. They would essentially be
| "buying" what has always been their long-term product
| vision.
| rogerbinns wrote:
| The most valuable owner in this space is whoever you
| communicate with to tell them where you want to go. They
| get to offer you a price, they get to offer you
| alternative destinations, and they get to offer you
| "deals". For example that means that a different
| supermarket can make an offer you come to them instead,
| or you can be offered a different price should a
| different route be taken, a ride share happen, a journey
| delayed or brought forward, and numerous other
| possibilities. It isn't too dissimilar to typing what you
| are interested in to a search engine. That will be
| _extremely_ lucrative.
|
| But for it to work, that entity will have to have
| ultimate control over where the vehicle goes. Everybody
| is going to want to have that ultimate control, and not
| cede it to someone else. That would make licensing not
| really work out since Google would retain control.
| ra7 wrote:
| > _I 've heard each Jag costs ~$250k fully loaded_
|
| They said it costs as much as a "moderately equipped
| S-Class" 3-4 years ago. At the time, that would be
| ~$140k. That includes the base car cost, sensor hardware,
| compute, redundant vehicle systems and their integration.
| So not quite $250k, but still steep. I think the Waymo-
| Geely robotaxis coming next year will be interesting
| cost-wise.
|
| > _That being said, it 's not generalized, so opening
| markets is expensive because they're all individually
| trained for each mile of road in the market_
|
| This is a misconception. The Waymo Driver is, in fact,
| designed to be generalizable. There some steps like
| mapping and initial validation in each market, but the
| same software runs on Waymo vehicles in every city. It's
| definitely not individually trained for each mile in each
| market.
| jeffbee wrote:
| There's a significant amount of cope involved when
| someone steps up to say that Waymo only works on rails,
| doesn't work in conditions where they have operated for
| years, etc. It is necessary to continue believing that
| Tesla is still in this race.
| ra7 wrote:
| Yeah, there's a mind boggling amount of misinformation
| about Waymo. I'm sure it's driven by financial and
| emotional interest in Tesla. It's strange.
| clhodapp wrote:
| _I 've heard each Jag costs ~$250k fully loaded... that's
| a lot of ~$14-on-average trips before breakeven_
|
| My math says that's about 25 trips per day to break even
| in two years (modulo maintenance costs).
| xnx wrote:
| > I expect they'll be functionally useless in bad winters
|
| Google expanded testing in Buffalo, NY in November 2023,
| including new sensor hardware: https://www.reddit.com/r/S
| elfDrivingCars/comments/1aedrmy/ne...
| javiramos wrote:
| What are some promising Google moonshots apart from Waymo?
| xnx wrote:
| Drone delivery: https://wing.com/
| foota wrote:
| Most of the difference is explained by an increase in revenue
| while holding expenses constant:
|
| Other Bets, which includes the Waymo self-driving car
| business and the Verily life sciences unit, reported revenue
| of $657 million, up from $226 million the year prior. Its
| loss narrowed to $863 million from $1.24 billion.
|
| So revenue up 400 million, and losses dropped by 400 million.
| rdsubhas wrote:
| I guess the point being made by that comment is, it could be
| an accounting / book-shifting trick.
| morkalork wrote:
| Does that mean we'll stop seeing all the alarmist posts about
| how one should never build on GCP?
| laverya wrote:
| Only when they buy back their domains business from
| Squarespace.
| badrequest wrote:
| Those posts are an HN staple, this place wouldn't be the same
| without it. I think I've been using GCP longer than most
| people's projections of how long it would last.
| stefan_ wrote:
| Did you know the IBM cloud is the biggest in the world?
|
| Public companies can structure their business however they
| prefer. If the story needs to be that Cloud is growing and
| profitable on a numbers sheet, you need no more than the
| finance geeks to make it happen.
| scarface_74 wrote:
| $864 million is really a nothingburger for Google or any
| company Google's size compared to Azure or AWS.
| tibbydudeza wrote:
| Thomas Kurian is awesome - trained by Larry Ellison no doubt
| :).
| hiddencost wrote:
| The most consistent thing I hear in the hallways is "I really
| hope they don't make TK the CEO."
|
| People in cloud are profoundly unhappy. It's scary.
| VirusNewbie wrote:
| I work in GCP, I don't get the sense that people are
| unhappy here. I think it's more likely that GCP, unlike the
| rest of google, is more of an amalgamation of many
| corporate cultures, (both good and bad).
|
| A little bit more Amazon/Oracle, a little less traditional
| 'Google'. I think most people work 45 hours a week. I don't
| see anyone slacking off. But it's not a death march, it
| pays well, there are tons of perks still.
|
| _shrug_ It 's not some magical fantasy land that some
| people make google out to be, but it's a nice job with
| interesting problems, smart coworkers, and it pays well.
| mistrial9 wrote:
| "Kurian joined Oracle in 1996, initially holding various
| product management and development positions. His first
| executive role was as Vice President of Oracle's e-Business
| division."
| bradhe wrote:
| What the heck is Google Bets?
| Always42 wrote:
| From page 1: The following table summarizes our consolidated
| financial results for the quarters and years ended December 31,
| 2022 and 2023 (in millions, except for per share information and
| percentages
|
| But the numbers appear to be billion (no way revunue 80mil) in
| the following table? what am i missing
| Grollicus wrote:
| revenue is ~80000mil, that comma is a thousands separator
| jsnell wrote:
| You're presumably reading "," as a decimal separator (like
| continental Europe) rather than a thousands separator (English-
| speaking countries).
| lvl102 wrote:
| At the end of the day, people paid up (investing) for AI and it's
| way too early to see results. Google and Microsoft.
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