Alphabet’s Google Cloud business has yet to turn a profit, but company CEO Sundar Pichai touted the unit as a key contributor to an order backlog that grew 70% in Q4 2021.
Speaking during an earnings call, Pichai said Alphabet’s backlog hit $51 billion in the quarter, “most of which is attributed to Google Cloud.” He noted deal volumes for Google Cloud Platform rose 80% for the full year 2021 compared to 2020, with the number of deals over $1 billion jumping 65%.
He highlighted wins across verticals, including with grocery chain Albertsons, music streaming service Spotify, banking company Wells Fargo, public sector agencies like the United States Department of Agriculture and telcos such as Verizon, Telenor and Ooredoo.
All told, Google Cloud revenue grew 45% year on year to $5.5 billion, rising from $3.8 billion in Q4 2020. Alphabet CFO Ruth Porat stated Google Cloud revenue increased 47% for the full year 2021 versus 2020, with Google Cloud Platform sales growing at a faster rate than cloud overall. Still, the cloud business continued to post losses, with the quarter’s tally amounting to $890 million.
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Despite this, Porat said the company plans to “continue to invest aggressively in cloud given the sizable market opportunity we see.”
“Our focus remains on revenue growth and investing as needed as we're looking over the long term,” she said, noting the money will go toward go-to-market capabilities, products and infrastructure. “We do remain focused on the longer-term path to profitability, but we are continuing to invest here as we're seeing early innings, and pleased with the ongoing progress.”
Alphabet’s consolidated revenue jumped 32% year on year in Q4 to $75.3 billion, with net income rising just over 35% to $20.6 billion. The company’s advertising division continued to be its primary sales driver, posting $61.2 billion in revenue for the quarter compared to $46.2 billion in Q4 2020. Other revenue from its sales of Pixel and Fitbit hardware as well as non-advertising YouTube revenue hit $8.1 billion, up from $6.7 billion, while its Other Bets division brought in $181 million.