We are officially in the middle of the biggest week of Q4 earnings season for the technology sector, with many of the world’s largest companies and key market-moving stocks set to report this week. Of these, the upcoming earnings announcement from Google parent Alphabet Inc. (NASDAQ:GOOGL) is sure to be one of Wall Street’s most-closely followed.
Alphabet’s core business is, of course, advertising. The company generates the vast majority of its revenue through its traditional Google search business and ads on places like YouTube. Another major revenue generator is Alphabet’s “Google Other revenues” category, which includes Google Cloud, Google Play Store, and hardware—including the Pixel and Google Home.
Nevertheless, Alphabet’s mysterious “Other Bets” category always attracts attention when the company reports earnings. Like many tech companies, Alphabet is tight-lipped about its side projects, but we know that Other Bets includes a few recognizable brands.
Most notably, Other Bets generates revenue from Nest, a home automation company that makes “smart” thermostats, smoke detectors, and security cameras. Investors might also recognize Alphabet’s life sciences brand, Verily. Another Other Bets revenue generator is Google Fiber, which provides broadband internet services in nine markets throughout the U.S.
For now, Alphabet management seems to view Other Bets as an investment in the future.
“We’re pleased with our progress across Other Bets,” said CFO Ruth Porat in the company’s most recent earnings call. “Longer-term, we remain excited about the opportunities in our Other Bets, with ongoing progress.”
One Other Bets venture that could potentially become a bigger business for Alphabet is Waymo. This subsidiary spent years as a top-secret autonomous vehicle project under the Google banner, but now it is free to operate publicly. Waymo is making significant progress and will likely emerge as a leader in the self-driving vehicle market over the next few years.
But what can investors expect from Other Bets in Alphabet’s upcoming earnings report? To answer this, we can turn to our exclusive non-financial metrics consensus estimate file.
The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.
Based on our current consensus estimates, Other Bets revenues are expected to come in at $362 million, which would represent growth of 38.2% year-over-year. Last quarter, Other Bets revenues soared 53.3% to touch $302 million.
Make sure to check back here for our full analysis of Alphabet’s actual results tomorrow!
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