The company reported net income of $8.95 billion, or $12.77 per Class A and B common share and Class C capital share, in the quarter ended December 31, compared with a loss of $3.02 billion, or $4.35 per share, a year earlier when it recorded a one-time tax charge of $9.9 billion.
Revenue from Google properties rose to 27 billion from about $22 billion in the year-ago quarter.
Analysts had expected net income of $7.6 billion on revenue of $38.9 billion. The company also hired more engineers for its Google Cloud Platform in the fourth quarter.
Indeed, some analysts are expecting bigger things, in particular a significant acquisition, though it's not clear what company would change the landscape as much as, say, IBM Corp.'s $34 billion acquisition of Red Hat Inc. announced in October.
Investors concerned that Alphabet's future growth, especially in emerging markets, will not match its previous rates, are looking to the company's other businesses to provide new streams of revenue.
The report offered no detailed breakdown of Alphabet income but Google took in the overwhelming majority of revenue in the quarter, $39.1 billion, with $32.6 billion from advertising. For the full year, analysts are looking for EPS of $41.81 and revenues of $136.49 billion, the vast majority of which is ad revenue from Google search and YouTube.
Money spent on Google hardware, such as Pixel smartphones or Nest smart home devices, was also a factor along with investments in datacenters essential to Google's growing cloud computing business.
Facebook and Google have been the two dominant forces in digital advertising for years, but now Amazon is quickly ramping up its own advertising business. Amazon now leads in that market, followed by Microsoft and Google in a somewhat more distant third place. The latter figure rose to $1.328 billion from last year's $748 million while TAC rose by a percent to $7.436 billion. It's also seeing an "uptick" in $100 million contracts, Porat said. Thanks chiefly to its search ads as well ads on its YouTube video service, Google has 31.3 percent of the worldwide market to Facebook's 20.5 percent, according to eMarketer. "Other Bets" revenues, primarily derived from Fiber and Verily life sciences, was $154 million for the quarter, up from $131 million a year ago, with a loss of $1.32 billion, up from a loss of $748 million a year earlier.
All this even as Alphabet released mostly upbeat news yesterday about its Q4 results, beating analysts' forecasts in key metrics in many instances.
Google's full-year operating margin fell by more than 2 percent from Q4 2017, representing a far larger decline than the overall business.