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Alphabet (Nasdaq: GOOG) recently announced its fourth quarter results. While revenues surpassed market expectations, the earnings were a miss due to accounting policy changes. But the market has been forgiving to Alphabet given the huge strides it is making in non-search areas.

Alphabet’s Financials

Alphabet’s fourth quarter revenues grew 22% over the year to $26.06 billion, ahead of the Street’s forecast of $25.26 billion. EPS of $9.36 was, however, lower than the market’s forecast of $9.64 for the quarter. The earnings miss was due to a tax charge of $586 million that Alphabet incurred in relation to its stock-based compensation. The tax charge was due to a rule change in the US that now expects companies to account for the tax benefits of paying employees in stock instead of cash. During the quarter, Alphabet had to record the charge for the full year.

By segment, revenues from the Google segment grew 22% to $25.8 billion driven by a 20% growth in revenues from Google’s properties. Google properties revenues came in at $17.97 billion and revenues from its Members’ websites grew 7% to $4.43 billion. Other revenues grew 62% over the year to $3.4 billion. Google Other segment includes revenues from non-ad businesses such as the Play Store and infrastructure sales and hardware. Growth improved 39% over the quarter driven by the Pixel phone launch.

Revenues from Other Bets grew 74% to $262 million from from $150 million a year ago. Other Bets includes the famous Nest business along with other moonshot initiatives. Losses from the segment reduced marginally from $1.2 billion to $1.1 billion for the quarter. Alphabet did not break out the revenues for YouTube, but analysts estimate that the business would be generating nearly $14 billion-$15 billion a year.

Among operating metrics, aggregate paid clicks grew 36% over the year and 20% sequentially. Paid clicks on Google websites grew 43% over the year and paid clicks on members’ websites grew 23% over the year. Aggregate cost per click fell 15% over the year.