Google’s non advertising revenue is growing fast

 Alphabet (NASDAQ: GOOG, GOOGL) is experiencing a sharp rise in its non-advertising revenue. Its business is divided into two reportable segments that include Google & Other Bets.

Alphabet’s main source of revenue from the Google segment is advertising which accounted for more than 85% of the company’s entire revenue in 2018. In 2019, the share of advertising revenue has decline to less than 85% of the company’s net revenue. The share of non-advertising revenue in the net revenue of google has kept rising over the past three years. Total nonadvertising revenue of google has grown by more than 90% from 2016 to 2018. According to 2018 form 10K of Alphabet, non-advertising revenue in 2016 stood at $10.6 billion which grew to $19.9 billion in 2018. The fourth quarter non-advertising revenue of Alphabet in 2018 reached $6.5 billion compared to $4.97 billion in 2017 Q4.

Here is how much Google generated from non-advertising businesses during past four years:

YearNonAdvertising Revenue ($mn)
2016$10,601
2017$14,970
2018$19,901
2019$25,932

 The sources of non-advertising revenues of Google include sales of apps, in-app purchases, digital content products, and hardware; and licensing and service fees, including subscription fees for Google Cloud offerings. 

In fiscal 2019 as well, Google’s non-advertising revenue has grown sharply. Check the table below. (Sums are in millions)

 2019.
Q1$5,449
Q2$6,181
Q3$6,428
Q4$7,878

As you can see, Google’s non-advertising revenue has gained significantly compared to the previous year in 2019. The total revenue of Google during fiscal 2019 at the end of the third quarter was $18,058 million compared to $13,419 million during the same period the previous year. The net revenue of Google during the fourth quarter of 2019 grew to $45.8 billion compared to $39 billion in 2018. 

About Google:

Google is the leading search engine in the world with the largest market share. Its core source of revenue is digital advertising where it leads the industry. The parent company of Google is Alphabet which also operates other businesses (collectively termed as other bets) apart from Google. Google is the largest business segment of Alphabet which has enjoyed revenue growth from the cloud as well as YouTube ads in recent years. The company has its headquarters in Mountain View, California, United States. The CEO of Alphabet is Sundar Pichai. Google was founded on 4th September 1998 at Menlo Park, California, United States. The head office of Google at Mountainview, California, is known as Googleplex.

Sam’s Club Revenue

Net sales of Sam’s club 2001-2019

(Premium membership club of Walmart).

Sums are in Billions.

YearSam’s Club net sales (Billions)
2019$ 57.84
2018 $  59.2
2017 $   57.37 
2016 $   56.83 
2015 $   58.02 
2014 $   57.16 
2013 $   56.42 
2012 $   53.80 
2011 $   49.46 
2010 $   46.71 
2009 $   46.90 
2008 $   90.64 
2007 $   77.12 
2006 $   59.24 
2005 $   56.28 
2004 $   47.57 
2003 $   40.80 
2002 $   35.49 
2001 $   32.10 

Sam’s club is the premium business segment of walmart which was started in the year 1983. It includes membership-only warehouse clubs and is operational in 44 states in the U.S. and in Puerto Rico. Sam’s club also operates through eCommerce channels. In fiscal year 2018, Sam’s club accounted for around 12% of the net sales of Walmart.  In 2019, its net sales declined by 2.3% as compared to the previous year falling to around 57.84 Billion dollars.

(Sources: Walmart Annual reports)

Walmart was incorporated in Delaware in 1969. the company started its international operations in 1991 and first ecommerce initiative in 2000. The company has expanded internationally and operates across 27 countries as of 2018. each week around 270 milion customers visit its more than 11,700 stores. the company also serves its customers in 28 countries through ecommerce websites under 65 banners.  the number of total retail units ofWalmart in 2018 reached 11,718. Walmart US segment had 4,761 units whereas Walmart Internation 6,360 and Sam’s club had 597.

Walmart operates retail, wholesale and other units in the U.S., Africa, Argentina, Brazil, Canada, Central America, Chile, China, India, Japan, Mexico, and the United Kingdom. It conducts its business in three reportable segments that are Walmart U.S., Walmart International, and Sam’s Club. The largest of these segments that accounted for around 64% of the total revenue of the brand is Walmart US with operations in all 50 states in the U.S., Washington D.C., and Puerto Rico. Walmart International has operations in 27 countries outside the USA. Sam’s club is a chain of membership-only warehouse clubs. (Walmart Annual Reports). 

Nike financial performance in 2019 versus previous year

Nike (NASDAQ: NKE) is a well known sports shoe and apparel brand based in the United States. The company has its headquarters in Oregon, United States. It sells its products worldwide through both online and offline channels. Apart from the company owned retail stores, Nike also sells its products through independent distributors as well as licensees and sales repersentatives in almost all the countries around the world. United States is the largest market for Nike products. However, its share of revenue from the international markets has continued to grow over the last few years. The company has 384 brand retail stores operational in United States as of 2019 apart from 768 operational internationally. 

 20192018
Revenue$39,117$36,397
Net Income$4,029$1,933
Gross Profit$17,474$15,956
Total Assets$23,717$22,536
Cost of sales$21,643$20,441
Marketing expenses$3,753$3,577
Selling and administrative expenses$12,702$11,511 


Nike Distribution Centers in the United States:

The company has established six main distribution centers in the United States. Four of these distriution centers are located in Memphis, Tennessee. Nike owns two of these distribution centers and the rest two are leased properties. One more distribution center of Nike is located in Indianapolis, Indiana and one another in Dayton, Tennessee. Apart from the six main distribution centers, Nike also ships apparel and equipment form one another distribution center that is located at Foothill Ranch, California. This one is a leased facility and there are several more smaller distribution centers of Nike, all of which are leased and operated by third parties and located throughout the US in the various corners of the country.

Nike Brand Financial Performance in fiscal 2019 versus 2018

Apart from Nike brand products, the company also sells Hurley, Jordan and Converse products. (However, here we are discussing Nike’s sales and revenue from Nike brand products only) Nike’s net revenue grew by 11% on a  currency neutral basis in 2019 compared ot the previous year. It experienced revenue growth across all the geographic markets. Nike brand revenue from footwear and apparel grew 12% and 11% respectively in 2019. Revenue from Nike brand equipment on the other hand grew by 4%. Nike brand revenue grew aross all footwear categories. While the sportswear category saw the highest growth in revenue of all the footwear categories, the Jordan Brand and running categories also experienced growth though less than the sportswear category. While the unit sales of footwear grew by 8%, higher average selling price per pair drove a growth of around 4% in Nike’s revenue from footwear. Footwear accounted for around 65% of the company’s net revenue in 2019.

Nike revenue from Nike brand apparel grew 8% and 11% on a  currency neutral basis. The company experienced revenue growth across all the NIke brand apparel categories. Nike experienced a 6% growth in the sales of Nike brand apparel. Due to higher average selling price per unit, the revenue of the brand from apparel sales grew by around 5%. 

Nike revenue from Direct sales grew to 32% of the total sales of the brand compared to 30% during the previous year.  Ecommerce sales in 2019 reached $3.8 billion compared to $2.8 billion in 2018. Several factors drove the growth in revenue from Nike Direct which grew 16% on a currency neutral basis. Ecommerce sales of NIke grew 35% driving much of the growth in revenue from Nike Direct. Apart from that growth in comparable store sales as well as growth in the number of stores also drove revenue growth across Nike Direct. 

Nike’s revenue from men’s and women’s products grew 10% and 11% respectively on a currency neutral basis in 2019 compared to the previous year. Nike exprienced grwth across nearly all product categories for men and women and the highest across the sportswear category. Several factors drove Nike’s revenue growth across women’s product categories including Nike’s focus on creating more compellign designs, creating marketing camapigns focused on the female audiences worldwide as well as a shift towards a digital distribution strategy led by digital channels. Nike also exprienced growth across its Kids product categories except football products for kids. Wholesale revenue was 68% of Nike’s consolidated net revenue whereas revenue from Nike Direct was 32% on a currency neutral basis.

The geographic region accounting for the highest part of the company’s net revenue is North America. In 2019, it accounted for 43% of the company’s revenue, followed by Europe, Middle East and Africa at 26% as well as Asia Pacific and Latin America at 14%.  Greater China accounted for 17% of the net revenue of the brand in 2019. 

North America revenue of Nike grew 7% in 2019 compared to the previous year. 2019 revenue of Nike from North American region was $15.9 billion compared to $14.9 billion in 2018.  Revenue from Europe, Middle East and Africa grew to $9.8 billion in 2019 compared to $9.2 billion in 2018. Revenue of Nike from Greater China reached $6.2 billion in 2019 from $5.1 billion in 2018.

Nike Revenue from Men’s and Women’s products

Revenue of Nike from Men’s & Women’s Products 2014-2019

Nike is leading international brand of sports shoes, apparel and equipment. The company makes products for men, women and kids.

Check out its revenue from each of these categories from the following table.

Amounts are in $ millions.

YearMen’sWomen’sKidsOthers
2019$17,737$7,380$5,283$2,150
2018$16,698$6,913$4,906$1,784
2017$15,819$6,637$4,838$1,400
2016$15,496$6,296$4,560$983
2015$14,689$5,732$4,301$1,111
2014$13,996$4,976$3,737$1,081

Revenue of Nike from Sportswear

Nike Revenue from Sportswear 2013-2019

Amounts are in $ millions.

Nike is a leading international brand of sports shoes, apparel and equipment. Check out the wholesale equivalent revenue of Nike from sportswear from the following table. In 2019, Nike earned $12.4 billion in revenue from sportswear as compared to $10.7 billion in 2018. 

YearNike Sportswear Revenue ($mn)
2019$12,442
2018$10,720 
2017$9,272 
2016$8,129 
2015$6,604 
2014$5,744 
2013$5,456 

Nike Return on Assets (ROA)

Return on Assets (ROA) of Nike Inc 2005-2019

Nike is a leading international brand of sports shoe, apparel and equipment. Check out its ROA (Return on Assets) from 2005 to 2019 from this table. In 2019, Nike’s Return on Assets (ROA) was 17.4% in 2019 compared to 8.4% in 2018.

YearROA
201917.4%
20188.4%
201719%
201617.5%
201516.3%
201414.9%
201315.3%
201215.1%
201115%
201014.3%
200914.6%
200816.3%
200714.5%
200614.9%
200514.5%

Nike Return on Equity (ROE)

Return on Equity (ROE) of Nike Inc.

Nike is a leading international brand of sports shoes, apparel and equipment. Check out its Return on Equity (ROE) from the table below. In 2019, the return on equity of Nike inc was 42.7% compared to 17.4% in 2018.

YearROE
201942.7%
201817.4%
201734.4% 
201630.1% 
201527.8% 
201424.6%
201323.1% 
201222% 
201121.8% 
201020.7%
200921.2%
200825.4%
200722.4%
200623.3%
200523.2%

Nike Price/Earnings Ratio

Price/Earnings (P/E) Ratio of Nike 2005-2019

Nike is a leading brand of sports shoes, apparel and equipment. The company has an international presence. Read about its Price/Earnings (P/E) ratio from 2005 to 2019 in the table below. Nike’s P/E ratio was 31 in 2019 compared to 61.4 in 2018.

YearP/E Ratio
201931
201861.4
201721.1
201625.6
201527.5
201425.9
201322.8
201223
201119.3
201018.8 
200915.9 
200818.3 
200719.4 
200615.2 
200518.3 

Nike Gross Margin

Nike Inc Gross Margin 2006-2019.

Nike is a leading international brand of sports shoes, apparel and equipment. Check out its gross margin from the following table for the period between 2005 and 2019. In 2019, Nike’s gross margin was 44.7% compared to 43.8% in 2018.

YearGross Margin
201944.7%
201843.8%
201744.6%
201646.2%
201546%
201444.8%
201343.6%
201243.5%
201145.7%
201046.4%
200944.9%
200845%
200743.9%
200644%
200544.5%

Nike Inc Total Assets

Total Assets of Nike Inc 2006-2019

Amounts are in $ millions.

YearTotal Assets
2019 $23,717
2018$22,536 
2017$23,259 
2016$21,379 
2015$21,590 
2014$18,579 
2013$17,531 
2012$14,800 
2011$14,398 
2010$13,852 
2009$12,716 
2008$12,443 
2007$10,688 
2006$9,870 

 Total assets of Nike Inc were worth $23.72 Billion in 2019 compared to $22.54 billion in 2018.