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Good morning investors!

During the ever important earnings season, we publish our “Earnings Recap” — an in-depth summary of the earnings reports for stocks that we cover on a regular basis.

Earnings season is in full swing and we just had one of the biggest weeks of the season — let’s dive in.

Alphabet (GOOG)

Alphabet reported a strong Q4 2024, with double-digit earnings and revenue growth, though revenue came in slightly below estimates while EPS exceeded expectations.

The company posted revenue of $96.47 billion, up 12% year-over-year, but missed estimates by 0.23%. Net income reached $26.5 billion, rising 28% YoY, with diluted EPS of $2.15, beating analyst projections by 1.42%.

Key revenue drivers included Google Search at $54.0 billion (+13% YoY), YouTube at $10.5 billion (+14% YoY), and Google Cloud at $12.0 billion (+30% YoY). Operating income rose 31% to $31.0 billion, while operating expenses increased 5% YoY to $65.5 billion. Operating cash flow more than doubled (+107% YoY) to $39.1 billion, with free cash flow surging 215% YoY to $24.8 billion. The company also executed $15.5 billion in share buybacks for the quarter, bringing the FY total to $62.2 billion.

For 2025, Alphabet expects low-to-mid teens revenue growth, double-digit EPS expansion, and capital expenditures of $75 billion, reflecting continued investments in AI, cloud, and infrastructure.

GOOG shares are -6.1% so far this week.

Amazon (AMZN)

Amazon reported strong earnings for Q4 2024, with revenue and profitability exceeding expectations, driven by robust AWS growth, solid holiday sales, and operational efficiencies.

The company posted net income of $20.0 billion, or $1.86 per diluted share, marking an 88% YoY increase. Total revenue rose 11% YoY to $187.8 billion, narrowly surpassing estimates of $187.3 billion.

AWS remained a major growth driver, with revenue increasing 19% YoY to $28.8 billion, while North America sales grew 10% YoY to $115.6 billion, and International revenue climbed 8% YoY to $43.4 billion.

Operating income surged 61% YoY to $21.2 billion, supported by margin expansion, while free cash flow improved 4% YoY to $38.2 billion. Additionally, same-day and overnight delivery volumes rose 65% YoY, reflecting Amazon’s investments in logistics efficiency.

For Q1 2025, Amazon forecasts revenue between $151.0B and $155.5B (+7% YoY) and operating income between $14.0B and $18.0B (+5% YoY). However, the company anticipates a $2.1 billion negative impact from foreign exchange fluctuations, which could moderate near-term growth.

AMZN shares are -2.3% so far this week.

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Eli Lilly (LLY)

Eli Lilly reported a strong fourth quarter, driven by surging demand for its blockbuster drugs Mounjaro and Zepbound, despite narrowly missing revenue expectations.

The company posted net income of $4.4 billion (+101% YoY) on revenue of $13.53 billion (+45% YoY), with EPS of $5.32, handily beating estimates by 5.56%.

Mounjaro continued its rapid growth, generating $3.5 billion in revenue (+60% YoY), while Verzenio saw a 36% YoY increase to $1.6 billion. However, Trulicity sales declined 25% YoY as the company shifts focus toward newer weight-loss and diabetes treatments. Operating income surged 116% YoY to $5.2 billion, while operating expenses jumped 30% YoY due to ongoing R&D and marketing investments.

Lilly’s gross margin expanded to 82.2%, supported by strong pricing power and product mix, with U.S. revenue climbing 40% YoY to $9.0 billion and international sales soaring 55% to $4.5 billion. Additionally, the company announced a new $15 billion share buyback program and a 15% dividend increase to $1.30 per share.

For 2025, Lilly expects revenue between $58.0 billion and $61.0 billion (+32% YoY) and EPS of $22.50-$24.00 (+88% YoY), reflecting continued momentum from its obesity and diabetes franchises, as well as potential new product launches.

LLY shares are +7.6% so far this week.

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Merck (MRK)

Merck delivered a strong fourth quarter, beating expectations on both revenue and earnings, driven by robust growth in Keytruda and animal health sales.

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