Shares of Google parent Alphabet (GOOGL 0.10%) (GOOG -0.02%) surged in after-market trading on Tuesday, trading about 9% higher as of 5:40 p.m. ET. Investors cheered at the company's strong finish to 2021. Revenue increased sharply, marking a significant acceleration over the 23% growth Alphabet reported in the fourth quarter of 2020. 

Here's a look at some key takeaways from the digital advertising giant's fourth-quarter 2021 results.

A woman tapping a search icon.

Image source: Getty Images.

Impressive growth

Alphabet's fourth-quarter revenue increased 32% year over year to $75.3 billion. This easily beat analysts' consensus forecast for revenue of $72.2 billion -- a figure that would have represented about 27% growth.

But here's another way to appreciate this growth. This top-line growth is a significant acceleration over the 23% growth that Alphabet reported in 2020. Indeed, it's even a massive acceleration over the tech company's pre-pandemic growth rates. Full-year 2019 revenue increased 18% year over year.

Earnings per share also crushed analyst estimates, rising 38% year over year to $30.69. The consensus analyst forecast called for earnings per share of $27.34.

"Our fourth quarter revenues of $75 billion, up 32% year over year, reflected broad-based strength in advertiser spend and strong consumer online activity, as well as substantial ongoing revenue growth from Google Cloud," said Alphabet CFO Ruth Porat in the company's fourth-quarter earnings release.

Suffice to say, Alphabet is firing on all cylinders.

Cloud momentum

Looking at specific parts of Alphabet's business, one segment worth calling out is its cloud computing business. While Google Cloud only accounts for 7% of total revenue, it's growing faster than the company's overall top line. Segment revenue increased 45% to $5.4 billion.

Record Pixel smartphone sales

Though Pixel phones represent an even smaller fraction of Alphabet's business (one so small that the company doesn't break it out), management notably said it saw record quarterly Pixel phones "despite supply constraints..."

Alphabet had announced the new smartphones, called Pixel 6 and Pixel 6 Pro, in October of last year.

Margin expansion

The company also continued to make progress on operating margin, helping explain some of the outsize earnings growth relative to revenue growth (the other contributing factor to this outsize growth is Alphabet's share repurchases, which totaled $50.3 billion in 2021). Alphabet's operating margin for the fourth quarter of 2021 was 29%, up from 28% in the year-ago period. For the full year of 2021, it was 31%, up from 23% in 2020.

With broad-based momentum and an acceleration in the company's revenue growth compared to 2020 and 2019, it's no wonder that investors are bidding up the stock. If this momentum can persist, Alphabet's price-to-earnings ratio of sub-30 is looking particularly attractive.