Alphabet Inc. said its Google Cloud business had an operating loss of US$1.2 billion in the fourth quarter, a new disclosure that may disappoint some Wall Street analysts.

The Mountain View, California-based company revealed the number on Tuesday in a statement. For 2020, the cloud division lost US$5.6 billion, Alphabet said.

Google Cloud revenue climbed 47 per cent to US$3.8 billion in the fourth quarter, matching analysts’ estimates, according to data compiled by Bloomberg.

Brian Fitzgerald, an analyst at Wells Fargo & Co. was looking for Google Cloud to generate an operating margin of less than 20 per cent in the fourth quarter, or roughly US$750 million in profit on revenue of US$3.75 billion.

Morgan Stanley’s Brian Nowak expected Google Cloud to make about US$3 billion last year, before interest, taxes, depreciation and amortization.

The results are way behind Amazon.com Inc., which runs Amazon Web Services, the largest cloud provider. That business generated fourth-quarter operating income of US$3.56 billion on revenue of US$12.7 billion.

Google Cloud Chief Executive Officer Thomas Kurian is trying to catch Amazon and Microsoft Corp. He has spent rapidly to expand the cloud sales force and the company has continued investing in new data centers.

Some analysts expect the division’s profitability to emerge as the it matures. Morgan Stanley’s Nowak sees Google Cloud’s EBITDA reaching US$13 billion by 2024 on revenue of US$35 billion.