UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549________________________________________________________________________________________FORM 10-Q(Mark One)☒________________________________________________________________________________________QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number: 001-37580________________________________________________________________________________________

Alphabet Inc.
(Exact name of registrant as specified in its charter)________________________________________________________________________________________

Delaware(State or other jurisdiction of incorporation or organization)

61-1767919(I.R.S. Employer Identification Number)

1600 Amphitheatre Parkway
Mountain View, CA 94043(Address of principal executive offices, including zip code)(650) 253-0000(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classClass A Common Stock, $0.001 par value

Trading Symbol(s)GOOGLClass C Capital Stock, $0.001 par value

GOOG

Name of each exchange on which registered
Nasdaq Stock Market LLC(Nasdaq Global Select Market)
Nasdaq Stock Market LLC(Nasdaq Global Select Market)________________________________________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter periodthat the registrant was required to submit such files). Yes ☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smallerreporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smallerreporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Emerging growth company

☒
☐
☐

☐
☐

Accelerated filer
Smaller reporting company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☒

Yes ☐

No

As of April 18, 2024, there were 5,874 million shares of Alphabet’s Class A stock outstanding, 867 million shares of Alphabet's
Class B stock outstanding, and 5,617 million shares of Alphabet's Class C stock outstanding.

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Alphabet Inc.
Alphabet Inc.
Form 10-Q
For the Quarterly Period Ended March 31, 2024
TABLE OF CONTENTS
Page No.

Note About Forward-Looking Statements

3PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets - December 31, 2023 and March 31, 2024
Consolidated Statements of Income - Three Months Ended March 31, 2023 and 2024
Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2023
and 2024
Consolidated Statements of Stockholders' Equity - Three Months Ended March 31, 2023 and2024
Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2024
Notes to Consolidated Financial Statements
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

9
10
29

Item 3

Quantitative and Qualitative Disclosures About Market Risk

42

Item 4Controls and Procedures

42

5
5
6
7
8

PART II. OTHER INFORMATION
Item 1

Legal Proceedings

43

Item 1A Risk Factors

43

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

44

Item 5

Other Information

44

Item 6

Exhibits

45

Signatures46

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Alphabet Inc.
Note About Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These include, among other things, statements regarding:•the growth of our business and revenues and our expectations about the factors that influence our successand trends in our business;•fluctuations in our revenues and margins and various factors contributing to such fluctuations;•

our expectation that the continuing shift from an offline to online world will continue to benefit our business;•

our expectation that the portion of our revenues that we derive beyond advertising will continue to increase
and may affect our margins;•

our expectation that our traffic acquisition costs (TAC) and the associated TAC rate will fluctuate, which
could affect our overall margins;•

our expectation that our monetization trends will fluctuate, which could affect our revenues and margins;•fluctuations in paid clicks and cost-per-click as well as impressions and cost-per-impression, and various
factors contributing to such fluctuations;•

our expectation that we will continue to periodically review, refine, and update our methodologies formonitoring, gathering, and counting the number of paid clicks and impressions;•

our expectation that our results will be affected by our performance in international markets as users indeveloping economies increasingly come online;•

our expectation that our foreign exchange risk management program will not fully offset our net exposure tofluctuations in foreign currency exchange rates;•

the expected variability of gains and losses related to hedging activities under our foreign exchange risk
management program;•the amount and timing of revenue recognition from customer contracts with commitments for performanceobligations, including our estimate of the remaining amount of commitments and when we expect torecognize revenue;•

our expectation that our capital expenditures will increase, including the expected increase in our technicalinfrastructure investment to support the growth of our business and our long-term initiatives, in particular in
support of artificial intelligence (AI) products and services;•

our plans to continue to invest in new businesses, products, services and technologies, and systems, aswell as to continue to invest in acquisitions and strategic investments;•

our pace of hiring and our plans to provide competitive compensation programs;•

our expectation that our cost of revenues, research and development (R&D) expenses, sales and marketing
expenses, and general and administrative expenses may increase in amount and/or may increase as apercentage of revenues and may be affected by a number of factors;•

estimates of our future compensation expenses;•

our expectation that our other income (expense), net (OI&E), will fluctuate in the future, as it is largely
driven by market dynamics;•

our expectation that our effective tax rate and cash tax payments could increase in future years;•

seasonal fluctuations in internet usage and advertiser expenditures, underlying business trends such as
traditional retail seasonality, which are likely to cause fluctuations in our quarterly results;•

the sufficiency of our sources of funding;•our potential exposure in connection with new and pending investigations, proceedings, and othercontingencies, including the possibility that certain legal proceedings to which we are a party could harm
our business, financial condition, and operating results;•

our expectation that we will continue to face heightened regulatory scrutiny, and changes in regulatory
conditions, laws, and public policies, which could affect our business practices and financial results;

3

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Alphabet Inc.

•the expected timing, amount, and effect of Alphabet Inc.'s share repurchases and dividends;•

our long-term sustainability and diversity goals;

as well as other statements regarding our future operations, financial condition and prospects, and businessstrategies. Forward-looking statements may appear throughout this report and other documents we file with the
Securities and Exchange Commission (SEC), including without limitation, the following sections: Part I, Item 2,"Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Reporton Form 10-Q and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, as updated in this Quarterly Report on Form 10-Q. Forward-looking statements generally canbe identified by words such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans,""predicts," "projects," "will be," "will continue," "will likely result," and similar expressions. These forward-looking
statements are based on current expectations and assumptions that are subject to risks and uncertainties, which
could cause our actual results to differ materially from those reflected in the forward-looking statements. Factorsthat could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly
Report on Form 10-Q; the risks discussed in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K forthe fiscal year ended December 31, 2023, as updated in this Quarterly Report on Form 10-Q; the trends discussed
in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2023; and those discussed in other documents
we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to theseforward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned
not to place undue reliance on such forward-looking statements.
As used herein, "Alphabet," "the company," "we," "us," "our," and similar terms include Alphabet Inc. and its
subsidiaries, unless the context indicates otherwise.
"Alphabet," "Google," and other trademarks of ours appearing in this report are our property. We do not intend
our use or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us bysuch companies, or any relationship with any of these companies.

4

Table of Contents
PART I.
ITEM 1.

Alphabet Inc.

FINANCIAL INFORMATIONFINANCIAL STATEMENTS
Alphabet Inc.
CONSOLIDATED BALANCE SHEETS(in millions, except par value per share amounts)
As ofDecember 31, 2023

As ofMarch 31, 2024
(unaudited)

AssetsCurrent assets:
Cash and cash equivalents$
Marketable securities
Total cash, cash equivalents, and marketable securities
Accounts receivable, net
Other current assets
Total current assets
Non-marketable securities
Deferred income taxes
Property and equipment, net
Operating lease assets
Goodwill
Other non-current assets
Total assets$
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$
Accrued compensation and benefits
Accrued expenses and other current liabilities
Accrued revenue share
Deferred revenue
Total current liabilities
Long-term debt
Deferred revenue, non-current
Income taxes payable, non-current
Deferred income taxes
Operating lease liabilities
Other long-term liabilities
Total liabilities
Commitments and Contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value per share, 100 shares authorized; noshares issued and outstanding
Class A, Class B, and Class C stock and additional paid-in capital,$0.001 par value per share: 300,000 shares authorized (Class A 180,000,
Class B 60,000, Class C 60,000); 12,460 (Class A 5,899, Class B 870,
Class C 5,691) and 12,381 (Class A 5,879, Class B 867, Class C 5,635)
shares issued and outstanding
Accumulated other comprehensive income (loss)
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity$
See accompanying notes.

5

24,04886,868110,916
47,964
12,650171,530
31,008
12,169134,345
14,091
29,19810,051
402,392$

7,493
15,14046,1688,876
4,137
81,814
13,253
911
8,474
485
12,4601,616
119,013$$

24,49383,597108,090
44,552
12,829165,471
33,994
11,687
143,182
13,76829,183
10,065407,350

6,198
9,703
48,6038,520
3,973
76,997
13,228
921
9,234
486
11,957
1,683
114,5060076,534

77,913(4,402)
211,247
283,379
402,392 $(4,839)219,770
292,844407,350

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Alphabet Inc.
Alphabet Inc.
CONSOLIDATED STATEMENTS OF INCOME(in millions, except per share amounts; unaudited)Three Months Ended
March 31,
2023

Revenues
Costs and expenses:
Cost of revenues
Research and development
Sales and marketing
General and administrative
Total costs and expenses
Income from operations
Other income (expense), net
Income before income taxes
Provision for income taxes$

Net income
Basic net income per share of Class A, Class B, and Class C stock
Diluted net income per share of Class A, Class B, and Class C stock
See accompanying notes.

6

2024

69,787 $

80,53930,612
11,4686,533
3,759
52,372
17,415790
18,205
3,154

33,712
11,9036,426
3,026
55,06725,472
2,843
28,315
4,653$

15,051 $23,662$$

1.18 $
1.17 $

1.91
1.89

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Alphabet Inc.
Alphabet Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in millions; unaudited)Three Months Ended
March 31,2023

Net income$
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of income tax
benefit (expense) of $47 and $(18)Available-for-sale investments:
Change in net unrealized gains (losses)
Less: reclassification adjustment for net (gains) losses included in net
incomeNet change, net of income tax benefit (expense) of $(330) and $14
Cash flow hedges:
Change in net unrealized gains (losses)
Less: reclassification adjustment for net (gains) losses included in net
incomeNet change, net of income tax benefit (expense) of $30 and $(23)Other comprehensive income (loss)
Comprehensive income$
See accompanying notes.

7

2024

15,051 $23,662

596

(503)

866

(360)

292
1,158

311
(49)

(74)

186

(77)
(151)
1,603
16,654 $

(71)
115
(437)
23,225

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Alphabet Inc.
Alphabet Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY(in millions; unaudited)Three Months Ended March 31, 2023
Class A, Class B, Class C Stockand Additional Paid-In Capital
SharesBalance as of December 31, 2022
Stock issued
Stock-based compensation expense
Tax withholding related to vesting ofrestricted stock units and other
Repurchases of stock
Net income
Other comprehensive income (loss)
Balance as of March 31, 2023

AmountAccumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings

Total
Stockholders’Equity12,849 $30
068,184 $0
5,313(7,603) $00195,563 $00

256,144
0
5,313

0
(157)
0
0
12,722 $(2,093)(1,135)0070,269 $

0
0
0
1,603
(6,000) $0(13,989)
15,051
0
196,625 $(2,093)(15,124)
15,051
1,603
260,894

Three Months Ended March 31, 2024
Class A, Class B, Class C Stockand Additional Paid-In Capital
SharesBalance as of December 31, 2023
Stock issued
Stock-based compensation expense
Tax withholding related to vesting ofrestricted stock units and other
Repurchases of stock
Net income
Other comprehensive income (loss)
Balance as of March 31, 2024

AmountAccumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings

Total
Stockholders’Equity12,460 $32
076,534 $0
5,293(4,402) $00211,247 $00283,379
0
5,293

0
(111)
0
0
12,381 $(2,996)(918)
0
077,913 $

0
0
0
(437)
(4,839) $0(15,139)
23,662
0219,770 $(2,996)(16,057)
23,662(437)
292,844

See accompanying notes.

8

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Alphabet Inc.
Alphabet Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS(in millions; unaudited)Three Months Ended
March 31,
2023
2024

Operating activities
Net income
Adjustments:
Depreciation of property and equipment
Stock-based compensation expense
Deferred income taxes
Loss (gain) on debt and equity securities, net
Other
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net
Income taxes, net
Other assets
Accounts payable
Accrued expenses and other liabilities
Accrued revenue share
Deferred revenue
Net cash provided by operating activities
Investing activities
Purchases of property and equipment
Purchases of marketable securities
Maturities and sales of marketable securities
Purchases of non-marketable securities
Maturities and sales of non-marketable securities
Acquisitions, net of cash acquired, and purchases of intangible assets
Other investing activities
Net cash used in investing activities$

15,051$

23,662

2,635
5,284(1,854)
(84)
1,104

3,413
5,264
419
(1,781)
334

4,454
4,069
(746)
(1,105)(4,496)(602)(201)
23,5093,167
3,011(1,000)(2,124)(5,054)(322)(141)
28,848(6,289)(14,227)
18,327
(626)
36
(42)
(125)
(2,946)(12,012)(20,684)
24,985(1,206)
313
(61)
101
(8,564)

Financing activities
Net payments related to stock-based award activities(1,989)(2,929)Repurchases of stock
Proceeds from issuance of debt, net of costs
Repayments of debt
Proceeds from sale of interest in consolidated entities, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(14,557)
6,927(6,952)
3(16,568)
50
4,045
21,87925,924 $(15,696)
1,982(3,079)8(19,714)(125)445
24,04824,493

See accompanying notes.

9$

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Alphabet Inc.
Alphabet Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

Note 1.

Summary of Significant Accounting Policies

Nature of Operations
Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware inAugust 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc.
("Alphabet") became the successor issuer to Google.
We generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions thatprovide enterprise customers with infrastructure and platform services as well as communication and collaboration
tools; sales of other products and services, such as fees received for subscription-based products, apps and in-app
purchases, and devices.
Basis of Consolidation
The consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated
under the variable interest and voting models. Intercompany balances and transactions have been eliminated.
Unaudited Interim Financial Information
These unaudited interim consolidated financial statements have been prepared in accordance with generally
accepted accounting principles in the United States (GAAP), and in our opinion, include all adjustments of a normalrecurring nature necessary for fair financial statement presentation. Interim results are not necessarily indicative of
the results to be expected for the full year ending December 31, 2024. We have made estimates and assumptions
that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual
results could differ materially from these estimates.
These consolidated financial statements and other information presented in this Form 10-Q should be read in
conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form
10-K for the fiscal year ended December 31, 2023 filed with the SEC.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update(ASU) 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which expands
annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures aboutsignificant segment expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and forinterim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential
effect that the updated standard will have on our financial statement disclosures.
In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax
Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliationand income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early
adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our
financial statement disclosures.
Prior Period Reclassifications
Certain amounts in prior periods have been reclassified to conform with current period presentation.

10

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Note 2.

Alphabet Inc.

Revenues

Disaggregated Revenues
The following table presents revenues disaggregated by type (in millions):Three Months Ended
March 31,2023

Google Search & other
YouTube ads
Google Network
Google advertising
Google subscriptions, platforms, and devices
Google Services total
Google Cloud
Other Bets
Hedging gains (losses)
Total revenues

$

$

2024

40,359 $
6,693
7,496
54,548
7,413
61,961
7,454
288
84
69,787 $46,156
8,090
7,413
61,6598,739
70,3989,574
495
72
80,539The following table presents revenues disaggregated by geography, based on the addresses of our customers(in millions):Three Months Ended
March 31,2023

United States
EMEA(1)
APAC(1)Other Americas(1)Hedging gains (losses)
Total revenues
(1)

$

$

32,864
21,078
11,681
4,080
84
69,7872024

47 % $
30
17
6
0
100 % $

38,73723,78813,2894,653
72
80,539

48 %
30
16
6
0
100 %

Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America("Other Americas").

Revenue Backlog
As of March 31, 2024, we had $72.5 billion of remaining performance obligations (“revenue backlog”), primarily
related to Google Cloud. Our revenue backlog represents commitments in customer contracts for future services
that have not yet been recognized as revenue. The estimated revenue backlog and timing of revenue recognition forthese commitments is largely driven by our ability to deliver in accordance with relevant contract terms and when
our customers utilize services. We expect to recognize approximately half of the revenue backlog as revenues overthe next 24 months with the remaining to be recognized thereafter. Revenue backlog includes related deferred
revenue currently recorded as well as amounts that will be invoiced in future periods, and excludes contracts withan original expected term of one year or less and cancellable contracts.
Deferred Revenues
We record deferred revenues when cash payments are received or due in advance of our performance,
including amounts which are refundable. Deferred revenues primarily relate to Google Cloud and Google
subscriptions, platforms, and devices. Total deferred revenue as of December 31, 2023 was $5.0 billion, of which$2.4 billion was recognized as revenues during the three months ended March 31, 2024.
Note 3.

Financial Instruments

Fair Value Measurements
Investments Measured at Fair Value on a Recurring Basis
Cash, cash equivalents, and marketable equity securities are measured at fair value and classified within
Level 1 and Level 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets
11

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Alphabet Inc.

or inputs that are based upon quoted prices for similar instruments in active markets.
Debt securities are measured at fair value and classified within Level 2 in the fair value hierarchy, because weuse quoted market prices to the extent available or alternative pricing sources and models utilizing market
observable inputs to determine fair value. For certain marketable debt securities, we have elected the fair value
option for which changes in fair value are recorded in OI&E. The fair value option was elected for these securities toalign with the unrealized gains and losses from related derivative contracts.
The following tables summarize our cash, cash equivalents, and marketable securities measured at fair value
on a recurring basis (in millions):
As of December 31, 2023
Fair Value
Hierarchy

Adjusted
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses$$Fair Value

Cash andCash
Equivalents

Marketable
Securities

$

$

$

Fair value changes
recorded in othercomprehensive
incomeTime deposits

Level 2Government bonds

Level 2

Corporate debt
securities

Level 2Mortgage-backed andasset-backed
securities$

Level 2

Total investmentswith fair valuechange reflected inothercomprehensive
income(1)

$

2,628

0

0

2,628

2,628

0

38,106233(679)

37,6601,993

35,66722,457112(637)

21,932

0

21,932

17,24388(634)

16,697

0

16,697(1,950) $78,917

$

4,621

$

74,296

$

6,480

$

6,480

$

0

80,434$433$

Fair value
adjustments
recorded in net
incomeMoney market funds

Level 1

Current marketable
equity securities(2)Level 1

Mutual funds

Level 2

311

0

311

Government bonds

Level 2

1,952

347

1,605

Corporate debt
securities

Level 2

3,782

91

3,691

Mortgage-backed andasset-backed
securities

Level 2
2,683

0

2,683

4,282

Total investmentswith fair valuechange recorded in
net income

$

Cash
Total
(1)

(2)

19,4900$0$80,434$433$(1,950) $98,407

6,918

4,282

$

12,509$24,048

12,5720$86,868

Represents gross unrealized gains and losses for debt securities recorded to accumulated other comprehensive income(AOCI).
The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $1.4 billion as ofDecember 31, 2023 is included within other non-current assets.

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Alphabet Inc.
As of March 31, 2024
Fair Value
Hierarchy

Adjusted
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses$$Fair Value

Cash andCash
Equivalents

Marketable
Securities

$

$

$

Fair value changes
recorded in othercomprehensive
incomeTime deposits

Level 2Government bonds

Level 2

Corporate debt
securities

Level 2Mortgage-backed andasset-backed
securities$

Level 2

Total investmentswith fair valuechange reflected inothercomprehensive
income(1)

$

2,812

0

0

2,812

0

88

(595)

22,08564(546)

17,01847(642)

16,423(1,783) $76,667

$

5,536

$

71,131

$

6,890

$

6,890

$

0

78,251$

199$

35,8292,812

36,336

21,603

2,724

33,105021,6030

16,423

Fair value
adjustments
recorded in net
incomeMoney market funds

Level 1

Current marketable
equity securities(2)Level 1

Mutual funds

3,998

0

3,998

Level 2

278

0

278

Government bonds

Level 2

1,965

158

1,807

Corporate debt
securities

Level 2

3,772

80

3,692

Mortgage-backed andasset-backed
securities

Level 2
2,691

0

2,691

Total investmentswith fair valuechange recorded in
net income$

19,594(1,783) $96,261

Cash
Total
(1)
(2)

$

0
$

78,251

$

199

$

7,128

$

12,466$

83,597

11,829$24,4930

Represents gross unrealized gains and losses for debt securities recorded to AOCI.
The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $1.4 billion as ofMarch 31, 2024 is included within other non-current assets.

Investments Measured at Fair Value on a Nonrecurring Basis
Our non-marketable equity securities are investments in privately held companies without readily determinable
market values. The carrying value of our non-marketable equity securities is adjusted to fair value upon observabletransactions for identical or similar investments of the same issuer or impairment. Non-marketable equity securities
that have been remeasured during the period based on observable transactions are classified within Level 2 orLevel 3 in the fair value hierarchy. Non-marketable equity securities that have been remeasured due to impairment
are classified within Level 3. Our valuation methods include option pricing models, market comparable approach,and common stock equivalent method, which may include a combination of the observable transaction price at thetransaction date and other unobservable inputs including volatility, expected time to exit, risk free rate, and therights, and obligations of the securities we hold. These inputs significantly vary based on investment type.
As of March 31, 2024, the carrying value of our non-marketable equity securities was $31.4 billion, of which$13.6 billion were remeasured at fair value during the three months ended March 31, 2024 and primarily classified
within Level 2 of the fair value hierarchy at the time of measurement.

13

Table of Contents

Alphabet Inc.

Debt Securities
The following table summarizes the estimated fair value of investments in available-for-sale marketable debt
securities by effective contractual maturity dates (in millions):
As ofMarch 31, 2024$

Due in 1 year or lessDue in 1 year through 5 years
Due in 5 years through 10 years
Due after 10 years
Total

8,551
42,755
13,972
14,04379,321$

The following tables present fair values and gross unrealized losses recorded to AOCI, aggregated byinvestment category and the length of time that individual securities have been in a continuous loss position (inmillions):
As of December 31, 2023
Less than 12 Months

Government bonds
Corporate debt securities
Mortgage-backed and asset-backed
securities
Total

Fair Value

Unrealized
Loss

$

$

$

1,456
827
2,945
5,228

$

12 Months or Greater
Fair Value

Total

Unrealized
Loss

Fair Value(22) $ 13,897(5)
15,367$(657) $ 15,353(592)
16,194(26)
7,916(53) $ 37,180(608)
10,861$ (1,857) $ 42,408

Unrealized
Loss

$

(679)
(597)

(634)
$ (1,910)

As of March 31, 2024
Less than 12 Months
Fair Value

Government bonds
Corporate debt securities
Mortgage-backed and asset-backed
securities
Total$ 14,539
2,653
4,895
$ 22,087

Unrealized
Loss

$

$

12 Months or Greater
Fair Value

Total

Unrealized
Loss

Fair Value(116) $ 9,276(8)
13,022$(479) $ 23,815(494)
15,675(79)6,851(203) $ 29,149(563)
11,746$ (1,536) $ 51,236

Unrealized
Loss

$

(595)
(502)

(642)
$ (1,739)

We determine realized gains or losses on the sale or extinguishment of debt securities on a specificidentification method. The following table summarizes gains and losses for debt securities, reflected as acomponent of OI&E (in millions):Three Months Ended
March 31,
2023

2024

Unrealized gain (loss) on fair value option debt securities$

Gross realized gain on debt securities
Gross realized loss on debt securities(Increase) decrease in allowance for credit losses
Total gain (loss) on debt securities recognized in other income (expense),
net

145 $
57
(492)
(3)

(46)
68
(480)
(4)

$

(293) $

(462)

14

Table of Contents

Alphabet Inc.

Equity Investments
The carrying value of equity securities is measured as the total initial cost plus the cumulative net gain (loss).
Gains and losses, including impairments, are included as a component of OI&E in the Consolidated Statements ofIncome. See Note 6 for further details on OI&E.
The carrying values for marketable and non-marketable equity securities are summarized below (in millions):
As of December 31, 2023
NonMarketable
EquitySecurities

Marketable
EquitySecurities

Total initial cost
Cumulative net gain (loss)(1)
Carrying value
(1)

$
$

5,418
555
5,973

$
$

As of March 31, 2024

Total

17,616
11,15028,766$$

NonMarketable
EquitySecurities

Marketable
EquitySecurities

23,034 $11,70534,739 $5,083 $
570
5,653 $

Total

18,505 $12,92531,430 $23,58813,49537,083Non-marketable equity securities cumulative net gain (loss) is comprised of $18.1 billion gains and $6.9 billion losses(including impairments) as of December 31, 2023 and $20.6 billion gains and $7.7 billion losses (including impairments) asof March 31, 2024.

Gains and Losses on Marketable and Non-marketable Equity Securities
Gains and losses (including impairments), net, for marketable and non-marketable equity securities included in
OI&E are summarized below (in millions):Three Months Ended
March 31,2023

Realized net gain (loss) on equity securities sold during the period$

Unrealized net gain (loss) on marketable equity securities
Unrealized net gain (loss) on non-marketable equity securities(1)Total gain (loss) on equity securities in other income (expense), net

$

(1)

2024

105 $
51
221
377 $

95
164
1,984
2,243

Unrealized gain (loss) on non-marketable equity securities accounted for under the measurement alternative is comprisedof $915 million and $2.8 billion of upward adjustments and $694 million and $814 million of downward adjustments(including impairments) for the three months ended March 31, 2023 and 2024, respectively.

In the table above, realized net gain (loss) on equity securities sold during the period reflects the difference
between the sale proceeds and the carrying value of the equity securities at the beginning of the period or thepurchase date, if later.
Cumulative net gains (losses) on equity securities sold during the period, which is summarized in the following
table (in millions), represents the total net gains (losses) recognized after the initial purchase date of the equity
security sold during the period. While these net gains (losses) may have been reflected in periods prior to the periodof sale, we believe they are important supplemental information as they reflect the economic net gains (losses) on
the securities sold during the period. Cumulative net gains (losses) are calculated as the difference between thesale price and the initial purchase price for the equity security sold during the period.
Equity Securities SoldThree Months Ended
March 31,2023

Total sale priceTotal initial cost
Cumulative net gains (losses)

$
$

2024

312
211
101

$
$

1,090
661
429

Equity Securities Accounted for Under the Equity Method
As of December 31, 2023 and March 31, 2024, equity securities accounted for under the equity method had acarrying value of approximately $1.7 billion and $2.0 billion, respectively. Our share of gains and losses, including
impairments, are included as a component of OI&E, in the Consolidated Statements of Income. See Note 6 forfurther details on OI&E.

15

Derivative Financial Instruments
We use derivative instruments to manage risks relating to our ongoing business operations. The primary risk
managed is foreign exchange risk. We use foreign currency contracts to reduce the risk that our cash flows,
earnings, and investment in foreign subsidiaries will be adversely affected by foreign currency exchange rate
fluctuations. We also enter into derivative instruments to partially offset our exposure to other risks and enhanceinvestment returns.
We recognize derivative instruments in the Consolidated Balance Sheets at fair value and classify thederivatives primarily within Level 2 in the fair value hierarchy. We present our collar contracts (an option strategy
comprised of a combination of purchased and written options) at net fair values and present all other derivatives atgross fair values. The accounting treatment for derivatives is based on the intended use and hedge designation.
Cash Flow Hedges
We designate foreign currency forward and option contracts (including collars) as cash flow hedges to hedge
certain forecasted revenue transactions denominated in currencies other than the United States (U.S.) dollar. These
contracts have maturities of 24 months or less.
Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI andsubsequently reclassified to revenue when the hedged item is recognized in earnings. We exclude forward points
and time value from our assessment of hedge effectiveness and amortize them on a straight-line basis over the lifeof the hedging instrument in revenues. The difference between fair value changes of the excluded component andthe amount amortized to revenues is recorded in AOCI.
As of March 31, 2024, the net accumulated gain on our foreign currency cash flow hedges before tax effect
was $128 million, which is expected to be reclassified from AOCI into revenues within the next 12 months.
Fair Value Hedges
We designate foreign currency forward contracts as fair value hedges to hedge foreign currency risks for ourmarketable securities denominated in currencies other than the U.S. dollar. Fair value hedge amounts included in
the assessment of hedge effectiveness are recognized in OI&E, along with the offsetting gains and losses of therelated hedged items. We exclude forward points from the assessment of hedge effectiveness and recognizechanges in the excluded component in OI&E.
Net Investment Hedges
We designate foreign currency forward contracts as net investment hedges to hedge the foreign currency risks
related to our investment in foreign subsidiaries. Net investment hedge amounts included in the assessment ofhedge effectiveness are recognized in AOCI along with the foreign currency translation adjustment. We exclude
forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in
OI&E.
Other Derivatives
We enter into foreign currency forward and option contracts that are not designated as hedging instruments tohedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than thefunctional currency of a subsidiary. Gains and losses on these derivatives that are not designated as accounting
hedges are primarily recorded in OI&E along with the foreign currency gains and losses on monetary assets andliabilities.
We also use derivatives not designated as hedging instruments to manage risks relating to interest rates,
commodity prices, and credit exposures, and to enhance investment returns. From time to time, we enter into
derivatives to hedge the market price risk on certain of our marketable equity securities. Gains and losses arisingfrom other derivatives are primarily reflected within the “other” component of OI&E. See Note 6 for further details.

16

The gross notional amounts of outstanding derivative instruments were as follows (in millions):
As of December 31,
2023

As of March 31,
2024

Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges
Fair value hedges
Net investment hedges
Derivatives not designated as hedging instruments:
Foreign exchange contracts(1)Other contracts
(1)

$
$
$

18,039
2,065
9,472

$
$
$

17,726
1,847
9,321

$
$

39,722
10,818$$

107,978
10,902

The gross notional amounts of these derivative instruments as of March 31, 2024 reflect a rollover in timing of settlement
into our second quarter as a result of a holiday market closure.

The fair values of outstanding derivative instruments were as follows (in millions):
As of December 31, 2023
Assets(1)As of March 31, 2024

Liabilities(2)Assets(1)Liabilities(2)Derivatives designated as hedging instruments:
Foreign exchange contracts
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other contracts
Total derivatives not designated as hedging instruments
Total
(1)
(2)

$

205

$

242 $

150

$

125

$

134
114
248
453 $

156
47
203
445 $

317
164
481
631 $

221
40
261
386

Derivative assets are recorded as other current and non-current assets in the Consolidated Balance Sheets.
Derivative liabilities are recorded as accrued expenses and other liabilities, current and non-current in the Consolidated
Balance Sheets.

The gains (losses) on derivatives in cash flow hedging and net investment hedging relationships recognized inother comprehensive income (OCI) are summarized below (in millions):Three Months Ended
March 31,
2023

2024

Derivatives in cash flow hedging relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness$Amount excluded from the assessment of effectiveness
Derivatives in net investment hedging relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness
Total

$

17

(138) $

155

47

58

(215)

82

(306) $

295

The table below presents the gains (losses) of our derivatives on the Consolidated Statements of Income: (inmillions):Three Months Ended March 31, 2024
2023
Revenues

Total amounts in the Consolidated Statements of Income
Effect of cash flow hedges:
Foreign exchange contracts
Amount reclassified from AOCI to income
Amount excluded from the assessment ofeffectiveness (amortized)
Effect of fair value hedges:
Foreign exchange contracts
Hedged items
Derivatives designated as hedging instruments
Amount excluded from the assessment ofeffectiveness
Effect of net investment hedges:
Foreign exchange contracts
Amount excluded from the assessment ofeffectiveness
Effect of non designated hedges:
Foreign exchange contracts
Other contracts
Total gains (losses)

2024

Other income(expense), net

Other income(expense), net

Revenues$

69,787$790$

80,539

$

2,843

$

88

$

0

$

74

$

0

$

(4)

0

(2)

0

0
0

32
(32)

0
0

(16)
15

0

5

0

3

0

51

0

36

0
0
84

30
3
89

0
0
72

21
76
135

$

$

$

Offsetting of Derivatives
We enter into master netting arrangements and collateral security arrangements to reduce credit risk. Cashcollateral received related to derivative instruments under our collateral security arrangements are included in othercurrent assets with a corresponding liability. Cash and non-cash collateral pledged related to derivative instruments
under our collateral security arrangements are included in other current assets.
The gross amounts of derivative instruments subject to master netting arrangements with various
counterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (inmillions):
As of December 31, 2023
Gross Amounts Not Offset in
the Consolidated Balance
Sheets, but Have Legal Rights
to Offset

Derivatives assets
Derivatives liabilities

Gross
Amounts
Recognized

Gross
Amounts
Offset in theConsolidated
Balance
Sheets

$
$

$
$

535
527

Net Amounts
Presented intheConsolidated
Balance
Sheets(82) $(82) $

18

Financial
Instruments(1)

453 $
445 $

Cash and
Non-CashCollateral
Received or
Pledged(213) $
(213) $Net Amounts(75) $(16) $

165216

As of March 31, 2024
Gross Amounts Not Offset in
the Consolidated Balance
Sheets, but Have Legal Rights
to Offset

Derivatives assets
Derivatives liabilities
(1)

Gross
Amounts
Recognized

Gross
Amounts
Offset in theConsolidated
Balance
Sheets

$
$

$
$

705
460

Net Amounts
Presented intheConsolidated
Balance
Sheets(74) $(74) $

Financial
Instruments(1)

631 $
386 $

Cash and
Non-CashCollateral
Received or
Pledged(179) $
(179) $Net Amounts(264) $
(9) $

188
198

The balances as of December 31, 2023 and March 31, 2024 were related to derivatives allowed to be net settled inaccordance with our master netting agreements.

Note 4.

Variable Interest Entities (VIE)

Consolidated VIEs
We consolidate VIEs in which we hold a variable interest and are the primary beneficiary. The results ofoperations and financial position of these VIEs are included in our consolidated financial statements.
For certain consolidated VIEs, their assets are not available to us, and their creditors do not have recourse tous. As of December 31, 2023 and March 31, 2024, assets that can only be used to settle obligations of these VIEs
were $4.9 billion and $4.1 billion, respectively, and the liabilities for which creditors only have recourse to the VIEs
were $2.5 billion and $2.2 billion, respectively. We may continue to fund ongoing operations of certain VIEs that areincluded within Other Bets.
Total noncontrolling interests (NCI) in our consolidated subsidiaries were $3.4 billion and $3.2 billion as ofDecember 31, 2023 and March 31, 2024, respectively, of which $1.1 billion and $1.0 billion is redeemablenoncontrolling interest (RNCI) as of December 31, 2023 and March 31, 2024, respectively. NCI and RNCI are
included within additional paid-in capital. Net loss attributable to noncontrolling interests was not material for any
period presented and is included within the "other" component of OI&E. See Note 6 for further details on OI&E.
Unconsolidated VIEs
We have investments in VIEs in which we are not the primary beneficiary. These VIEs include privatecompanies that are primarily early stage companies and certain renewable energy entities in which activities involve
power generation using renewable sources.
We have determined that the governance structures of these entities do not allow us to direct the activities thatwould significantly affect their economic performance. Therefore, we are not the primary beneficiary, and the resultsof operations and financial position of these VIEs are not included in our consolidated financial statements. We
account for these investments primarily as non-marketable equity securities or equity method investments.
The maximum exposure of these unconsolidated VIEs is generally based on the current carrying value of theinvestments and any future funding commitments. The maximum exposure and carrying value of these
unconsolidated VIEs were $5.7 billion and $4.0 billion, respectively, as of December 31, 2023 and $6.9 billion and$5.3 billion, respectively, as of March 31, 2024. The difference between the maximum exposure and the carrying
value relates primarily to future funding commitments.
Note 5.

Debt

Short-Term Debt
We have a debt financing program of up to $10.0 billion through the issuance of commercial paper. Net
proceeds from this program are used for general corporate purposes. We had no commercial paper outstanding asof December 31, 2023 and March 31, 2024.
Our short-term debt balance also includes the current portion of certain long-term debt.

19

Long-Term Debt
Total outstanding debt is summarized below (in millions, except percentages):
Maturity

Debt
2016-2020 Notes issuances
Future finance lease payments, net
and other (1)Total debt
Unamortized discount and debt
issuance costs

Coupon Rate

Effective Interest
Rate

As of
December 31,
2023

2025 - 2060 0.45% - 2.25% 0.57% - 2.33% $13,000As ofMarch 31,2024$

12,0001,746
14,746

1,672
13,672

(130)

(127)

Less: Current portion of long-term
notes(2)(1,000)0Less: Current portion of futurefinance lease payments, net andother current debt(1)(2)
Total long-term debt

(363)
13,253 $

(1)
(2)

$

(317)
13,228Future finance lease payments are net of imputed interest.
Total current portion of long-term debt is included within other accrued expenses and current liabilities. See Note 6 forfurther details.

The notes in the table above are fixed-rate senior unsecured obligations and rank equally with each other. We
may redeem the notes at any time in whole or in part at specified redemption prices. The effective interest rates are
based on proceeds received with interest payable semi-annually.
The total estimated fair value of the outstanding notes was approximately $10.3 billion and $9.0 billion as ofDecember 31, 2023 and March 31, 2024, respectively. The fair value was determined based on observable market
prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value
hierarchy.
Credit Facility
As of March 31, 2024, we had $10.0 billion of revolving credit facilities, of which $4.0 billion expires in April
2024 and $6.0 billion expires in April 2028. In April 2024, we entered into a new $4.0 billion revolving credit facility
expiring in April 2025. The interest rates for all credit facilities are determined based on a formula using certain
market rates, as well as our progress toward the achievement of certain sustainability goals. No amounts were
outstanding under the credit facilities as of December 31, 2023 and March 31, 2024.
Note 6.

Supplemental Financial Statement Information

Accounts Receivable
The allowance for credit losses on accounts receivable was $771 million and $745 million as of December 31,
2023 and March 31, 2024, respectively.
Property and Equipment, Net
Property and equipment, net, consisted of the following (in millions):
As of
December 31, 2023

Land and buildings$

Information technology assets
Construction in progress
Leasehold improvements
Furniture and fixtures
Property and equipment, gross
Less: accumulated depreciation
Property and equipment, net$

20

74,083 $80,59435,22911,425472
201,803(67,458)
134,345 $As ofMarch 31, 2024

77,421
85,97637,679
11,576534
213,186(70,004)
143,182

Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in millions):
As of
December 31, 2023

European Commission fines(1)Accrued purchases of property and equipment
Accrued customer liabilities
Current operating lease liabilities
Income taxes payable, net
Other accrued expenses and current liabilities
Accrued expenses and other current liabilities
(1)

$

9,525
4,679
4,140
2,791
2,748
22,285
46,168$

As ofMarch 31, 2024

$

9,475
5,666
4,355
2,874
4,926
21,307
48,603$

While each European Commission (EC) decision is under appeal, the fines are included in accrued expenses and othercurrent liabilities on our Consolidated Balance Sheets, as we provided bank guarantees (in lieu of a cash payment) for thefines. Amounts include the effects of foreign exchange and interest. See Note 8 for further details.

Accumulated Other Comprehensive Income (Loss)
Components of AOCI, net of income tax, were as follows (in millions):
Foreign
Currency
Translation
Adjustments

Balance as of December 31, 2022
Other comprehensive income (loss) before
reclassifications
Amounts excluded from the assessment of hedge
effectiveness recorded in AOCI
Amounts reclassified from AOCIOther comprehensive income (loss)
Balance as of March 31, 2023

$

$

$

Other comprehensive income (loss) before
reclassifications
Amounts excluded from the assessment of hedge
effectiveness recorded in AOCI
Amounts reclassified from AOCIOther comprehensive income (loss)
Balance as of March 31, 2024$

21

Unrealized
Gains(Losses) on
Cash Flow
HedgesTotal(4,142) $(3,477) $

16

596

866

(121)

1,341

0
0
596
(3,546) $

0
292
1,158
(2,319) $

47
(77)
(151)
(135) $

47
215
1,603
(6,000)Foreign
Currency
Translation
Adjustments

Balance as of December 31, 2023

Unrealized
Gains(Losses) on
Available-forSale
Investments

Unrealized
Gains(Losses) on
Available-forSale
Investments(3,407) $$Unrealized
Gains(Losses) on
Cash Flow
Hedges(965) $

(30) $

(503)

(360)

128

0
0
(503)
(3,910) $

0
311
(49)
(1,014) $

58
(71)
115
85 $

(7,603)

Total(4,402)
(735)
58
240
(437)
(4,839)

The effects on net income of amounts reclassified from AOCI were as follows (in millions):Three Months Ended
March 31,
AOCI Components

Location

2023

Unrealized gains (losses) on available-for-sale investments
Other income (expense), net
Benefit (provision) for income taxes
Net of income tax
Unrealized gains (losses) on cash flow hedges
Foreign exchange
contracts
Revenue
Interest rate contracts
Other income (expense), net
Benefit (provision) for income taxes
Net of income tax
Total amount reclassified, net of income tax

$

$

2024

(374) $
82
(292)

(399)
88
(311)

88
2
(13)
77
(215) $

74
1
(4)
71
(240)

Other Income (Expense), Net
Components of OI&E were as follows (in millions):Three Months Ended
March 31,2023

Interest income
Interest expense(1)Foreign currency exchange gain (loss), net
Gain (loss) on debt securities, net
Gain (loss) on equity securities, net
Performance fees
Income (loss) and impairment from equity method investments, net
Other
Other income (expense), net
(1)

$

$

2024

797 $
(80)
(210)
(293)
377
118
(51)
132
790 $

1,061
(94)
(238)
(462)
2,243
104
(26)
255
2,843

Interest expense is net of interest capitalized of $40 million and $43 million for the three months ended March 31, 2023 and2024, respectively.

Note 7.

Goodwill

Goodwill
Changes in the carrying amount of goodwill for the three months ended March 31, 2024 were as follows (inmillions):
GoogleServices

Balance as of December 31, 2023
Acquisitions
Foreign currency translation and other adjustments
Balance as of March 31, 2024
Note 8.

$$

Google Cloud

21,118 $9(22)
21,105 $7,199 $
0(2)
7,197 $

Other Bets

881
0
0
881

Total

$

$

29,1989(24)
29,183

Commitments and Contingencies

Commitments
We have content licensing agreements with future fixed or minimum guaranteed commitments of $10.1 billion
as of March 31, 2024, of which the majority is paid quarterly through the first quarter of 2030.

22

Indemnifications
In the normal course of business, including to facilitate transactions in our services and products and corporate
activities, we indemnify certain parties, including advertisers, Google Network partners, distribution partners,
customers of Google Cloud offerings, lessors, and service providers with respect to certain matters. We haveagreed to defend and/or hold certain parties harmless against losses arising from a breach of representations or
covenants, or out of intellectual property infringement or other claims made against certain parties. Several of these
agreements limit the time within which an indemnification claim can be made and the amount of the claim. In
addition, we have entered into indemnification agreements with our officers and directors, and our bylaws containsimilar indemnification obligations to our agents.
It is not possible to make a reasonable estimate of the maximum potential amount under these indemnificationagreements due to the unique facts and circumstances involved in each particular agreement. Additionally, thepayments we have made under such agreements have not had a material adverse effect on our results ofoperations, cash flows, or financial position. However, to the extent that valid indemnification claims arise in the
future, future payments by us could be significant and could have a material adverse effect on our results ofoperations or cash flows in a particular period.
As of March 31, 2024, we did not have any material indemnification claims that were probable or reasonably
possible.
Legal Matters
We record a liability when we believe that it is probable that a loss has been incurred, and the amount can bereasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be
estimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could
affect the amount of liability that has been previously accrued, and the matters and related reasonably possible
losses disclosed, and make adjustments as appropriate.
Certain outstanding matters seek speculative, substantial or indeterminate monetary amounts, substantialchanges to our business practices and products, or structural remedies. Significant judgment is required todetermine both the likelihood of there being a loss and the estimated amount of a loss related to such matters, andwe may be unable to estimate the reasonably possible loss or range of losses. The outcomes of outstanding legal
matters are inherently unpredictable and subject to significant uncertainties, and could, either individually or inaggregate, have a material adverse effect.
We expense legal fees in the period in which they are incurred.
Antitrust Matters
On November 30, 2010, the EC's Directorate General for Competition opened an investigation into various
antitrust-related complaints against us.
•

On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display
and ranking of shopping search results and ads infringed European competition law. The EC decision
imposed a €2.4 billion ($2.7 billion as of June 27, 2017) fine. On September 11, 2017, we appealed the EC
decision to the General Court, and on September 27, 2017, we implemented product changes to bring
shopping ads into compliance with the EC's decision. We recognized a charge of $2.7 billion for the fine in
the second quarter of 2017. On November 10, 2021, the General Court rejected our appeal, and we
subsequently filed an appeal with the European Court of Justice on January 20, 2022.

•

On July 18, 2018, the EC announced its decision that certain provisions in Google’s Android-related
distribution agreements infringed European competition law. The EC decision imposed a €4.3 billion ($5.1
billion as of June 30, 2018) fine and directed the termination of the conduct at issue. On October 9, 2018,
we appealed the EC decision, and on October 29, 2018, we implemented changes to certain of our Android
distribution practices. On September 14, 2022, the General Court reduced the fine from €4.3 billion to€4.1 billion. We subsequently filed an appeal with the European Court of Justice. In 2018, we recognized acharge of $5.1 billion for the fine, which we reduced by $217 million in 2022.

•

On March 20, 2019, the EC announced its decision that certain contractual provisions in agreements that
Google had with AdSense for Search partners infringed European competition law. The EC decision
imposed a fine of €1.5 billion ($1.7 billion as of March 20, 2019) and directed actions related to AdSense for
Search partners' agreements, which we implemented prior to the decision. On June 4, 2019, we appealed
the EC decision. We recognized a charge of $1.7 billion for the fine in the first quarter of 2019.

23

In addition, on July 7, 2021, a number of state Attorneys General filed an antitrust complaint in the U.S. District
Court for the Northern District of California, alleging that Google’s operation of Android and Google Play violated
U.S. antitrust laws and state antitrust and consumer protection laws. In September 2023, we reached a settlementin principle with 50 state Attorneys General and three territories. The U.S. District Court subsequently vacated thetrial date with the states, and we expect any final approval of the settlement would come in 2024.
In December 2023, a California jury delivered a verdict in a similar lawsuit in Epic Games v. Google. The jury
found that Google violated antitrust laws related to Google Play's business. Epic did not seek monetary damages.
The presiding judge will determine non-monetary remedies in 2024, and the range of potential remedies vary widely.
We plan to appeal.
From time to time we are subject to formal and informal inquiries and investigations on various competition
matters by regulatory authorities in the U.S., Europe, and other jurisdictions globally. Examples, for which given theirnature we cannot estimate a possible loss include:•

In August 2019, we began receiving civil investigative demands from the U.S. Department of Justice (DOJ)
requesting information and documents relating to our prior antitrust investigations and certain aspects of ourbusiness. The DOJ and a number of state Attorneys General filed a lawsuit in the U.S. District Court for theDistrict of Columbia on October 20, 2020 alleging that Google violated U.S. antitrust laws relating to Searchand Search advertising. The trial ended on November 16, 2023, and we expect a decision in 2024. Further,in June 2022, the Australian Competition and Consumer Commission (ACCC) and the United Kingdom'sCompetition and Markets Authority (CMA) each opened an investigation into Search distribution practices.

•

On December 16, 2020, a number of state Attorneys General filed an antitrust complaint in the U.S. District
Court for the Eastern District of Texas, alleging that Google violated U.S. antitrust laws as well as state
deceptive trade laws relating to its advertising technology, and a trial is scheduled for March 2025.
Additionally, on January 24, 2023, the DOJ, along with a number of state Attorneys General, filed an
antitrust complaint in the U.S. District Court for the Eastern District of Virginia alleging that Google’s digitaladvertising technology products violate U.S. antitrust laws, and on April 17, 2023, a number of additional
state Attorneys General joined the complaint. A trial is scheduled for September 2024. The EC, the CMA,
and the ACCC each opened a formal investigation into Google's advertising technology business practices
on June 22, 2021, May 25, 2022, and June 29, 2022, respectively. On June 14, 2023, the EC issued aStatement of Objections (SO) informing Google of its preliminary view that Google violated European
antitrust laws relating to its advertising technology. We responded to the SO on December 1, 2023.

•

In May 2022, the EC and the CMA each opened investigations into Google Play’s business practices.
Korean regulators are investigating Google Play's billing practices, including a formal review in May 2022 of
Google's compliance with the new app store billing regulations.

We believe we have strong arguments against these claims and will defend ourselves vigorously. We continue
to cooperate with federal and state regulators in the U.S., the EC, and other regulators around the world.
Privacy Matters
We are subject to a number of privacy-related laws and regulations, and we currently are party to a number ofprivacy investigations and lawsuits ongoing in multiple jurisdictions. For example, there are ongoing investigations
and litigation in the U.S. and the European Union, including those relating to our collection and use of location
information and advertising practices, which could result in significant fines, judgments, and product changes.
Patent and Intellectual Property Claims
We have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming thatcertain of our products, services, and technologies infringe others' intellectual property rights. Adverse results inthese lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, ororders preventing us from offering certain features, functionalities, products, or services. As a result, we may haveto change our business practices and develop non-infringing products or technologies, which could result in a lossof revenues for us and otherwise harm our business. In addition, the U.S. International Trade Commission (ITC) has
increasingly become an important forum to litigate intellectual property disputes because an ultimate loss in an ITC
action can result in a prohibition on importing infringing products into the U.S. Because the U.S. is an important
market, a prohibition on importation could have an adverse effect on us, including preventing us from importing
many important products into the U.S. or necessitating workarounds that may limit certain features of our products.

24

Furthermore, many of our agreements with our customers and partners require us to indemnify them against
certain intellectual property infringement claims, which would increase our costs as a result of defending suchclaims, and may require that we pay significant damages if there were an adverse ruling in any such claims. In
addition, our customers and partners may discontinue the use of our products, services, and technologies, as aresult of injunctions or otherwise, which could result in loss of revenues and adversely affect our business.
Other
We are subject to claims, lawsuits, regulatory and government investigations, other proceedings, and consent
orders involving competition, intellectual property, data security, tax and related compliance, labor and employment,commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using
our platforms, personal injury, consumer protection, and other matters. For example, we periodically have data
incidents that we report to relevant regulators as required by law. Such claims, consent orders, lawsuits, regulatoryand government investigations, and other proceedings could result in substantial fines and penalties, injunctive
relief, ongoing monitoring and auditing obligations, changes to our products and services, alterations to ourbusiness models and operations, and collateral related civil litigation or other adverse consequences, all of which
could harm our business, reputation, financial condition, and operating results.
We have ongoing legal matters relating to Russia. For example, civil judgments that include compounding
penalties have been imposed upon us in connection with disputes regarding the termination of accounts, including
those of sanctioned parties. We do not believe these ongoing legal matters will have a material adverse effect.
Non-Income Taxes
We are under audit by various domestic and foreign tax authorities with regards to non-income tax matters.
The subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied
to the sale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We
accrue non-income taxes that may result from examinations by, or any negotiated agreements with, these tax
authorities when a loss is probable and reasonably estimable. If we determine that a loss is reasonably possible andthe loss or range of loss can be estimated, we disclose the reasonably possible loss. Due to the inherent complexity
and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materiallydifferent from our expectations.
See Note 12 for information regarding income tax contingencies.
Note 9.

Stockholders' Equity

Share Repurchases
During the three months ended March 31, 2023 and 2024, we repurchased $15.1 billion and $16.1 billion,
respectively, of Alphabet's Class A and Class C shares.
In April 2023, the Board of Directors of Alphabet authorized the company to repurchase up to $70.0 billion of its
Class A and Class C shares. As of March 31, 2024, $20.4 billion remained available for Class A and Class C share
repurchases. In April 2024, the Board of Directors of Alphabet authorized the company to repurchase up to an
additional $70.0 billion of its Class A and Class C shares.
The following table presents Class A and Class C shares repurchased and subsequently retired (in millions):Three Months Ended March 31, 2024
Shares

(1)

Amount

23 $
88
111 $

Class A share repurchases
Class C share repurchases
Total share repurchases(1)3,350
12,707
16,057

Shares repurchased include unsettled repurchases as of March 31, 2024.

Class A and Class C shares are repurchased in a manner deemed in the best interest of the company and its
stockholders, taking into account the economic cost and prevailing market conditions, including the relative trading
prices and volumes of the Class A and Class C shares. Repurchases are executed from time to time, subject togeneral business and market conditions and other investment opportunities, through open market purchases or
privately negotiated transactions, including through Rule 10b5-1 plans. The repurchase program does not have an
expiration date.

25

Dividends
On April 25, 2024, the Board of Directors of Alphabet declared a cash dividend of $0.20 per share to be paid on
June 17, 2024, to stockholders of record as of June 10, 2024, on each of the company’s Class A, Class B, andClass C shares.
The company intends to pay quarterly cash dividends in the future, subject to review and approval by thecompany’s Board of Directors in its sole discretion. In connection with the cash dividend (and any future dividend
the company’s Board of Directors may declare from time to time), the company will also award dividend equivalent
units to holders of all unvested stock units in accordance with the Alphabet Inc. Amended and Restated 2021 Stock
Plan and pursuant to each holder’s outstanding stock unit grant agreements, as amended.
Note 10.

Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share of Class A, Class B,
and Class C stock (in millions, except per share amounts):
Three Months Ended March 31,
2023
Class A

2024

Class BClass CClass AClass BClass C

Basic net income per share:
Numerator
Allocation of undistributed earnings

$

7,006

$

1,040

$

7,005

$

11,213

$

1,656

$

10,793

Denominator
Number of shares used in per share computation
Basic net income per share

5,949

883

5,949

5,883

869

5,663

$

1.18

$

1.18

$

1.18

$

1.91

$

1.91

$

1.91

$

7,006

$

1,040

$

7,005

$

11,213

$

1,656

$

10,793

Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic
computation
Reallocation of undistributed earnings as a result of
conversion of Class B to Class A shares
Reallocation of undistributed earnings
Allocation of undistributed earnings

$

1,040

0

0

1,656

0

0

(27)

(4)

27

(115)

(15)

115

8,019

$

1,036

$

7,032

$

12,754

$

1,641

$

10,908

Denominator
Number of shares used in basic computation

5,949

883

5,949

5,883

869

5,663

Conversion of Class B to Class A shares outstanding

883

0

0

869

0

0

Restricted stock units and other contingently issuable
shares

0

0

42

0

0

112

Weighted-average effect of dilutive securities
Add:

Number of shares used in per share computation
Diluted net income per share

6,832
$

1.17

883
$

1.17

5,991
$

1.17

6,752
$

1.89

869
$

1.89

5,775
$

1.89

For the periods presented above, the net income per share amounts are the same for Class A, Class B, andClass C stock because the holders of each class are entitled to equal per share dividends or distributions inliquidation in accordance with the Amended and Restated Certificate of Incorporation of Alphabet Inc.
Note 11.

Compensation Plans

Stock-Based Compensation
For the three months ended March 31, 2023 and 2024, total stock based compensation (SBC) expense was$5.3 billion, including amounts associated with awards we expect to settle in Alphabet stock of $5.1 billion, for both
periods.

26

Stock-Based Award Activities
The following table summarizes the activities for unvested Alphabet restricted stock units (RSUs) for the threemonths ended March 31, 2024 (in millions, except per share amounts):
WeightedAverage
Grant-Date
Fair Value

Number of
SharesUnvested as of December 31, 2023

338
159
(49)
(8)
440

Granted
VestedForfeited/canceled
Unvested as of March 31, 2024

$
$
$
$
$

104.93133.43107.61106.64114.91

As of March 31, 2024, there was $48.7 billion of unrecognized compensation cost related to unvested RSUs.
This amount is expected to be recognized over a weighted-average period of 2.9 years.
Note 12.

Income Taxes

The following table presents provision for income taxes (in millions, except for effective tax rate):
Three Months Ended
March 31,

Income before provision for income taxes
Provision for income taxes
Effective tax rate

$
$

2023

2024

18,205$3,154$
17.3 %

28,315
4,653
16.4 %We are subject to income taxes in the U.S. and foreign jurisdictions. Significant judgment is required in
evaluating our uncertain tax positions and determining our provision for income taxes. The total amount of grossunrecognized tax benefits was $9.4 billion and $10.2 billion, of which $7.4 billion and $8.1 billion, if recognized,
would affect our effective tax rate, as of December 31, 2023 and March 31, 2024, respectively.
Note 13.

Information about Segments and Geographic Areas

We report our segment results as Google Services, Google Cloud, and Other Bets:•

Google Services includes products and services such as ads, Android, Chrome, devices, Google Maps,
Google Play, Search, and YouTube. Google Services generates revenues primarily from advertising; fees
received for consumer subscription-based products such as YouTube TV, YouTube Music and Premium,and NFL Sunday Ticket, as well as Google One; the sale of apps and in-app purchases and devices.

•

Google Cloud includes infrastructure and platform services, collaboration tools, and other services forenterprise customers. Google Cloud generates revenues primarily from consumption-based fees andsubscriptions received for Google Cloud Platform services, Google Workspace communication andcollaboration tools, and other enterprise services.

•

Other Bets is a combination of multiple operating segments that are not individually material. Revenues
from Other Bets are generated primarily from the sale of healthcare-related services and internet services.

Revenues, certain costs, such as costs associated with content and traffic acquisition, certain engineering
activities, and devices, as well as certain operating expenses are directly attributable to our segments. Due to theintegrated nature of Alphabet, other costs and expenses, such as technical infrastructure and office facilities, aremanaged centrally at a consolidated level. These costs, including the associated depreciation and impairment, areallocated to operating segments as a service cost generally based on usage, headcount, or revenue.
Certain costs are not allocated to our segments because they represent Alphabet-level activities. These costs
primarily include AI-focused shared R&D activities, including development costs of our general AI models; corporate
initiatives such as our philanthropic activities; corporate shared costs such as certain finance, human resource, andlegal costs, including certain fines and settlements. Charges associated with employee severance and office space
reductions during 2023 and employee severance in the first quarter of 2024, were not allocated to our segments.
Additionally, hedging gains (losses) related to revenue are not allocated to our segments.
Our operating segments are not evaluated using asset information.
27

The following table presents information about our segments (in millions):Three Months Ended
March 31,
2023

Revenues:
Google Services
Google Cloud
Other Bets
Hedging gains (losses)
Total revenues

$

$

2024

61,961
7,454
288
84
69,787$70,3989,574
495
72
80,539$Three Months Ended
March 31,2023

Operating income (loss):
Google Services
Google Cloud
Other Bets
Alphabet-level activities
Total income from operations

$

$

2024

21,737 $191(1,225)(3,288)17,415 $27,897900(1,020)(2,305)25,472

See Note 2 for information relating to revenues by geography.
The following table presents long-lived assets by geographic area, which includes property and equipment, net
and operating lease assets (in millions):
As of
December 31, 2023

Long-lived assets:
United States
International
Total long-lived assets

$
$

28

110,053
38,383
148,436

As ofMarch 31, 2024$$

117,085
39,865
156,950ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Please read the following discussion and analysis of our financial condition and results of operations together
with "Note About Forward-Looking Statements" and our consolidated financial statements and related notes
included under Item 1 of this Quarterly Report on Form 10-Q as well as our Annual Report on Form 10-K for the
fiscal year ended December 31, 2023, including Part I, Item 1A "Risk Factors," as updated in this Quarterly Reporton Form 10-Q.
Understanding Alphabet’s Financial Results
Alphabet is a collection of businesses — the largest of which is Google. We report Google in two segments,
Google Services and Google Cloud; we also report all non-Google businesses collectively as Other Bets. For further
details on our segments, see Note 13 of the Notes to Consolidated Financial Statements included in Item 1 of thisQuarterly Report on Form 10-Q.
Revenues and Monetization Metrics
We generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions thatprovide enterprise customers of all sizes with infrastructure and platform services as well as communication andcollaboration tools; sales of other products and services, such as fees received for subscription-based products,
apps and in-app purchases, and devices. For additional information on how we recognize revenue, see Note 1 of
the Notes to Consolidated Financial Statements included in Part II, Item 8 in our Annual Report on Form 10-K forthe fiscal year ended December 31, 2023.
In addition to the long-term trends and their financial effect on our business discussed in "Trends in Our
Business and Financial Effect" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, fluctuations in our revenues have been and may continue to be affected by a combination offactors, including:•changes in foreign currency exchange rates;•changes in pricing, such as those resulting from changes in fee structures, discounts, and customer
incentives;•

general economic conditions and various external dynamics, including geopolitical events, regulations, andother measures and their effect on advertiser, consumer, and enterprise spending;•new product and service launches; and•seasonality.

Additionally, fluctuations in our revenues generated from advertising ("Google advertising"), revenues fromother sources ("Google subscriptions, platforms, and devices revenues"), Google Cloud, and Other Bets revenues
have been, and may continue to be, affected by other factors unique to each set of revenues, as described below.
Google Services
Google Services revenues consist of Google advertising as well as Google subscriptions, platforms, anddevices revenues.
Google Advertising
Google advertising revenues are comprised of the following:•

Google Search & other, which includes revenues generated on Google search properties (including
revenues from traffic generated by search distribution partners who use Google.com as their default searchin browsers, toolbars, etc.), and other Google owned and operated properties like Gmail, Google Maps, andGoogle Play;•

YouTube ads, which includes revenues generated on YouTube properties; and•Google Network, which includes revenues generated on Google Network properties participating in AdMob,
AdSense, and Google Ad Manager.

We use certain metrics to track how well traffic across various properties is monetized as it relates to ouradvertising revenues: paid clicks and cost-per-click pertain to traffic on Google Search & other properties, while
impressions and cost-per-impression pertain to traffic on our Google Network properties.

29

Paid clicks represent engagement by users and include clicks on advertisements by end-users on Google
search properties and other Google owned and operated properties including Gmail, Google Maps, and Google
Play. Cost-per-click is defined as click-driven revenues divided by our total number of paid clicks and represents theaverage amount we charge advertisers for each engagement by users.
Impressions include impressions displayed to users on Google Network properties participating primarily in
AdMob, AdSense, and Google Ad Manager. Cost-per-impression is defined as impression-based and click-based
revenues divided by our total number of impressions, and represents the average amount we charge advertisers foreach impression displayed to users.
As our business evolves, we periodically review, refine, and update our methodologies for monitoring,gathering, and counting the number of paid clicks and the number of impressions, and for identifying the revenues
generated by the corresponding click and impression activity.
Fluctuations in our advertising revenues, as well as the change in paid clicks and cost-per-click on Google
Search & other properties and the change in impressions and cost-per-impression on Google Network properties
and the correlation between these items have been, and may continue to be, affected by factors in addition to thegeneral factors described above, such as:•advertiser competition for keywords;•

changes in advertising quality, formats, delivery or policy;•

changes in device mix;•

seasonal fluctuations in internet usage, advertising expenditures, and underlying business trends, such as
traditional retail seasonality; and•traffic growth in emerging markets compared to more mature markets and across various verticals andchannels.
Google subscriptions, platforms, and devices
Google subscriptions, platforms, and devices revenues are comprised of the following:•

consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV,
YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One;•platforms, which primarily include revenues from Google Play from the sales of apps and in-app purchases;•

devices, which primarily include sales of the Pixel family of devices; and•other products and services.

Fluctuations in our Google subscriptions, platforms, and devices revenues have been, and may continue to be,affected by factors in addition to the general factors described above, such as changes in customer usage anddemand, number of subscribers, and fluctuations in the timing of product launches.
Google Cloud
Google Cloud revenues are comprised of the following:•

Google Cloud Platform, which generates consumption-based fees and subscriptions for infrastructure,platform, and other services. These services provide access to solutions such as cybersecurity, databases,
analytics, and AI offerings including our AI infrastructure, Vertex AI platform, and Gemini for Google Cloud;•Google Workspace, which includes subscriptions for cloud-based communication and collaboration tools forenterprises, such as Calendar, Gmail, Docs, Drive, and Meet, with integrated features like Gemini for
Google Workspace; and•other enterprise services.

Fluctuations in our Google Cloud revenues have been, and may continue to be, affected by factors in addition
to the general factors described above, such as customer usage.
Other Bets
Revenues from Other Bets are generated primarily from the sale of healthcare-related services and internet
services.

30

Costs and Expenses
Our cost structure has two components: cost of revenues and operating expenses. Our operating expenses
include costs related to R&D, sales and marketing, and general and administrative functions. Certain of our costs
and expenses, including those associated with the operation of our technical infrastructure as well as componentsof our operating expenses, are generally less variable in nature and may not correlate to changes in revenue.
Additionally, fluctuations in compensation expenses may not directly correlate with changes in headcount, inparticular due to annual SBC awards that generally vest over four years.
Cost of Revenues
Cost of revenues is comprised of TAC and other costs of revenues.
••

TAC includes:◦

amounts paid to our distribution partners who make available our search access points andservices. Our distribution partners include browser providers, mobile carriers, original equipment
manufacturers, and software developers; and◦amounts paid to Google Network partners primarily for ads displayed on their properties.

Other cost of revenues primarily includes:◦

compensation expense related to our data centers and other operations such as content review andcustomer and product support;◦

content acquisition costs, which are payments to content providers from whom we license video
and other content for distribution on YouTube and Google Play (we pay fees to these content
providers based on revenues generated or a flat fee);◦

depreciation expense related to our technical infrastructure; and◦inventory and other costs related to the devices we sell.

TAC as a percentage of revenues generated from ads placed on Google Network properties are significantly
higher than TAC as a percentage of revenues generated from ads placed on Google Search & other properties,
because most of the advertiser revenues from ads served on Google Network properties are paid as TAC to our
Google Network partners.
Operating Expenses
Operating expenses are generally incurred during our normal course of business, which we categorize as
either R&D, sales and marketing, or general and administrative.
The main components of our R&D expenses are:•compensation expenses for engineering and technical employees responsible for R&D related to ourexisting and new products and services;•

depreciation; and•third-party services fees primarily relating to consulting and outsourced services in support of ourengineering and product development efforts.
The main components of our sales and marketing expenses are:•compensation expenses for employees engaged in sales and marketing, sales support, and certain
customer service functions; and•spending relating to our advertising and promotional activities in support of our products and services.
The main components of our general and administrative expenses are:•compensation expenses for employees in finance, human resources, information technology, legal, andother administrative support functions;•

expenses relating to legal matters, including certain fines and settlements; and•third-party services fees, including audit, consulting, outside legal, and other outsourced administrative
services.

31

Other Income (Expense), Net
OI&E, net primarily consists of interest income (expense), the effect of foreign currency exchange gains(losses), net gains (losses) and impairment on our marketable and non-marketable securities, performance fees,
and income (loss) and impairment from our equity method investments.
For additional information, including how we account for our investments and factors that can drive fluctuationsin the value of our investments, see Note 1 of the Notes to Consolidated Financial Statements included in Part II,
Item 8 and Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10K for the fiscal year ended December 31, 2023 as well as Note 3 of the Notes to Consolidated Financial Statements
included in Item 1 of this Quarterly Report on Form 10-Q.
Provision for Income Taxes
Provision for income taxes represents the estimated amount of federal, state, and foreign income taxes
incurred in the U.S. and the many jurisdictions in which we operate. The provision includes the effect of reserve
provisions and changes to reserves that are considered appropriate as well as the related net interest and penalties.
For additional information, see Note 1 of the Notes to Consolidated Financial Statements included in Part II,
Item 8 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as well as Note 12 of theNotes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.
Executive Overview
The following table summarizes our consolidated financial results (in millions, except per share informationand percentages):Three Months Ended
March 31,
2023

2024

Consolidated revenues
Change in consolidated constant currency revenues(1)$ 69,787$ 80,539$

10,75215 %16 %Cost of revenues
Operating expenses$ 30,612$ 21,760$ 33,712$ 21,355

$
$

3,100
(405)

10 %
(2)%

Operating income
Operating margin$ 17,415$ 25,472
$
25 %
32 %

8,057

46 %
7%

Other income (expense), net$

Net Income
Diluted EPS
(1)

790

% Change

2,843

$

2,053

260 %

$ 15,051$ 23,662

$

8,611

57 %

$

$

$

0.72

62 %

1.17

$

$ Change

1.89

See "Use of Non-GAAP Constant Currency Measures" below for details relating to our use of constant currency
information.

•

Revenues were $80.5 billion, an increase of 15% year over year, primarily driven by an increase in Google
Services revenues of $8.4 billion, or 14%, and an increase in Google Cloud revenues of $2.1 billion, or
28%.

•

Total constant currency revenues, which exclude the effect of hedging, increased 16% year over year.

•

Cost of revenues was $33.7 billion, an increase of 10% year over year, primarily driven by increases in TAC,
content acquisition costs, and depreciation expense. These increases were partially offset by decreases incompensation expenses, largely the result of a reduction in employee severance and related charges, andcharges related to our office space optimization efforts.

•

Operating expenses were $21.4 billion, a decrease of 2% year over year, primarily driven by decreases incharges related to our office space optimization efforts, compensation expenses, largely the result of areduction in employee severance and related charges, and charges related to legal matters. These
decreases were partially offset by an increase in depreciation expense.
32

Other Information•

On April 25, 2024, the Board of Directors of Alphabet approved the initiation of a cash dividend program,and declared a cash dividend of $0.20 per share that will be paid on June 17, 2024, to stockholders ofrecord as of June 10, 2024, on each of the company’s Class A, Class B, and Class C shares. See Note 9 of
the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-Q for
additional information.

•

Repurchases of Class A and Class C shares were $3.4 billion and $12.7 billion, respectively, totaling $16.1
billion for the three months ended March 31, 2024. In April 2024, the Board of Directors of Alphabet
authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares.
For additional information, see Note 9 of the Notes to Consolidated Financial Statements included in Item 1of this Quarterly Report on Form 10-Q for additional information.

•

Compensation expenses included employee severance and related charges for the three months ended
March 31, 2024 of $716 million, a $1.3 billion decrease in severance and related charges as compared tothe three months ended March 31, 2023. For the first quarter of 2024, these charges are included withincost of revenues, research and development, sales and marketing, and general and administrative
expenses in the amounts of $153 million, $247 million, $217 million, and $99 million, respectively.

•

Operating cash flow was $28.8 billion for the three months ended March 31, 2024.

•

Capital expenditures, which primarily reflected investments in technical infrastructure, were $12.0 billion for
the three months ended March 31, 2024.

•

As of March 31, 2024, we had 180,895 employees.

Financial Results
Revenues
The following table presents revenues by type (in millions):Three Months Ended
March 31,2023

Google Search & other
YouTube ads
Google Network
Google advertising
Google subscriptions, platforms, and devices$

Google Services total
Google Cloud
Other Bets
Hedging gains (losses)
Total revenues$

40,3596,693
7,496
54,548
7,413
61,961
7,454
288
84
69,7872024$$

46,156
8,090
7,413
61,6598,739
70,3989,574
495
72
80,539Google Services
Google advertising revenues
Google Search & other
Google Search & other revenues increased $5.8 billion from the three months ended March 31, 2023 to thethree months ended March 31, 2024. The overall growth was driven by interrelated factors including increases insearch queries resulting from growth in user adoption and usage on mobile devices; growth in advertiser spending;and improvements we have made in ad formats and delivery.
YouTube ads
YouTube ads revenues increased $1.4 billion from the three months ended March 31, 2023 to the threemonths ended March 31, 2024. The growth was driven by our direct response and brand advertising products, bothof which benefited from increased spending by our advertisers.

33

Google Network
Google Network revenues decreased $83 million from the three months ended March 31, 2023 to the threemonths ended March 31, 2024 primarily driven by a decrease in AdSense revenues.
Monetization Metrics
The following table presents changes in monetization metrics for Google Search & other revenues (paid clicks
and cost-per-click) and Google Network revenues (impressions and cost-per-impression), expressed as apercentage, from three months ended March 31, 2023 to three months ended March 31, 2024:
Google Search & other
Paid clicks change
Cost-per-click change
Google Network
Impressions change
Cost-per-impression change

5%
8%
(13)%
14 %

Changes in paid clicks and impressions are driven by a number of interrelated factors, including changes inadvertiser spending; ongoing product and policy changes; and, as it relates to paid clicks, fluctuations in search
queries resulting from changes in user adoption and usage, primarily on mobile devices.
Changes in cost-per-click and cost-per-impression are driven by a number of interrelated factors includingchanges in device mix, geographic mix, advertiser spending, ongoing product and policy changes, product mix,
property mix, and changes in foreign currency exchange rates.
Google subscriptions, platforms, and devices
Google subscriptions, platforms, and devices revenues increased $1.3 billion from the three months ended
March 31, 2023 to the three months ended March 31, 2024, primarily driven by an increase in subscription
revenues, largely from growth in the number of paid subscribers for YouTube services.
Google Cloud
Google Cloud revenues increased $2.1 billion from the three months ended March 31, 2023 to the threemonths ended March 31, 2024. Growth was primarily driven by Google Cloud Platform followed by Google
Workspace offerings. Google Cloud's infrastructure and platform services were the largest drivers of growth in
Google Cloud Platform.
Revenues by Geography
The following table presents revenues by geography as a percentage of revenues, determined based on theaddresses of our customers:
Three Months Ended
March 31,2023

United States
EMEA
APAC
Other Americas
Hedging gains (losses)

2024

47 %
30 %
17 %
6%
0%

48 %
30 %
16 %
6%
0%

For additional information, see Note 2 of the Notes to Consolidated Financial Statements included in Item 1 ofthis Quarterly Report on Form 10-Q.
Use of Non-GAAP Constant Currency Information
International revenues, which represent a significant portion of our revenues, are generally transacted in
multiple currencies and therefore are affected by fluctuations in foreign currency exchange rates.
The effect of currency exchange rates on our business is an important factor in understanding period-to-period
comparisons. We use non-GAAP constant currency revenues ("constant currency revenues") and non-GAAP
percentage change in constant currency revenues ("percentage change in constant currency revenues") for34

financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe
the presentation of results on a constant currency basis in addition to GAAP results helps improve the ability tounderstand our performance, because it excludes the effects of foreign currency volatility that are not indicative of
our core operating results.
Constant currency information compares results between periods as if exchange rates had remained constantperiod over period. We define constant currency revenues as revenues excluding the effect of foreign currency
exchange rate movements ("FX Effect") as well as hedging activities, which are recognized at the consolidated
level. We use constant currency revenues to determine the constant currency revenue percentage change on a
year-on-year basis. Constant currency revenues are calculated by translating current period revenues using prioryear comparable period exchange rates, as well as excluding any hedging effects realized in the current period.
Constant currency revenue percentage change is calculated by determining the change in current period
revenues over prior year comparable period revenues where current period foreign currency revenues aretranslated using prior year comparable period exchange rates and hedging effects are excluded from revenues ofboth periods.
These results should be considered in addition to, not as a substitute for, results reported in accordance with
GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titledmeasures used by other companies and are not a measure of performance presented in accordance with GAAP.
The following table presents the foreign currency exchange effect on international revenues and total revenues(in millions, except percentages):Three Months Ended March 31, 2024
% Change from Prior Period
Three Months Ended
March 31,2023
United States$Less FX
Effect2024

32,864$38,737$0Constant
Currency
Revenues$As
Reported

Less
Hedging
EffectLess FX
EffectConstant
Currency
Revenues

38,737

18 %

0%

18 %

EMEA

21,07823,788204

23,584

13 %

1%

12 %

APAC

11,681

13,289(439)

13,728

14 %

(4)%

18 %

Other Americas

4,080

4,653

(152)

4,805

14 %

(4)%

18 %

Revenues, excluding hedging
effect

69,70380,467(387)

80,854

15 %

(1)%

16 %

80,854

15 %

(1)%

16 %

Hedging gains (losses)
Total revenues(1)
(1)

84
$

69,78772$

80,539$0%Total constant currency revenues of $80.9 billion for the three months ended March 31, 2024 increased $11.2 billion
compared to $69.7 billion in revenues, excluding hedging effect, for the three months ended March 31, 2023.

EMEA revenue growth was favorably affected by changes in foreign currency exchange rates, primarily due tothe U.S. dollar weakening relative to the Euro, partially offset by the U.S. dollar strengthening relative to the Turkishlira.
APAC revenue growth was unfavorably affected by changes in foreign currency exchange rates, primarily due
to the U.S. dollar strengthening relative to the Japanese yen.
Other Americas revenue growth was unfavorably affected by changes in foreign currency exchange rates,
primarily due to the U.S. dollar strengthening relative to the Argentine peso.

35

Costs and Expenses
Cost of Revenues
The following table presents cost of revenues, including TAC (in millions, except percentages):Three Months Ended
March 31,

TAC
Other cost of revenues
Total cost of revenues
Total cost of revenues as a percentage of revenues

$
$

2023

2024

11,721$
18,891
30,612$44 %

12,946
20,76633,71242 %Cost of revenues increased $3.1 billion from the three months ended March 31, 2023 to the three months
ended March 31, 2024 due to an increase in other cost of revenues and TAC of $1.9 billion and $1.2 billion,
respectively.
The increase in TAC from the three months ended March 31, 2023 to the three months ended March 31, 2024
was largely due to an increase in TAC paid to distribution partners, primarily driven by growth in revenues subject toTAC. The TAC rate decreased from 21.5% to 21.0% from the three months ended March 31, 2023 to the threemonths ended March 31, 2024 primarily due to a revenue mix shift from Google Network properties to Google
Search & other properties. The TAC rate on Google Search & other revenues was substantially consistent from thethree months ended March 31, 2023 to the three months ended March 31, 2024. The TAC rate on Google Network
revenues reflected a slight increase from the three months ended March 31, 2023 to the three months ended March
31, 2024 due to a combination of factors, none of which were individually significant.
The increase in other cost of revenues from the three months ended March 31, 2023 to the three months
ended March 31, 2024 was primarily due to increases in content acquisition costs, largely for YouTube, anddepreciation expense. These increases were partially offset by decreases in compensation expenses, largely the
result of a reduction in employee severance and related charges of $308 million, and charges related to our officespace optimization efforts of $220 million.
Research and Development
The following table presents R&D expenses (in millions, except percentages):Three Months Ended
March 31,

Research and development expenses
Research and development expenses as a percentage of revenues

$

2023

2024

11,468$16 %

11,90315 %R&D expenses increased $435 million from the three months ended March 31, 2023 to the three months
ended March 31, 2024, primarily driven by increases in depreciation expense of $308 million and third-party
services fees of $253 million, partially offset by a decrease in charges associated with our office space optimization
efforts of $247 million. Additionally, a decrease in compensation expenses of $64 million was primarily the result of areduction in employee severance and related charges of $588 million. This decrease was partially offset by anincrease in SBC expense of $320 million, excluding employee severance and related charges.
Sales and Marketing
The following table presents sales and marketing expenses (in millions, except percentages):Three Months Ended
March 31,2023

Sales and marketing expenses
Sales and marketing expenses as a percentage of revenues

$

6,533
$
9%

2024

6,426
8%

Sales and marketing expenses decreased $107 million from the three months ended March 31, 2023 to thethree months ended March 31, 2024, primarily driven by a decrease in compensation expenses of $85 million,36

largely the result of a reduction in employee severance and related charges of $228 million, partially offset by a
combination of factors, none of which were individually significant.
General and Administrative
The following table presents general and administrative expenses (in millions, except percentages):Three Months Ended
March 31,2023

General and administrative expenses
General and administrative expenses as a percentage of revenues

$

2024

3,759
$
5%

3,026
4%

General and administrative expenses decreased $733 million from the three months ended March 31, 2023 to
the three months ended March 31, 2024, primarily driven by a reduction in charges related to legal matters of $248
million and a combination of factors, none of which were individually significant.
Segment Profitability
The following table presents segment operating income (loss) (in millions):Three Months Ended
March 31,2023

Operating income (loss):
Google Services
Google Cloud
Other Bets
Alphabet-level activities(1)Total income from operations
(1)

$

$

21,737 $191(1,225)(3,288)17,415 $2024

27,897900(1,020)(2,305)25,472

In addition to the costs included in Alphabet-level activities, hedging gains (losses) related to revenue were $84 million and$72 million for the three months ended March 31, 2023 and 2024, respectively. For the three months ended March 31,
2023 and 2024, Alphabet-level activities included substantially all of the charges related to employee severance and ouroffice space optimization efforts. For additional information relating to our segments, see Note 13 of the Notes toConsolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.

Google Services
Google Services operating income increased $6.2 billion from the three months ended March 31, 2023 to thethree months ended March 31, 2024. The increase in operating income was primarily driven by an increase inrevenues, partially offset by increases in TAC and content acquisition costs. Additionally, a reduction incompensation expenses contributed to the increase in operating income.
Google Cloud
Google Cloud operating income increased $709 million from the three months ended March 31, 2023 to thethree months ended March 31, 2024. The increase in operating income was primarily driven by an increase inrevenues, partially offset by increases in compensation expenses, largely driven by headcount growth, and usage
costs for technical infrastructure assets.
Other Bets
Other Bets operating loss decreased $205 million from the three months ended March 31, 2023 to the threemonths ended March 31, 2024 primarily due to growth in revenues.

37

Other Income (Expense), Net
The following table presents OI&E (in millions):Three Months Ended
March 31,2023

Interest income
Interest expense
Foreign currency exchange gain (loss), net
Gain (loss) on debt securities, net
Gain (loss) on equity securities, net
Performance fees
Income (loss) and impairment from equity method investments, net
Other
Other income (expense), net

$

$

2024

797
(80)
(210)
(293)
377
118
(51)
132
790

$

1,061
(94)
(238)
(462)
2,243
104
(26)
255
2,843

$

OI&E increased $2.1 billion from the three months ended March 31, 2023 to the three months ended March 31,
2024. The increase was primarily due to net unrealized gains in non-marketable equity securities due to fair value
adjustments related to observable transactions and increased interest income due to interest rates.
For additional information, see Note 6 of the Notes to Consolidated Financial Statements included in Item 1 ofthis Quarterly Report on Form 10-Q for further information.
Provision for Income Taxes
The following table presents provision for income taxes (in millions, except effective tax rate):
Three Months Ended
March 31,

Income before provision for income taxes
Provision for income taxes
Effective tax rate

$
$

2023

2024

18,205$3,154$
17.3 %

28,315
4,653
16.4 %The effective tax rate decreased from the three months ended March 31, 2023 to the three months ended
March 31, 2024, primarily due to the tax rule change related to U.S. federal foreign tax credits issued by the IRS in
July 2023 and an increase in stock-based compensation-related tax benefits, partially offset by a decrease in the
U.S. federal Foreign Derived Intangible Income tax deduction and an increase in taxes for certain U.S. jurisdictions.
The OECD is coordinating negotiations among more than 140 countries with the goal of achieving consensus
around substantial changes to international tax policies, including the implementation of a minimum global effective
tax rate of 15%. Some countries have already implemented the legislation effective January 1, 2024, and we expect
others to follow, however we do not expect a material change to our income tax provision for the 2024 fiscal year. As
additional jurisdictions enact such legislation, transitional rules lapse, and other provisions of the minimum tax
legislation become effective, we expect our effective tax rate and cash tax payments could increase in future years.
Financial Condition
Cash, Cash Equivalents, and Marketable Securities
As of March 31, 2024, we had $108.1 billion in cash, cash equivalents, and short-term marketable securities.
Cash equivalents and marketable securities are comprised of time deposits, money market funds, highly liquid
government bonds, corporate debt securities, mortgage-backed and asset-backed securities, and marketable equity
securities.
Sources, Uses of Cash and Related Trends
Our principal sources of liquidity are cash, cash equivalents, and marketable securities, as well as the cash
flow that we generate from operations. The primary use of capital continues to be to invest for the long-term growthof the business. We regularly evaluate our cash and capital structure, including the size, pace, and form of capital
return to stockholders.
38

The following table presents our cash flows (in millions):Three Months Ended
March 31,2023

Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities

$
$
$

2024

23,509 $(2,946) $(16,568) $28,848(8,564)(19,714)

Cash Provided by Operating Activities
Our largest source of cash provided by operations are advertising revenues generated by Google Search &other properties, Google Network properties, and YouTube properties. In Google Services, we also generate cash
through consumer subscriptions and the sale of apps and in-app purchases and devices. In Google Cloud, we
generate cash through consumption-based fees and subscriptions for infrastructure, platform, collaboration tools,
and other cloud services.
Our primary uses of cash from operating activities include payments to distribution and Google Network
partners, to employees for compensation, and to content providers. Other uses of cash from operating activities
include payments to suppliers for devices, to tax authorities for income taxes, and other general corporate
expenditures.
Net cash provided by operating activities increased from the three months ended March 31, 2023 to the threemonths ended March 31, 2024 due to the increase in cash received from customers, partially offset by an increasein cash payments for cost of revenues and operating expenses.
Cash Used in Investing Activities
Cash provided by investing activities consists primarily of maturities and sales of investments in marketable
and non-marketable securities. Cash used in investing activities consists primarily of purchases of marketable andnon-marketable securities, purchases of property and equipment, and payments for acquisitions.
Net cash used in investing activities increased from the three months ended March 31, 2023 to the threemonths ended March 31, 2024 primarily due to an increase in purchases of property and equipment.
Cash Used in Financing Activities
Cash provided by financing activities consists primarily of proceeds from issuance of debt and proceeds fromthe sale of interests in consolidated entities. Cash used in financing activities consists primarily of repurchases ofstock, net payments related to stock-based award activities, and repayments of debt.
Net cash used in financing activities increased from the three months ended March 31, 2023 to the threemonths ended March 31, 2024 due to increases in net repayments related to debt, net payments related to stockbased award activities, and repurchases of stock.
Liquidity and Material Cash Requirements
We expect existing cash, cash equivalents, short-term marketable securities, cash flows from operations andfinancing activities to continue to be sufficient to fund our operating activities and cash commitments for investing
and financing activities for at least the next 12 months and thereafter for the foreseeable future.
Capital Expenditures and Leases
We make investments in land and buildings for data centers and offices and information technology assets
through purchases of property and equipment and lease arrangements to provide capacity for the growth of ourservices and products.
Capital Expenditures
Our capital investments in property and equipment consist primarily of the following major categories:•

technical infrastructure, which consists of our investments in servers and network equipment for computing,storage, and networking requirements for ongoing business activities, including AI, (collectively referred toas our information technology assets) and data center land and building construction; and•office facilities, ground-up development projects, and building improvements (also referred to as "fit-outs").

39

Construction in progress consists primarily of technical infrastructure and office facilities which have not yet
been placed in service. The time frame from date of purchase to placement in service of these assets may extend
from months to years. For example, our data center construction projects are generally multi-year projects withmultiple phases, where we acquire land and buildings, construct buildings, and secure and install information
technology assets.
During the three months ended March 31, 2023 and 2024, we spent $6.3 billion and $12.0 billion on capital
expenditures, respectively. We expect to increase, relative to 2023, our investment in our technical infrastructure,including servers, network equipment, and data centers, to support the growth of our business and our long-term
initiatives, in particular in support of AI products and services. Depreciation of our property and equipment
commences when the deployment of such assets are completed and are ready for our intended use. Land is notdepreciated. For the three months ended March 31, 2023 and 2024, our depreciation on property and equipment
was $2.6 billion and $3.4 billion, respectively.
LeasesFor the three months ended March 31, 2023 and 2024, we recognized total operating lease assets of $1.1
billion and $0.4 billion, respectively. As of March 31, 2024, the amount of total future lease payments underoperating leases, which had a weighted average remaining lease term of 8 years, was $17.2 billion.
As of March 31, 2024, we have entered into leases that have not yet commenced with future lease payments
of $3.6 billion, that are not yet recorded on our Consolidated Balance Sheets. These leases will commence between
2024 and 2026 with non-cancelable lease terms of one to 25 years.
For the three months ended March 31, 2023 and 2024, our operating lease expenses (including variable lease
costs) were $1.1 billion and $1.1 billion, respectively. Finance lease costs were not material for the three months
ended March 31, 2023 and 2024.
Financing
We have a short-term debt financing program of up to $10.0 billion through the issuance of commercial paper.
Net proceeds from this program are used for general corporate purposes. As of March 31, 2024, we had nocommercial paper outstanding.
As of March 31, 2024, we had $10.0 billion of revolving credit facilities, $4.0 billion expiring in April 2024 and$6.0 billion expiring in April 2028. In April 2024, we entered into a new $4.0 billion revolving credit facility expiring in
April 2025.The interest rates for all credit facilities are determined based on a formula using certain market rates, aswell as our progress toward the achievement of certain sustainability goals. No amounts have been borrowed under
the credit facilities.
As of March 31, 2024, we had senior unsecured notes outstanding with a total carrying value of $11.9 billion.
For additional information, see Note 5 of the Notes to Consolidated Financial Statements included in Item 1 of thisQuarterly Report on Form 10-Q.
We primarily utilize contract manufacturers for the assembly of our servers used in our technical infrastructureand devices we sell. We have agreements where we may purchase components directly from suppliers and thensupply these components to contract manufacturers for use in the assembly of the servers and devices. Certain of
these arrangements result in a portion of the cash received from and paid to the contract manufacturers to bepresented as financing activities in the Consolidated Statements of Cash Flows included in Item 1 of this Quarterly
Report on Form 10-Q.
Share Repurchase Program
During the three months ended March 31, 2024, we repurchased and subsequently retired 111 million sharesfor $16.1 billion.
In April 2023, the Board of Directors of Alphabet authorized the company to repurchase up to $70.0 billion of its
Class A and Class C shares. As of March 31, 2024, $20.4 billion remained available for Class A and Class C share
repurchases. In April 2024, the Board of Directors of Alphabet authorized the company to repurchase up to an
additional $70.0 billion of its Class A and Class C shares.
The following table presents Class A and Class C shares repurchased and subsequently retired (in millions):40

Three Months Ended March 31, 2024
SharesClass A share repurchases
Class C share repurchases
Total share repurchases(1)(1)

Amount

23 $
88
111 $

3,350
12,707
16,057

Shares repurchased include unsettled repurchases as of March 31, 2024.

For additional information, see Note 9 of the Notes to Consolidated Financial Statements included in Item 1 ofthis Quarterly Report on Form 10-Q.
Dividend Program
On April 25, 2024, the Board of Directors of Alphabet declared a cash dividend of $0.20 per share to be paid on
June 17, 2024, to stockholders of record as of June 10, 2024, on each of the company’s Class A, Class B, andClass C shares.
The company intends to pay quarterly cash dividends in the future, subject to review and approval by thecompany’s Board of Directors in its sole discretion. In connection with the cash dividend (and any future dividend
the company’s Board of Directors may declare from time to time), the company will also award dividend equivalent
units to holders of all unvested stock units in accordance with the Alphabet Inc. Amended and Restated 2021 Stock
Plan and pursuant to each holder’s outstanding stock unit grant agreements, as amended.
European Commission Fines
In 2017, 2018 and 2019, the EC announced decisions that certain actions taken by Google infringed European
competition law and imposed fines of €2.4 billion ($2.7 billion as of June 27, 2017), €4.3 billion ($5.1 billion as ofJune 30, 2018), and €1.5 billion ($1.7 billion as of March 20, 2019), respectively. On September 14, 2022, theGeneral Court reduced the 2018 fine from €4.3 billion to €4.1 billion. We subsequently filed an appeal to theEuropean Court of Justice.
While each EC decision is under appeal, we included the fines in accrued expenses and other current liabilities
on our Consolidated Balance Sheets as we provided bank guarantees (in lieu of a cash payment) for the fines. For
additional information, see Note 8 of the Notes to Consolidated Financial Statements included in Item 1 of thisQuarterly Report on Form 10-Q.
Taxes
As of March 31, 2024, we had income taxes payable of $4.2 billion, of which $2.1 billion was short-term,
related to a one-time transition tax payable incurred as a result of the U.S. Tax Cuts and Jobs Act ("Tax Act"). As
permitted by the Tax Act, we will pay the transition tax in annual interest-free installments through 2025. We also
have long-term taxes payable of $7.1 billion primarily related to uncertain tax positions as of March 31, 2024.
Purchase Commitments and Other Contractual Obligations
As of March 31, 2024, we had material purchase commitments and other contractual obligations of $44.0
billion, of which $29.4 billion was short-term. These amounts primarily consist of purchase orders for certain
technical infrastructure as well as the non-cancelable portion or the minimum cancellation fee in certain agreements
related to commitments to purchase licenses, including content licenses, inventory and network capacity. For thoseagreements with variable terms, we do not estimate the non-cancelable obligation beyond any minimum quantities
and/or pricing as of March 31, 2024. In certain instances, the amount of our contractual obligations may change
based on the expected timing of order fulfillment from our suppliers. For more information related to our content
licenses, see Note 8 of the Notes to Consolidated Financial Statements included in Item I of this Quarterly Reporton Form 10-Q.
In addition we regularly enter into multi-year, non-cancellable agreements to purchase renewable energy andenergy attributes, such as renewable energy certificates. These agreements do not include a minimum dollar
commitment. The amounts to be paid under these agreements are based on the actual volumes to be generated
and are not readily determinable.
Critical Accounting Estimates
See Part II, Item 7, "Critical Accounting Estimates" in our Annual Report on Form 10-K for the year ended
December 31, 2023.

41

Available Information
Our website is located at www.abc.xyz, and our investor relations website is located at www.abc.xyz/investor.
Access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and
our Proxy Statements, and any amendments to these reports, is available on our investor relations website, free ofcharge, after we file or furnish them with the SEC and they are available on the SEC's website at www.sec.gov.
We webcast via our investor relations website our earnings calls and certain events we participate in or hostwith members of the investment community. Our investor relations website also provides notifications of news orannouncements regarding our financial performance and other items of interest to our investors, including SEC
filings, investor events, press and earnings releases, and blogs. We also share Google news and product updates
on Google’s Keyword blog at https://www.blog.google/, which may be of interest or material to our investors.
Further, corporate governance information, including our certificate of incorporation, bylaws, governance guidelines,
board committee charters, and code of conduct, is also available on our investor relations website under theheading "Governance." The content of our websites is not incorporated by reference into this Quarterly Report on
Form 10-Q or in any other report or document we file with the SEC, and any references to our websites areintended to be inactive textual references only.
ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKFor quantitative and qualitative disclosures about market risk, refer to Part II, Item 7A, Quantitative andQualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for the year ended December 31,
2023.
ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated theeffectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of theend of the period covered by this Quarterly Report on Form 10-Q.
Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of March 31,
2024, our disclosure controls and procedures are designed at a reasonable assurance level and are effective toprovide reasonable assurance that information we are required to disclose in reports that we file or submit under the
Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s
rules and forms, and that such information is accumulated and communicated to our management, including ourchief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required
disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter
ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving
the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that
there are resource constraints and that management is required to apply its judgment in evaluating the benefits ofpossible controls and procedures relative to their costs.

42

PART II.

OTHER INFORMATIONITEM 1.

LEGAL PROCEEDINGSFor a description of our material pending legal proceedings, see Note 8 “Commitments and Contingencies Legal Matters” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Reporton Form 10-Q, which is incorporated herein by reference.
ITEM 1A.

RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties, including those described inPart I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, which
could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of
our stock. Below are material changes to our risk factors since our Annual Report on Form 10-K for the year ended
December 31, 2023.
Risks Specific to our Company
We generate a significant portion of our revenues from advertising. Reduced spending by advertisers,a loss of partners, or new and existing technologies that block ads online and/or affect our ability tocustomize ads could harm our business.
We generated more than 75% of total revenues from online advertising in 2023. Many of our advertisers,
companies that distribute our products and services, digital publishers, and content providers can terminate theircontracts with us at any time. These partners may not continue to do business with us if we do not create morevalue (such as increased numbers of users or customers, new sales leads, increased brand awareness, or more
effective monetization) than their available alternatives. Changes to our advertising policies and data privacy
practices, such as our initiatives to phase out third-party cookies (which remain subject to review, affecting thetiming), as well as changes to other companies’ advertising and/or data privacy practices have in the past, and may
in the future, affect the advertising that we are able to provide. In addition, technologies have been developed thatmake customized ads more difficult, or that block the display of ads altogether, and some providers of online
services have integrated these technologies that could potentially impair the availability and functionality of thirdparty digital advertising. Failing to provide superior value or deliver advertisements effectively and competitively
could harm our business, reputation, financial condition, and operating results.
In addition, expenditures by advertisers tend to correlate with overall economic conditions. Adverse
macroeconomic conditions have affected, and may in the future affect, the demand for advertising, resulting influctuations in the amounts our advertisers spend on advertising, which could harm our financial condition andoperating results.
Risks Related to Ownership of our Stock
We cannot guarantee that any share repurchase program or dividend program will be continuously
active or fully consummated or will enhance long-term stockholder value, and share repurchases ordividends could increase the volatility of our stock prices and could diminish our cash reserves.
We engage in share repurchases of our Class A and Class C stock from time to time in accordance withauthorizations from the Board of Directors of Alphabet. Our repurchase program does not have an expiration dateand does not obligate Alphabet to repurchase any specific dollar amount or to acquire any specific number ofshares. In April 2024, we announced the approval of a cash dividend to our Class A, Class B and Class C
stockholders. Any and all future cash dividends are subject to declaration by the Board of Directors at their sole
discretion, and in accordance with the requirements of any applicable laws, rules and regulations, including theDelaware General Corporation Law. Our cash dividend program does not require, and our Board of Directors may
not declare, a cash dividend each quarter, and does not obligate our Board of Directors to declare a dividend in any
specific dollar amount per share. Further, our share repurchases or dividends could affect our share trading prices,increase their volatility, reduce our cash reserves and may be suspended or terminated at any time, which may
result in a decrease in the trading prices of our stock.
The trading price for our Class A stock and non-voting Class C stock may continue to be volatile.
The trading price of our stock has at times experienced significant volatility and may continue to be volatile. In
addition to the factors discussed in this report, the trading prices of our Class A stock and Class C stock havefluctuated, and may continue to fluctuate widely, in response to various factors, including, among others, the size orcontinuity of either our share repurchase or dividend programs, the activities of our peers and changes in broader

43

economic and political conditions around the world. These broad market and industry factors could harm the market
price of our Class A stock and our Class C stock, regardless of our actual operating performance.
ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities
The following table presents information with respect to Alphabet's repurchases of Class A and Class C stockduring the quarter ended March 31, 2024.

PeriodTotal Number ofClass A Shares
Purchased(in thousands)

Total Number ofClass C Shares
Purchased(in thousands)

9,717
7,568
5,949
23,234

29,62328,80429,23087,657(1)

January 1 - 31
February 1 - 29
March 1 - 31
Total

(1)

Average Price
Paid per ClassA Share (2)$$$Average Price
Paid per ClassC Share (2)145.11 $143.82 $143.08 $146.28144.75143.86

Total Number of
SharesPurchased as
Part of Publicly
Announced
Programs(in thousands)(1)

39,34036,37235,179110,891

Approximate
Dollar Value of
Shares that May
Yet BePurchased
Under theProgram(in millions)$$$30,64825,42920,404(1)

Repurchases are being executed from time to time, subject to general business and market conditions and otherinvestment opportunities, through open market purchases or privately negotiated transactions, including through Rule10b5-1 plans. The repurchase program does not have an expiration date. For additional information related to share
repurchases, see Note 9 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly
Report on Form 10-Q.

(2)

Average price paid per share includes costs associated with the repurchases.

ITEM 5.

OTHER INFORMATION

10b5-1 Trading Plans
During the fiscal quarter ended March 31, 2024, no Section 16 director or officer adopted, modified, or
terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act).
There were no “non-Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K of the
Exchange Act) adopted, modified or terminated during the fiscal quarter ended March 31, 2024 by our directors andSection 16 officers.
Compensatory Arrangements of Certain Officers
On April 16, 2024, the Leadership Development, Inclusion and Compensation Committee of the Board of
Directors of Alphabet approved the accrual of dividend equivalent units to holders of all unvested stock units,subject to the approval of a dividend declaration by the Board of Directors of the Company (which was approved
and announced on April 25, 2024). This approval covers both performance stock unit awards and Google stock unit
awards, and applies both to currently outstanding and future equity awards. For the avoidance of doubt, thecorresponding amendments to the respective stock unit grant agreements will apply both to currently outstanding
grant agreements and all future grant agreements. As stock units are not outstanding shares of stock and thus
would not otherwise be entitled to participate in any dividends (including the one referenced above), the crediting ofdividend equivalent units is intended to preserve the equity-based incentives intended by the Company when thestock units were granted and to treat the holders of stock units consistently with all stockholders.

44

ITEM 6.

EXHIBITS

Exhibit
Number

10.01
10.02
10.03

Incorporated by reference herein
Form
Date

Description* ♦ Alphabet Inc. Amended and Restated 2021 Stock Plan –Form of Alphabet Restricted Stock Unit Agreement* ♦ Alphabet Inc. Amended and Restated 2021 Stock Plan –Form of Alphabet CEO Performance Stock Unit Agreement* ♦ Alphabet Inc. Amended and Restated 2021 Stock Plan –Form of Alphabet Non-CEO Performance Stock Unit
Agreement

31.01

*

Certification of Chief Executive Officer pursuant to Exchange
Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

31.02

*

Certification of Chief Financial Officer pursuant to Exchange
Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

32.01

‡

Certifications of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*

Inline XBRL Instance Document - the instance document
does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document.

101.SCH *101.CAL *101.DEF *101.LAB *101.PRE *104*

Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Linkbase
Document
Inline XBRL Taxonomy Extension Definition Linkbase
Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase
Document
Cover Page Interactive Data File (formatted as Inline XBRLand contained in Exhibit 101)__________________________♦*‡

Indicates management compensatory plan, contract, or arrangement.
Filed herewith.
Furnished herewith.

45

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned thereunto duly authorized.

ALPHABET INC.
April 25, 2024

By: /s/

RUTH M. PORAT

Ruth M. Porat
President and Chief Investment Officer; Chief Financial Officer

ALPHABET INC.
April 25, 2024

By: /s/AMIE THUENER O'TOOLE

Amie Thuener O'Toole
Vice President, Corporate Controller and Principal Accounting
Officer46