Alphabet Announces Fourth Quarter and Fiscal Year 2023 Results
MOUNTAIN VIEW, Calif. – January 30, 2024 – Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced
financial results for the quarter and fiscal year ended December 31, 2023.
Sundar Pichai, CEO, said: “We are pleased with the ongoing strength in Search and the growing contribution from
YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter theGemini era, the best is yet to come.”
Ruth Porat, President and Chief Investment Officer; CFO said: “We ended 2023 with very strong fourth quarter
financial results, with Q4 consolidated revenues of $86 billion, up 13% year over year. We remain committed to ourwork to durably re-engineer our cost base as we invest to support our growth opportunities.”
Q4 2023 Financial Highlights
The following table summarizes our consolidated financial results for the quarters and years ended December 31,
2022 and 2023 (in millions, except for per share information and percentages).
Quarter Ended
December 31,
2022
2023

Year Ended
December 31,
2022
2023

Revenues
Change in revenues year over year
Change in constant currency revenues year over year(1)(unaudited)(unaudited)$ 76,048$ 86,310$ 282,836$ 307,394
1%
13 %
10 %
9%
7%
13 %
14 %
10 %

Operating income
Operating margin$ 18,160$ 23,697$ 74,842$ 84,293
24 %
27 %
26 %
27 %

Other income (expense), net$

Net income
Diluted EPS$ 13,624
$
1.05

(1)

(1,013)$715$ 20,687$
1.64$(3,514)$ 59,972
$
4.56

$

1,424

$ 73,795$
5.80

Non-GAAP measure. See the table captioned “Reconciliation from GAAP revenues to non-GAAP constant currency
revenues and GAAP percentage change in revenues to non-GAAP percentage change in constant currency revenues” formore details.

Q4 2023 Supplemental Information (in millions, except for number of employees; unaudited)
Revenues, Traffic Acquisition Costs (TAC), and Number of Employees

Google Search & other
YouTube ads
Google Network
Google advertising
Google subscriptions, platforms, and devices(1)Google Services total
Google Cloud
Other Bets
Hedging gains (losses)
Total revenues

Quarter Ended December 31,
2022
2023
$
42,604 $48,020
7,963
9,200
8,475
8,297
59,04265,517
8,796
10,794
67,83876,311
7,315
9,192
226
657
669
150
$
76,048 $86,310Total TAC$

Number of employees(1)12,925$

190,234

13,986
182,502

Formerly “Google other.”Segment Operating Results
Quarter Ended December 31,
2022
2023
Operating income (loss):
Google Services
Google Cloud
Other Bets
Alphabet-level activities(1)Total income from operations(1)$

20,222 $(186)(1,237)(639)

26,730864(863)(3,034)$

18,160 $23,697

Formerly “corporate costs, unallocated.” In addition to the costs included in Alphabet-level activities, hedging gains (losses)
related to revenue were $669 million and $150 million for the three months ended December 31, 2022 and 2023,
respectively. For the quarter ended December 31, 2023, Alphabet-level activities included charges related to the reduction
in force and our office space optimization efforts totaling $1.2 billion and $62 million in accelerated rent and accelerated
depreciation.

Additional Information Relating to the Quarter Ended December 31, 2023 (unaudited)
Reductions in Our Workforce and Office SpaceIn January 2023, we announced a reduction of our workforce, and as a result we recorded employee severance andrelated charges of $2.1 billion for the twelve months ended December 31, 2023. In addition, we are taking actions
to optimize our global office space. As a result, exit charges recorded during the three and twelve months ended
December 31, 2023, were $1.2 billion and $1.8 billion, respectively. In addition to these exit charges, for the three
and twelve months ended December 31, 2023, we incurred $62 million and $269 million, respectively, in
accelerated rent and accelerated depreciation.

2

Severance and office space exit charges are included within our consolidated statements of income as follows (inmillions):
Quarter Ended December 31, 2023
Severance
and Related

Cost of revenues
Research and development
Sales and marketing
General and administrative
Total charges$$

Office Space

2 $
1
3
1
7 $

Total

235 $
602
198
161
1,196 $

Year Ended December 31, 2023
Severance
and Related

237 $
603
201
162
1,203 $

Office Space

479 $
848
497
264
2,088 $

481 $
870
257
237
1,845 $

Total

960
1,718
754
501
3,933

For segment reporting, the substantial majority of these charges are included within Alphabet-level activities in our
segment results.
Change in Useful Lives of Our Server and Network Equipment
In January 2023, we completed an assessment of the useful lives of our servers and network equipment andadjusted the estimated useful life of our servers from four years to six years and the estimated useful life of certain
network equipment from five years to six years. This change in accounting estimate was effective beginning in fiscal
year 2023, and the effect was a reduction in depreciation expense of $983 million and $3.9 billion and an increasein net income of $765 million and $3.0 billion, or $0.06 and $0.24 per basic and $0.06 and $0.24 per diluted sharefor the three and twelve months ended December 31, 2023, respectively.
Webcast and Conference Call Information
A live audio webcast of our fourth quarter 2023 earnings release call will be available on YouTube at https://www.youtube.com/watch?v=b4alwdVvn4Q. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press
release, including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures,is also available at http://abc.xyz/investor.
We also provide announcements regarding our financial performance, including SEC filings, investor events, press
and earnings releases, and blogs, on our investor relations website (http://abc.xyz/investor).
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.
Forward-Looking Statements
This press release may contain forward-looking statements that involve risks and uncertainties. Actual results may
differ materially from the results predicted, and reported results should not be considered as an indication of future
performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted
include, among others, those risks and uncertainties included under the captions “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K forthe year ended December 31, 2022 and our most recent Quarterly Report on Form 10-Q for the quarter ended
September 30, 2023, which are on file with the SEC and are available on our investor relations website at http://
abc.xyz/investor and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual
Report on Form 10-K for the year ended December 31, 2023, and may be set forth in other reports and filings wemake with the SEC. All information provided in this release and in the attachments is as of January 30, 2024. Undue
reliance should not be placed on the forward-looking statements in this press release, which are based on
information available to us on the date hereof. We undertake no duty to update this information unless required bylaw.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP,
we use the following non-GAAP financial measures: free cash flow; constant currency revenues; and percentagechange in constant currency revenues. The presentation of this financial information is not intended to beconsidered in isolation or as a substitute for, or superior to, the financial information prepared and presented inaccordance with GAAP.
We use these non-GAAP financial measures for financial and operational decision-making and as a means toevaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful3supplemental information regarding our performance and liquidity by excluding certain items that may not be
indicative of our recurring core business operating results, such as our revenues excluding the effect of foreignexchange rate movements and hedging activities, which are recognized at the consolidated level. We believe thatboth management and investors benefit from referring to these non-GAAP financial measures in assessing our
performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures
also facilitate management’s internal comparisons to our historical performance and liquidity as well as comparisons
to our competitors’ operating results. We believe these non-GAAP financial measures are useful to investors bothbecause (1) they allow for greater transparency with respect to key metrics used by management in its financial andoperational decision-making and (2) they are used by our institutional investors and the analyst community to help
them analyze the health of our business.
There are a number of limitations related to the use of non-GAAP financial measures. We compensate for theselimitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial
measures and evaluating these non-GAAP financial measures together with their relevant financial measures inaccordance with GAAP.
For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliation fromGAAP net cash provided by operating activities to non-GAAP free cash flow” and “Reconciliation from GAAP
revenues to non-GAAP constant currency revenues and GAAP percentage change in revenues to non-GAAP
percentage change in constant currency revenues” included at the end of this release.
Contact
Investor relations
Media
investor-relations@abc.xyz press@abc.xyz

4Alphabet Inc.
CONSOLIDATED BALANCE SHEETS(In millions, except par value per share amounts)
As of December 31,
2022
2023
(unaudited)

AssetsCurrent assets:
Cash and cash equivalents$

21,879$24,048Marketable securities

91,88386,868

Total cash, cash equivalents, and marketable securities

113,762

110,916

Accounts receivable, net

40,25847,964

Other current assets

10,775

12,650Total current assets

164,795

171,530

Non-marketable securities

30,49231,008Deferred income taxes

5,261

12,169Property and equipment, net

112,668

134,345

Operating lease assets

14,381

14,091

Goodwill

28,96029,198Other non-current assets

8,707

Total assets

10,051$

365,264$

402,392

$

5,128

$

7,493

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
Accrued compensation and benefits

14,02815,140Accrued expenses and other current liabilities

37,866

46,168

Accrued revenue share

8,370

8,876

Deferred revenue

3,908

4,137

69,30081,814

14,701

13,253

Total current liabilities
Long-term debt
Deferred revenue, non-current

599

911

9,258

8,474

Deferred income taxes

514

485

Operating lease liabilities

12,501

12,460

Other long-term liabilities

2,247

1,616

Total liabilities

109,120

119,013

Preferred stock, $0.001 par value per share, 100 shares authorized; no sharesissued and outstanding

0

0

Class A, Class B, and Class C stock and additional paid-in capital, $0.001 parvalue per share: 300,000 shares authorized (Class A 180,000, Class B 60,000,
Class C 60,000); 12,849 (Class A 5,964, Class B 883, Class C 6,002) and 12,460(Class A 5,899, Class B 870, Class C 5,691) shares issued and outstanding

68,18476,534

Income taxes payable, non-current

Commitments and contingencies
Stockholders’ equity:

Accumulated other comprehensive income (loss)
Retained earnings
Total stockholders’ equity(7,603)(4,402)

195,563

211,247

256,144

Total liabilities and stockholders’ equity$

5

365,264

283,379$

402,392

Alphabet Inc.
CONSOLIDATED STATEMENTS OF INCOME(In millions, except per share amounts)
Quarter Ended December 31,
2022

Year Ended December 31,

2023

2022

2023

(unaudited)
Revenues$

76,048$(unaudited)
86,310$282,836$

307,394

Costs and expenses:
Cost of revenues

35,342

37,575

126,203

133,332

Research and development

10,267

12,11339,50045,427

Sales and marketing

7,183

7,719

26,567

27,917

General and administrative

5,096

5,206

15,724

16,425

Total costs and expenses

57,88862,613207,994

223,101

Income from operations

18,16023,697

74,842

84,293

Other income (expense), net(1,013)715(3,514)

1,424

Income before income taxes

17,147

24,412

71,32885,717

Provision for income taxes

3,523

3,725

11,356

11,922

Net income$

13,624$

20,687$59,972$73,795

Basic earnings per share of Class A, Class B, and Class C
stock
$

1.06

$

1.66

$

4.59

$

5.84

Diluted earnings per share of Class A, Class B, and Class
C stock
$

1.05

$

1.64

$

4.56

$

5.80

Number of shares used in basic earnings per sharecalculation

12,897

12,48813,063

12,630

Number of shares used in diluted earnings per sharecalculation

12,947

12,602

13,15912,7226

Alphabet Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)
Quarter Ended December 31,
2022

Year Ended December 31,

2023(unaudited)

2022

2023
(unaudited)

Operating activities
Net income$

13,624$

20,687$59,972$73,795Adjustments:
Depreciation of property and equipment

3,602

3,316

13,475

11,946

Stock-based compensation expense

5,100

5,659

19,362

22,460

Deferred income taxes(1,924)(1,670)(8,081)(7,763)(Gain) loss on debt and equity securities, net

1,663

(471)

5,519

823

Other

1,260

1,665

3,483

4,330

Accounts receivable, net(4,615)(6,518)(2,317)(7,833)

Income taxes, net

1,446(9,869)584

523

Other assets

(778)

740

(5,046)(2,143)

Accounts payable

(28)

427

707

664

Changes in assets and liabilities, net of effects ofacquisitions:

Accrued expenses and other liabilities

3,424

4,317

3,915

3,937

Accrued revenue share

577

797

(445)

482

Deferred revenue

263

(165)

367

525

23,614

18,91591,495

101,746

Purchases of property and equipment(7,595)(11,019)(31,485)(32,251)

Purchases of marketable securities(11,621)(28,436)(78,874)(77,858)

Maturities and sales of marketable securities

13,73534,03097,822

86,672

(903)

(851)

(2,531)(3,027)

19

204

150

947

Acquisitions, net of cash acquired, and purchases ofintangible assets

(84)

(29)

(6,969)(495)

Other investing activities

222

(66)

1,589

(1,051)(6,227)(6,167)(20,298)(27,063)

Net payments related to stock-based award activities(2,079)(2,680)(9,300)(9,837)

Repurchases of stock

Net cash provided by operating activities
Investing activities

Purchases of non-marketable securities
Maturities and sales of non-marketable securities

Net cash used in investing activities
Financing activities(15,407)(16,191)(59,296)(61,504)

Proceeds from issuance of debt, net of costs

8,550

1,492

52,872

10,790

Repayments of debt

(8,718)(1,929)(54,068)(11,550)

Proceeds from sale of interest in consolidated entities,
net

25

0

35

8

Net cash used in financing activities(17,629)(19,308)(69,757)(72,093)

Effect of exchange rate changes on cash and cash
equivalents

137

(94)

(506)

(421)

Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

$

(105)

(6,654)

934

2,169

21,98430,702

20,94521,87921,8797$

24,048$21,879$24,048

Segment Results
The following table presents our segment revenues and operating income (loss) (in millions; unaudited):
Quarter Ended December 31,
2022
2023
Revenues:
Google Services
Google Cloud
Other Bets
Hedging gains (losses)
Total revenues
Operating income (loss):
Google Services
Google Cloud
Other Bets
Alphabet-level activities
Total income from operations

$

$
$

$

67,838 $
7,315
226
669
76,048 $76,311
9,192
657
150
86,31020,222 $(186)(1,237)(639)
18,160 $26,730864(863)(3,034)
23,697

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; 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.

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 reductions in our workforce and officespace during 2023 were not allocated to our segments. Additionally, hedging gains (losses) related to revenue are
not allocated to our segments.
Other Income (Expense), Net
The following table presents our other income (expense), net (in millions; unaudited):

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

Quarter Ended December 31,
2022
2023
$
659 $
1,110
(90)
(69)
(185)
(449)
(176)
(115)
(1,487)
586
193
(45)
(31)
(256)
104
(47)
$
(1,013) $715

Includes all gains and losses, unrealized and realized, on equity securities. For Q4 2023, the net effect of the gain on equity
securities of $586 million and the $45 million of performance fees related to certain investments increased the provision for8

income tax, net income, and diluted EPS by $114 million, $427 million, and $0.03, respectively. Fluctuations in the value of
our investments may be affected by market dynamics and other factors and could significantly contribute to the volatility of
OI&E in future periods.

Reconciliation from GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow (inmillions; unaudited):
We provide non-GAAP free cash flow because it is a liquidity measure that provides useful information to
management and investors about the amount of cash generated by the business that can be used for strategic
opportunities, including investing in our business and acquisitions, and to strengthen our balance sheet.
Quarter Ended
December 31, 2023$
18,915(11,019)$
7,896

Net cash provided by operating activities
Less: purchases of property and equipment
Free cash flow

Free cash flow: We define free cash flow as net cash provided by operating activities less capital expenditures.

9

Reconciliation from GAAP Revenues to Non-GAAP Constant Currency Revenues and GAAP Percentage
Change in Revenues to Non-GAAP Percentage Change in Constant Currency Revenues (in millions, except
percentages; unaudited):
We provide non-GAAP constant currency revenues (“constant currency revenues”) and non-GAAP percentage change
in constant currency revenues (“percentage change in constant currency revenues”), because they facilitate thecomparison of current results to historic performance by excluding the effect of foreign exchange rate movements (“FX
Effect”) as well as hedging activities, which are recognized at the consolidated level, as they are not indicative of ourcore operating results.
Non-GAAP constant currency revenues is defined as revenues excluding the effect of foreign exchange rate
movements and hedging activities and is calculated by translating current period revenues using prior period exchange
rates and excluding any hedging effect recognized in the current period. We calculate the percentage change inconstant currency revenues by comparing constant currency revenues to the prior year comparable period revenues,
excluding any hedging effect recognized in the prior period.
Revenues by Geography
Comparison from the Quarter Ended December 31, 2022 to the Quarter Ended December 31, 2023
Quarter Ended December 31, 2023
% Change from Prior Period
Quarter Ended December 31,
2022
United States

$

2023

36,982$

41,995Less FX
EffectConstant
Currency
Revenues

$

$

0

As
Reported

Less
Hedging
EffectLess FX
EffectConstant
Currency
Revenues

41,995

14 %

0%

14 %

EMEA

21,76225,0101,105

23,905

15 %

5%

10 %

APAC

11,97913,979(90)

14,069

17 %

0%

17 %

Other Americas

4,656

5,176

(75)

5,251

11 %

(2)%

13 %

Revenues, excluding hedging effect75,37986,160940

85,220

14 %

1%

13 %

85,220

13 %

1%

13 %

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

669
$

150

76,048$86,310$(1)%

Total constant currency revenues of $85.2 billion for the quarter ended December 31, 2023 increased $9.8 billion compared to $75.4 billion inrevenues, excluding hedging effect for the quarter ended December 31, 2022.

Comparison from the Quarter Ended September 30, 2023 to the Quarter Ended December 31, 2023
Quarter Ended December 31, 2023
% Change from Prior Period
Quarter Ended

United States

September
30, 2023

December31, 2023$$

36,354

41,995

EMEA

22,66125,010APAC

13,126

13,979Less FX
Effect$0Constant
Currency
Revenues$As
Reported

Less
Hedging
EffectLess FX
EffectConstant
Currency
Revenues

41,995

16 %

0%

16 %

(508)

25,518

10 %

(3)%

13 %

(196)

14,175

6%

(2)%

8%

Other Americas

4,553

5,176

(151)

5,327

14 %

(3)%

17 %

Revenues, excluding hedging effect

76,694

86,160(855)

87,015

12 %

(1)%

13 %

87,015

13 %

(1)%

13 %

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

(1)
$

76,693150$

86,310$1%

Total constant currency revenues of $87.0 billion for the quarter ended December 31, 2023 increased $10.3 billion compared to $76.7 billion inrevenues, excluding hedging effect for the quarter ended September 30, 2023.

10

Comparison from the Year Ended December 31, 2022 to the Year Ended December 31, 2023
Year Ended December 31, 2023
% Change from Prior Period
Year Ended December 31,
2022
United States$0$ 146,286

9%

0%

9%

90,578

11 %

1%

10 %

APAC

47,02451,514(1,759)53,273

10 %

(3)%

13 %

Other Americas

16,97618,320(654)

18,974

8%

(4)%

12 %

Revenues, excluding hedging effect280,876

307,158(1,953)309,111

9%

(1)%

10 %

1,960

236
$ 309,111

9%

(1)%

10 %

$

$

Constant
Currency
Revenues

Less FX
Effect460

282,836

146,286

Less
Hedging
Effect91,038$$

As
Reported

82,062

Total revenues(1)134,814

Constant
Currency
Revenues

EMEA

Hedging gains (losses)

(1)

2023

Less FX
Effect307,3940%

Total constant currency revenues of $309.1 billion for the year ended December 31, 2023 increased $28.2 billion compared to $280.9 billion inrevenues, excluding hedging effect for the year ended December 31, 2022.

Total Revenues — Prior Year Comparative Periods
Comparison from the Quarter Ended December 31, 2021 to the Quarter Ended December 31, 2022
Quarter Ended December 31, 2022
% Change from Prior Period

Quarter Ended December
31,
2021
Revenues excluding hedging effect$Hedging gains (losses)
Total revenues

75,122

2022
$

203
$

75,325Less FX
Effect

75,379$Constant
Currency
Revenues

Less
Hedging
EffectAs
Reported(4,733) $80,1120%$80,112

1%

Less FX
EffectConstant
Currency
Revenues

(7)%

7%

(7)%

7%

669
$

76,0481%Comparison from the Year Ended December 31, 2021 to the Year Ended December 31, 2022
Year Ended December 31, 2022
% Change from Prior Period
Year Ended December 31,
2021
Revenues excluding hedging effect$Hedging gains (losses)
Total revenues

257,488149$

257,637

280,876

As
Reported(13,324) $ 294,200

9%$ 294,200

10 %Less FX
Effect2022$

Constant
Currency
Revenues$

Less
Hedging
EffectLess FX
EffectConstant
Currency
Revenues

(5)%

14 %

(5)%

14 %

1,960
$

282,836111%