Alphabet 2023 Annual ReportA note from Sundar,
April 2024
In 2023, we celebrated our 25th birthday as acompany. I wrote a letter in September 2023 tomark the occasion, reflecting on a quarter century
of technological progress. I believe it’s a greatcelebration of all we’ve achieved as a company overthe past 25 years – so we’re reprinting it here.
Since it was published, we’ve continued to makeincredible progress in building and deploying AI
across all of our products, including Search, Cloud,and YouTube. We’re also growing our subscriptions
business and seeing great momentum across
our Cloud business to bring AI advances toorganizations around the world. Thanks to ourstockholders, who have supported us and our
mission over the last 25 years – looking forward
to so much more to come!

Directors and executive
officers as of January 2024
Directors

Executive officers

Stockholder information

Larry Page
Co-Founder

Sundar Pichai
Chief Executive Officer
Alphabet and Google

For further information about
Alphabet Inc., contact:

Sergey Brin
Co-Founder
Sundar Pichai
Chief Executive Officer
Alphabet and Google
John L. Hennessy
Chair of the Board of Directors
Former President
Stanford University
Frances H. Arnold
Linus Pauling Professor ofChemical Engineering,
Bioengineering and Biochemistry
California Institute of Technology
R. Martin “Marty” Chávez
Partner and Vice Chairman
Sixth Street Partners
L. John Doerr
General Partner and Chair
Kleiner Perkins
Roger W. Ferguson Jr.
Former President andChief Executive Officer
TIAA
K. Ram ShriramManaging Partner
Sherpalo Ventures
Robin L. Washington
Former Executive Vice President andChief Financial Officer
Gilead Sciences

Ruth M. Porat
President and Chief Investment Officer;
Chief Financial Officer
Alphabet and Google
Prabhakar Raghavan
Senior Vice President
Knowledge and Information
GooglePhilipp Schindler
Senior Vice President
Chief Business Officer
GoogleKent Walker
President, Global Affairs,
Chief Legal Officer and Secretary
Alphabet and Google

Investor Relations
Alphabet Inc.
1600 Amphitheatre Parkway
Mountain View, California 94043
investor-relations@abc.xyz
You may also reach us by visiting theinvestor relations portion of our website at:
abc.xyz/investor/
Alphabet’s stock (GOOG, GOOGL) tradeson the Nasdaq Global Select Market
Transfer Agent and Registrar
First Class/Registered/Certified Mail:
Computershare Investor Services
P.O. Box 43006
Providence, RI 02940-3006
Courier Services:
Computershare Investor Services
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Shareholder Services Numbers:(866) 298-8535 (toll-free within the USA,
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Investor Centre™ Portal:
computershare.com/investor
Independent Registered
Public Accounting Firm
Ernst & Young LLPTo everyone aroundthe world who uses our
products, our employees,
and our partners:[Letter originally published September 2023]
This month, Google will celebrate our 25th birthday.
It’s a huge privilege to reach this milestone, madepossible by the people who use our products andchallenge us to keep innovating, the hundreds ofthousands of Googlers past and present who havegiven their talents to building those products, and ourpartners, who believe in our mission as much as we do.

It’s a time for some gratitude, and a moment to reflect.
I’ve been thinking a lot about how far technology hascome over the last 25 years and how people adapt toit. Years ago, when I was studying in the U.S., my dad –who was back in India – got his first email address.
I was really excited to have a faster (and cheaper)
way to communicate with him, so I sent a message.
And then I waited … and waited. It was two full days
before I got this reply:“Dear Mr. Pichai, email received. All is well.”
Perplexed by the delay and the formality, I called him
up to see what happened. He told me that someone
at his work had to bring up the email on their officecomputer, print it out, and then deliver it to him.
My dad dictated a response, which the guy wrote
down and eventually typed up to send back to me.
Fast-forward to a few months ago: I was with myteenage son. He saw something interesting, took
some quick pictures, and shared them with his friends.
Then they exchanged a few messages, and it all
seemed faster than the time it would take me justto pull out my phone.
How I communicated with my dad all those years ago
compared with how my son communicates today
shows just how much change can happen acrossgenerations. Technology that takes us years toadapt to is second nature for our kids. Ideas my dad
marveled at as science fiction – taking a call from yourwatch or telling your car to play your favorite song –make my children shrug.
Those shrugs give me great hope for the future.
They set a high bar for what the next generation willbuild and invent ... and I can’t wait to see what will
make their children shrug, too.
An essential truth of innovation is that the moment
you push the boundary of a technology, it soon goesfrom extraordinary to ordinary. That’s why Google has
never taken our success for granted.
→

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AnnualReport2023_Letter_0418.indd 1

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It all started
with a search

A quarter century
of questions

Larry and Sergey first wrote down our mission
25 years ago: to organize the world’s informationand make it universally accessible and useful.
They had an ambitious vision for a new kind of searchengine to help people make sense of the waves of
information moving online. The product they built,
Google Search, went on to help billions of people
around the world get answers to their questions.

Search is still at the core of our mission, and it’s still
our biggest moonshot with so much more to do.

For a few years, I was one of those people experiencing
Google like any other user of the web. I remember
feeling blown away by Google’s ability to find the bestanswer for the most esoteric questions, from a tiny
detail buried in a store’s customer service page to an
obscure football rule.
The questions I’ve asked Google have evolved overtime: “How do you fix a dripping faucet?” “Fastest
route to Stanford Hospital?” “Ways to calm a crying
baby?” And right around spring of 2003, perhaps:“How to ace a Google interview?” And over time,
Google got much better at answering them.
It’s been inspiring to see what people have done withthe answers to their questions, be it to find health careor comfort in difficult times, learn new skills, pursue
new career paths, or start new businesses. The ideathat a student in rural Indonesia could access thesame information as a professor at Stanford was
revolutionary and has changed lives and our world
for the better. It’s opened up access to education andentrepreneurship like nothing else before it or since.
Search also laid the foundations for Google to makean economic impact beyond our own walls. Our
advertising platforms and tools started out with apremise as simple as Search itself: to help businesses
reach customers who were already looking for thekinds of products and services they offer. It wasa platform that appealed to small businesses inparticular, like the mail-order business selling lobsters
that was the first to sign up. And also like Search itself,
the ability for any business to advertise online has had
a truly transformational impact, helping millions ofbusinesses become part of the digital economy.

Of course, Google today is more than a search box.
We have 15 Google products that each serve morethan half a billion people and businesses, and six thatserve more than 2 billion users each.
Like most Google searches, all those products started
with a question, too. With Gmail it was: Could we offer
1 GB of storage to every person? In 2004, when Gmail
launched, that volume of storage was over 100X whatmost other free webmail services were offering!
Then a few years later, we saw an opportunity todramatically improve web browsers – and in turnthe web – for people everywhere. So with Chrome
we asked: Could we build a browser that made theweb better, with simplicity, speed, and security at its
core? Right before launch, I had my own question:Will people use this?
YouTube dared to ask: What if we gave everyone
a way to share what they know with the world?
And today, it’s become a powerful platform forlearning and knowledge.
The questions have kept coming, and we’ve kept
improving and expanding our products with new
answers: What if Google Maps enabled people tosee every street in the world in detail? What if webuilt a translation tool that allowed people to accessinformation and communicate in multiple languages?
What if you could search and find all your old photos
by simply describing what you wanted to see?
We’ve also asked ourselves how we could best share
our tools, breakthroughs, and infrastructure withothers. Google was built in the cloud from the start,even though we only launched our Cloud businessin 2008. Today, Google Cloud has become one of
the top enterprise companies in the world. Partners
across industries are using Google technology to
improve customer support and supply chain efficiency,
reduce their carbon footprint, build new applications,and get more done with AI. Like our advertising clients
before them, Cloud’s partners are operating better,
growing faster, and creating jobs with our help.

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Of course, not every question we asked ended up
as a success. In any 25-year journey, you take a
few lumps, learn the lessons, and work to do better.
Remember Google Wave?
We’ve also faced hard questions about our future as
a company. In the 2000s, it was: How long can the
web really last? In the 2010s, people asked if we could
adapt to the era of mobile computing and whether
search was “over”? Each time, we’ve answered bycoming back even stronger. We’ve done this guided bya singular focus on our mission, our belief in applying
deep computer science to make people’s lives better,and a healthy disregard for the impossible.

A healthy disregard
for the impossible
That healthy disregard is why we’ve been able to takeon problems others couldn’t – or wouldn’t. There was,for example, this impossible idea of putting a powerfulcomputer in everyone’s pocket, no matter theirincome or internet connectivity. Today, Android runs
on 3 billion devices all over the world, from the latest
foldables to entry-level phones. It’s been at the coreof our efforts to make the internet more accessible foreveryone and inspired other transformative products.
Likewise, Chromebooks made computing available
to schools all over the world. And Google Pixel puts
the best of our latest technology – machine learningpowered cameras, speech recognition, transcription
capabilities, tensor chips, and more – directly into
people’s hands.
Which brings us to AI. Google has been investingin AI since almost the beginning. We were one of
the first to use machine learning in our products,
starting in the early 2000s, for spelling corrections,improving the quality of ads, and showing
suggestions and recommendations.
Then, in the early 2010s, there was real excitement
around deep neural networks. In 2012, a few of us
went along to a demo in a meeting room near Charlie’s,
our main campus café. I remember watching in awe
as the Research team showed us the progress they’dmade with image recognition, driven by breakthroughsin neural networks. It was the first moment I thought
to myself: This is really going to change everything!

Annual Report 2023

AnnualReport2023_Letter_0418.indd 3

I had a similar feeling when I saw the groundbreaking,interdisciplinary research happening at DeepMind,
focused on understanding the nature of intelligence.
This progress deeply influenced my thinking, when
I became CEO in 2015, that Google should pivot tobe an AI-first company.
More questions followed. How to power this new
generation of computing? So we invented Tensor
Processing Units, or TPUs – which provided dramatic
performance improvements of 30X to 80X formachine learning over other hardware at the time,and powered the AlphaGo computer, which beat the
Go world champion Lee Sedol in 2016. Around thesame time, we released our landmark Transformer
paper in 2017, which created the neural networkarchitecture that’s the foundation for most of thegenerative AI and large language models today.
Many of these technology breakthroughs have led
to some of our most incredible product innovations.
Search results for complex queries got much more
helpful because of large language models like MUM
and BERT. We’ve created entirely new ways for people
to express what they’re looking for through voice,images, and even asking questions about what they
see with multisearch. Now generative AI is helping us
reimagine our core products in exciting ways – fromour new Search Generative Experience (SGE) to “Help
Me Write” in Gmail. And earlier this year, we launched
Bard, an early experiment that lets people collaborate
with generative AI.
My favorite moments are seeing how our products
can make a difference in people’s lives: Whether it’sa busy parent taking a photo of their craft drawer andusing Bard to inspire a rainy day project for their kids;a traveler using Lens to translate a train schedule ina foreign country; or, more profoundly, a family able
to hear the voice of a man with ALS, thanks to our
research on speech recognition and synthesis.
Designing products that help people at scale is botha privilege and a responsibility. People have their own
questions: Can we trust these new technologies?
We think deeply about how to build responsible
technology from the start, whether it’s making sureeveryone’s information is protected and secure,or keeping people safe from bad actors online.
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4/18/24 1:22 PM

This also includes engaging in the important debates
about how those technologies will shape our society
and then finding the answers together. AI is a key partof this. As excited as we are about the potential of AI
to benefit people and society, we understand thatAI, like any early technology, poses complexities andrisks. Our development and use of AI must addressthese risks, and help to develop the technology
responsibly. The AI principles we launched in 2018
are an important part of how we do this. These
principles prompt questions like: Will it be helpful topeople and benefit society, or could it lead to harm in
any way? They also shape our product development
and AI applications, and guide us in finding solutions
to emerging issues. For example, just last week weintroduced SynthID, a tool for watermarking andidentifying AI-generated images, which will help
address an important issue around transparency.
We’ll continue to engage with experts and thecommunity to keep learning and improving.

Looking ahead
As we look ahead, I’ve been reflecting on thecommitment from our original founders’ letter in 2004:“to develop services that improve the lives of as many
people as possible – to do things that matter.”With AI, we have the opportunity to do things thatmatter on an even larger scale.
We’re just beginning to see what the next waveof technology is capable of and how quickly it can
improve. One million people are already using
generative AI in Google Workspace to write andcreate. Flood forecasting now covers places where
460+ million people live. A million researchers haveused the AlphaFold database, which covers 200
million predictions of protein structures, helping withadvances to cut plastic pollution, tackle antibiotic
resistance, fight malaria, and more. And we’vedemonstrated how AI can help the airline industry
to decrease contrails from planes, an important tool
for fighting climate change.

Making AI more helpful for everyone – and deploying
it responsibly – is the most important way we’ll deliveron our mission for the next 10 years and beyond.
And now AI will allow us,
and others, to ask questions like:
How could every student have access to apersonal tutor, in any language, and on any topic?
How could we enable entrepreneurs
to develop new forms of clean energy?
What tools could we invent to help people designand create new products and grow new businesses?
How can fields like transportation
and agriculture be reimagined?
How could we help communities predictand prepare for natural disasters?
As these new frontiers come into view, we havea renewed invitation to act boldly and responsibly
to improve as many lives as possible and to keep
asking those big questions.
Our search for answers will drive extraordinary
technology progress over the next 25 years.
And in 2048, if, somewhere in the world, a teenager
looks at all we’ve built with AI and shrugs, we’ll know
we succeeded. And then we’ll get back to work.
Thanks for an amazing 25,
Sundar Pichai

Still, there is so much more ahead. Over time, AI will be
the biggest technological shift we see in our lifetimes.
It’s bigger than the shift from desktop computing tomobile, and it may be bigger than the internet itself.
It’s a fundamental rewiring of technology and anincredible accelerant of human ingenuity.

4

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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
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(State or other jurisdiction ofincorporation or organization)(Exact name of registrant as specified in its charter)(Address of principal executive offices, including zip
code)(Registrant’s telephone number, including area code)

ALPHABET INC.

DelawareCommission
file number:(I.R.S. Employer
Identification No.)001-37580

61-1767919

1600 Amphitheatre Parkway
Mountain View, CA 94043(650) 253-0000

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

Title of each class

Trading Symbol(s)Name of each exchange on which registered

Class C Capital Stock, $0.001 par value

GOOG

Nasdaq Stock Market LLC(Nasdaq Global Select Market)

Class A Common Stock, $0.001 par value

GOOGL

Nasdaq Stock Market LLC(Nasdaq Global Select Market)

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Title of each class
None

Alphabet Inc.

Indicate by check mark• if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES

NO

• if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

• 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 theregistrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
• whether the registrant has submitted electronically every Interactive Data File required to besubmitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit such files).

• whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company• If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section
13(a) of the Exchange Act.
• whether the registrant has filed a report on and attestation to its management’s assessment of the effectivenessof its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b))
by the registered public accounting firm that prepared or issued its audit report.

• If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statementsof the registrant included in the filing reflect the correction of an error to previously issued financial statements.
• whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant
to §240.10D-1(b).
• whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES

NO

As of June 30, 2023, the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing saleprices of such shares on the Nasdaq Global Select Market on June 30, 2023) was approximately $1,331.2 billion. For purposesof calculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding shares areheld by non-affiliates, except for shares held by each of our executive officers, directors, and 5% or greater stockholders.
In the case of 5% or greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts andcircumstances which would indicate that such stockholders exercise any control over our company, or unless they hold 10% ormore of our outstanding common stock. These assumptions should not be deemed to constitute an admission that all executive
officers, directors, and 5% or greater stockholders are, in fact, affiliates of our company, or that there are not other persons
who may be deemed to be affiliates of our company. Further information concerning shareholdings of our officers, directors,
and principal stockholders is included or incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.
As of January 23, 2024, there were 5,893 million shares of Alphabet’s Class A stock outstanding, 869 million shares of Alphabet’s
Class B stock outstanding, and 5,671 million shares of the Alphabet’s Class C stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for the 2024 Annual Meeting of Stockholders are incorporated herein by referencein Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities
and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2023.

ii

Alphabet 2023 Annual ReportAlphabet Inc.
Form 10-K
For the Fiscal Year Ended December 31, 2023

Table of Contents
Note About Forward-Looking Statements
Part I

iv

Item 1.

Business

Item 1B.

Unresolved Staff Comments

22

Properties

23

Item 1A.

1

Risk Factors

8

Item 1C. Cybersecurity
Item 2.

Part II

22

Item 3.

Legal Proceedings

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, andIssuer Purchases of Equity Securities

24

Management’s Discussion and Analysis of Financial Condition and Resultsof Operations

26

Item 4.

Item 6.
Item 7.

23

Mine Safety Disclosures[Reserved]

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9.

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

42

45
87

88

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

89

88

Item 10.

Directors, Executive Officers, and Corporate Governance90

Item 12.

Security Ownership of Certain Beneficial Owners and Management andRelated Stockholder Matters

90

Item 11.

Item 13.
Part IV

25

Item 9A. Controls and Procedures
Item 9B. Other Information
Part III

23

Item 14.
Item 15.

Item 16.

Executive Compensation

90

Certain Relationships and Related Transactions, and Director Independence

90

Exhibits, Financial Statement Schedules

91

Principal Accountant Fees and Services
Form 10-K Summary

90
94

Signatures

95

Alphabet 2023 Annual Reportiii

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These include, among other things, statements regarding:
•

•
•
•

•

•
•

•

•

•

•

•

•

•

•
•

•
•

iv

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 toonline world will continue to benefit our business;•

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

our expectation that the portion of our revenues that wederive beyond advertising will continue to increase and may
affect our 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 for monitoring,gathering, and counting the number of paid clicks andimpressions;

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

our expectation that our foreign exchange risk management
program will not fully offset our net exposure to fluctuations
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 amountof commitments and when we expect to recognize revenue;

our expectation that our capital expenditures will
increase, including the expected increase in our technicalinfrastructure investment to support the growth of ourbusiness 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, as well as tocontinue to invest in acquisitions and strategic investments;
our pace of hiring and our plans to provide competitivecompensation programs;

our expectation that our cost of revenues, researchand development (R&D) expenses, sales and marketing
expenses, and general and administrative expenses may
increase in amount and/or may increase as a percentageof 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 bymarket dynamics;
Alphabet 2023 Annual Report•••

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 other contingencies,
including the possibility that certain legal proceedings towhich 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 businesspractices and financial results;

the expected timing, amount, and effect of Alphabet Inc.’sshare repurchases;
our long-term sustainability and diversity goals;

as well as other statements regarding our future operations,financial condition and prospects, and business strategies.
Forward-looking statements may appear throughout thisreport and other documents we file with the Securities andExchange Commission (SEC), including without limitation,
the following sections: Part I, Item 1 “Business;” Part I,
Item 1A “Risk Factors;” and Part II, Item 7 “Management’s
Discussion and Analysis of Financial Condition and Resultsof Operations.” Forward-looking statements generally can be
identified by words such as “anticipates,” “believes,” “could,”“estimates,” “expects,” “intends,” “may,” “plans,” “predicts,”“projects,” “will be,” “will continue,” “will likely result,” andsimilar expressions. These forward-looking statements are
based on current expectations and assumptions that are
subject to risks and uncertainties, which could cause ouractual results to differ materially from those reflected in theforward-looking statements. Factors that could cause orcontribute to such differences include, but are not limited
to, those discussed in this Annual Report on Form 10-K,
including the risks discussed in Part I, Item 1A “Risk Factors”
and the trends discussed in Part II, Item 7 “Management’s
Discussion and Analysis of Financial Condition and Results ofOperations,” and those discussed in other documents we filewith the SEC. We undertake no obligation to revise or publicly
release the results of any revision to these forward-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 ortrademarks to imply an endorsement or sponsorship of us
by such companies, or any relationship with any of thesecompanies.

Part I

Item 1. Business
Overview

As our founders Larry and Sergey wrote in the original founders’ letter, “Google is not a conventional company. We do notintend to become one.” That unconventional spirit has been a driving force throughout our history, inspiring us to tackle big
problems and invest in moonshots. It led us to be a pioneer in the development of AI and, since 2016, an AI-first company.
We continue this work under the leadership of Alphabet and Google CEO, Sundar Pichai.

Alphabet is a collection of businesses — the largest of which is Google. We report Google in two segments, Google
Services and Google Cloud, and all non-Google businesses collectively as Other Bets. Alphabet’s structure is about helping
each of our businesses prosper through strong leaders and independence.

Access and Technology for Everyone

The Internet is one of the world’s most powerful equalizers; it propels ideas, people, and businesses large and small. Our mission
to organize the world’s information and make it universally accessible and useful is as relevant today as it was when we were
founded in 1998. Since then, we have evolved from a company that helps people find answers to a company that also helps
people get things done.
We are focused on building an even more helpful Google for everyone, and we aspire to give everyone the tools they needto increase their knowledge, health, happiness, and success. Google Search helps people find information and make senseof the world in more natural and intuitive ways, with trillions of searches on Google every year. YouTube provides people withentertainment, information, and opportunities to learn something new. Google Assistant offers the best way to get things done
seamlessly across different devices, providing intelligent help throughout a person’s day, no matter where they are. Google Cloudhelps customers solve today’s business challenges, improve productivity, reduce costs, and unlock new growth engines. We arecontinually innovating and building new products and features that will help our users, partners, customers, and communities
and have invested more than $150 billion in research and development in the last five years in support of these efforts.

Making AI Helpful for Everyone

AI is a transformational technology that can bring meaningful and positive change to people and societies across the world,and for our business. At Google, we have been bringing AI into our products and services for more than a decade andmaking them available to our users. Our journey began in 2001, when machine learning was first incorporated into Google
Search to suggest better spellings to users searching the web. Today, AI in our products is used by billions of people
globally through features like autocomplete suggestions in Google Search; translation across 133 languages in Google
Translate; and organization, searching, and editing in Google Photos.
Large language models (LLMs) are an exciting aspect of our work in AI based on deep learning architectures, such as theTransformer, a neural network architecture that we introduced in 2017 that helped with language understanding. This led to
the Bidirectional Encoder Representations from Transformers, or BERT, in 2019 that helped Search understand the intent ofuser search queries better than ever before.
Google was a company built in the cloud, and we continue to invest in our Google Cloud offerings, including Google
Cloud Platform and Google Workspace, to help organizations stay at the forefront of AI innovation with our AI-optimized
infrastructure, mature AI platform and world-class models, and assistive agents.

We believe AI can solve some of the hardest societal, scientific and engineering challenges of our time. For example, in 2020,
Google DeepMind’s AlphaFold system solved a 50-year-old protein folding challenge. Since then, we have open-sourced tothe scientific community 200 million of AlphaFold’s protein structures which are used to work on everything from accelerating
new malaria vaccines to advancing cancer drug discovery and developing plastic-eating enzymes. As another example, AI
can also have a transformative effect on climate progress by providing helpful information, predicting climate-related events,and optimizing climate action. Using advanced AI and geospatial analysis, Google Research has developed flood forecastingmodels that can provide early warning and real-time flooding information to communities and individuals.
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Part IIIPart IVAs AI continues to improve rapidly, we are focused on giving helpful features to our users and customers as we deliver on
our mission to organize the world’s information and make it universally accessible and useful. With a bold and responsible
approach, we continue to take the next steps to make this technology even more helpful for everyone.

Deliver the Most Advanced, Safe, and Responsible AI

We aim to build the most advanced, safe, and responsible AI with models that are developed, trained, and rigorously tested
at scale powered by our continued investment in AI technical infrastructure. In December 2023, we launched Gemini, ourmost capable and general model. It was built from the ground up to be multimodal, which means it can generalize andseamlessly understand, operate across, and combine different types of information, including text, code, audio, images,
and video. Our teams across Alphabet will leverage Gemini, as well as other AI models we have previously developed andannounced, across our business to deliver the best product and service experiences for our users, advertisers, partners,
customers, and developers.

We believe our approach to AI must be both bold and responsible. That means developing AI in a way that maximizes the
positive benefits to society while addressing the challenges, guided by our AI Principles. We published these in 2018, as oneof the first companies to articulate principles that put beneficial use, users, safety, and avoidance of harms above businessconsiderations. While there is natural tension between being bold and being responsible, we believe it is possible — and infact critical — to embrace that tension productively.

Enable Organizations and Developers to Innovate on Google Cloud

AI is not only a powerful enabler, it is also a major platform shift. Globally, businesses from startups to large enterprises,
and the public sector are thinking about how to drive transformation. That is why we are focused on making it easy andscalable for others to innovate, and grow, with AI. That means providing the most advanced computing infrastructure andexpanding access to Google’s latest AI models that have been rigorously tested in our own products. Our Vertex AI platform
gives developers the ability to train, tune, augment, and deploy applications using generative AI models and services suchas Enterprise Search and Conversations. Duet AI for Google Cloud provides pre-packaged AI agents that assist developers
to write, test, document, and operate software.

Improve Knowledge, Learning, Creativity, and Productivity

Things that we now consider routine – like spell check, mobile check deposit, or Google Search, Google Translate, andGoogle Maps – all use AI. As AI continues to improve rapidly, we are focused on giving helpful features to our users as we
continue to deliver on our mission to organize the world’s information and make it universally accessible and useful.
While we have been integrating AI into our products for years, we are now embedding the power of generative AI tocontinue helping our users express themselves and get things done. For example, Duet AI in Google Workspace helps
users write, organize, visualize, accelerate workflows, and have richer meetings. Bard allows users to collaborate withexperimental AI with new features that include image capabilities, coding support, and app integration. Dream Screen, a
new experimental feature in YouTube, allows for the creation of AI-generated video or image backgrounds to Shorts by
typing an idea into a prompt.

We also know businesses of all sizes around the world rely on Google Ads to find customers and grow their businesses —and we make that even easier with AI. With Performance Max, advertisers simply tell us their campaign goals and share
their creative assets, and AI will automatically produce and run a highly effective ad campaign across all of Google’s
properties, to meet their budget. Product Studio brings the benefits of AI to businesses of all sizes, helping them easily
create uniquely-tailored imagery featuring their products — for free. Additionally, we are experimenting with Search andShopping ads that are directly integrated into the AI-powered snapshot and conversational mode in Search Generative
Experience.

Build the Most Helpful Personal Computing Platforms and Devices

Over the years, our Pixel phones have incorporated AI compute directly into the device and built experiences on top of it.
Our latest Pixel devices were built around AI, bringing the best AI-assistive experiences to our users, such as Best Take,
Magic Editor, and Audio Magic Eraser. As we look ahead, we are designing our Android and Chrome operating systems with
new AI-forward user experiences.

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Moonshots

Many companies get comfortable doing what they have always done, making only incremental changes. This incrementalism
leads to irrelevance over time, especially in technology, where change tends to be revolutionary, not evolutionary. People
thought we were crazy when we acquired YouTube and Android and when we launched Chrome, but those efforts havematured into major platforms for digital video and mobile devices and a safer, popular browser. Our early investments in AI
started out as moonshots but are now incorporated into our core products and central to future developments. We continue
to look toward the future and to invest for the long term, most notably for the application of AI to our products and services,
as well as other frontier technologies such as quantum computing. As we said in the original founders’ letter, we will not shy
away from high-risk, high-reward projects that we believe in, as they are the key to our long-term success.

Privacy and Security

We make it a priority to protect the privacy and security of our products, users, and customers, even if there are near-term
financial consequences. We do this by continuously investing in building products that are secure by default; strictly
upholding responsible data practices that emphasize privacy by design; and building easy-to-use settings that put people
in control. We are continually enhancing these efforts over time, whether by enabling users to auto-delete their data, giving
them tools, such as My Ad Center, to control their ad experience, or advancing anti-malware, anti-phishing, and password
security features.

GoogleFor reporting purposes Google comprises two segments: Google Services and Google Cloud.

Google Services
Serving Our Users

We have always been committed to building helpful products that can improve the lives of millions of people worldwide.
Our product innovations are what make our services widely used, and our brand one of the most recognized in the world.
Google Services’ core products and platforms include ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps,
Google Photos, Google Play, Search, and YouTube, with broad and growing adoption by users around the world.
Our products and services have come a long way since the company was founded more than 25 years ago. While Google
Search started as a way to find web pages, organized into ten blue links, we have driven technical advancements andproduct innovations that have transformed Google Search into a dynamic, multimodal experience. We first expandedfrom traditional desktop browsers into mobile web search, making it easier to navigate on smaller screens. As new
types of content surfaced on the internet, Universal Search made it possible to search multiple content types, like news,
images, videos, and more, to deliver rich, relevant results. The introduction of new search modalities, like voice and visual
search, made it easier for people to express their curiosity in natural and intuitive ways. We took that a step further withmultisearch, which lets people search with text and images at the same time. Large language models like BERT andMultitask Unified Models, or MUMs, have made it possible to express more natural language queries, vastly improving thequality of results. Each advancement has made it easier and more natural for people to find what they are looking for.

This drive to make information more accessible and helpful has led us over the years to improve the discovery and creationof digital content both on the web and through platforms like Google Play and YouTube. People are consuming many formsof digital content, including watching videos, streaming TV, playing games, listening to music, reading books, and usingapps. Working with content creators and partners, we continue to build new ways for people around the world to create andfind great digital content.
Fueling all of these great digital experiences are extraordinary platforms and devices. That is why we continue to invest in
platforms like our Android mobile operating system, Chrome browser, and Chrome operating system, as well as growing
our family of devices. We see tremendous potential for devices to be helpful and make people’s lives easier by combining
the best of our AI, software, and hardware. This potential is reflected in our latest generation of devices, such as the new
Pixel 8 and Pixel 8 Pro, and the Pixel Watch 2. Creating products and services that people rely on every day is a journey that
we are investing in for the long-term.

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How We Make Money

We have built world-class advertising technologies for advertisers, agencies, and publishers to power their digitalmarketing businesses. Our advertising solutions help millions of companies grow their businesses through our wide
range of products across devices and formats, and we aim to ensure positive user experiences by serving the right ads
at the right time and by building deep partnerships with brands and agencies. AI has been foundational to our advertisingbusiness for more than a decade. Products like Performance Max and Product Studio use the full power of our AI to help
advertisers find untapped and incremental conversion opportunities.
Google Services generates revenues primarily by delivering both performance and brand advertising that appears on
Google Search & other properties, YouTube, and Google Network partners’ properties (“Google Network properties”).
We continue to invest in both performance and brand advertising and seek to improve the measurability of advertising so
advertisers understand the effectiveness of their campaigns.
• Performance advertising creates and delivers relevant ads that users will click on leading to direct engagement withadvertisers. Performance advertising lets our advertisers connect with users while driving measurable results. Our ads
tools allow performance advertisers to create simple text-based ads.

• Brand advertising helps enhance users’ awareness of and affinity for advertisers’ products and services, throughvideos, text, images, and other interactive ads that run across various devices. We help brand advertisers deliver digital
videos and other types of ads to specific audiences for their brand-building marketing campaigns.

We have allocated substantial resources to stopping bad advertising practices and protecting users on the web. We focus
on creating the best advertising experiences for our users and advertisers in many ways, including filtering out invalid
traffic, removing billions of bad ads from our systems every year, and closely monitoring the sites, apps, and videos whereads appear and blocklisting them when necessary to ensure that ads do not fund bad content.
In addition, Google Services increasingly generates revenues from products and services beyond advertising, including:• consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV, YouTube Musicand 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; and• devices, which primarily include sales of the Pixel family of devices.

Google CloudThrough our Google Cloud Platform and Google Workspace offerings, Google Cloud generates revenues primarily fromconsumption-based fees and subscriptions for infrastructure, platform, collaboration tools and other cloud services.
Customers use five key capabilities from Google Cloud.

• AI-optimized Infrastructure: provides open, reliable, and scalable compute, networking, and storage to enable
customers to run workloads anywhere — on our Cloud, at the edge, or in their data centers. It can be used to migrate andmodernize IT systems and to train and serve various types of AI models.
• Cybersecurity: helps customers detect, protect, and respond to a broad range of cybersecurity threats, with AI
integrated to further strengthen security outcomes, prioritize which threats to investigate, and identify attack paths, aswell as accelerate resolution of cybersecurity threats.

• Databases and Analytics: provides a variety of different types of databases — relational, key-value, in-memory — tostore and manage data for different types of applications. Our Data Cloud also unifies data lakes, data warehouses, data
governance, and advanced machine learning into a single platform that can analyze data across any cloud.
• Collaboration Tools: Google Workspace and Duet AI in Google Workspace provide easy-to-use, secure communicationand collaboration tools, including apps like Gmail, Docs, Drive, Calendar, Meet, and more. These tools enable secure
hybrid and remote work, boosting productivity and collaboration. AI has been used in Google Workspace for years
to improve grammar, efficiency, security, and more with features like Smart Reply, Smart Compose, and malware andphishing protection in Gmail. Duet AI in Google Workspace helps users write, organize, visualize, accelerate workflows,
and have richer meetings.

• AI Platform and Duet AI for Google Cloud: Our Vertex AI platform gives developers the ability to train, tune, augment,
and deploy applications using generative AI models and services such as Enterprise Search and Conversations. Duet AI
for Google Cloud provides pre-packaged AI agents that assist developers to write, test, document, and operate software.
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Other Bets

Across Alphabet, we are also using technology to try to solve big problems that affect a wide variety of industries from
improving transportation and health technology to exploring solutions to address climate change. Alphabet’s investment in
the portfolio of Other Bets includes businesses that are at various stages of development, ranging from those in the R&D
phase to those that are in the beginning stages of commercialization. Our goal is for them to become thriving, successful
businesses. Other Bets operate as independent companies and some of them have their own boards with independent
members and outside investors. While these early-stage businesses naturally come with considerable uncertainty, someof them are already generating revenue and making important strides in their industries. Revenues from Other Bets are
generated primarily from the sale of healthcare-related services and internet services.

Competition

Our business is characterized by rapid change as well as new and disruptive technologies. We face formidable competitionin every aspect of our business, including, among others, from:• general purpose search engines and information services;• vertical search engines and e-commerce providers for queries related to travel, jobs, and health, which users may
navigate directly to rather than go through Google;• online advertising platforms and networks;• other forms of advertising, such as billboards, magazines, newspapers, radio, and television as our advertisers typically
advertise in multiple media, both online and offline;• digital content and application platform providers;• providers of enterprise cloud services;• developers and providers of AI products and services;• companies that design, manufacture, and market consumer hardware products, including businesses that havedeveloped proprietary platforms;• providers of digital video services;• social networks, which users may rely on for product or service referrals, rather than seeking information throughtraditional search engines;• providers of workspace communication and connectivity products; and• digital assistant providers.

Competing successfully depends heavily on our ability to develop and distribute innovative products and technologies
to the marketplace across our businesses. For example, for advertising, competing successfully depends on attracting
and retaining:• users, for whom other products and services are literally one click away, largely on the basis of the relevance of ouradvertising, as well as the general usefulness, security, and availability of our products and services;• advertisers, primarily based on our ability to generate sales leads, and ultimately customers, and to deliver theiradvertisements in an efficient and effective manner across a variety of distribution channels; and• content providers, primarily based on the quality of our advertiser base, our ability to help these partners generate
revenues from advertising, and the terms of our agreements with them.
For additional information about competition, see Item 1A Risk Factors of this Annual Report on Form 10-K.

Ongoing Commitment to Sustainability

We believe that every business has the opportunity and obligation to protect our planet. Sustainability is one of our corevalues at Google, and we strive to build sustainability into everything we do. We have been a leader on sustainability andclimate change since Google’s founding more than 25 years ago.
Our sustainability work is focused on empowering individuals to take action, working together with our partners andcustomers, and working to reduce our carbon footprint across our operations and supply chain.

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In 2020, we shared our aspiration to help individuals, cities, and other partners collectively reduce one gigaton of theircarbon equivalent emissions annually by 2030. This is an ambitious vision that we have set to push us to contributemeaningfully to helping with climate solutions beyond our own operations and value chain.
In 2021, we set an ambitious goal to achieve net-zero emissions across all of our operations and value chain, by 2030.
To accomplish this, we aim to reduce 50% of our combined Scope 1, Scope 2 (market-based), and Scope 3 absoluteemissions (versus our 2019 baseline) before 2030, and plan to invest in nature-based and technology-based carbon
removal solutions to neutralize our remaining emissions. We have formally committed to the Science Based Targets
initiative to seek their validation of our absolute emissions reduction target.

One of the key levers for reducing emissions from our operations is transitioning to clean energy. Since 2017, we havematched 100% of the electricity consumption of our global operations with purchases of renewable energy on an annual
basis. However, because of differences in the availability of renewable energy sources like solar and wind across theregions where we operate—and because of the variable supply of these resources—we still need to rely on carbon-emittingenergy sources that power local grids. That is why we set a goal to run on 24/7 carbon-free energy (CFE) on every gridwhere we operate by 2030.
Achieving net-zero emissions and 24/7 CFE by 2030 are extremely ambitious goals. We also know that our path to net-zeroemissions will not be easy or linear. Some of our plans may take years to deliver results, particularly where they involve
building new large-scale infrastructure with long lead times. So as our business continues to evolve, we expect ouremissions to rise before dropping towards our absolute emissions reduction target.
To benefit the people and places where we operate, we have set goals to replenish 120% of the freshwater volume weconsume, on average, across our offices and data centers by 2030 and to help restore and improve the quality of waterand health of ecosystems in the communities where we operate.

We also aim to maximize the reuse of finite resources across our operations, products, and supply chains. Our circularity
principles focus on designing out waste from the start, keeping materials in use for as long as possible, and promoting
healthy materials—for our data centers, workplaces, and products.
More information on our approach to sustainability can be found in our annual sustainability reports, including Google’s
Environmental Report. The contents of our sustainability reports are not incorporated by reference into this Annual
Report on Form 10-K or in any other report or document we file with the SEC. For additional information about risks anduncertainties applicable to our commitments to attain certain sustainability goals, see Item 1A Risk Factors of this Annual
Report on Form 10-K.

Culture and Workforce

We are a company of curious, talented, and passionate people. We embrace collaboration and creativity, and encourage
the iteration of ideas to address complex challenges in technology and society.

Our people are critical for our continued success, so we work hard to create an environment where employees can havefulfilling careers, and be happy, healthy, and productive. We offer industry-leading benefits and programs to take careof the diverse needs of our employees and their families, including opportunities for career growth and development,
resources to support their financial health, and access to excellent healthcare choices. Our competitive compensation
programs help us to attract and retain top candidates, and we will continue to invest in recruiting talented people totechnical and non-technical roles, and rewarding them well. We provide a variety of high quality training and support tomanagers to build and strengthen their capabilities—ranging from courses for new managers, to learning resources that
help them provide feedback and manage performance, to coaching and individual support.

At Alphabet, we are committed to making diversity, equity, and inclusion part of everything we do and to growing aworkforce that is representative of the users we serve. More information on Google’s approach to diversity can be found in
our annual diversity reports, available publicly at diversity.google. The contents of our diversity reports are not incorporated
by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
As of December 31, 2023, Alphabet had 182,502 employees. We have work councils and statutory employee representation
obligations in certain countries, and we are committed to supporting protected labor rights, maintaining an open culture,and listening to all employees. Supporting healthy and open dialogue is central to how we work, and we communicate
information about the company through multiple internal channels to our employees.
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When necessary we contract with businesses around the world to provide specialized services where we do not haveappropriate in-house expertise or resources, often in fields that require specialized training like cafe operations, content
moderation, customer support, and physical security. We also contract with temporary staffing agencies when we need tocover short-term leaves, when we have spikes in business needs, or when we need to quickly incubate special projects. We
choose our partners and staffing agencies carefully, and review their compliance with Google’s Supplier Code of Conduct.
We continually make improvements to promote a respectful and positive working environment for everyone — employees,
vendors, and temporary staff alike.

Government Regulation

We are subject to numerous United States (U.S.) federal, state, and local, as well as foreign laws and regulations covering
a wide variety of subjects, and the scope of this coverage continues to broaden with continuing new legal and regulatory
developments in the U.S. and internationally. Like other companies in the technology industry, we face increasingly
heightened scrutiny from both U.S. and foreign governments with respect to our compliance with laws and regulations.
Many of these laws and regulations are evolving and their applicability and scope, as interpreted by the courts, remain
uncertain. Particularly with regard to AI; climate change and sustainability; competition; consumer protection; content
moderation; data privacy and security; news publications; and reporting on human capital and diversity, we have seen
an increase in new and evolving laws and regulations, as well as related enforcement actions and investigations, being
proposed and implemented in recent years by legislative and regulatory bodies around the world.

Our compliance with these laws and regulations may be onerous and could, individually or in the aggregate, increase ourcost of doing business, make our products and services less useful, limit our ability to pursue certain business models,cause us to change our business practices, affect our competitive position relative to our peers, and/or otherwise harm ourbusiness, reputation, financial condition, and operating results.
For additional information about government regulation applicable to our business, see Item 1A Risk Factors; Trends in
Our Business and Financial Effect in Part II, Item 7; and Legal Matters in Note 10 of the Notes to Consolidated Financial
Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Intellectual Property

We rely on various intellectual property laws, confidentiality procedures and contractual provisions to protect our
proprietary technology and our brand. We have registered, and applied for the registration of, U.S. and international
trademarks, service marks, domain names, and copyrights. We have also filed patent applications in the U.S. and foreigncountries covering certain of our technology, and acquired patent assets to supplement our portfolio. We have licensed
in the past, and expect that we may license in the future, certain of our rights to other parties. For additional information,
see Item 1A Risk Factors of this Annual Report on Form 10-K.

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 of charge, 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 host with membersof the investment community. Our investor relations website also provides notifications of news or announcements
regarding our financial performance and other items that may be material or 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 the heading “Governance.”
The content of our websites are not incorporated by reference into this Annual Report on Form 10-K or in any other reportor document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

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Item 1A. Risk Factors

Our operations and financial results are subject to various risks and uncertainties, including but not limited to thosedescribed below, which could harm our business, reputation, financial condition, and operating results, and affect thetrading price of our Class A and Class C stock.

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 their contracts with us at
any time. These partners may not continue to do business with us if we do not create more value (such as increased
numbers of users or customers, new sales leads, increased brand awareness, or more effective monetization) than theiravailable alternatives. Changes to our advertising policies and data privacy practices, such as our initiatives to phase out
third-party cookies, 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 developedthat make 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 third-party digitaladvertising. Failing to provide superior value or deliver advertisements effectively and competitively could harm ourbusiness, 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 in fluctuations in the amounts
our advertisers spend on advertising, which could harm our financial condition and operating results.

We face intense competition. If we do not continue to innovate and provide products and services thatare useful to users, customers, and other partners, we may not remain competitive, which could harm ourbusiness, financial condition, and operating results.

Our business environment is rapidly evolving and intensely competitive. Our businesses face changing technologies,
shifting user needs, and frequent introductions of rival products and services. To compete successfully, we must accurately
anticipate technology developments and deliver innovative, relevant and useful products, services, and technologies in atimely manner. As our businesses evolve, the competitive pressure to innovate will encompass a wider range of products
and services. We must continue to invest significant resources in technical infrastructure and R&D, including throughacquisitions, in order to enhance our technology, products, and services.
We have many competitors in different industries. Our current and potential domestic and international competitors range
from large and established companies to emerging start-ups. Some competitors have longer operating histories andwell-established relationships in various sectors. They can use their experience and resources in ways that could affect ourcompetitive position, including by making acquisitions and entering into other strategic arrangements; continuing to invest
heavily in technical infrastructure, R&D, and in talent; initiating intellectual property and competition claims (whether or not
meritorious); and continuing to compete for users, advertisers, customers, and content providers. Further, discrepancies
in enforcement of existing laws may enable our lesser known competitors to aggressively interpret those laws without
commensurate scrutiny, thereby affording them competitive advantages. Our competitors may also be able to innovate andprovide products and services faster than we can or may foresee the need for products and services before we do.
We are expanding our investment in AI across the entire company. This includes generative AI and continuing to integrate AI
capabilities into our products and services. AI technology and services are highly competitive, rapidly evolving, and requiresignificant investment, including development and operational costs, to meet the changing needs and expectations of ourexisting users and attract new users. Our ability to deploy certain AI technologies critical for our products and services andfor our business strategy may depend on the availability and pricing of third-party equipment and technical infrastructure.
Additionally, other companies may develop AI products and technologies that are similar or superior to our technologies ormore cost-effective to deploy. Other companies may also have (or in the future may obtain) patents or other proprietary
rights that would prevent, limit, or interfere with our ability to make, use, or sell our own AI products and services.
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Our financial condition and operating results may also suffer if our products and services are not responsive to theevolving needs and desires of our users, advertisers, publishers, customers, and content providers. As new and existing
technologies continue to develop, competitors and new entrants may be able to offer experiences that are, or that are seen
to be, substantially similar to or better than ours. These technologies could reduce usage of our products and services, andforce us to compete in different ways and expend significant resources to develop and operate equal or better products
and services. Competitors’ success in providing compelling products and services or in attracting and retaining users,
advertisers, publishers, customers, and content providers could harm our financial condition and operating results.

Our ongoing investment in new businesses, products, services, and technologies is inherently risky, andcould divert management attention and harm our business, financial condition, and operating results.

We have invested and expect to continue to invest in new businesses, products, services, and technologies in a wide range
of industries beyond online advertising. The investments that we are making across our businesses, such as building AI
capabilities into new and existing products and services, reflect our ongoing efforts to innovate and provide products andservices that are helpful to users, advertisers, publishers, customers, and content providers. Our investments ultimately
may not be commercially viable or may not result in an adequate return of capital and, in pursuing new strategies, we may
incur unanticipated liabilities. Innovations in our products and services could also result in changes to user behavior andaffect our revenue trends. These endeavors involve significant risks and uncertainties, including diversion of resources
and management attention from current operations, different monetization models, and the use of alternative investment,
governance, or compensation structures that may fail to adequately align incentives across the company or otherwise
accomplish their objectives.

Within Google Services, we continue to invest heavily in devices, including our smartphones, home devices, and wearables,
which is a highly competitive market with frequent introduction of new products and services, rapid adoption oftechnological advancements by competitors, increased market saturation in developed countries, short product life cycles,
evolving industry standards, continual improvement in performance characteristics, and price and feature sensitivity on thepart of consumers and businesses. There can be no assurance we will be able to provide devices that compete effectively.
Within Google Cloud, we devote significant resources to develop and deploy our enterprise-ready cloud services, including
Google Cloud Platform and Google Workspace, and we are advancing our AI platforms and models to support these tools
and technologies. We are incurring costs to build and maintain infrastructure to support cloud computing services, invest
in cybersecurity, and hire talent, particularly to support and scale our sales force. At the same time, our competitors
are rapidly developing and deploying cloud-based services. Pricing and delivery models are competitive and constantly
evolving, and we may not attain sufficient scale and profitability to achieve our business objectives. Further, our businesswith public sector customers may present additional risks, including regulatory compliance risks. For instance, we may besubject to government audits and cost reviews, and any failure to comply or any deficiencies found may expose us to legal,financial, and/or reputational risks. Evolving laws and regulations may require us to make new capital investments, build
new products, and seek partners to deliver localized services in other countries, and we may not be able to meet sovereign
operating requirements.
Within Other Bets, we are investing significantly in the areas of health, life sciences, and transportation, among others.
These investment areas face intense competition from large, experienced, and well-funded competitors, and our offerings,
many of which involve the development of new and emerging technologies, may not be successful, or be able to compete
effectively or operate at sufficient levels of profitability.

In addition, new and evolving products and services, including those that use AI, raise ethical, technological, legal,
regulatory, and other challenges, which may negatively affect our brands and demand for our products and services.
Because all of these investment areas are inherently risky, no assurance can be given that such strategies and offerings will
be successful or will not harm our reputation, financial condition, and operating results.

Our revenue growth rate could decline over time, and we may experience downward pressure on ouroperating margin in the future.

Our revenue growth rate could decline over time as a result of a number of factors, including changes in the devices andmodalities used to access our products and services; changes in geographic mix; deceleration or declines in advertiser
spending; competition; customer usage and demand for our products; decreases in our pricing of our products andservices; ongoing product and policy changes; and shifts to lower priced products and services.
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In addition, we may experience downward pressure on our operating margin resulting from a variety of factors, such as anincrease in the mix of lower-margin products and services, in particular from the continued expansion of our business into
new fields, including products and services such as our devices, Google Cloud, and consumer subscription products, aswell as significant investments in Other Bets, all of which may have margins lower than those we generate from advertising.
In particular, margins on our devices have had, and may continue to have, an adverse effect on our consolidated margins
due to pressures on pricing and higher cost of sales. We may also experience downward pressure on our operating margins
from increasing regulations, increasing competition, and increasing costs for many aspects of our business. Further, certainof our costs and expenses are generally less variable in nature and may not correlate to changes in revenue. We may also
not be able to execute our efforts to re-engineer our cost base successfully or in a timely manner. Due to these factors andthe evolving nature of our business, our historical revenue growth rate and historical operating margin may not be indicativeof our future performance. For additional information, see Trends in Our Business and Financial Effect and Revenues andMonetization Metrics in Part II, Item 7 of this Annual Report on Form 10-K.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value ofour products, services, and brands as well as affect our ability to compete.

Our patents, trademarks, trade secrets, copyrights, and other intellectual property rights are important assets for us.
Various events outside of our control pose a threat to our intellectual property rights, as well as to our products, services,and technologies. For example, effective intellectual property protection may not be available in every country in which our
products and services are distributed or made available through the Internet. Also, the efforts we have taken to protect
our proprietary rights may not be sufficient or effective. Although we seek to obtain patent protection for our innovations,
it is possible we may not be able to protect some of these innovations. Moreover, we may not have adequate patent or
copyright protection for certain innovations that later turn out to be important. There is always the possibility that thescope of the protection gained will be insufficient or that an issued patent may be deemed invalid or unenforceable.
We also seek to maintain certain intellectual property as trade secrets. The secrecy of such trade secrets and othersensitive information could be compromised, which could cause us to lose the competitive advantage resulting from these
trade secrets. We also face risks associated with our trademarks. For example, there is a risk that the word “Google” could
become so commonly used that it becomes synonymous with the word “search.” Some courts have ruled that “Google”
is a protectable trademark, but it is possible that other courts, particularly those outside of the U.S., may reach a different
determination. If this happens, we could lose protection for this trademark, which could result in other people using theword “Google” to refer to their own products, thus diminishing our brand.
Any significant impairment of our intellectual property rights could harm our business and our ability to compete. Also,
protecting our intellectual property rights is costly and time consuming. Any increase in the unauthorized use of ourintellectual property could make it more expensive to do business and harm our financial condition and operating results.

Our business depends on strong brands, and failing to maintain and enhance our brands would hurt ourability to expand our base of users, advertisers, customers, content providers, and other partners.

Our strong brands have significantly contributed to the success of our business. Maintaining and enhancing the brands
within Google Services, Google Cloud, and Other Bets increases our ability to enter new categories and launch new andinnovative products and services that better serve the needs of our users, advertisers, customers, content providers, andother partners. Our brands have been, and may in the future be, negatively affected by a number of factors, including,among others, reputational issues, third-party content shared on our platforms, data privacy and security issues anddevelopments, and product or technical performance failures. For example, if we fail to respond appropriately to thesharing of misinformation or objectionable content on our services and/or products or objectionable practices by
advertisers, or otherwise to adequately address user concerns, our users may lose confidence in our brands.
Furthermore, failure to maintain and enhance our brands could harm our business, reputation, financial condition, andoperating results. Our success will depend largely on our ability to remain a technology leader and continue to provide
high-quality, trustworthy, innovative products and services that are truly useful and play a valuable role in a rangeof settings.

We face a number of manufacturing and supply chain risks that could harm our business, financial
condition, and operating results.

We face a number of risks related to manufacturing and supply chain management, which could affect our ability to supply
both our products and our services.
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We rely on contract manufacturers to manufacture or assemble our devices and servers and networking equipment usedin our technical infrastructure, and we may supply the contract manufacturers with components to assemble the devices
and equipment. We also rely on other companies to participate in the supply of components and distribution of our
products and services. Our business could be negatively affected if we are not able to engage these companies with thenecessary capabilities or capacity on reasonable terms, or if those we engage fail to meet their obligations (whether due tofinancial difficulties or other reasons), or make adverse changes in the pricing or other material terms of our arrangementswith them.
We have experienced and/or may in the future experience supply shortages, price increases, quality issues, and/or longer
lead times that could negatively affect our operations, driven by raw material, component availability, manufacturing
capacity, labor shortages, industry allocations, logistics capacity, inflation, foreign currency exchange rates, tariffs,
sanctions and export controls, trade disputes and barriers, forced labor concerns, sustainability sourcing requirements,
geopolitical tensions, armed conflicts, natural disasters or pandemics, the effects of climate change (such as sea levelrise, drought, flooding, heat waves, wildfires and resultant air quality effects and power shutdowns associated with wildfire
prevention, and increased storm severity), power loss, and significant changes in the financial or business condition of
our suppliers. Some of the components we use in our technical infrastructure and our devices are available from only one
or limited sources, and we may not be able to find replacement vendors on favorable terms in the event of a supply chain
disruption. A significant supply interruption that affects us or our vendors could delay critical data center upgrades or
expansions and delay consumer product availability.

We may enter into long-term contracts for materials and products that commit us to significant terms and conditions.
We may face costs for materials and products that are not consumed due to market demand, technological change,changed consumer preferences, quality, product recalls, and warranty issues. For instance, because certain of ourhardware supply contracts have volume-based pricing or minimum purchase requirements, if the volume of sales of ourdevices decreases or does not reach projected targets, we could face increased materials and manufacturing costs orother financial liabilities that could make our products more costly per unit to manufacture and harm our financial conditionand operating results. Furthermore, certain of our competitors may negotiate more favorable contractual terms based onvolume and other commitments that may provide them with competitive advantages and may affect our supply.
Our devices have had, and in the future may have, quality issues resulting from design, manufacturing, or operations.
Sometimes, these issues may be caused by components we purchase from other manufacturers or suppliers. If the qualityof our products and services does not meet expectations or our products or services are defective or require a recall, it
could harm our reputation, financial condition, and operating results.

We require our suppliers and business partners to comply with laws and, where applicable, our company policies andpractices, such as the Google Supplier Code of Conduct, regarding workplace and employment practices, data security,environmental compliance, and intellectual property licensing, but we do not control them or their practices. Violations oflaw or unethical business practices could result in supply chain disruptions, canceled orders, harm to key relationships, anddamage to our reputation. Their failure to procure necessary license rights to intellectual property could affect our ability tosell our products or services and expose us to litigation or financial claims.

Interruption to, interference with, or failure of our complex information technology and communications
systems could hurt our ability to effectively provide our products and services, which could harm our
reputation, financial condition, and operating results.

The availability of our products and services and fulfillment of our customer contracts depend on the continuing operationof our information technology and communications systems. Our systems are vulnerable to damage, interference, orinterruption from modifications or upgrades, terrorist attacks, state-sponsored attacks, natural disasters or pandemics,
geopolitical tensions or armed conflicts, export controls and sanctions, the effects of climate change (such as sea levelrise, drought, flooding, heat waves, wildfires and resultant air quality effects and power shutdowns associated with wildfire
prevention, and increased storm severity), power loss, utility outages, telecommunications failures, computer viruses,
software bugs, ransomware attacks, supply-chain attacks, computer denial of service attacks, phishing schemes, orother attempts to harm or access our systems. Some of our data centers are located in areas with a high risk of major
earthquakes or other natural disasters. Our data centers are also subject to break-ins, sabotage, and intentional actsof vandalism, and, in some cases, to potential disruptions resulting from problems experienced by facility operators or
disruptions as a result of geopolitical tensions and conflicts happening in the area. Some of our systems are not fully
redundant, and disaster recovery planning cannot account for all eventualities. The occurrence of a natural disaster
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Part IIIPart IVor pandemic, closure of a facility, or other unanticipated problems affecting our data centers could result in lengthy
interruptions in our service. In addition, our products and services are highly technical and complex and have containedin the past, and may contain in the future, errors or vulnerabilities, which could result in interruptions in or failure of ourservices or systems. Any of these incidents could impede or prevent us from effectively offering products and providing
services, which could harm our reputation, financial condition, and operating results.

Our international operations expose us to additional risks that could harm our business, financial condition,and operating results.
Our international operations are significant to our revenues and net income, and we plan to continue to grow internationally.
International revenues accounted for approximately 53% of our consolidated revenues in 2023. In addition to risks
described elsewhere in this section, our international operations expose us to other risks, including the following:• restrictions on foreign ownership and investments, and stringent foreign exchange controls that might prevent us from
repatriating cash earned in countries outside the U.S.;• sanctions, import and export controls, other market access barriers, political unrest, geopolitical tensions, changes
in regimes, or armed conflict (such as ongoing conflicts in the Middle East and Ukraine), any of which may affect ourbusiness continuity, increase our operating costs, limit demand for our products and services, limit our ability to sourcecomponents or final products, or prevent or impede us from operating in certain jurisdictions, complying with local laws,
or offering products or services;• longer payment cycles in some countries, increased credit risk, and higher levels of payment fraud;• an evolving foreign policy landscape that may adversely affect our revenues and could subject us to litigation, newregulatory costs and challenges (including new customer requirements), uncertainty regarding regulatory outcomes, andother liabilities under local laws that may not offer due process or clear legal precedent;• anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act, and other local laws prohibiting certain payments togovernment officials, violations of which could result in civil and criminal penalties; and• different employee/employer relationships, existence of works councils and differing labor practices, and otherchallenges caused by distance, language, local expertise, and cultural differences, increasing the complexity of doing
business in multiple jurisdictions.

Because we conduct business in currencies other than U.S. dollars but report our financial results in U.S. dollars, we have
faced, and will continue to face, exposure to fluctuations in foreign currency exchange rates. Although we hedge a portionof our international currency exposure, significant fluctuations in exchange rates between the U.S. dollar and foreign
currencies have in the past and may in the future adversely affect our revenues and earnings. Hedging programs are also
inherently risky and could expose us to additional risks that could harm our financial condition and operating results.

We are exposed to fluctuations in the fair values of our investments and, in some instances, our financial
statements incorporate inherently subjective valuation methodologies.

The fair value of our debt and equity investments may in the future be, and certain investments have been in the past,
negatively affected by liquidity, credit deterioration or losses, performance and financial results of the underlying entities,
foreign exchange rates, changes in interest rates, including changes that may result from the implementation of new
benchmark rates, the effect of new or changing regulations, the stock market in general, or other factors.

We measure certain of our non-marketable equity and debt securities, certain other instruments including stock-based
compensation awards settled in the stock of Other Bet companies, and certain assets and liabilities acquired in a businesscombination, at fair value on a nonrecurring basis, which is inherently subjective and requires management judgment andestimation. All gains and losses on non-marketable equity securities are recognized in OI&E, which increases the volatilityof our OI&E. The unrealized gains and losses or impairments we record from fair value remeasurements in any particularperiod may differ significantly from the gains or losses we ultimately realize on such investments.
As a result of these factors, the value of our investments could decline, which could harm our financial condition andoperating results.

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Risks Related to our Industry

People access our products and services through a variety of platforms and devices that continue to
evolve with the advancement of technology and user preferences. If manufacturers and users do notwidely adopt versions of our products and services developed for these interfaces, our business could
be harmed.

People access our products and services through a growing variety of devices such as desktop computers, mobile phones,
smartphones, laptops and tablets, video game consoles, voice-activated speakers, wearables (including virtual reality
and augmented reality devices), automobiles, and television-streaming devices. Our products and services may be lesspopular on some interfaces. Each manufacturer or distributor may establish unique technical standards for its devices,and our products and services may not be available or may only be available with limited functionality for our users or our
advertisers on these devices as a result. Some manufacturers may also elect not to include our products on their devices.
In addition, search queries may be undertaken via voice-activated search, apps, social media or other platforms, which
could harm our business. It is hard to predict the challenges we may encounter in adapting our products and services anddeveloping competitive new products and services. We expect to continue to devote significant resources to creating andsupporting products and services across multiple platforms and devices. Failing to attract and retain a substantial numberof new device manufacturers, suppliers, distributors, developers, and users, or failing to develop products and technologies
that work well on new devices and platforms, could harm our business, financial condition, and operating results and ability
to capture future business opportunities.

Issues in the development and use of AI may result in reputational harm and increased liability exposure.

Our evolving AI-related efforts may give rise to risks related to harmful content, inaccuracies, discrimination, intellectual
property infringement or misappropriation, defamation, data privacy, cybersecurity, and other issues. As a result of theseand other challenges associated with innovative technologies, our implementation of AI systems could subject us tocompetitive harm, regulatory action, legal liability (including under new and proposed legislation and regulations), newapplications of existing data protection, privacy, intellectual property, and other laws, and brand or reputational harm.
Some uses of AI will present ethical issues and may have broad effects on society. In order to implement AI responsibly
and minimize unintended harmful effects, we have already devoted and will continue to invest significant resources todevelop, test, and maintain our products and services, but we may not be able to identify or resolve all AI-related issues,
deficiencies, and/or failures before they arise. Unintended consequences, uses, or customization of our AI tools andsystems may negatively affect human rights, privacy, employment, or other social concerns, which may result in claims,
lawsuits, brand or reputational harm, and increased regulatory scrutiny, any of which could harm our business, financial
condition, and operating results.

Data privacy and security concerns relating to our technology and our practices could harm our
reputation, cause us to incur significant liability, and deter current and potential users or customers fromusing our products and services. Computer viruses, software bugs or defects, security breaches, andattacks on our systems could result in the improper disclosure and use of user data and interference with
our users’ and customers’ ability to use our products and services, harming our business and reputation.

Concerns about, including the adequacy of, our practices with regard to the collection, use, governance, disclosure, or
security of personal data or other data-privacy-related matters, even if unfounded, could harm our business, reputation,
financial condition, and operating results. Our policies and practices may change over time as expectations and regulations
regarding privacy and data change.
Our products and services involve the storage, handling, and transmission of proprietary and other sensitive information.
Software bugs, theft, misuse, defects, vulnerabilities in our products and services, and security breaches expose us to arisk of loss or improper use and disclosure of such information, which could result in litigation and other potential liabilities,
including regulatory fines and penalties, as well as reputational harm. Additionally, our products incorporate highly
technical and complex technologies, and thus our technologies and software have contained, and are likely in the future tocontain, undetected errors, bugs, and/or vulnerabilities. We continue to add new features involving AI to our offerings andinternal systems, and features that rely on AI may be susceptible to unanticipated security threats as our and the market’s
understanding of AI-centric security risks and protection methods continue to develop. We have in the past discovered,and may in the future discover, some errors in our software code only after we have released the code. Systems andAlphabet 2023 Annual Report

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control failures, security breaches, failure to comply with our privacy policies, and/or inadvertent disclosure of user data
could result in government and legal exposure, seriously harm our reputation, brand, and business, and impair our ability to
attract and retain users or customers. Such incidents have occurred in the past and may continue to occur due to the scaleand nature of our products and services. While there is no guarantee that such incidents will not cause significant damage,
we expect to continue to expend significant resources to maintain security protections that limit the effect of bugs, theft,misuse, and security vulnerabilities or breaches.
We experience cyber attacks and other attempts to gain unauthorized access to our systems on a regular basis. Cyberattacks continue to evolve in sophistication and volume, and inherently may be difficult to detect for long periods of time.
We have seen, and will continue to see, industry-wide software supply chain vulnerabilities, which could affect our or otherparties’ systems. We expect to continue to experience such incidents or vulnerabilities in the future. Our efforts to address
undesirable activity on our platform may also increase the risk of retaliatory attack. In addition, we face the risk of cyberattacks by nation-states and state-sponsored actors. These attacks may target us or our customers, particularly our public
sector customers (including federal, state, and local governments). Geopolitical tensions or armed conflicts, such as theongoing conflict in the Middle East and Ukraine, may increase these risks.
We may experience security issues, whether due to employee or insider error or malfeasance, system errors, orvulnerabilities in our or other parties’ systems. While we may not determine some of these issues to be material at the timethey occur and may remedy them quickly, there is no guarantee that these issues will not ultimately result in significant
legal, financial, and reputational harm, including government inquiries, enforcement actions, litigation, and negative
publicity. There is also no guarantee that a series of related issues may not be determined to be material at a later datein the aggregate, even if they may not be material individually at the time of their occurrence. Because the techniques
used to obtain unauthorized access to, disable or degrade service provided by or otherwise sabotage systems change
frequently and often are recognized only after being launched against a target, even taking all reasonable precautions,
including those required by law, we have been unable in the past and may continue to be unable to anticipate or detectattacks or vulnerabilities or implement adequate preventative measures.

Further, if any partners with whom we share user or other customer information fail to implement adequate data-security
practices, fail to comply with our terms and policies, or otherwise suffer a network or other security breach, our users’
data may be improperly accessed, used, or disclosed. If an actual or perceived breach of our or our business partners’ orservice providers’ security occurs, the market perception of the effectiveness of our security measures would be harmed,
we could lose users and customers, our trade secrets or those of our business partners may be compromised, and we may
be exposed to significant legal and financial risks, including legal claims (which may include class-action litigation) andregulatory actions, fines, and penalties. Any of the foregoing consequences could harm our business, reputation, financial
condition, and operating results.
While we have dedicated significant resources to privacy and security incident response capabilities, including dedicatedworldwide incident response teams, our response process, particularly during times of a natural disaster or pandemic,
may not be adequate, may fail to accurately assess the severity of an incident, may not be fast enough to prevent or limit
harm, or may fail to sufficiently remediate an incident. As a result, we may suffer significant legal, reputational, or financial
exposure, which could harm our business, financial condition, and operating results.

For additional information, see also our risk factor on privacy and data protection regulations under ‘Risks Related to Laws,
Regulations, and Policies’ below.

Our ongoing investments in safety, security, and content review will likely continue to identify abuse of ourplatforms and misuse of user data.
In addition to our efforts to prevent and mitigate cyber attacks, we are making significant investments in safety, security,
and review efforts to combat misuse of our services and unauthorized access to user data by third parties, including
investigation and review of platform applications that could access the information of users of our services. As a resultof these efforts, we have in the past discovered, and may in the future discover, incidents of unnecessary access to or
misuse of user data or other undesirable activity by third parties. However, we may not have discovered, and may in the
future not discover, all such incidents or activity, whether as a result of our data limitations, including our lack of visibility
over our encrypted services, the scale of activity on our platform, or other factors, including factors outside of our control
such as a natural disaster or pandemic, and we may learn of such incidents or activity via third parties. Such incidents
and activities may include the use of user data or our systems in a manner inconsistent with our terms, contracts orpolicies, the existence of false or undesirable user accounts, election interference, improper ad purchases, activities that
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threaten people’s safety on- or off-line, or instances of spamming, scraping, or spreading disinformation. While we may
not determine some of these incidents to be material at the time they occurred and we may remedy them quickly, there
is no guarantee that these issues will not ultimately result in significant legal, financial, and reputational harm, including
government inquiries and enforcement actions, litigation, and negative publicity. There is also no guarantee that a seriesof related issues may not be determined to be material at a later date in the aggregate, even if they may not be material
individually at the time of their occurrence.

We may also be unsuccessful in our efforts to enforce our policies or otherwise prevent or remediate any such incidents.
Any of the foregoing developments may negatively affect user trust and engagement, harm our reputation and brands,
require us to change our business practices in ways that harm our business operations, and adversely affect our businessand financial results. Any such developments may also subject us to additional litigation and regulatory inquiries, which
could result in monetary penalties and damages, divert management’s time and attention, and lead to enhanced regulatory
oversight.

Problematic content on our platforms, including low-quality user-generated content, web spam, content
farms, and other violations of our guidelines could affect the quality of our services, which could harm our
reputation and deter our current and potential users from using our products and services.
We, like others in the industry, face violations of our content guidelines across our platforms, including sophisticatedattempts by bad actors to manipulate our hosting and advertising systems to fraudulently generate revenues, or tootherwise generate traffic that does not represent genuine user interest or intent. While we invest significantly in efforts topromote high-quality and relevant results and to detect and prevent low-quality content and invalid traffic, we have been
unable and may continue to be unable to detect and prevent all such abuses or promote uniformly high-quality content.
Increased use of AI in our offerings and internal systems may create new avenues of abuse for bad actors.

Many websites violate or attempt to violate our guidelines, including by seeking to inappropriately rank higher in search
results than our search engine’s assessment of their relevance and utility would rank them. Such efforts have affected, andmay continue to affect, the quality of content on our platforms and lead them to display false, misleading, or undesirable
content. Although English-language web spam in our search results has been reduced, and web spam in most otherlanguages is limited, we expect web spammers will continue to seek inappropriate ways to improve their rankings. Although
we continue to invest in and deploy proprietary technology to detect and prevent web spam on our platforms, there is no
guarantee that our technology will always be successful, and our users may have negative experiences on our platforms
if our technology fails to work as intended, which may affect our users’ decisions in continuing to use our platforms. We
also face other challenges from low-quality and irrelevant content websites, including content farms, which are websitesthat generate large quantities of low-quality content to help them improve their search rankings. We are continually
launching algorithmic changes designed to detect and prevent abuse from low-quality websites, but we may not always
be successful. We also face other challenges on our platforms, including violations of our content guidelines involving
incidents such as attempted election interference, activities that threaten the safety and/or well-being of our users on- or
off-line, and the spreading of misinformation or disinformation.
If we fail to either detect and prevent an increase in problematic content or effectively promote high-quality content, it
could hurt our reputation for delivering relevant information or reduce use of our platforms, harming our financial conditionand operating results. It may also subject us to litigation and regulatory actions, which could result in monetary penalties
and damages and divert management’s time and attention.

Our business depends on continued and unimpeded access to the Internet by us and our users. Internet
access providers may be able to restrict, block, degrade, or charge for access to certain of our products
and services, which could lead to additional expenses and the loss of users and advertisers.

Our products and services depend on the ability of our users to access the Internet, and certain of our products requiresignificant bandwidth to work effectively. Currently, this access is provided by companies that have significant market
power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies,
mobile communications companies, and government-owned service providers. Some of these providers have taken, or
have stated that they may take, measures that could degrade, disrupt, or increase the cost of user access to certain of
our products by restricting or prohibiting the use of their infrastructure to support or facilitate our offerings, by charging
increased fees to us or our users to provide our offerings, or by providing our competitors preferential access. Somejurisdictions have adopted regulations prohibiting certain forms of discrimination by internet access providers; however,substantial uncertainty exists in the U.S. and elsewhere regarding such protections. For example, in 2018 the U.S. Federal
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Communications Commission repealed net neutrality rules, which could permit internet access providers to restrict, block,degrade, or charge for access to certain of our products and services. In addition, in some jurisdictions, our products andservices have been subject to government-initiated restrictions or blockages. These could harm existing key relationships,
including with our users, customers, advertisers, and/or content providers, and impair our ability to attract new ones; harm
our reputation; and increase costs, thereby negatively affecting our business.

Risks Related to Laws, Regulations, and Policies

We are subject to a variety of new, existing, and changing laws and regulations worldwide that could harm
our business, and will likely be subject to an even broader scope of laws and regulations as we continue toexpand our business.

We are subject to numerous U.S. and foreign laws and regulations covering a wide variety of subjects, and our introductionof new businesses, products, services, and technologies will likely continue to subject us to additional laws and regulations.
In recent years, governments around the world have proposed and adopted a large number of new laws and regulations
relevant to the digital economy, particularly in the areas of data privacy and security, competition, environmental, socialand governance (ESG) requirements, AI, and online content. The costs of compliance with these measures are high and arelikely to increase in the future.
New or changing laws and regulations, or new interpretations or applications of existing laws and regulations in a mannerinconsistent with our practices, have resulted in, and may continue to result in, less useful products and services, alteredbusiness practices, limited ability to pursue certain business models or offer certain products and services, substantial
costs, and civil or criminal liability. Examples include laws and regulations regarding:• Competition and technology platforms’ business practices: Laws and regulations focused on large technology
platforms, including the Digital Markets Act in the European Union (EU); regulations and legal settlements in the U.S.,
South Korea, and elsewhere that affect Google Play’s billing policies, fees, and business model; as well as litigation andnew regulations under consideration in a range of jurisdictions.

• AI: Laws and regulations focused on the development, use, and provision of AI technologies and other digital products
and services, which could result in monetary penalties or other regulatory actions. For example, while legislative text
has yet to be finalized and formally approved, provisional political agreement on a proposed EU AI Act was reached
between co-legislators in December 2023, including that specific transparency and other requirements would be
introduced for general purpose AI systems and the models on which those systems are based. In addition, the WhiteHouse’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence devises
a framework for the U.S. government, among other things, to regulate private sector use and development of certain
foundation models.
• Data privacy, collection, and processing: Laws and regulations further restricting the collection, processing, and/or
sharing of user or advertising-related data, including privacy and data protection laws; laws affecting the processing ofchildren’s data (as discussed further below), data breach notification laws, and laws limiting data transfers (including
data localization laws).

• Copyright and other intellectual property: Copyright and related laws, including the EU Directive on Copyright in
the Digital Single Market and European Economic Area transpositions, which may introduce new licensing regimes,
increase liability with respect to content uploaded by users or linked to from our platforms, or create property
rights in news publications that could require payments to news agencies and publishers, which may result in otherregulatory actions.

• Content moderation: Various laws covering content moderation and removal, and related disclosure obligations,such as the EU’s Digital Services Act, Florida’s Senate Bill 7072 and Texas’ House Bill 20, and laws and proposed
legislation in Singapore, Australia, and the United Kingdom that impose penalties for failure to remove certain
types of content or require disclosure of information about the operation of our services and algorithms, which
may make it harder for services like Google Search and YouTube to detect and deal with low-quality, deceptive, or
harmful content.
• Consumer protection: Consumer protection laws, including the EU’s New Deal for Consumers, which could result inmonetary penalties and create a range of new compliance obligations.

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In addition, the applicability and scope of these and other laws and regulations, as interpreted by courts, regulators, or
administrative bodies, remain uncertain and could be interpreted in ways that harm our business. For example, we rely on
statutory safe harbors, like those set forth in the Digital Millennium Copyright Act and Section 230 of the Communications
Decency Act in the U.S. and the E-Commerce Directive in Europe, to protect against liability for various linking, caching,ranking, recommending, and hosting activities. Legislation or court rulings affecting these safe harbors may adversely
affect us and may impose significant operational challenges. There are legislative proposals and pending litigation in the
U.S., EU, and around the world that could diminish or eliminate safe harbor protection for websites and online platforms.
Our development, use, and commercialization of AI products and services (including our implementation of AI in ourofferings and internal systems) could subject us to regulatory action and legal liability, including under specific legislation
regulating AI, as well as new applications of existing data protection, cybersecurity, privacy, intellectual property, andother laws.

We are and may continue to be subject to claims, lawsuits, regulatory and government investigations,enforcement actions, consent orders, and other forms of regulatory scrutiny and legal liability that could
harm our business, reputation, financial condition, and operating results.

We are subject to claims, lawsuits, regulatory and government investigations, other proceedings, and orders involving
competition, intellectual property, data privacy and 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, and other matters. We are also subject to a variety of claims including product warranty,
product liability, and consumer protection claims related to product defects, among other litigation, and we may also
be subject to claims involving health and safety, hazardous materials usage, other environmental effects, AI training,development, and commercialization, or service disruptions or failures. Claims have been brought, and we expect
will continue to be brought, against us for defamation, negligence, breaches of contract, copyright and trademark
infringement, unfair competition, unlawful activity, torts, privacy rights violations, fraud, or other legal theories basedon the nature and content of information available on or via our services, the design and effect of our products andservices, or due to our involvement in hosting, transmitting, marketing, branding, or providing access to content createdby third parties.

For example, in December 2023, a California jury delivered a verdict in Epic Games v. Google finding that Google violated
antitrust laws related to Google Play’s billing practices. The presiding judge will determine remedies in 2024 and the rangeof potential remedies vary widely. We plan to appeal. In addition, the U.S. Department of Justice, various U.S. states,and other plaintiffs have filed several antitrust lawsuits about various aspects of our business, including our advertisingtechnologies and practices, the operation and distribution of Google Search, and the operation and distribution of theAndroid operating system and Play Store. Other regulatory agencies in the U.S. and around the world, including competition
enforcers, consumer protection agencies, and data protection authorities, have challenged and may continue to challenge
our business practices and compliance with laws and regulations. We are cooperating with these investigations anddefending litigation or appealing decisions where appropriate.
Various laws, regulations, investigations, enforcement lawsuits, and regulatory actions have involved in the past, and may inthe future result in substantial fines and penalties, injunctive relief, ongoing monitoring and auditing obligations, changes toour products and services, alterations to our business models and operations, including divestiture, and collateral related
civil litigation or other adverse consequences, all of which could harm our business, reputation, financial condition, andoperating results.
Any of these legal proceedings could result in legal costs, diversion of management resources, negative publicity andother harms to our business. Estimating liabilities for our pending proceedings is a complex, fact-specific, and speculative
process that requires significant judgment, and the amounts we are ultimately liable for may be less than or exceed ourestimates. The resolution of one or more such proceedings has resulted in, and may in the future result in, additional
substantial fines, penalties, injunctions, and other sanctions that could harm our business, reputation, financial condition,and operating results.

For additional information about the ongoing material legal proceedings to which we are subject, see Legal Proceedings inPart I, Item 3 of this Annual Report on Form 10-K.

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Privacy, data protection, and data usage regulations are complex and rapidly evolving areas. Any failureor alleged failure to comply with these laws could harm our business, reputation, financial condition, andoperating results.

Authorities around the world have adopted and are considering a number of legislative and regulatory proposals
concerning data protection, data usage, and encryption of user data. Adverse legal rulings, legislation, or regulation haveresulted in, and may continue to result in, fines and orders requiring that we change our practices, which have had andcould continue to have an adverse effect on how we provide services, harming our business, reputation, financial condition,and operating results. These laws and regulations are evolving and subject to interpretation, and compliance obligations
could cause us to incur substantial costs or harm the quality and operations of our products and services in ways that harm
our business. Examples of these laws include:• The General Data Protection Regulation and the United Kingdom General Data Protection Regulations, which apply to allof our activities conducted from an establishment in the EU or the United Kingdom, respectively, or related to products
and services that we offer to EU or the United Kingdom users or customers, respectively, or the monitoring of their
behavior in the EU or the UK, respectively.

• Various comprehensive U.S. state and foreign privacy laws, which give new data privacy rights to their respective
residents (including, in California, a private right of action in the event of a data breach resulting from our failure to
implement and maintain reasonable security procedures and practices) and impose significant obligations on controllers
and processors of consumer data.
• State laws governing the processing of biometric information, such as the Illinois Biometric Information Privacy Act andthe Texas Capture or Use of Biometric Identifier Act, which impose obligations on businesses that collect or disclose
consumer biometric information.

• Various federal, state, and foreign laws governing how companies provide age appropriate experiences to children
and minors, including the collection and processing of children and minor’s data. These include the Children’s Online
Privacy Protection Act of 1998, and the United Kingdom Age-Appropriate Design Code, all of which address the use anddisclosure of the personal data of children and minors and impose obligations on online services or products directed toor likely to be accessed by children.
• The California Internet of Things Security Law, which regulates the security of data used in connection withinternet-connected devices.

• The EU’s Digital Markets Act, which will require in-scope companies to obtain user consent for combining data acrosscertain products and require search engines to share anonymized data with rival companies, among other changes.

Further, we are subject to evolving laws and regulations that dictate whether, how, and under what circumstances we cantransfer, process and/or receive personal data, as well as ongoing enforcement actions from supervisory authorities related
to cross-border transfers of personal data. The validity of various data transfer mechanisms we currently rely upon remains
subject to legal, regulatory, and political developments in both Europe and the U.S., which may require us to adapt ourexisting arrangements.

We face, and may continue to face, intellectual property and other claims that could be costly to defend,
result in significant damage awards or other costs (including indemnification awards), and limit our ability
to use certain technologies.

We, like other internet, technology, and media companies, are frequently subject to litigation based on allegations ofinfringement or other violations of intellectual property rights, including patent, copyright, trade secrets, and trademarks.
Parties have also sought broad injunctive relief against us by filing claims in U.S. and international courts and the U.S.
International Trade Commission (ITC) for exclusion and cease-and-desist orders. In addition, patent-holding companies
may frequently seek to generate income from patents they have obtained by bringing claims against us. As we continue toexpand our business, the number of intellectual property claims against us has increased and may continue to increase as
we develop and acquire new products, services, and technologies.
Adverse results in any of these lawsuits may include awards of monetary damages, costly royalty or licensing agreements(if licenses are available at all), or orders limiting our ability to sell our products and services in the U.S. or elsewhere,
including by preventing us from offering certain features, functionalities, products, or services in certain jurisdictions.
They may also cause us to change our business practices in ways that could result in a loss of revenues for us andotherwise harm our business.
18

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Many of our agreements with our customers and partners, including certain suppliers, require us to defend against certain
intellectual property infringement claims and in some cases indemnify them for certain intellectual property infringement
claims against them, which could result in increased costs for defending such claims or significant damages if there
were an adverse ruling in any such claims. Such customers and partners may also discontinue the use of our products,
services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and harm ourbusiness. Moreover, intellectual property indemnities provided to us by our suppliers, when obtainable, may not cover all
damages and losses suffered by us and our customers arising from intellectual property infringement claims. Furthermore,in connection with our divestitures, we have agreed, and may in the future agree, to provide indemnification for certain
potential liabilities, including those associated with intellectual property claims. Regardless of their merits, intellectual
property claims are often time consuming and expensive to litigate or settle. To the extent such claims are successful, they
could harm our business, including our product and service offerings, financial condition, and operating results.

Expectations relating to ESG considerations could expose us to potential liabilities, increased costs, andreputational harm.

We are subject to laws, regulations, and other measures that govern a wide range of topics, including those related tomatters beyond our core products and services. For instance, new laws, regulations, policies, and international accords
relating to ESG matters, including sustainability, climate change, human capital, and diversity, are being developed andformalized in Europe, the U.S., and elsewhere, which may entail specific, target-driven frameworks and/or disclosure
requirements. We have implemented robust ESG programs, adopted reporting frameworks and principles, and announced
a number of goals and initiatives. The implementation of these goals and initiatives may require considerable investments,and our goals, with all of their contingencies, dependencies, and in certain cases, reliance on third-party verification and/or performance, are complex and ambitious, and may change. We cannot guarantee that our goals and initiatives will befully realized on the timelines we expect or at all, and projects that are completed as planned may not achieve the results
we anticipate. Any failure, or perceived failure, by us to adhere to our public statements, comply fully with developing
interpretations of ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could
harm our business, reputation, financial condition, and operating results.

We could be subject to changes in tax rates, the adoption of new U.S. or international tax legislation, or
exposure to additional tax liabilities.

We are subject to a variety of taxes and tax collection obligations in the U.S. and numerous foreign jurisdictions. Our effective
tax rates are affected by a variety of factors, including changes in the mix of earnings in jurisdictions with different statutory
tax rates, net gains and losses on hedges and related transactions under our foreign exchange risk management program,changes in our stock price for shares issued as employee compensation, changes in the valuation of our deferred tax
assets or liabilities, and the application of different provisions of tax laws or changes in tax laws, regulations, or accounting
principles (including changes in the interpretation of existing laws). Further, if we are unable or fail to collect taxes on behalfof customers, employees and partners as the withholding agent, we could become liable for taxes that are levied against
third parties.

We are subject to regular review and audit by both domestic and foreign tax authorities. As a result, we have received, andmay in the future receive, assessments in multiple jurisdictions, on various tax-related assertions, such as transfer-pricing
adjustments or permanent-establishment claims. Any adverse outcome of such a review or audit could harm our financial
condition and operating results, require adverse changes to our business practices, or subject us to additional litigation
and regulatory inquiries. In addition, the determination of our worldwide provision for income taxes and other tax liabilities
requires significant judgment and often involves uncertainty. Although we believe our estimates are reasonable, theultimate tax outcome may differ from the amounts recorded in our financial statements and may affect our financial resultsin the period or periods for which such determination is made.
Furthermore, due to shifting economic and political conditions, tax policies, laws, or rates in various jurisdictions may
be subject to significant changes in ways that could harm our financial condition and operating results. For example,
various jurisdictions around the world have enacted or are considering revenue-based taxes such as digital services
taxes and other targeted taxes, which could lead to inconsistent and potentially overlapping international tax regimes.
The Organization for Economic Cooperation and Development (OECD) is coordinating negotiations among more than
140 countries with the goal of achieving consensus around substantial changes to international tax policies, including theimplementation of a minimum global effective tax rate of 15%. Our effective tax rate and cash tax payments could increasein future years as a result of these changes.
Alphabet 2023 Annual Report

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Part IIIPart IV

Risks Related to Ownership of our Stock

We cannot guarantee that any share repurchase program will be fully consummated or will enhancelong-term stockholder value, and share repurchases could increase the volatility of our stock prices andcould diminish our cash reserves.
We engage in share repurchases of our Class A and Class C stock from time to time in accordance with authorizations
from the Board of Directors of Alphabet. Our repurchase program does not have an expiration date and does not
obligate Alphabet to repurchase any specific dollar amount or to acquire any specific number of shares. Further, ourshare repurchases could affect our share trading prices, increase their volatility, reduce our cash reserves and may besuspended or terminated at any time, which may result in a decrease in the trading prices of our stock.

The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters.

Our Class B stock has 10 votes per share, our Class A stock has one vote per share, and our Class C stock has no voting rights.
As of December 31, 2023, Larry Page and Sergey Brin beneficially owned approximately 86.5% of our outstanding Class B
stock, which represented approximately 51.5% of the voting power of our outstanding common stock. Through their stock
ownership, Larry and Sergey have significant influence over all matters requiring stockholder approval, including the electionof directors and significant corporate transactions, such as a merger or other sale of our company or our assets, for theforeseeable future. In addition, because our Class C stock carries no voting rights (except as required by applicable law), theissuance of the Class C stock, including in future stock-based acquisition transactions and to fund employee equity incentive
programs, could continue Larry and Sergey’s current relative voting power and their ability to elect all of our directors and to
determine the outcome of most matters submitted to a vote of our stockholders. The share repurchases made pursuant toour repurchase program may also affect Larry and Sergey’s relative voting power. This concentrated control limits or severely
restricts other stockholders’ ability to influence corporate matters and we may take actions that some of our stockholders do
not view as beneficial, which could reduce the market price of our Class A stock and our Class C stock.

Provisions in our charter documents and under Delaware law could discourage a takeover thatstockholders may consider favorable.

Provisions in Alphabet’s certificate of incorporation and bylaws may have the effect of delaying or preventing a change ofcontrol or changes in our management. These provisions include the following:• Our Board of Directors has the right to elect directors to fill a vacancy created by the expansion of the Board of Directors
or the resignation, death, or removal of a director.
• Our stockholders may not act by written consent, which makes it difficult to take certain actions without holding a
stockholders’ meeting.

• Our certificate of incorporation prohibits cumulative voting in the election of directors. This limits the ability of minority
stockholders to elect director candidates.
• Stockholders must provide advance notice to nominate individuals for election to the Board of Directors or to propose
matters that can be acted upon at a stockholders’ meeting. These provisions may discourage or deter a potential
acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting
to obtain control of our company.

• Our Board of Directors may issue, without stockholder approval, shares of undesignated preferred stock, which makes it
possible for our Board of Directors to issue preferred stock with voting or other rights or preferences that could impede
the success of any attempt to acquire us.
As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware law, acorporation may not engage in a business combination with any holder of 15% or more of its outstanding voting stock
unless the holder has held the stock for three years or, among other things, the Board of Directors has approved thetransaction. Our Board of Directors could rely on Delaware law to prevent or delay an acquisition of us.

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 have fluctuated, and may
continue to fluctuate widely, in response to various factors, many of which are beyond our control, including, among others,
the activities of our peers and changes in broader 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.
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General Risks

Our operating results may fluctuate, which makes our results difficult to predict and could cause ourresults to fall short of expectations.

Our operating results have fluctuated, and may in the future fluctuate, as a result of a number of factors, many outside ofour control, including the cyclical nature and seasonality in our business and geopolitical events. As a result, comparing
our operating results (including our expenses as a percentage of our revenues) on a period-to-period basis may not bemeaningful, and our past results should not be relied on as an indication of our future performance. Consequently, ouroperating results in future quarters may fall below expectations.

Acquisitions, joint ventures, investments, and divestitures could result in operating difficulties,
dilution, and other consequences that could harm our business, financial condition, and operating
results.

Acquisitions, joint ventures, investments, and divestitures are important elements of our overall corporate strategy
and use of capital, and these transactions could be material to our financial condition and operating results.
We expect to continue to evaluate and enter into discussions regarding a wide array of such potential strategic
arrangements, which could create unforeseen operating difficulties and expenditures. Some of the areas where weface risks include:• diversion of management time and focus from operating our business to challenges related to acquisitions and otherstrategic arrangements;• failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon
approval that could, among other things, delay or prevent us from completing a transaction, or otherwise restrict ourability to realize the expected financial or strategic goals of a transaction;• failure to successfully integrate the acquired operations, technologies, services, and personnel (including cultural
integration and retention of employees) and further develop the acquired business or technology;• implementation of controls (or remediation of control deficiencies), procedures, and policies at the acquiredcompany;• integration of the acquired company’s accounting and other administrative systems, and the coordination of product,engineering, and sales and marketing functions;• transition of operations, users, and customers onto our existing platforms;• in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and toaddress the particular economic, currency, political, and regulatory risks associated with specific countries;• failure to accomplish commercial, strategic or financial objectives with respect to investments, joint ventures, and otherstrategic arrangements;• failure to realize the value of investments and joint ventures due to a lack of liquidity;• liability for activities of the acquired company before the acquisition, including patent and trademark infringement
claims, data privacy and security issues, violations of laws, commercial disputes, tax liabilities, warranty claims, productliabilities, and other known and unknown liabilities; and• litigation or other claims in connection with the acquired company, including claims from terminated employees,
customers, former stockholders, or other third parties.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions andother strategic arrangements could cause us to fail to realize their anticipated benefits, incur unanticipated liabilities, andharm our business generally.

Our acquisitions and other strategic arrangements could also result in dilutive issuances of our equity securities, theincurrence of debt, contingent liabilities, or amortization expenses, or impairment of goodwill and/or purchased long-lived
assets, and restructuring charges, any of which could harm our financial condition and operating results. Also, theanticipated benefits or value of our acquisitions and other strategic arrangements may not materialize. In connection with
our divestitures, we have agreed, and may in the future agree, to provide indemnification for certain potential liabilities,
which could harm our financial condition and operating results.
Alphabet 2023 Annual Report

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We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel, hire qualified
personnel, or maintain and continue to adapt our corporate culture, we may not be able to grow or
operate effectively.

Our performance and future success depends in large part upon the continued service of key technical leads as well as
members of our senior management team. For instance, Sundar Pichai is critical to the overall management of Alphabet
and its subsidiaries and plays an important role in the development of our technology, maintaining our culture, and setting
our strategic direction.

Our ability to compete effectively and our future success depend on our continuing to identify, hire, develop, motivate,
and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified employees
is intense, and certain of our competitors have directly targeted, and may continue to target, our employees. In addition,
our compensation arrangements, such as our equity award programs, may not always be successful in attracting new
employees and retaining and motivating our existing employees. Restrictive immigration policy and regulatory changes may
also affect our ability to hire, mobilize, or retain some of our global talent. All of our executive officers and key employees
are at-will employees, and we do not maintain any key-person life insurance policies.
In addition, we believe that our corporate culture fosters innovation, creativity, and teamwork. As our organization grows
and evolves, we may need to adapt our corporate culture and work environments to ever-changing circumstances, suchas during times of a natural disaster or pandemic, and these changes could affect our ability to compete effectively or
have an adverse effect on our corporate culture. Under our hybrid work models, we may experience increased costs and/or
disruption, in addition to potential effects on our ability to operate effectively and maintain our corporate culture.

Item 1B. Unresolved Staff Comments
Not applicable.

Item 1C. Cybersecurity

We maintain a comprehensive process for identifying, assessing, and managing material risks from cybersecurity threatsas part of our broader risk management system and processes. We obtain input, as appropriate, for our cybersecurity risk
management program on the security industry and threat trends from multiple external experts and internal threat intelligenceteams. Teams of dedicated privacy, safety, and security professionals oversee cybersecurity risk management and mitigation,
incident prevention, detection, and remediation. Leadership for these teams are professionals with deep cybersecurity
expertise across multiple industries, including our Vice President of Privacy, Safety, and Security Engineering. Our executive
leadership team, along with input from the above teams, are responsible for our overall enterprise risk management systemand processes and regularly consider cybersecurity risks in the context of other material risks to the company.
As part of our cybersecurity risk management system, our incident management teams track and log privacy and security
incidents across Alphabet, our vendors, and other third-party service providers to remediate and resolve any such
incidents. Significant incidents are reviewed regularly by a cross-functional working group to determine whether further
escalation is appropriate. Any incident assessed as potentially being or potentially becoming material is immediately
escalated for further assessment, and then reported to designated members of our senior management. We consult withoutside counsel as appropriate, including on materiality analysis and disclosure matters, and our senior management makes
the final materiality determinations and disclosure and other compliance decisions. Our management apprises Alphabet’s
independent public accounting firm of matters and any relevant developments.
The Audit and Compliance Committee has oversight responsibility for risks and incidents relating to cybersecurity threats,
including compliance with disclosure requirements, cooperation with law enforcement, and related effects on financial and otherrisks, and it reports any findings and recommendations, as appropriate, to the full Board for consideration. Senior management
regularly discusses cyber risks and trends and, should they arise, any material incidents with the Audit and Compliance
Committee. Internal Audit maintains a dedicated cybersecurity auditing team that independently tests our cybersecurity controls.
Our business strategy, results of operations and financial condition have not been materially affected by risks fromcybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide
assurance that they will not be materially affected in the future by such risks or any future material incidents. For more
information on our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K.
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Item 2. Properties

Our headquarters are located in Mountain View, California. We own and lease office facilities and data centers around theworld, primarily in Asia, Europe, and North America. We believe our existing facilities are in good condition and suitable forthe conduct of our business.

Item 3. Legal Proceedings

For a description of our material pending legal proceedings, see Legal Matters in Note 10 of the Notes to Consolidated
Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein byreference.

Item 4. Mine Safety Disclosures
Not applicable.

Alphabet 2023 Annual Report

23Part II

Item 5. Market for Registrant’s Common Equity, Related
Stockholder Matters, and Issuer Purchases of Equity
Securities

As of October 2, 2015, Alphabet Inc. became the successor issuer of Google Inc. pursuant to Rule 12g-3(a) under the
Exchange Act. Our Class A stock has been listed on the Nasdaq Global Select Market under the symbol “GOOG” sinceAugust 19, 2004, and under the symbol “GOOGL” since April 3, 2014. Prior to August 19, 2004, there was no public market
for our stock. Our Class B stock is neither listed nor traded. Our Class C stock has been listed on the Nasdaq Global SelectMarket under the symbol “GOOG” since April 3, 2014.

Holders of Record

As of December 31, 2023, there were approximately 7,305 and 1,757 stockholders of record of our Class A stock andClass C stock, respectively. Because many of our shares of Class A stock and Class C stock are held by brokers and otherinstitutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by theserecord holders. As of December 31, 2023, there were approximately 59 stockholders of record of our Class B stock.

Dividend Policy

We have never declared or paid any cash dividend on our common or capital stock. The primary use of capital continues to
be to invest for the long-term growth of the business. We regularly evaluate our cash and capital structure, including thesize, pace, and form of capital return to stockholders.

Issuer Purchases of Equity Securities

The following table presents information with respect to Alphabet’s repurchases of Class A and Class C stock during thequarter ended December 31, 2023:

PeriodOctober 1 - 31

November 1 - 30
December 1 - 31

(1)

(2)

Total

Total Numberof Class A
SharesPurchased(in thousands)(1)
9,923

9,197

7,502

26,622

Total Numberof Class C
SharesPurchased(in thousands) (1)38,687$

24,760$28,19891,645$

Average Price
Average Price
Paid perPaid perClass A Share(2) Class C Share(2)134.66$135.65135.76$136.37134.53$135.16

Total Number ofApproximate
Shares Purchased
Dollar Value ofas Part of Publicly
Shares that May
Announced
Yet Be Purchased
Programs Under the Program(in thousands)(1)(in millions)
48,610$45,73632,262$

36,34737,395

118,267$

40,725

Repurchases are being executed from time to time, subject to general 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. For additional information related to share repurchases, see Note 11 of the Notes
to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

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

Stock Performance Graphs

The graph below matches Alphabet Inc. Class A’s cumulative five-year total stockholder return on common stock with the
cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet Composite index. The
graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all
dividends) from December 31, 2018, to December 31, 2023. The returns shown are based on historical results and are notintended to suggest future performance.
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Comparison of Cumulative 5-Year Total Return*

ALPHABET INC. CLASS A COMMON STOCK
Among Alphabet Inc., the S&P 500 Index, the
NASDAQ Composite Index, and the RDG Internet Composite Index
$300
$250
$200
$150
$100
$50
$0

12/18 3/19

6/19

9/19 12/19 3/20 6/20 9/20 12/20 3/21

Alphabet Inc.

S&P 500

6/21

9/21 12/21 3/22

NASDAQ Composite

6/22

9/22 12/22 3/23

6/23

9/23 12/23

RDG Internet Composite*$100 invested on December 31, 2018, in stock or index, including reinvestment of dividends.
Copyright© 2024 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

The graph below matches Alphabet Inc. Class C’s cumulative five-year total stockholder return on capital stock with the
cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet Composite index. The
graph tracks the performance of a $100 investment in our Class C capital stock and in each index (with the reinvestment of
all dividends) from December 31, 2018, to December 31, 2023. The returns shown are based on historical results and are notintended to suggest future performance.

Comparison of Cumulative 5-Year Total Return*

ALPHABET INC. CLASS C CAPITAL STOCK
Among Alphabet Inc., the S&P 500 Index, the
NASDAQ Composite Index, and the RDG Internet Composite Index
$300
$250
$200
$150
$100
$50
$0

12/18 3/19

6/19

9/19 12/19 3/20 6/20 9/20 12/20 3/21

Alphabet Inc.

S&P 500

6/21

9/21 12/21 3/22

NASDAQ Composite

6/22

9/22 12/22 3/23

6/23

9/23 12/23

RDG Internet Composite*$100 invested on December 31, 2018, in stock or in index, including reinvestment of dividends.
Copyright© 2024 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

Item 6. [Reserved]

Alphabet 2023 Annual Report25Part I

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Item 7. 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 “Noteabout Forward-Looking Statements,” Part I, Item 1 “Business,” Part I, Item 1A “Risk Factors,” and our consolidated financial
statements and related notes included under Item 8 of this Annual Report on Form 10-K.
The following section generally discusses 2023 results compared to 2022 results. Discussion of 2022 results compared to2021 results to the extent not included in this report can be found in Item 7 of our 2022 Annual Report on Form 10-K.

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 additional informationon our segments, see Part I, Item 1 Business and Note 15 of the Notes to Consolidated Financial Statements included in
Item 8 of this Annual Report on Form 10-K.

Trends in Our Business and Financial Effect

The following long-term trends have contributed to the results of our consolidated operations, and we anticipate that they
will continue to affect our future results:• Users’ behaviors and advertising continue to shift online as the digital economy evolves.

The continuing evolution of the online world has contributed to the growth of our business and our revenues since
inception. We expect that this evolution will continue to benefit our business and our revenues, although at a slower
pace than we have experienced historically, in particular after the outsized growth in our advertising revenues during the
COVID-19 pandemic. In addition, we face increasing competition for user engagement and advertisers, which may affectour revenues.
• Users continue to access our products and services using diverse devices and modalities, which allows for new
advertising formats that may benefit our revenues but adversely affect our margins.

Our users are accessing our products and services via diverse devices and modalities, such as smartphones, wearables,
connected TVs, and smart home devices, and want to be able to be connected no matter where they are or what they are
doing. We are focused on expanding our products and services to stay in front of these trends in order to maintain andgrow our business.

We benefit from advertising revenues generated from different channels, including mobile, and newer advertising formats.
The margins from these channels and newer products have generally been lower than those from traditional desktop
search. Additionally, as the market for a particular device type or modality matures, our advertising revenues may beaffected. For example, changing dynamics within the global smartphone market, such as increased market saturation indeveloped countries, can affect our mobile advertising revenues.

We expect TAC paid to our distribution partners and Google Network partners to increase as our revenues grow and TAC
as a percentage of our advertising revenues (“TAC rate”) to be affected by changes in device mix; geographic mix; partner
agreement terms; partner mix; the percentage of queries channeled through paid access points; product mix; the relative
revenue growth rates of advertising revenues from different channels; and revenue share terms.
We expect these trends to continue to affect our revenues and put pressure on our margins.

• As online advertising evolves, we continue to expand our product offerings, which may affect our monetization.
As interactions between users and advertisers change, and as online user behavior evolves, we continue to expand
our product offerings to serve these changing needs, which may affect our monetization. For example, revenues fromads on YouTube and Google Play monetize at a lower rate than our traditional search ads. We also expect to continue
to incorporate AI innovations into our products, such as AI in Search, that could affect our monetization trends. Whendeveloping new products and services we generally focus first on user experience and then on monetization.
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Part IIIPart IV• As users in developing economies increasingly come online, our revenues from international markets continue
to increase, and may require continued investments. In addition, movements in foreign exchange rates affectsuch revenues.

The shift to online, as well as the advent of the multi-device world, has brought opportunities outside of the U.S., including
in emerging markets, such as India. We continue to invest heavily and develop localized versions of our products andadvertising programs relevant to our users in these markets. This has led to a trend of increased revenues from emerging
markets. We expect that our results will continue to be affected by our performance in these markets, particularly as
low-cost mobile devices become more available. This trend could affect our revenues as developing markets initiallymonetize at a lower rate than more mature markets.

International revenues represent a significant portion of our revenues and are subject to fluctuations in foreign currency
exchange rates relative to the U.S. dollar. While we have a foreign exchange risk management program designed to reduce
our exposure to these fluctuations, this program does not fully offset their effect on our revenues and earnings.
• The revenues that we derive beyond advertising are increasing and may adversely affect our margins.

Revenues from cloud, consumer subscriptions, platforms, and devices, which may have differing characteristics than our
advertising revenues, have grown over time, and we expect this trend to continue as we focus on expanding our products
and services. The margins on these revenues vary significantly and are generally lower than the margins on our advertising
revenues. For example, sales of our devices adversely affect our consolidated margins due to pressures on pricing andhigher cost of sales.
• As we continue to serve our users and expand our businesses, we will invest heavily in operating and capital
expenditures.

We continue to make significant research and development investments in areas of strategic focus as we seek to develop
new, innovative offerings, improve our existing offerings, and rapidly and responsibly deploy AI across our businesses.
We also 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 supportof AI products and services. In addition, acquisitions and strategic investments contribute to the breadth and depth of ourofferings, expand our expertise in engineering and other functional areas, and build strong partnerships around strategic
initiatives.
• We continue to face an evolving regulatory environment, and we are subject to claims, lawsuits, investigations, andother forms of potential legal liability, which could affect our business practices and financial results.

Changes in social, political, economic, tax, and regulatory conditions or in laws and policies governing a wide range of
topics and related legal matters, including investigations, lawsuits, and regulatory actions, have resulted in fines and caused
us to change our business practices. As these global trends continue, our cost of doing business may increase, our ability
to pursue certain business models or offer certain products or services may be limited, and we may need to change ourbusiness practices to comply with evolving regulatory and legal matters. Examples include the antitrust complaints filed by
the U.S. Department of Justice and a number of state Attorneys General; legislative proposals and pending litigation in the
U.S., EU, and around the world that could diminish or eliminate safe harbor protection for websites and online platforms;
and the Digital Markets Act and Digital Services Act in Europe and various legislative proposals in the U.S. focused on large
technology platforms. For additional information, see Item 1A Risk Factors and Legal Matters in Note 10 of the Notes toConsolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
• Our employees are critical to our success and we expect to continue investing in them.

Our employees are among our best assets and are critical for our continued success. We expect to continue hiring talented
employees around the globe and to provide competitive compensation programs. For additional information, see Culture
and Workforce in Part I, Item 1 Business of this Annual Report on Form 10-K.

Alphabet 2023 Annual Report27Part I

Part II

Part IIIPart IV

Revenues and Monetization Metrics

We generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide
enterprise customers of all sizes with infrastructure and platform services as well as communication and collaboration
tools; sales of other products and services, such as apps and in-app purchases, and devices; and fees received for
consumer subscription-based products. For additional information on how we recognize revenue, see Note 1 of the Notes
to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

In addition to the long-term trends and their financial effect on our business discussed above, fluctuations in our revenues
have been, and may continue to be, affected by a combination of general factors, 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, and othermeasures 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 from other 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, and devices 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 search in browsers, toolbars, etc.), andother Google owned and operated properties like Gmail, Google Maps, and Google 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 our advertising
revenues: paid clicks and cost-per-click pertain to traffic on Google Search & other properties, while impressions andcost-per-impression pertain to traffic on our Google Network properties.

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 isdefined as click-driven revenues divided by our total number of paid clicks and represents the average 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 for each impression
displayed to users.
As our business evolves, we periodically review, refine, and update our methodologies for monitoring, gathering, andcounting the number of paid clicks and the number of impressions, and for identifying the revenues generated by thecorresponding click and impression activity.

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Fluctuations in our advertising revenues, as well as the change in paid clicks and cost-per-click on Google Search & otherproperties 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 the general factors describedabove, 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 and channels.

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 YouTube TV, YouTube Music andPremium, 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 byfactors in addition to the general factors described above, such as changes in customer usage and demand, number ofsubscribers, 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, andother services. These services provide access to solutions such as cybersecurity, databases, analytics, and AI offerings
including our AI infrastructure, Vertex AI platform, and Duet AI for Google Cloud;• Google Workspace, which includes subscriptions for cloud-based communication and collaboration tools for enterprises,
such as Calendar, Gmail, Docs, Drive, and Meet, with integrated features like Duet AI in 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 thegeneral 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.

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 components of our operating expenses, aregenerally 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, in particular due to annual stock-based compensation(SBC) awards that generally vest over four years.

Alphabet 2023 Annual Report29Part I

Part II

Part IIIPart IV

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 and services. 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 and customer andproduct 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 aflat 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 theadvertiser 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 our existing and new
products and services;• depreciation; and• third-party services fees primarily relating to consulting and outsourced services in support of our engineering andproduct 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, and otheradministrative 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.

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 fluctuations in the valueof our investments, see Note 1 and Note 3 of the Notes to Consolidated Financial Statements included in Part II, Item 8 as
well as Item 7A Quantitative and Qualitative Disclosures About Market Risk of this Annual Report on Form 10-K.
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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 toreserves that are considered appropriate as well as the related net interest and penalties.
For additional information, including a reconciliation of the U.S. federal statutory rate to our effective tax rate, see Note 14of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Executive Overview

The following table summarizes our consolidated financial results (in millions, except for per share information andpercentages):Year Ended December 31,
Consolidated revenues

2022

2023

$ Change$282,836$

307,394$

Cost of revenues$

126,203$

133,332$

7,129

Operating income$

74,842$

84,293$9,451

Change in consolidated constant currency revenues

Operating expenses
Operating margin(1)$

Other income (expense), net$

Diluted EPS$

Net income

NM = Not Meaningful(1)$81,791

26%$(3,514)

$

4.56

$

59,972$

89,769

27%

$

1,424

$

5.80

$

73,795$24,558% Change

9%

10%

6%

7,978

10%

13%

1%

4,938

NM

1.24

27%

13,82323%

See “Use of Non-GAAP Constant Currency Information” below for details relating to our use of constant currency information.

• Revenues were $307.4 billion, an increase of 9% year over year, primarily driven by an increase in Google Services
revenues of $19.0 billion, or 8%, and an increase in Google Cloud revenues of $6.8 billion, or 26%.
• Total constant currency revenues, which exclude the effect of hedging, increased 10% year over year.

• Cost of revenues was $133.3 billion, an increase of 6% year over year, primarily driven by increases in content acquisition
costs, compensation expenses, and TAC. The increase in compensation expenses included charges related to employee
severance associated with the reduction in our workforce. Additionally, cost of revenues benefited from a reduction in
depreciation due to the change in estimated useful lives of our servers and network equipment.

• Operating expenses were $89.8 billion, an increase of 10% year over year, primarily driven by an increase incompensation expenses and charges related to our office space optimization efforts. The increase in compensation
expenses was largely the result of charges related to employee severance associated with the reduction in our workforce
and an increase in SBC expense. Operating expenses benefited from the change in the estimated useful lives of ourservers and certain network equipment.

Other Information:• In 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 year ended December 31, 2023. In addition, we are taking actions to optimize our
global office space. As a result, exit charges recorded during the year ended December 31, 2023, were $1.8 billion.
In addition to these exit charges, for the year ended December 31, 2023, we incurred $269 million in accelerated rent
and accelerated depreciation. For additional information, see Note 8 of the Notes to Consolidated Financial Statements
included in Item 8 of this Annual Report on Form 10-K.

Alphabet 2023 Annual Report

31Part I

Part II

Part IIIPart IV• In January 2023, we completed an assessment of the useful lives of our servers and network equipment, resulting in achange in the estimated useful life of our servers and certain network equipment to six years. The effect of this change
was a reduction in depreciation expense of $3.9 billion for the year ended December 31, 2023, recognized primarily
in cost of revenues and R&D expenses. For additional information, see Note 1 of the Notes to Consolidated Financial
Statements included in Item 8 of this Annual Report on Form 10-K.

• On July 21, 2023, the IRS announced a rule change allowing taxpayers to temporarily apply the regulations in effect prior
to 2022 related to U.S. federal foreign tax credits. This announcement applies to foreign taxes paid or accrued in thefiscal years 2022 and 2023. A cumulative one-time adjustment applicable to the prior period for this tax rule change wasrecorded in 2023 and is reflected in our effective tax rate of 13.9% for the year ended December 31, 2023.
• Repurchases of Class A and Class C shares were $62.2 billion for the year ended December 31, 2023. For additional
information, see Note 11 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on
Form 10-K.
• Operating cash flow was $101.7 billion for the year ended December 31, 2023.

• Capital expenditures, which primarily reflected investments in technical infrastructure, were $32.3 billion for the year
ended December 31, 2023.
• As of December 31, 2023, we had 182,502 employees.

Financial Results
Revenues

The following table presents revenues by type (in millions):
Year Ended December 31,
Google Search & other
YouTube ads$

Google Network

Google subscriptions, platforms, and devices

Google Cloud

$

2023

175,033

31,51031,312

224,473

237,855

253,528

272,543

1,068

1,527

34,68826,280

Other Bets

Google Services

29,243$29,055

Google Services total

Total revenues

162,450
32,780Google advertising

Hedging gains (losses)

2022

1,960

282,836

33,088$236

307,394

Google advertising revenues
Google Search & other

Google Search & other revenues increased $12.6 billion from 2022 to 2023. The overall growth was driven by interrelated
factors including increases in search queries resulting from growth in user adoption and usage on mobile devices; growth inadvertiser spending; and improvements we have made in ad formats and delivery.

YouTube ads

YouTube ads revenues increased $2.3 billion from 2022 to 2023. The growth was driven by our brand and direct response
advertising products, both of which benefited from increased spending by our advertisers.

Google Network

Google Network revenues decreased $1.5 billion from 2022 to 2023, primarily driven by a decrease in Google Ad Manager
and AdSense revenues.
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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 a percentage, from 2022 to 2023:
Google Search & other
Paid clicks change

7%

Cost-per-click change

1%

Google Network

Impressions change(5)%

Cost-per-impression change

0%

Changes in paid clicks and impressions are driven by a number of interrelated factors, including changes in advertiser
spending; ongoing product and policy changes; and, as it relates to paid clicks, fluctuations in search queries resulting fromchanges 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 including changes indevice mix, geographic mix, advertiser spending, ongoing product and policy changes, product mix, property mix, andchanges in foreign currency exchange rates.

Google subscriptions, platforms, and devices

Google subscriptions, platforms, and devices revenues increased $5.6 billion from 2022 to 2023 primarily driven by
growth in subscriptions, largely for YouTube services. The growth in YouTube services was primarily due to an increase inpaid subscribers.

Google subscriptions, platforms, and devices revenues increased $1.0 billion from 2021 to 2022 primarily driven by growthin subscription and device revenues, partially offset by a decrease in platform revenues. The growth in subscriptions waslargely for YouTube services, primarily due to an increase in paid subscribers. The growth in device revenues was primarily
driven by increased sales of Pixel devices. The decrease in platform revenues was primarily due to Google Play, driven by
the fee structure changes we announced in 2021 as well as a decrease in buyer spending. Additionally, the overall increase
in Google subscriptions, platforms, and devices revenues was adversely affected by the unfavorable effect of foreign
currency exchange rates.

Google Cloud

Google Cloud revenues increased $6.8 billion from 2022 to 2023. Growth was primarily driven by Google Cloud Platform
followed by Google Workspace offerings. Google Cloud’s infrastructure and platform services were the largest drivers ofgrowth in Google Cloud Platform.

Revenues by Geography

The following table presents revenues by geography as a percentage of revenues, determined based on the addresses ofour customers:
Year Ended December 31,
United States
EMEA
APAC

Other Americas

Hedging gains (losses)

2022

2023

29%

30%

48%
16%
6%
1%

47%
17%

6%
0%

For additional information, see Note 2 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual
Report on Form 10-K.
Alphabet 2023 Annual Report33Part I

Part II

Part IIIPart IV

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 percentagechange in constant currency revenues (“percentage change in constant currency revenues”) for financial and operational
decision-making and as a means to evaluate period-to-period comparisons. We believe the presentation of results on aconstant currency basis in addition to U.S. Generally Accepted Accounting Principles (GAAP) results helps improve theability to understand our performance, because it excludes the effects of foreign currency volatility that are not indicativeof our core operating results.
Constant currency information compares results between periods as if exchange rates had remained constant period
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 constantcurrency revenues to determine the constant currency revenue percentage change on a year-on-year basis. Constantcurrency revenues are calculated by translating current period revenues using prior year 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 overprior year comparable period revenues where current period foreign currency revenues are translated using prior year
comparable period exchange rates and hedging effects are excluded from revenues of both 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 titled measures used byother 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):Year Ended December 31, 2023

2023

Less FX
EffectAs
Reported

91,038460

90,57811%

18,9748%

Year Ended December 31,
United States

$

EMEA
APAC

Total revenues(1)

82,062$$

146,286 $0 $51,514(1,759)280,876

307,158(1,953)

1,960

236

16,976

Revenues, excluding
hedging effect(1)

134,81447,024

Other Americas

Hedging gains (losses)

2022

282,836

18,320$% Change from Prior Period

Constant
Currency
Revenues

307,394

146,286
53,273(654)

309,111$309,111

9%Less
Hedging
EffectLess FX
EffectConstant
Currency
Revenues

1%

10%

(4)%

12%

0%

10%

(3)%

9%

(1)%

9%

0%

(1)%

9%

13%
10%

10%

Total constant currency revenues of $309.1 billion for 2023 increased $28.2 billion compared to $280.9 billion in revenues, excluding
hedging effect, for 2022.

EMEA revenue growth was favorably affected by changes in foreign currency exchange rates, primarily due to the
U.S. dollar weakening relative to the Euro, partially offset by the U.S. dollar strengthening relative to the Turkish lira.

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 tothe U.S. dollar strengthening relative to the Argentine peso.
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Costs and Expenses
Cost of Revenues

The following table presents cost of revenues, including TAC (in millions, except percentages):

TAC$

Total cost of revenues$

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

2021

Year Ended December 31,
2022

2023

45,566$

48,955$50,886110,939$

126,203$

133,332

65,373

43%

77,24845%

82,446
43%

Cost of revenues increased $7.1 billion from 2022 to 2023 due to an increase in other cost of revenues and TAC of$5.2 billion and $1.9 billion, respectively.

The increase in TAC from 2022 to 2023 was largely due to an increase in TAC paid to distribution partners, primarily driven
by growth in revenues subject to TAC. The TAC rate decreased from 21.8% to 21.4% from 2022 to 2023 primarily due to arevenue mix shift from Google Network properties to Google Search & other properties. The TAC rate on Google Search &other revenues and the TAC rate on Google Network revenues were both substantially consistent from 2022 to 2023.
The increase in other cost of revenues from 2022 to 2023 was primarily due to increases in content acquisition costs,
largely for YouTube, and compensation expenses, which included $479 million of charges related to employee severance
associated with the reduction in our workforce. Additionally, other cost of revenues benefited from a reduction in
depreciation expense due to the change in estimated useful lives of our servers and network equipment.
The increase in other cost of revenues of $11.9 billion from 2021 to 2022 was primarily due to increases in device costs,
compensation expenses, depreciation, and equipment-related expenses.

Research and Development

The following table presents R&D expenses (in millions, except percentages):Year Ended December 31,
Research and development expenses

Research and development expenses as a percentage of revenues

$

2022

39,500

14%

$

2023

45,42715%

R&D expenses increased $5.9 billion from 2022 to 2023 primarily driven by an increase in compensation expenses of$2.9 billion, $870 million in charges related to our office space optimization efforts, and an increase in depreciation
expense of $722 million. The $2.9 billion increase in compensation expenses was largely the result of a 4% increase inaverage headcount, after adjusting for roles affected by the reduction in our workforce, and an increase in SBC expense.
Additionally, the increase in compensation expenses included $848 million in employee severance charges associated withthe reduction in our workforce. The $722 million increase in depreciation expense reflected an offsetting benefit of thechange in the estimated useful lives of our servers and network equipment.

Alphabet 2023 Annual Report

35

Part I

Part II

Part IIIPart IV

Sales and Marketing

The following table presents sales and marketing expenses (in millions, except percentages):Year Ended December 31,
Sales and marketing expenses

Sales and marketing expenses as a percentage of revenues

$

2022

26,567

9%

$

2023

27,917

9%

Sales and marketing expenses increased $1.4 billion from 2022 to 2023, primarily driven by an increase in compensation
expenses of $1.6 billion, partially offset by a decrease in advertising and promotional activities of $441 million. The$1.6 billion increase in compensation expenses was largely the result of $497 million in employee severance charges
associated with the reduction in our workforce in addition to a combination of other factors, none of which were individuallysignificant.

General and Administrative

The following table presents general and administrative expenses (in millions, except percentages):Year Ended December 31,
General and administrative expenses

General and administrative expenses as a percentage of revenues

$

2022

15,724

6%

2023

$

16,425General and administrative expenses increased $701 million from 2022 to 2023, primarily driven by an increase incompensation expenses of $416 million, which was largely the result of $264 million in employee severance charges
associated with the reduction in our workforce in addition to a combination of other factors, none of which wereindividually significant.

5%

Segment Profitability

The following table presents segment operating income (loss) (in millions).
Year Ended December 31,
2022

Operating income (loss):
Google Services$

Google Cloud
Other Bets

Alphabet-level activities(1,922)$(4,636)(1)

Total income from operations(1)

82,699$(1,299)74,842

2023
95,858

1,716(4,095)$(9,186)

84,293

In addition to the costs included in Alphabet-level activities, hedging gains (losses) related to revenue were $2.0 billion and $236 million
in 2022 and 2023, respectively. For the year ended December 31, 2023, Alphabet-level activities include charges related to the reduction
in force and our office space optimization efforts totaling $3.9 billion. In addition, for the year ended December 31, 2023, we incurred$269 million in accelerated rent and accelerated depreciation. For additional information relating to our workforce reduction and otherinitiatives, see Note 8 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. For
additional information relating to our segments, see Note 15 of the Notes to Consolidated Financial Statements included in Item 8 of thisAnnual Report on Form 10-K.

Google Services

Google Services operating income increased $13.2 billion from 2022 to 2023. The increase in operating income wasprimarily driven by an increase in revenues, partially offset by an increase in content acquisition costs and compensation
expenses including an increase in SBC expense. Additionally, operating income benefited from a reduction in costs driven
by the change in the estimated useful lives of our servers and certain network equipment.
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Google Cloud

Google Cloud operating income of $1.7 billion for 2023 compared to an operating loss of $1.9 billion for 2022 represents anincrease of $3.6 billion. The increase in operating income was primarily driven by an increase in revenues, partially offset by
an increase in compensation expenses largely driven by headcount growth. Additionally, operating income benefited from a
reduction in costs driven by the change in the estimated useful lives of our servers and certain network equipment.

Other Bets

Other Bets operating loss decreased $541 million from 2022 to 2023 primarily due to growth in revenues as well as a
reduction in valuation-based compensation liabilities related to Other Bet companies.

Other Income (Expense), Net

The following table presents OI&E, (in millions):
Year Ended December 31,
Interest income

Interest expense$

Foreign currency exchange gain (loss), net
Gain (loss) on debt securities, net

Performance fees

(357)

$

3,865

(308)

(1,238)(3,455)392(1,215)
257

(337)
$

2023

(654)

798

Income (loss) and impairment from equity method investments, net
Other income (expense), net

2,174(2,064)Gain (loss) on equity securities, net

Other

2022

381

(3,514)

(628)
$

299

1,424

OI&E, net increased $4.9 billion from 2022 to 2023. The increase was primarily due to fluctuations in the value of equity
securities reflecting market driven changes in the value of our marketable equity securities, investment specific event
driven changes in our non-marketable equity securities, and increased interest income due to interest rates.

For additional information, see Note 7 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual
Report on Form 10-K.

Provision for Income Taxes

The following table presents provision for income taxes (in millions, except for effective tax rate):
Year Ended December 31,
Income before provision for income taxes
Provision for income taxes
Effective tax rate

$
$

2022

71,328
11,356

15.9%

$
$

2023

85,717
11,922

13.9%

In 2023, the Internal Revenue Services (IRS) issued a rule change allowing taxpayers to temporarily apply the regulationsin effect prior to 2022 related to U.S. federal foreign tax credits, as well as a separate rule change with interim guidance on
the capitalization and amortization of R&D expenses. A cumulative one-time adjustment applicable to the prior period forthese tax rule changes was recorded in 2023.
The effective tax rate decreased from 2022 to 2023, reflecting the effect of the two tax rule changes described above,
particularly the change related to foreign tax credits. The effect of these tax rule changes was partially offset by changes
in uncertain tax benefits and a decrease in the U.S. federal Foreign Derived Intangible Income tax deduction.

Alphabet 2023 Annual Report37Part I

Part II

Part IIIPart IVThe OECD is coordinating negotiations among more than 140 countries with the goal of achieving consensus aroundsubstantial changes to international tax policies, including the implementation of a minimum global effective tax rate of
15%. While various countries have implemented the legislation as of January 1, 2024, we do not expect a resulting materialchange to our income tax provision for the 2024 fiscal year. As additional jurisdictions enact such legislation, we expect oureffective tax rate and cash tax payments could increase in future years.

Financial Condition

Cash, Cash Equivalents, and Marketable Securities

As of December 31, 2023, we had $110.9 billion in cash, cash equivalents, and short-term marketable securities. Cashequivalents 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 growth of the business. We
regularly evaluate our cash and capital structure, including the size, pace, and form of capital return to stockholders.
The following table presents our cash flows (in millions):

Year Ended December 31,

Net cash provided by operating activities$

Net cash used in financing activities$

Net cash used in investing activities

Cash Provided by Operating Activities

$

2022

91,495(20,298)(69,757)2023$

101,746$(72,093)$(27,063)

Our largest source of cash provided by operations are advertising revenues generated by Google Search & otherproperties, Google Network properties, and YouTube properties. In Google Services, we also generate cash throughconsumer subscriptions and the sale of apps and in-app purchases and devices. In Google Cloud we generatecash through consumption-based fees and subscriptions for infrastructure, platform, collaboration tools, and othercloud services.

Our primary uses of cash from operating activities include payments to distribution and Google Network partners, toemployees 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 2022 to 2023 due to the increase in cash received from
customers, partially offset by increases in cash paid 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-marketablesecurities. Cash used in investing activities consists primarily of purchases of marketable and non-marketable securities,
purchases of property and equipment, and payments for acquisitions.
Net cash used in investing activities increased from 2022 to 2023 due to a decrease in maturities and sales of marketablesecurities, partially offset by a decrease in payments for acquisitions.

Cash Used in Financing Activities

Cash provided by financing activities consists primarily of proceeds from issuance of debt and proceeds from the sale ofinterests in consolidated entities. Cash used in financing activities consists primarily of repurchases of stock, net payments
related to stock-based award activities, and repayments of debt.
Net cash used in financing activities increased from 2022 to 2023 due to an increase in repurchases of stock.
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Liquidity and Material Cash Requirements

We expect existing cash, cash equivalents, short-term marketable securities, cash flows from operations and financing
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 throughpurchases of property and equipment and lease arrangements to provide capacity for the growth of our services andproducts.

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 to as 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”).

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 toyears. For example, our data center construction projects are generally multi-year projects with multiple phases, where we
acquire land and buildings, construct buildings, and secure and install information technology assets.
During the years ended December 31, 2022 and 2023, we spent $31.5 billion and $32.3 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, inparticular 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 not depreciated. For the years
ended December 31, 2022 and 2023, our depreciation on property and equipment were $13.5 billion and $11.9 billion,
respectively.

LeasesFor the years ended December 31, 2022 and 2023, we recognized total operating lease assets of $4.4 billion and$2.9 billion, respectively. As of December 31, 2023, the amount of total future lease payments under operating leases, which
had a weighted average remaining lease term of eight years, was $17.7 billion, of which $3.2 billion is short-term. As of
December 31, 2023, we have entered into leases that have not yet commenced with future short-term and long-term lease
payments of $657 million and $3.3 billion, that are not yet recorded on our Consolidated Balance Sheets. These leases willcommence between 2024 and 2026 with non-cancelable lease terms of one to 25 years.
For the years ended December 31, 2022 and 2023, our operating lease expenses (including variable lease costs) were
$3.7 billion and $4.5 billion, respectively. Finance lease costs were not material for the years ended December 31, 2022 and2023. For additional information, see Note 4 of the Notes to Consolidated Financial Statements included in Item 8 of thisAnnual Report on Form 10-K.

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 December 31, 2023, we had no commercial
paper outstanding.

As of December 31, 2023, we had $10.0 billion of revolving credit facilities, $4.0 billion expiring in April 2024 and $6.0 billion
expiring in April 2028. 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 have been borrowed
under the credit facilities.

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As of December 31, 2023, we had senior unsecured notes outstanding with a total carrying value of $12.9 billion withshort-term and long-term future interest payments of $214 million and $3.6 billion, respectively. For additional information,
see Note 6 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

We primarily utilize contract manufacturers for the assembly of our servers used in our technical infrastructure anddevices we sell. We have agreements where we may purchase components directly from suppliers and then supply thesecomponents 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 be presented as financing activities
in the Consolidated Statements of Cash Flows included in Item 8 of this Annual Report on Form 10-K.

Share Repurchase Program

During 2023 we repurchased and subsequently retired 528 million shares for $62.2 billion.

In April 2023, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $70.0 billionof its Class A and Class C shares. As of December 31, 2023, $36.3 billion remains available for Class A and Class C share
repurchases.
The following table presents Class A and Class C shares repurchased and subsequently retired (in millions):
Year Ended December 31, 2022
Class A share repurchases

Class C share repurchases
Total share repurchases

(1)

(1)

Shares
61

$

530

$

469

Amount6,719

52,57759,296

Year Ended December 31, 2023
Shares
78

$

528

$

450

Amount9,316

52,86862,184

Shares repurchased include unsettled repurchases as of December 31, 2023.

For additional information, see Note 11 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual
Report on Form 10-K.

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 of June 30, 2018), and€1.5 billion ($1.7 billion as of March 20, 2019), respectively. On September 14, 2022, the General Court reduced the 2018 finefrom €4.3 billion to €4.1 billion. We subsequently filed an appeal to the European 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 10 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Taxes

As of December 31, 2023, 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 payableof $6.3 billion primarily related to uncertain tax positions as of December 31, 2023.

Purchase Commitments and Other Contractual Obligations

As of December 31, 2023, we had material purchase commitments and other contractual obligations of $45.9 billion, of
which $31.6 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 topurchase licenses, including content licenses, inventory and network capacity. For those agreements with variable terms,
we do not estimate the non-cancelable obligation beyond any minimum quantities and/or pricing as of December 31,
2023. In certain instances, the amount of our contractual obligations may change based on the expected timing oforder fulfillment from our suppliers. For more information related to our content licenses, see Note 10 of the Notes toConsolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
40Alphabet 2023 Annual ReportPart I

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In addition, we regularly enter into multi-year, non-cancellable agreements to purchase renewable energy and energy
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 notreadily determinable.

Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we have to make estimatesand assumptions. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at
the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our
financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We baseour estimates on past experience and other assumptions that we believe are reasonable under the circumstances, andwe evaluate these estimates on an ongoing basis. We have reviewed our critical accounting estimates with the Audit andCompliance Committee of our Board of Directors.
For a summary of significant accounting policies and the effect on our financial statements, see Note 1 of the Notes toConsolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Fair Value Measurements of Non-Marketable Equity Securities

We measure certain financial instruments at fair value on a nonrecurring basis, consisting primarily of our
non-marketable equity securities. These investments are accounted for under the measurement alternative method(“the measurement alternative”) and are measured at cost, less impairment, subject to upward and downward
adjustments resulting from observable price changes for identical or similar investments of the same issuer. These
adjustments require quantitative assessments of the fair value of our securities, which may require the use ofunobservable inputs. Adjustments are determined primarily based on a market approach as of the transaction dateand involve the use of estimates using the best information available, which may include cash flow projections orother available market data.

Non-marketable equity securities are also evaluated for impairment, based on qualitative factors including the companies’
financial and liquidity position and access to capital resources, among others. When indicators of impairment exist, we
prepare quantitative measurements of the fair value of our equity investments using a market approach or an income
approach, which requires judgment and the use of unobservable inputs, including discount rates, investee revenues andcosts, and comparable market data of private and public companies, among others. When the quantitative remeasurements
of fair value indicate an impairment exists, we write down the investment to its current fair value.
We also have compensation arrangements with payouts based on realized returns from certain investments, i.e.
performance fees. We record compensation expense based on the estimated payouts on an ongoing basis, which may
result in expense recognized before investment returns are realized and compensation is paid and may require the use ofunobservable inputs.

Property and Equipment

We assess the reasonableness of the useful lives of our property and equipment periodically as well as when otherchanges occur, such as when there are changes to ongoing business operations, changes in the planned use and utilizationof assets, or technological advancements, that could indicate a change in the period over which we expect to benefit fromthe assets.

Income Taxes

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.

Recording an uncertain tax position involves various qualitative considerations, including evaluation of comparable
and resolved tax exposures, applicability of tax laws, and likelihood of settlement. We evaluate uncertain tax positions
periodically, considering changes in facts and circumstances, such as new regulations or recent judicial opinions, as wellas the status of audit activities by taxing authorities. Although we believe we have adequately reserved for our uncertain
tax positions, no assurance can be given that the final tax outcome of these matters will not be different. To the extent thatthe final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision forincome taxes and the effective tax rate in the period in which such determination is made.
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The provision for income taxes includes the effect of reserve provisions and changes to reserves as well as the related net
interest and penalties. In addition, we are subject to the continuous examination of our income tax returns by the IRS andother tax authorities which may assert assessments against us. We regularly assess the likelihood of adverse outcomes
resulting from these examinations and assessments to determine the adequacy of our provision for income taxes.

Loss Contingencies

We are regularly subject to claims, lawsuits, regulatory and government investigations, other proceedings, andconsent orders involving competition, intellectual property, privacy, data security, tax and related compliance, laborand employment, commercial disputes, content generated by our users, goods and services offered by advertisersor publishers using our platforms, personal injury consumer protection, and other matters. Certain of these matters
include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believethat it is probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that aloss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss in Note 10 of
the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

We evaluate, on a regular basis, developments in our legal matters that could affect the amount of liability that has beenpreviously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments and changes
to our disclosures. Significant judgment is required to determine both the likelihood and the estimated amount of a loss
related to such matters. Until the final resolution of such matters, there may be an exposure to loss in excess of the amountrecorded, and such amounts could be material.

Change in Accounting Estimate

In January 2023, we completed an assessment of the useful lives of our servers and network equipment resulting in achange in the estimated useful life of our servers and certain network equipment to six years. This change in accounting
estimate was effective beginning fiscal year 2023. For additional information, see Note 1 of the Notes to Consolidated
Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk

We are exposed to financial market risks, including changes in foreign currency exchange rates, interest rates, and equity
investment risks.

Foreign Currency Exchange Risk

We transact business globally in multiple currencies. International revenues, as well as costs and expenses denominatedin foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar.
As discussed below, we enter into derivative instruments to hedge foreign currency risk. Principal currencies hedged
included the Australian dollar, British pound, Canadian dollar, Euro, and Japanese yen. For the purpose of analyzing foreign
currency exchange risk, we considered the historical trends in foreign currency exchange rates and determined that it was
reasonably possible that adverse changes in exchange rates of 10% could be experienced.
We use foreign currency forward and option contracts to offset the foreign exchange risk on assets and liabilities
denominated in currencies other than the functional currency of the subsidiary. These forward and option contracts
reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements on our assets and liabilities.
The foreign currency gains and losses on these assets and liabilities are recorded in OI&E, which are offset by the gains
and losses on the forward and option contracts.
If an adverse 10% foreign currency exchange rate change was applied to total monetary assets, liabilities, andcommitments denominated in currencies other than the functional currencies at the balance sheet date, it would
have resulted in an adverse effect on income before income taxes of approximately $136 million and $503 million as ofDecember 31, 2022 and 2023, respectively, after consideration of the effect of foreign exchange contracts in place for theyears ended December 31, 2022 and 2023.

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We use foreign currency forward and option contracts, including collars (an option strategy comprised of a combinationof purchased and written options) to protect forecasted U.S. dollar-equivalent earnings from changes in foreign currency
exchange rates. When the U.S. dollar strengthens, gains from foreign currency forward and option contacts reduce theforeign currency losses related to our earnings. When the U.S. dollar weakens, losses from foreign currency forward andoption contracts offset the foreign currency gains related to our earnings. These hedging contracts reduce, but do notentirely eliminate, the effect of foreign currency exchange rate movements. We designate these contracts as cash flow
hedges for accounting purposes. We reflect the gains or losses of foreign currency spot rate changes as a component ofaccumulated other comprehensive income (AOCI) and subsequently reclassify them into revenues to offset the hedged
exposures as they occur.

If the U.S. dollar weakened by 10% as of December 31, 2022 and 2023, the amount recorded in AOCI related to our cash
flow hedges before tax effect would have been approximately $1.3 billion and $1.5 billion lower as of December 31, 2022 and2023, respectively. The change in the value recorded in AOCI would be expected to offset a corresponding foreign currencychange in forecasted hedged revenues when recognized.
We use foreign exchange forward contracts designated as net investment hedges to hedge the foreign currency risks
related to investment in foreign subsidiaries. These forward contracts serve to offset the foreign currency translation risk
from our foreign operations.
If the U.S. dollar weakened by 10%, the amount recorded in cumulative translation adjustment (CTA) within AOCI related
to our net investment hedges before tax effect would have been approximately $903 million and $946 million lower
as of December 31, 2022 and 2023, respectively. The change in value recorded in CTA would be expected to offset a
corresponding foreign currency translation gain or loss from our investment in foreign subsidiaries.

Interest Rate Risk

Our Corporate Treasury investment strategy is to achieve a return that will allow us to preserve capital and maintainliquidity. We invest primarily in debt securities, including government bonds, corporate debt securities, mortgage-backed
and asset-backed securities, money market and other funds, time deposits, and interest rate derivatives. By policy, we
limit the amount of credit exposure to any one issuer. Our investments in both fixed rate and floating rate interest earning
securities carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely affected
due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall.
Unrealized gains or losses on our marketable debt securities are primarily due to interest rate fluctuations as compared
to interest rates at the time of purchase. For certain fixed and variable rate debt securities, we have elected the fairvalue option for which changes in fair value are recorded in OI&E. We measure securities for which we have not elected
the fair value option at fair value with gains and losses recorded in AOCI until the securities are sold, less any expectedcredit losses.
We use value-at-risk (VaR) analysis to determine the potential effect of fluctuations in interest rates on the value of ourmarketable debt security portfolio. The VaR is the expected loss in fair value, for a given confidence interval, for ourinvestment portfolio due to adverse movements in interest rates. We use a variance/covariance VaR model with 95%
confidence interval. The estimated one-day loss in fair value of marketable debt securities as of December 31, 2022 and2023 are shown below (in millions):
As of December 31,
Risk category - interest rate

$

2022
256

$

2023
296

12-Month Average
As of December 31,
$

2022
198

$

2023
271

Actual future gains and losses associated with our marketable debt security portfolio may differ materially from thesensitivity analyses performed as of December 31, 2022 and 2023 due to the inherent limitations associated with predicting
the timing and amount of changes in interest rates and our actual exposures and positions. VaR analysis is not intended torepresent actual losses but is used as a risk estimation.

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Equity Investment Risk

Our marketable and non-marketable equity securities are subject to a wide variety of market-related risks that could
substantially reduce or increase the fair value of our holdings.
Our marketable equity securities are publicly traded stocks or funds and our non-marketable equity securities areinvestments in privately held companies, some of which are in the startup or development stages.

We record marketable equity securities not accounted for under the equity method at fair value based on readily
determinable market values, of which publicly traded stocks and mutual funds are subject to market price volatility, andrepresent $5.2 billion and $6.0 billion of our investments as of December 31, 2022 and 2023, respectively. A hypothetical
adverse price change of 10% on our December 31, 2023 balance would decrease the fair value of marketable equity
securities by $597 million. From time to time, we may enter into derivatives to hedge the market price risk on certain of ourmarketable equity securities.
Our non-marketable equity securities not accounted for under the equity method are adjusted to fair value forobservable transactions for identical or similar investments of the same issuer or impairment (referred to as themeasurement alternative). The fair value measured at the time of the observable transaction is not necessarily anindication of the current fair value as of the balance sheet date. These investments, especially those that are in theearly stages, are inherently risky because the technologies or products these companies have under development are
typically in the early phases and may never materialize, and they may experience a decline in financial condition, which
could result in a loss of a substantial part of our investment in these companies. Valuations of our equity investments
in private companies are inherently more complex due to the lack of readily available market data and observabletransactions at lower valuations could result in significant losses. In addition, global economic conditions could result in
additional volatility. The success of our investment in any private company is also typically dependent on the likelihoodof our ability to realize appreciation in the value of investments through liquidity events such as public offerings,
acquisitions, private sales or other market events. Changes in the valuation of non-marketable equity securities may
not directly correlate with changes in valuation of marketable equity securities. As of December 31, 2022 and 2023, thecarrying value of our non-marketable equity securities, which were accounted for under the measurement alternative,
was $28.5 billion and $28.8 billion, respectively.

The carrying values of our equity method investments, which totaled approximately $1.7 billion as of December 31, 2022
and 2023, generally do not fluctuate based on market price changes. However, these investments could be impaired if thecarrying value exceeds the fair value and is not expected to recover.
For additional information about our equity investments, see Note 1 and Note 3 of the Notes to Consolidated Financial
Statements included in Item 8 of this Annual Report on Form 10-K.

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Item 8. Financial Statements and Supplementary Data
Alphabet Inc.
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)

46

Financial Statements:

Consolidated Balance Sheets

49

Consolidated Statements of Comprehensive Income

51

Consolidated Statements of Income

50

Consolidated Statements of Stockholders’ Equity

52

Consolidated Statements of Cash Flows53

Notes to Consolidated Financial Statements

54

Alphabet 2023 Annual Report45Part I

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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Alphabet Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Alphabet Inc. (the Company) as of December 31,
2022 and 2023, the related consolidated statements of income, comprehensive income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement
schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of the Company at
December 31, 2022 and 2023, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission(2013 framework), and our report dated January 30, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws andthe applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in thefinancial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statementsthat was communicated or required to be communicated to the audit committee and that: (1) relates to accounts ordisclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing aseparate opinion on the critical audit matter or on the account or disclosure to which it relates.

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Loss Contingencies

Descriptionof the Matter

How WeAddressed
the Matter in
Our Audit

The Company is regularly subject to claims, lawsuits, regulatory and government investigations,other proceedings, and consent orders involving competition, intellectual property, data privacy andsecurity, tax and related compliance, labor and employment, commercial disputes, content generated
by its users, goods and services offered by advertisers or publishers using their platforms, personal
injury, consumer protection, and other matters. As described in Note 10 to the consolidated financial
statements “Commitments and contingencies” such claims, lawsuits, regulatory and government
investigations, other proceedings, and consent orders could result in adverse consequences.

Significant judgment is required to determine both the likelihood, and the estimated amount, of a loss
related to such matters. Auditing management’s accounting for and disclosure of loss contingencies
from these matters involved challenging and subjective auditor judgment in assessing the Company’s
evaluation of the probability of a loss, and the estimated amount or range of loss.

We tested relevant controls over the identified risks associated with management’s accounting for anddisclosure of these matters. This included controls over management’s assessment of the probabilityof incurrence of a loss and whether the loss or range of loss was reasonably estimable and thedevelopment of related disclosures.

Our audit procedures included gaining an understanding of previous rulings and the status of ongoinglawsuits, reviewing letters addressing the matters from internal and external legal counsel, meeting withinternal legal counsel to discuss the allegations, and obtaining a representation letter from managementon these matters. We also evaluated the Company’s disclosures in relation to these matters.

/s/ Ernst & Young LLP
We have served as the Company's auditor since 1999.
San Jose, California
January 30, 2024

Alphabet 2023 Annual Report47

Part I

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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Alphabet Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Alphabet Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission (2013 framework) (the COSO criteria). In our opinion, Alphabet Inc. (the Company) maintained, in allmaterial respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the 2023 consolidated financial statements of the Company and our report dated January 30, 2024 expressed an
unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether effective internal control over financial reporting wasmaintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessedrisk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizationsof management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on thefinancial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
/s/ Ernst & Young LLP
San Jose, California
January 30, 2024

48

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Part IIIPart IV

Alphabet Inc.
Consolidated Balance Sheets

As of December 31,
2022(in millions, except par value per share amounts)

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$

21,87991,883$

113,7622023

24,04886,868110,916

40,25847,964

10,775

12,650164,795

171,530

5,261

12,16930,49231,008Property and equipment, net

112,668

134,345

Goodwill
Other non-current assets

28,96029,198Operating lease assets

14,381

Total assets

Liabilities and Stockholders’ Equity
Current liabilities:

Accounts payable
Accrued compensation and benefits

8,707

14,091

10,051$

365,264$

402,392

$

5,128

$

7,493

Accrued expenses and other current liabilities

14,02837,866

Accrued revenue share

46,168

8,370

Deferred revenue

8,876

3,908

Total current liabilities

Long-term debt

4,137

69,30081,814599

911

14,701

Deferred revenue, non-current

15,14013,253

Income taxes payable, non-current

9,258

8,474

Operating lease liabilities

12,501

12,460Total liabilities

109,120

119,0130068,18476,534

Deferred income taxes

514

Other long-term liabilities

485

2,247

Commitments and Contingencies (Note 10)

Stockholders’ equity:
Preferred stock, $0.001 par value per share, 100 shares authorized; no sharesissued 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); 12,849 (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
Accumulated other comprehensive income (loss)
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
See accompanying notes.

1,616(7,603)(4,402)

195,563$

256,144

365,264

211,247$

283,379

402,392

Alphabet 2023 Annual Report49Part I

Part II

Part IIIPart IV

Alphabet Inc.
Consolidated Statements of Income
Year Ended December 31,(in millions, except per share amounts)

Revenues

$

2021

2022

2023

257,637 $282,836 $

307,394

Cost of revenues

110,939

126,203

133,332

Sales and marketing

22,912

26,567

27,917

Costs and expenses:
Research and development

31,562

General and administrative

13,51039,50015,72445,427
16,425

Total costs and expenses

178,923

207,994

223,101

Other income (expense), net

12,020(3,514)

1,424

Income from operations

78,714

Income before income taxes
Provision for income taxes
Net income$

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

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

See accompanying notes.

50

Alphabet 2023 Annual Report

74,842

84,29390,734

71,32885,71776,033 $59,972 $73,795

14,701

5.69 $
5.61 $

11,356

4.59 $
4.56 $

11,922
5.84
5.80

Part I

Part II

Part IIIPart IV

Alphabet Inc.
Consolidated Statements of Comprehensive Income
Year Ended December 31,(in millions)

Net income$

Other comprehensive income (loss):

Change in foreign currency translation adjustment
Available-for-sale investments:

Change in net unrealized gains (losses)

Less: reclassification adjustment for net (gains) losses included in
net income

Net change, net of income tax benefit (expense) of $394, $1,056,
and $(698)Cash flow hedges:

Change in net unrealized gains (losses)

Less: reclassification adjustment for net (gains) losses included in
net income

Net change, net of income tax benefit (expense) of $(122), $110,
and $2Other comprehensive income (loss)
Comprehensive income

$

2021

2022

2023

76,033 $59,972 $(1,442)(1,836)735(1,312)(4,720)

1,344

(64)

1,007

1,168

(1,376)(3,713)

2,512

716

1,275

168

(154)

(1,706)

(214)

562

(431)

(46)

(2,256)73,777 $(5,980)53,992 $73,7953,201

76,996

See accompanying notes.

Alphabet 2023 Annual Report

51

Part I

Part II

Part IIIPart IV

Alphabet Inc.
Consolidated Statements of Stockholders’ Equity(in millions)

Balance as of December 31, 2020
Stock issued

Stock-based compensation expense
Tax withholding related to vesting ofrestricted stock units and other

Repurchases of stock

Sale of interest in consolidated entities
Net income

Other comprehensive income (loss)

Balance as of December 31, 2021
Stock issued

Stock-based compensation expense
Tax withholding related to vesting ofrestricted stock units and other

Repurchases of stock

Sale of interest in consolidated entities
Net income

Other comprehensive income (loss)

Balance 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 December 31, 2023

52

Alphabet 2023 Annual Report

Class A, Class B, Class C
Stock andAdditional Paid-In Capital
Shares13,504145$

Amount58,51012

015,5390(10,273)

0

310

(407)
0
0

Accumulated
Other
Comprehensive
Income (Loss)

$

633

0

$

0
0

Retained
Earnings

163,401

0

$

Total
Stockholders’Equity222,54412

015,5390(10,273)(2,324)0(47,950)(50,274)0076,03376,033000(2,256)310

0(2,256)

13,242

61,774(1,623)

191,484

251,635

0

19,5250019,5250(9,754)(1)(9,755)

137

8

(530)

(3,404)

0

0

0

0

0

0

0

8

0

(55,892)(59,296)

059,972

59,97235

00(5,980)035

0(5,980)12,84968,184(7,603)

195,563

256,144

0

22,5780022,5780(10,164)

9(10,155)

0

0

139

0

(528)
0

12,4600

0(4,064)$076,5340

0(58,120)(62,184)

3,201

0

3,201

0

$

See accompanying notes.

0(4,402)73,795$211,247

73,795$283,379

Part I

Part II

Part IIIPart IV

Alphabet Inc.
Consolidated Statements of Cash Flows
Year Ended December 31,

2021(in millions)Operating activities
Net income$

Adjustments:

Depreciation of property and equipment

76,0332022$

59,972$

2023
73,795

10,273

13,475

11,946

1,808(8,081)(7,763)

1,955

3,483

4,330

Accounts receivable, net(9,095)(2,317)(7,833)

Other assets(1,846)(5,046)(2,143)

Accrued expenses and other liabilities

7,304

3,915

3,937

Stock-based compensation expense

15,376

Deferred income taxes(Gain) loss on debt and equity securities, net(12,270)

Other

Changes in assets and liabilities, net of effects of acquisitions:
Income taxes, net

Net cash provided by operating activities

Purchases of property and equipment
Purchases of marketable securities

Purchases of non-marketable securities

Maturities and sales of non-marketable securities

367

Other investing activities

101,746(24,640)(31,485)(32,251)

128,294

97,822

86,672(78,874)

Financing activities

Net payments related to stock-based award activities
Repurchases of stock

Proceeds from issuance of debt, net of costs(2,531)

Proceeds from sale of interest in consolidated entities, net(2,618)(6,969)(35,523)(20,298)(27,063)(10,162)(9,300)(9,837)

Net cash used in financing activities

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Supplemental disclosures of cash flow information
See accompanying notes.

(495)(1,051)(50,274)(59,296)(61,504)(21,435)(54,068)(11,550)(61,362)(69,757)(72,093)

52,8728(506)(5,520)26,465

10,79035(287)

Net increase (decrease) in cash and cash equivalents

947

1,589

310

Effect of exchange rate changes on cash and cash equivalents(3,027)150

20,199

Repayments of debt

(77,858)(2,838)541

Net cash used in investing activities

525

91,495934

Acquisitions, net of cash acquired, and purchases of intangible assets

482

91,652(135,196)

Maturities and sales of marketable securities

664

(445)

774

Investing activities

523

707

1,682

Deferred revenue

823

584

283

Accrued revenue share

22,460

5,519

(625)

Accounts payable

Cash paid for income taxes, net of refunds

19,362(421)

934

20,945

2,169$

20,945$21,879$$13,412$

18,892$

21,87924,048
19,164Alphabet 2023 Annual Report

53Part I

Part II

Part IIIPart IV

Alphabet Inc.
Notes to Consolidated Financial Statements

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 in August 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 that provide
enterprise customers with infrastructure and platform services as well as communication and collaboration tools; salesof other products and services, such as fees received for consumer 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 thevariable interest and voting models. Intercompany balances and transactions have been eliminated.

Use of Estimates

Preparation of consolidated financial statements in conformity with GAAP requires us to make 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 due to uncertainties. On an ongoing basis, we evaluate our estimates, including
those related to the allowance for credit losses; content licenses; contingent liabilities; fair values of financial instruments
and goodwill; income taxes; inventory; and useful lives of property and equipment, among others. We base our estimateson assumptions, both historical and forward looking, that are believed to be reasonable, and the results of which form thebasis for making judgments about the carrying values of assets and liabilities.
In January 2023, we completed an assessment of the useful lives of our servers and network equipment and adjusted theestimated useful life of our servers from four years to six years and the estimated useful life of certain network equipmentfrom five years to six years. This change in accounting estimate was effective beginning in fiscal year 2023. Based on the
carrying value of servers and certain network equipment as of December 31, 2022, and those placed in service during
the year ended December 31, 2023, the effect of this change in estimate was a reduction in depreciation expense of$3.9 billion and an increase in net income of $3.0 billion, or $0.24 per basic and $0.24 per diluted share, for the year ended
December 31, 2023.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, and thecollectibility of an amount that we expect in exchange for those goods or services is probable. Sales and other similar taxes
are excluded from revenues.

Advertising Revenues

We generate advertising revenues primarily by delivering advertising on:• Google Search and other properties, including revenues from traffic generated by search distribution partners who use
Google.com as their default search in browsers, toolbars, etc. and other Google owned and operated properties like
Gmail, Google Maps, and Google Play;• YouTube properties; and• Google Network properties, including revenues from Google Network properties participating in AdMob, AdSense, andGoogle Ad Manager.
Our customers generally purchase advertising inventory through Google Ads, Google Ad Manager, Google Display &Video 360, and Google Marketing Platform, among others.
54

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We offer advertising by delivering both performance and brand advertising. We recognize revenues for performanceadvertising when a user engages with the advertisement. For brand advertising, we recognize revenues when the ad isdisplayed, or a user views the ad.

For ads placed on Google Network properties, we evaluate whether we are the principal (i.e., report revenues on a grossbasis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed on Google
Network properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues, and amounts
paid to Google Network partners are recorded as cost of revenues. Where we are the principal, we control the advertisinginventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertisinginventory before it is transferred to our customers and is further supported by us being primarily responsible to ourcustomers and having a level of discretion in establishing pricing.

Google Subscriptions, Platforms, and Devices

Google subscriptions, platforms, and devices revenues consist of revenues from:• consumer subscriptions, which primarily include revenues from YouTube services, such YouTube TV, YouTube Music andPremium, 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.

Subscription revenues are recognized ratably over the period of the subscription, primarily monthly. We report revenues
from Google Play app sales and in-app purchases on a net basis, because our performance obligation is to facilitate atransaction between app developers and end users, for which we earn a service fee.

Google Cloud Revenues

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

Our cloud services are generally provided on either a consumption or subscription basis and may have contract terms
longer than a year. Revenues related to cloud services provided on a consumption basis are recognized when the customer
utilizes the services, based on the quantity of services consumed. Revenues related to cloud services provided on a
subscription basis are recognized ratably over the contract term as the customer receives and consumes the benefits ofthe cloud services.

Arrangements with Multiple Performance Obligations

Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenues
to each performance obligation based on its relative standalone selling price. We generally determine standalone selling
prices based on the prices charged to customers.

Customer Incentives and Credits

Certain customers receive cash-based incentives or credits, which are accounted for as variable consideration. We
estimate these amounts based on the expected amount to be provided to customers and reduce revenues. We believe that
there will not be significant changes to our estimates of variable consideration.

Sales Commissions

We expense sales commissions when incurred when the period of the expected benefit is one year or less. We recognize an
asset for certain sales commissions and amortize if the expected benefit period is greater than one year. These costs arerecorded within sales and marketing expenses.
Alphabet 2023 Annual Report

55

Part I

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Part IIIPart IV

Cost of Revenues

Cost of revenues consists of TAC and other costs of revenues.
• TAC includes:• amounts paid to our distribution partners who make available our search access points and services. 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 includes:• compensation expense related to our data centers and other operations such as content review and customer andproduct 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.

Software Development Costs

We expense software development costs, including costs to develop software products or the software component of
products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technologicalfeasibility is typically reached shortly before the release of such products. As a result, development costs that meet thecriteria for capitalization were not material for the periods presented.

Software development costs also include costs to develop software to be used solely to meet internal needs and cloud-based
applications used to deliver our services. We capitalize development costs related to these software applications once thepreliminary project stage is complete and it is probable that the project will be completed and the software will be used toperform the function intended. Costs capitalized for developing such software applications were not material forthe periods presented.

Stock-based Compensation

Stock-based compensation (SBC) primarily consists of Alphabet restricted stock units (RSUs). RSUs are equity classified
and measured at the fair market value of the underlying stock at the grant date. We recognize RSU expense using thestraight-line attribution method over the requisite service period and account for forfeitures as they occur.

For RSUs, shares are issued on the vesting dates net of the applicable statutory income tax withholding to be paid by us
on behalf of our employees. As a result, fewer shares are issued than the number of RSUs outstanding, and the income tax
withholding is recorded as a reduction to additional paid-in capital.
Additionally, SBC includes other stock-based awards, such as performance stock units (PSUs) that include market
conditions and awards that may be settled in cash or the stock of certain Other Bet companies. PSUs and certain awards
granted by Other Bet companies are equity classified and expense is recognized over the requisite service period. Certain
awards granted by Other Bet companies are liability classified and remeasured at fair value through settlement. The fairvalue of awards granted by Other Bet companies is based on the equity valuation of the respective Other Bet company.

Advertising and Promotional Expenses

We expense advertising and promotional costs in the period in which they are incurred. For the years ended December 31,
2021, 2022, and 2023, advertising and promotional expenses totaled approximately $7.9 billion, $9.2 billion, and $8.7 billion,
respectively.

Performance Fees

Performance fees refer to compensation arrangements with payouts based on realized returns from certain investments.
We record compensation expense based on the estimated payouts on an ongoing basis, which may result in expense
recognized before investment returns are realized and compensation is paid and may require the use of unobservable
inputs. Performance fees are recorded as a component of OI&E.
56

Alphabet 2023 Annual ReportPart I

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Fair Value Measurements

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability inan orderly transaction between market participants. As such, fair value is a market-based measurement that is determinedbased on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded atfair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the
inputs available in the market used to measure fair value:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identicalor similar instruments in markets that are not active, and model-based valuation techniques for which all significant
inputs are observable in the market or can be derived from observable market data. Where applicable, these models
project future cash flows and discount the future amounts to a present value using market-based observable inputs
including interest rate curves, foreign exchange rates, and credit ratings.
Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. The determination of fair value involves the use of appropriate valuation methods andrelevant inputs into valuation models.

Our financial assets and liabilities that are measured at fair value on a recurring basis include cash equivalents, marketablesecurities, derivative financial instruments, and certain non-marketable debt securities. Our financial assets measured atfair value on a nonrecurring basis include non-marketable equity securities. Other financial assets and liabilities are carriedat cost with fair value disclosed, if required.
We measure certain other instruments, including SBC awards settled in the stock of Other Bet companies, and certain
assets and liabilities acquired in a business combination, also at fair value on a nonrecurring basis.

Financial Instruments

Our financial instruments include cash, cash equivalents, marketable and non-marketable securities, derivative financial
instruments and accounts receivable.

Credit Risks

We are subject to credit risk primarily from cash equivalents, marketable debt securities, derivative financial instruments,
including foreign exchange contracts, and accounts receivable. We manage our credit risk exposure through timely
assessment of our counterparty creditworthiness, credit limits and use of collateral management. Foreign exchange
contracts are transacted with various financial institutions with high credit standing. Accounts receivable are typicallyunsecured and are derived from revenues earned from customers located around the world. We manage our credit risk
exposure by performing ongoing evaluations to determine customer credit and we limit the amount of credit we extend. We
generally do not require collateral from our customers.

Cash Equivalents

We invest excess cash primarily in government bonds, corporate debt securities, mortgage-backed and asset-backed
securities, time deposits, and money market funds.

Marketable Securities

We classify all marketable debt securities that have effective maturities of three months or less from the date of purchaseas cash equivalents and those with effective maturities of greater than three months as marketable securities on our
Consolidated Balance Sheets. We determine the appropriate classification of our investments in marketable debt securities
at the time of purchase and reevaluate such designation at each balance sheet date. We have classified and accounted
for our marketable debt securities as available-for-sale. After consideration of our risk versus reward objectives, as well as
our liquidity requirements, we may sell these debt securities prior to their effective maturities. As we view these securities
as available to support current operations, we classify highly liquid securities with maturities beyond 12 months as current
assets under the caption marketable securities on the Consolidated Balance Sheets. We carry these securities at fair value,
and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for the changes inAlphabet 2023 Annual Report57Part I

Part II

Part IIIPart IV

allowance for expected credit losses, which are recorded in OI&E. For certain marketable debt securities we have elected
the fair value option, for which changes in fair value are recorded in OI&E. We determine any realized gains or losseson the sale of marketable debt securities on a specific identification method, and we record such gains and losses as acomponent of OI&E.
Our investments in marketable equity securities are measured at fair value with the related gains and losses, including
unrealized, recognized in OI&E. We classify our marketable equity securities subject to long-term lock-up restrictions
beyond 12 months as other non-current assets on the Consolidated Balance Sheets.

Non-Marketable Securities

Non-marketable securities primarily consist of equity securities. We account for non-marketable equity securities
through which we exercise significant influence but do not have control over the investee under the equity method. Allother non-marketable equity securities that we hold are primarily accounted for under the measurement alternative.
Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes
resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.
Adjustments are determined primarily based on a market approach as of the transaction date and are recorded as acomponent of OI&E.

Non-marketable securities that do not have effective contractual maturity dates are classified as other non-current assets
on the Consolidated Balance Sheets.

Derivative Financial Instruments

See Note 3 for the accounting policy pertaining to derivative financial instruments.

Accounts Receivable

Our payment terms for accounts receivable vary by the types and locations of our customers and the products or services
offered. The term between invoicing and when payment is due is not significant. For certain products or services andcustomers, we require payment before the products or services are delivered to the customer. Additionally, accounts
receivable includes amounts for services performed in advance of the right to invoice the customer.

We maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts
receivable, and changes in such are classified as general and administrative expense in the Consolidated Statementsof Income. We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics
exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. In
determining the amount of the allowance for credit losses, we consider historical collectibility based on past due
status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. We also
consider customer-specific information, current market conditions, and reasonable and supportable forecasts offuture economic conditions.

Other

Our financial instruments also include debt and equity investments in companies with which we also entered into
commercial arrangements at or near the same time. For these transactions, judgment is required in assessing
the substance of the arrangements, including assessing whether the components of the arrangements should be
accounted for as separate transactions under the applicable GAAP, and determining the value of the components of thearrangements, including the fair value of the investments. Additionally, if our investment in such companies becomes
impaired, any remaining performance obligations would be reassessed and may be reduced.

Impairment of Investments

We periodically review our debt and non-marketable equity securities for impairment.

For debt securities in an unrealized loss position, we determine whether a credit loss exists. The credit loss is estimated byconsidering available information relevant to the collectibility of the security and information about past events, current
conditions, and reasonable and supportable forecasts. Any credit loss is recorded as a charge to OI&E, not to exceed the amountof the unrealized loss. Unrealized losses other than the credit loss are recognized in AOCI. If we have an intent to sell, or if it ismore likely than not that we will be required to sell a debt security in an unrealized loss position before recovery of its amortizedcost basis, we will write down the security to its fair value and record the corresponding charge as a component of OI&E.
58

Alphabet 2023 Annual ReportPart I

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For non-marketable equity securities, including equity method investments, we consider whether impairment indicators
exist by evaluating the companies' financial and liquidity position and access to capital resources, among other indicators.
If the assessment indicates that the investment is impaired, we write down the investment to its fair value by recording
the corresponding charge as a component of OI&E. We prepare quantitative measurements of the fair value of our equity
investments using a market approach or an income approach.

Inventory

Inventory consists primarily of finished goods and is stated at the lower of cost and net realizable value. Cost is computed
using the first-in, first-out method.

Variable Interest Entities

We determine at the inception of each arrangement whether an entity in which we have made an investment or in which
we have other variable interests is considered a variable interest entity (VIE). We consolidate VIEs when we are the primary
beneficiary. We are the primary beneficiary of a VIE when we have the power to direct activities that most significantly
affect the economic performance of the VIE and have the obligation to absorb the majority of their losses or benefits. If
we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordancewith applicable GAAP.
Periodically, we assess whether any changes in our interest or relationship with the entity affect our determination ofwhether the entity is a VIE and, if so, whether we are the primary beneficiary.

Property and Equipment

Property and equipment includes the following categories: land and buildings, information technology assets,
construction in progress, leasehold improvements, and furniture and fixtures. Land and buildings include land,
offices, data centers, and related building improvements. Information technology assets include servers and network
equipment. Construction in progress is the construction or development of property and equipment that have not yet
been placed in service.

Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line
method over the estimated useful lives of the assets, which we regularly evaluate. Land is not depreciated. We depreciatebuildings over periods of seven to 25 years. We depreciate information technology assets generally over a period of six
years for servers and network equipment. We depreciate leasehold improvements over the shorter of the remaining leaseterm or the estimated useful lives of the assets. Depreciation for buildings, information technology assets, leasehold
improvements, and furniture and fixtures commences once they are ready for our intended use.

Goodwill

We allocate goodwill to reporting units based on the expected benefit from the business combination. We evaluate ourreporting units periodically, as well as when changes in our operating segments occur. For changes in reporting units, wereassign goodwill using a relative fair value allocation approach. We test our goodwill for impairment at least annually, or
more frequently if events or changes in circumstances indicate that the asset may be impaired. Goodwill impairments were
not material for the periods presented.

LeasesWe determine if an arrangement is a lease at inception. Our lease agreements generally contain lease and non-lease
components. Payments under our lease arrangements are primarily fixed. Non-lease components primarily include
payments for maintenance and utilities. We combine fixed payments for non-lease components with lease payments
and account for them together as a single lease component which increases the amount of our lease assets andliabilities.
Certain lease agreements contain variable payments, which are expensed as incurred and not included in the leaseassets and liabilities. These amounts primarily include payments affected by the Consumer Price Index, and payments formaintenance and utilities.

Alphabet 2023 Annual Report59Part I

Part II

Part IIIPart IV

Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement
date. The interest rate used to determine the present value of the future lease payments is our incremental borrowing
rate, because the interest rate implicit in our leases is not readily determinable. Our incremental borrowing rate isestimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic
environments where the leased asset is located. Our lease terms include periods under options to extend or terminate
the lease when it is reasonably certain that we will exercise that option. We generally use the base, non-cancelable,lease term when determining the lease assets and liabilities. Lease assets also include any prepaid lease payments andlease incentives.
Operating lease assets and liabilities are included on our Consolidated Balance Sheets. The current portion of ouroperating lease liabilities is included in accrued expenses and other current liabilities, and the long-term portion is included
in operating lease liabilities. Finance lease assets are included in property and equipment, net. Finance lease liabilities areincluded in accrued expenses and other current liabilities or long-term debt.
Operating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease term.

Impairment of Long-Lived Assets

We review leases, property and equipment, and intangible assets, excluding goodwill, for impairment when events orchanges in circumstances indicate the carrying amount may not be recoverable. The evaluation is performed at the lowest
level of identifiable cash flows independent of other assets. We measure recoverability of these assets by comparing thecarrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If thecarrying value of the assets or asset group is not recoverable, the impairment recognized is measured as the amount bywhich the carrying value exceeds its fair value.

Income Taxes

We account for income taxes using the asset and liability method, under which we recognize the amount of taxes payableor refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events thathave been recognized in our financial statements or tax returns. We measure current and deferred tax assets and liabilities
based on provisions of enacted tax law. We evaluate the likelihood of future realization of our deferred tax assets based on
all available evidence and establish a valuation allowance to reduce deferred tax assets when it is more likely than not thatthey will not be realized or release a valuation allowance to increase deferred tax assets when it is more likely than not thatthey will be realized. We have elected to account for the tax effects of the global intangible low tax Income provision as acurrent period expense.

We recognize the financial statement effects of a tax position when it is more likely than not that, based on technicalmerits, the position will be sustained upon examination. The tax benefits of the position recognized in the financial
statements are then measured based on the largest amount of benefit that is greater than 50% likely to be realized upon
settlement with a taxing authority. In addition, we recognize interest and penalties related to unrecognized tax benefits as acomponent of the income tax provision.

Business Combinations

We include the results of operations of the businesses that we acquire as of the acquisition date. We allocate the purchaseprice of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values, except forrevenue contracts acquired, which are recognized in accordance with our revenue recognition policy. The excess of thepurchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses
are recognized separately from the business combination and are expensed as incurred.

Foreign Currency

We translate the financial statements of our international subsidiaries to U.S. dollars using month-end exchange rates
for assets and liabilities, and average rates for the annual period derived from month-end exchange rates for revenues,
costs, and expenses. We record translation gains and losses in AOCI as a component of stockholders’ equity. We reflect
net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional
currency as a component of foreign currency exchange gain (loss) in OI&E.
60

Alphabet 2023 Annual ReportPart I

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Part IIIPart IV

Recent Accounting Pronouncements

In November 2023, the Financial Standards Accounting 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 about significant segment
expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim 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" toexpand the disclosure requirements for income taxes, specifically related to the rate reconciliation and 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.

Note 2. Revenues

Disaggregated Revenues

The following table presents revenues disaggregated by type (in millions):
Year Ended December 31,

Google Search & other

2021

$

YouTube ads

148,951$

28,845

Google Network

2022

162,450

29,24331,701

Google advertising

Google subscriptions, platforms, and devices

32,780Google Cloud

Hedging gains (losses)
Total revenues

31,312

237,855

237,529

253,528

272,543

753

1,068

1,527

29,05534,68826,280149$

31,510224,473

19,206

Other Bets

175,033

209,497
28,032

Google Services total

$

2023

257,637

33,0881,960$

282,836$236

307,394

No individual customer or groups of affiliated customers represented more than 10% of our revenues in 2021, 2022, or 2023.
The following table presents revenues disaggregated by geography, based on the addresses of our customers (in millions):

United States$

EMEA(1)
APAC(1)Other Americas(1)

Total revenues

117,854
79,107
46,123
14,404(1)

Hedging gains (losses)

2021

$

149

257,637

Year Ended December 31,
46%

31

$

18

100%

134,81482,06247,0245

02022

16,976$

1,960

282,836

48%

29

$

16

100%

146,286
91,03851,5146

1

2023

18,320$236

307,394

47%

30
17
6

0

100%

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

Alphabet 2023 Annual Report61Part I

Part II

Part IIIPart IV

Revenue Backlog

As of December 31, 2023, we had $74.1 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 for these commitments islargely 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 over the next 24 months with the remaining
to be recognized thereafter. Revenue backlog includes related deferred revenue currently recorded as well as amounts thatwill be invoiced in future periods, and excludes contracts with an 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, anddevices. Total deferred revenue as of December 31, 2022 was $4.5 billion, of which $2.4 billion was recognized as revenues
for the year ended December 31, 2023.

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Alphabet 2023 Annual ReportPart I

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Part IIIPart IV

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 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 we use quoted
market prices to the extent available or alternative pricing sources and models utilizing market observable inputs todetermine fair value. For certain marketable debt securities, we have elected the fair value option for which changes in fairvalue are recorded in OI&E. The fair value option was elected for these securities to align with the unrealized gains andlosses 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):

Fair value changes
recorded in othercomprehensive income

Fair Value
Hierarchy

Adjusted
Cost

Time deposits

Level 2

Corporate debt securities

Level 2

28,578

Level 2

16,176

Government bonds

Mortgage-backed andasset-backed securities

Total investmentswith fair value change
reflected in othercomprehensive income(1)Fair value adjustments
recorded in net income
Money market funds

Current marketable equity
securities(2)Level 2

41,036Gross
Unrealized
Gains

Gross
Unrealized
LossesFair Value

Cash and Cash
Equivalents

Marketable
Securities

$

$

$

$

$

$

0

64

0

(2,045)

Level 2

Total

(1)

(1,242)

14,939(4,856) $

86,308

$

5,577

$

80,731

$

7,234

$

7,234

$

0

$

Level 2

(2)

$
77

$

4,013

0

339

1,877

440
65

3,679

1,686

2

1,684

18,893$

(4,856) $ 105,201$Represents gross unrealized gains and losses for debt securities recorded to AOCI.

14,9390

3,744Level 227,0160339$38,772

5

77

1

4,013

$ 91,087

283

4

27,017

Total investmentswith fair value change
recorded in net incomeCash39,055

5,293(1,569)Level 1

Corporate debt securities

5,297

8

Level 1

Level 2Mortgage-backed andasset-backed securities

5,297$ 91,087

Mutual funds

Government bonds$

As of December 31, 2022

0

1,437

7,741

$

11,152

21,879$

91,8838,561

0Thelong-termportionofmarketableequitysecurities(subjecttolong-termlock-uprestrictions)of$803millionasofDecember31, 2022
is included within other non-current assets.

Alphabet 2023 Annual Report63Part I

Part II

Fair value changes
recorded in othercomprehensive income
Time deposits

Fair Value
Hierarchy

Level 2Government bonds

Level 2Mortgage-backed andasset-backed securities

Level 2

Corporate debt securities

Total investmentswith fair value change
reflected in othercomprehensive income(1)Fair value adjustments
recorded in net income
Money market funds

Current marketable equity
securities(2)Level 2

Part III

Adjusted
Cost

$

2,628

38,106Gross
Unrealized
Gains

$

22,457233

As of December 31, 2023

Gross
Unrealized
Losses$

112

17,243$ 80,434

0

433

0

(679)

$

$

2,628

37,6604,621$

74,296

$

6,480

$

6,480

$

0

Level 2

Level 2

Level 2

433

$

0

4,282

1,952

347

1,605

2,683

0

2,683

19,490$

(1,950) $

98,407

$

0

311

91

$

Represents gross unrealized gains and losses for debt securities recorded to AOCI.

16,6970

3,782

Total investmentswith fair value change
recorded in net income

(2)

0

311

$

21,932$Level 1

$ 80,434

35,667

78,917Mortgage-backed andasset-backed securities

Total

0

0

(1,950) $

Level 2

(1)

1,993

$

16,697

Government bonds

Cash

2,628

Marketable
Securities

(634)

4,282

Corporate debt securities$

21,932

Level 1

Mutual funds

Cash andCash
Equivalents

Fair Value

(637)

88

$

Part IV

3,691

6,918

$

12,572

24,048$

86,86812,5090Thelong-termportionofmarketableequitysecurities(subjecttolong-termlock-uprestrictions)of$1.4billionasofDecember 31,2023
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 observable transactions
for identical or similar investments of the same issuer or impairment. Non-marketable equity securities that have beenremeasured during the period based on observable transactions are classified within Level 2 or Level 3 in the fair value
hierarchy because we estimate the value based on valuation methods, including option pricing models, market comparable
approach, and common stock equivalent method, which may include a combination of the observable transaction priceat the transaction 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. The fair value of
non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.

AsofDecember31,2023, the carrying valueofournon-marketableequitysecuritieswas$28.8 billion,ofwhich$13.7 billion
were remeasured at fair value during the year ended December 31, 2023, and primarily classified within Level 2 of the fairvalue hierarchy at the time of measurement.

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Alphabet 2023 Annual ReportPart I

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Part IIIPart IV

Debt Securities

The following table summarizes the estimated fair value of investments in available-for-sale marketable debt securities byeffective contractual maturity dates (in millions):
As of December 31, 2023

Due in one year or less$

Due in one year through five years

11,231
41,477Due in five years through 10 years

15,351

Due after 10 years
Total

14,216$82,275

The following tables present fair values and gross unrealized losses recorded to AOCI, aggregated by investment category
and the length of time that individual securities have been in a continuous loss position (in millions):
As of December 31, 2022

Less than 12 Months

Government bonds

Corporate debt securities

Mortgage-backed andasset-backed securities
Total

$

Fair Value
21,03911,2287,725$

39,992$$

Fair Value(440)

15,125(1,004) $

(585)(2,029) $

Government bonds

Corporate debt securities

Mortgage-backed andasset-backed securities
Total

$

$

1,456
827

2,945

5,228

$

13,4386,964

35,527$Fair Value(1,052)

26,353(1,041) $

(657)(2,750) $

34,477

14,68975,51912 Months or Greater

Unrealized
Loss

Fair Value(5)

15,367

(26)

7,916

$

$

Total

Unrealized
Loss

As of December 31, 2023

Less than 12 Months
Fair Value

12 Months or Greater

Unrealized
Loss(22) $(53) $

13,89737,180$$Fair Value(592)

16,194(608)

10,861(1,857) $

$

Total

Unrealized
Loss(657) $$

15,35342,408$$

Unrealized
Loss(2,045)(1,492)(1,242)(4,779)Unrealized
Loss

(679)

(597)
(634)

(1,910)We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method.
The following table summarizes gains and losses for debt securities, reflected as a component of OI&E (in millions):
Year Ended December 31,

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

2021

2022

2023

432

103

182

(122) $

386

(329)

(1,588)(1,833)(110) $

(2,064) $

(1,215)(91)$(557) $(22)

50

Alphabet 2023 Annual Report65Part I

Part II

Part IIIPart IV

Equity Investments

The carrying value of equity securities is measured as the total initial cost plus the cumulative net gain (loss). Gains andlosses,includingimpairments,areincludedasacomponentofOI&EintheConsolidated StatementsofIncome.SeeNote7
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, 2022

Total initial cost

Cumulative
net gain (loss)(1)

Carrying value(1)

Marketable
Equity Securities

$

$

5,764
(608)

5,156

Non-Marketable
Equity Securities$$

16,157
12,372

28,529As of December 31, 2023
Total

$

21,921
11,764$

33,685Marketable
Equity Securities

$

5,418
555

$

5,973

Non-Marketable
Equity Securities$

17,616
11,150$

28,766

$

$

Total

23,034
11,70534,739Non-marketable equity securities cumulative net gain (loss) is comprised of $16.8 billion gains and $4.5 billion losses (including
impairments)asofDecember 31,2022and$18.1billiongainsand$6.9billionlosses(includingimpairments)asofDecember 31,2023.

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 aresummarized below (in millions):

Realized net gain (loss) on equity securities sold during theperiodUnrealized net gain (loss) on marketable equity securities

2021
$

(1)

1,335

2022

$

9,849

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

1,196Year Ended December 31,$12,380(442)(3,242)

2023
$

229

$

(3,455)690

790(1,088)$

392

Unrealized gain (loss) on non-marketable equity securities accounted for under the measurement alternative is comprised of $10.0 billion,$3.3billion,and$1.8billionofupwardadjustmentsasofDecember 31,2021,2022,and2023,respectively,and$122million,$3.0 billion,
and$2.9billionofdownwardadjustments(includingimpairments)asofDecember 31,2021,2022,and2023,respectively.

In the table above, realized net gain (loss) on equity securities sold during the period reflects the difference between thesale proceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if later.

Cumulative net gains (losses) on equity securities sold during the period, which is summarized in the following table (inmillions), 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 period of sale, we believe they
are important supplemental information as they reflect the economic net gains (losses) on the securities sold during theperiod. Cumulative net gains (losses) are calculated as the difference between the sale price and the initial purchase pricefor the equity security sold during the period.
Equity Securities Sold During theYear Ended December 31,
Total sale priceTotal initial cost

Cumulative net gains (losses)

66

Alphabet 2023 Annual Report

2022

$

1,784

$

$

847

$

937

2023

1,981

1,512

469

Part I

Part II

Part IIIPart IV

Equity Securities Accounted for Under the Equity Method

AsofDecember 31,2022and2023, equity securities accounted for under the equity method had a carrying
valueofapproximately$1.5 billion and$1.7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7 for
further details on OI&E.

Derivative Financial Instruments

We use derivative instruments to manage risks relating to our ongoing business operations. The primary risk managed isforeign exchange risk. We use foreign currency contracts to reduce the risk that our cash flows, earnings, and investment inforeign 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 enhance investment returns.
We recognize derivative instruments in the Consolidated Balance Sheets at fair value and classify the derivatives primarily
within Level 2 in the fair value hierarchy. We present our collar contracts (an option strategy comprised of a combinationof purchased and written options) at net fair values and present all other derivatives at gross 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 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 and subsequently
reclassified to revenue when the hedged item is recognized in earnings. We exclude forward points and time value from ourassessment of hedge effectiveness and amortize them on a straight-line basis over the life of the hedging instrument inrevenues. The difference between fair value changes of the excluded component and the amount amortized to revenues isrecorded in AOCI.

AsofDecember 31,2023,thenetaccumulatedgainonourforeigncurrencycashflow hedges before tax effectwas$47 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 our marketablesecurities 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 the related hedged items. We exclude
forward points from the assessment of hedge effectiveness and recognize changes 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 toour investment in foreign subsidiaries. Net investment hedge amounts included in the assessment of hedge effectivenessare recognized in AOCI along with the foreign currency translation adjustment. We exclude forward points from theassessment 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 to hedge
intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional
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 and liabilities.

We also use derivatives not designated as hedging instruments to manage risks relating to interest rates, commodity prices,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 arising from other derivatives are primarilyreflectedwithinthe“other”componentofOI&E.SeeNote7forfurtherdetails.
Alphabet 2023 Annual Report67Part I

Part II

Part IIIPart IV

The gross notional amounts of outstanding derivative instruments were as follows (in millions):
As of December 31,
2022

Derivatives designated as hedging instruments:
Foreign exchange contracts

2023

Cash flow hedges$

15,972$

18,039Net investment hedges

$

8,751

$

9,472

$

34,979$Fair value hedges

Derivatives not designated as hedging instruments:
Foreign exchange contracts

2,117

$

Other contracts

7,932

$

2,065

$

39,722$

10,818The fair values of outstanding derivative instruments were as follows (in millions):
As of December 31, 2022
AssetsDerivatives 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)

271

$

Assets(1)

(2)

556

$

Liabilities(2)

205

$

242

365

207

134

156

405

254

248

203

40

$

As of December 31, 2023

Liabilities

(1)

676

47

$

810

114
$

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

47

453

$

445

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 in othercomprehensive income (OCI) are summarized below (in millions):
Year Ended December 31,

2021

Derivatives in cash flow hedging relationship:
Foreign exchange contracts

Amount included in the assessment of effectivenessAmount excluded from the assessment of effectiveness

$

806

$

1,608

Derivatives in net investment hedging relationship:
Foreign exchange contracts

Amount included in the assessment of effectiveness
Total

68

Alphabet 2023 Annual Report

48

754

2022

$

1,699

$

2,119

(188)

608

$

$

2023

90

84

(287)

(113)

Part I

Part II

Part IIIPart IV

The table below presents the gains (losses) of our derivatives on the Consolidated Statements of Income: (in millions):

2021

Total amounts in the Consolidated Statements ofIncomeEffect of cash flow hedges:

Foreign exchange contracts

Amount reclassified from AOCI to income

Amount excluded from the assessment ofeffectiveness (amortized)

Revenues

Year Ended December 31,
Other
income(expense),
net

Revenues

Other
income(expense),net$ 282,836

$

$

$

$ 257,637$

12,020$$

0Effect 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:

165

2022

2,046

2023

Revenues(3,514) $ 307,394

0

$

213

Other
income(expense),
net

$

1,424

$

0

(16)

0

(85)

0

24

0

0

(95)

0

(162)

0

59

0

95

0

163

0

(59)

0

8

0

16

0

15

0

82

0

171

0

187

0

(860)

0

(395)

0

7

Foreign exchange contracts

Amount excluded from the assessment ofeffectiveness

Effect of non designated hedges:
Foreign exchange contracts

Other contracts

Total gains (losses)

$

0

149

$

101

(669) $

0

1,961

$

144

(63) $

0

237

$

53

262

Offsetting of Derivatives

We enter into master netting arrangements and collateral security arrangements to reduce credit risk. Cash collateral
received related to derivative instruments under our collateral security arrangements are included in other current 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.

Alphabet 2023 Annual Report69Part I

Part II

Part IIIPart IV

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 (in millions):
As of December 31, 2022
Gross Amounts Not Offset in theConsolidated Balance Sheets,
but Have Legal Rights to Offset

Derivatives assets

Derivatives liabilities

Gross
Amounts
Recognized

$
$

760
894

Gross Amounts
Offset in theConsolidated
Balance Sheets$$

Net Amounts
Presented in theConsolidated
Balance Sheets(84) $676(84) $810

Financial
Instruments(1)$(463) $$(463) $

Cash and
Non-CashCollateral
Received or
PledgedNet Amounts(132) $(28) $81319

As of December 31, 2023
Gross Amounts Not Offset in theConsolidated Balance Sheets,
but Have Legal Rights to Offset

Derivatives assets

Derivatives liabilities

(1)

Gross
Amounts
Recognized

$
$

535
527

Gross Amounts
Offset in theConsolidated
Balance Sheets$$

Net Amounts
Presented in theConsolidated
Balance Sheets(82) $(82) $

453
445

Financial
Instruments(1)$$(213) $(213) $

Cash and
Non-CashCollateral
Received or
PledgedNet Amounts(75) $(16) $165
216

The balances as of December 31, 2022 and 2023 were related to derivatives allowed to be net settled in accordance with our masternetting agreements.

Note 4. Leases

We have entered into operating lease agreements primarily for data centers, land, and offices throughout the world withlease periods expiring between 2024 and 2063.
Components of operating lease expense were as follows (in millions):

Year Ended December 31,

Operating lease cost
Variable lease cost

Total operating lease cost

2021

2022

2023

$

2,699

$

2,900

$

3,362

$

3,425

$

3,738

$

4,544

726

838

1,182

Supplemental information related to operating leases was as follows (in millions):
Year Ended December 31,

Cash payments for operating leases

New operating lease assets obtained in exchange for operating lease liabilities

70

Alphabet 2023 Annual Report

$

$

2021

2,489

2,951

$

$

2022

2,722

4,383

$

$

2023

3,173

2,877

Part I

Part II

Part IIIPart IV

AsofDecember 31,2023,ouroperatingleaseshadaweighted average remaining leasetermof8.1yearsandaweighted
averagediscountrateof3.1%.Futureleasepayments underoperatingleases asofDecember 31,2023 wereas follows(in millions):
2024
2025

$

2026

1,951

2028

1,488

Thereafter

5,685

Total future lease payments

Total lease liability balance

2,929
2,450

2027

Less imputed interest

3,179

17,682$(2,431)

15,251AsofDecember 31,2023,wehaveenteredintoleasesthathavenotyet commencedwithshort-termandlong-termfuture
lease paymentsof$657 millionand$3.3billionthatarenotyetrecordedonour ConsolidatedBalance Sheets.Theseleases
will commence between 2024 and 2026 with non-cancelable lease terms between one and 25 years.

Note 5. Variable Interest Entities

Consolidated Variable Interest Entities

We consolidate VIEs in which we hold a variable interest and are the primary beneficiary. The results of operations andfinancial 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 to us. As of
December 31,2022and2023,assetsthat canonlybeusedtosettleobligationsofthese VIEswere$4.1billionand$4.9billion,
respectively, and the liabilities for which creditors only have recourse to the VIEs were $2.6 billion and $2.5 billion, respectively.
We may continue to fund ongoing operations of certain VIEs that are included within Other Bets.
Totalnoncontrollinginterests (NCI)inourconsolidatedsubsidiarieswere$3.8billionand$3.4billionasofDecember 31,
2022 and 2023, respectively, of which $1.1 billion is redeemable noncontrolling interest (RNCI) for both periods. NCI andRNCI 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7for furtherdetailsonOI&E.

Unconsolidated Variable Interest Entities

We have investments in VIEs in which we are not the primary beneficiary. These VIEs include private companies that areprimarily 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 that would
significantly affect their economic performance. Therefore, we are not the primary beneficiary, and the results ofoperations and financial position of these VIEs are not included in our consolidated financial statements. We account forthese 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 the investments
and any future funding commitments. The maximum exposure and carrying value of these unconsolidated VIEs were
$2.8billionand$2.7billion,respectively,asofDecember 31,2022and$5.7billion and$4.0billion,respectively,asof
December 31,2023. Thedifferencebetweenthemaximumexposureandthecarryingvaluerelatesprimarilytofuture
funding commitments.

Alphabet 2023 Annual Report71Part I

Part II

Part IIIPart IV

Note 6. Debt

Short-Term Debt

We have a debt financing program of up to $10.0 billion through the issuance of commercial paper. Net proceedsfrom this program are used for general corporate purposes. We had no commercial paper outstanding as ofDecember 31,2022and2023.
Our short-term debt balance also includes the current portion of certain long-term debt.

Long-Term Debt

Total outstanding debt is summarized below (in millions, except percentages):

Debt

2014-2020 Notes issuances

Future finance lease payments, net andother(1)Maturity

Coupon Rate

Effective
Interest Rate

2024 - 2060

0.45% - 3.38%

0.57% - 3.38%

As of December 31,
2022

$

Total debt

(1)
(2)

Future finance lease payments are net of imputed interest.

14,746(143)$

13,0001,746

15,142

Less: Current portion of long-term notes(2)Total long-term debt

$

2,142

Unamortized discount and debt issuancecosts

Less: Current portion of future finance lease
payments, net and other current debt(1)(2)

13,000

2023

(130)

0

(1,000)

(298)

(363)

14,701$

13,253

Totalcurrentportionoflong-termdebtisincludedwithinotheraccruedexpensesandcurrentliabilities.SeeNote7forfurtherdetails.

The notes in the table above are fixed-rate senior unsecured obligations and generally 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 basedon proceeds received with interest payable semi-annually.
Thetotal estimated fair value of the outstanding notes was approximately $9.9 billion and $10.3 billion as of December 31,
2022andDecember 31,2023,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.

AsofDecember 31,2023, theaggregate future principalpaymentsfor long-termdebt, includingfinancelease liabilities,foreach of the next five years and thereafter were as follows (in millions):
2024
2025

$

2026

2,165

2027

1,143

2028

Thereafter
Total

Credit Facility

1,299

1,163

132

$

8,960

14,862AsofDecember 31,2023,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. 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,2022and2023.
72

Alphabet 2023 Annual ReportPart I

Part II

Part IIIPart IV

Note 7. Supplemental Financial Statement Information
Accounts Receivable

Theallowanceforcreditlossesonaccountsreceivable was $754 millionand$771millionasofDecember 31,2022and2023,
respectively.

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):
As of December 31,
Land and buildings

Information technology assets$Construction in progress

2022

66,897
66,267$27,657

Leasehold improvements

Less: accumulated depreciation
Property and equipment, net

11,425314

Property and equipment, gross472

171,710$

(59,042)

112,668

80,59435,22910,575

Furniture and fixtures

2023

74,083201,803$

(67,458)

134,345

Our technical infrastructure is comprised of information technology assets, including servers and networking equipment,
and data center land and buildings.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):
As of December 31,
European Commission fines(1)

Accrued purchases of property and equipment$Accrued customer liabilities

(1)

3,019

$

18,01337,866

9,525

4,679
2,791

1,632

$

2023

4,140

2,477

Income taxes payable, net

Accrued expenses and other current liabilities

9,106
3,619

Current operating lease liabilities
Other accrued expenses and current liabilities

2022

2,748

$

22,285

46,168

While each EC decision is under appeal, the fines are included 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. Amounts include the effects of foreignexchange and interest. See Note 10 for further details.

Alphabet 2023 Annual Report73Part I

Part II

Part IIIPart IV

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

Balance as of December 31, 2020

Other comprehensive income (loss) before
reclassifications$Foreign Currency
Translation
Adjustments

Amounts excluded from the assessment ofhedge effectiveness recorded in AOCI
Amounts reclassified from AOCI

Balance as of December 31, 2021

Amounts excluded from the assessment ofhedge effectiveness recorded in AOCI
Amounts reclassified from AOCI

Balance as of December 31, 2022

Amounts excluded from the assessment ofhedge effectiveness recorded in AOCI

633

(2,086)

0

0

48

48

(64)

(154)

236

447

(1,442)(1,376)(1,836)0(2,256)(4,720)1,463(5,093)

0

(188)

(188)

(431)

(5,980)

84

2,163

1,007

(1,706)(3,477)16(3,713)

735

1,344

735

(3,407)0(1,623)(699)(7,603)

84

1,168

84

(214)

2,512

$

(218)

562

(1,836)

0

$

$

668

0

Amounts reclassified from AOCI

(115)

(1,312)(4,142)Other comprehensive income (loss) before
reclassifications

$

Total

(1,442)0

Other comprehensive income (loss)

Unrealized Gains(Losses) on Cash
Flow Hedges

1,612(2,306)

Other comprehensive income (loss) before
reclassifications

Balance as of December 31, 2023

$0

Other comprehensive income (loss)

Other comprehensive income (loss)(864)

Unrealized Gains(Losses) on
Available-for-Sale
Investments

(965)

954

(46)

$

$

(30)

3,201

(4,402)The effects on net income of amounts reclassified from AOCI were as follows (in millions):
Gains (Losses) Reclassified from AOCI to theConsolidated Statements of Income
AOCI Components

Location

Unrealized gains (losses) on available-for-sale investments

Other income (expense), net

Benefit (provision) for income taxes
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts

Interest rate contracts

Total amount reclassified, net of income tax

74

Alphabet 2023 Annual Report

Year Ended December 31,

2021
$

Net of income tax

82

(18)

2022

$

(1,291)
284

$

2023
(1,497)329

64(1,007)(1,168)

Revenue

165

2,046

213

Benefit (provision) for income taxes

(17)

(346)

(5)

Other income (expense), net
Net of income tax

6

$

154

218

6

$

1,706
699

6

$

214

(954)

Part I

Part II

Part IIIPart IV

Other Income (Expense), Net

ComponentsofOI&Ewereasfollows(inmillions):
Year Ended December 31,

Interest income

Interest expense(1)

$

2021

1,499

(346)

Foreign currency exchange gain (loss), net(240)

Gain (loss) on debt securities, net

Gain (loss) on equity securities, net
Income (loss) and impairment from equity method investments, net
Other income (expense), net

(1)

(357)

392

(1,215)
257

(337)
$

(308)

(3,455)
798

411

2023

3,865

(1,238)(1,908)12,020$(654)(2,064)

334

$

2022

2,174

(110)

12,380

Performance fees
Other

$

381

(3,514)

(628)
$

299

1,424

Interestexpenseisnetofinterestcapitalizedof$163million,$128million,and$181million fortheyearsendedDecember 31,2021,2022,
and 2023, respectively.

Note 8. Workforce Reduction and Other Initiatives

We have a company-wide effort underway to re-engineer our cost base. As part of this program, in January 2023, weannounced a reduction of our workforce. As a result, total employee severance and related charges recorded during theyear ended December 31, 2023 were $2.1 billion. Substantially all of the employees affected were no longer included in ourheadcount as of December 31, 2023.

In addition, we are taking actions to optimize our global office space. As a result, exit charges recorded during the year
ended December 31,2023, were $1.8billionasreflectedin thetablebelow.In addition totheseexitcharges, for theyearendedDecember 31,2023, weincurred$269 millioninaccelerated rent andaccelerateddepreciation,whicharenot
included in the table below.

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

Cost of revenues

Research and development

Severance andRelated(1)$Sales and marketing

General and administrative
Total charges

(1)

479

848

$

497

$

264

2,088

Office Space
481

870

$

257

$

237

1,845

Total
960

1,718

754

$

501

3,933

Severance includes amounts to be settled in cash, accounted for as one-time involuntary employee termination benefits, and SBC.

For segment reporting, the substantial majority of these charges are included within Alphabet-level activities in our
segment results.

Alphabet 2023 Annual Report75Part I

Part II

Part IIIPart IV

FortheyearendedDecember 31,2023,changesinliabilitiesresultingfromtheseverancecharges andrelatedaccruals
were as follows (in millions):

Balance as of December 31, 2022

Charges$(1)Cash payments

(2)

0

1,656

(1,579)$Balance as of December 31, 2023
(1)

Severance andRelated(2)

Excludes non-cash SBC of $432 million.

77

Included in accrued compensation and benefits on the Consolidated Balance Sheets.

Note 9. Goodwill

Changesinthecarryingamountofgoodwillfor the yearsendedDecember 31,2022 and 2023 were as follows (in millions):

Balance as of December 31, 2021
Acquisitions$Foreign currency translation and other adjustments
Acquisitions

Balance as of December 31, 2023

19,826
1,176

$

(155)

Balance as of December 31, 2022

Foreign currency translation and other adjustments

GoogleServices

2,337

4,876

$

(8)

Other Bets

793
119

$

(4)

Total

22,956
6,171

(167)

20,847

7,205

908

28,960

31

(9)

(27)

(5)

240

$

Google Cloud

21,118

3

$

7,199

0

$

881

243

$

29,198Note 10. Commitments and Contingencies
Commitments

Wehavecontentlicensingagreementswithfuture fixedorminimumguaranteedcommitmentsof $10.6 billionasof
December 31, 2023, of which the majority is paid over seven years ending in the first quarter of 2030.

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 have agreed to defend and/or holdcertain 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 indemnificationagreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.

It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification agreements
due to the unique facts and circumstances involved in each particular agreement. Additionally, the payments we havemade under such agreements have not had a material adverse effect on our results of operations, cash flows, or financial
position. However, to the extent that valid indemnification claims arise in the future, future payments by us could besignificant and could have a material adverse effect on our results of operations or cash flows in a particular period.
AsofDecember 31,2023, we didnot have any material indemnification claims that wereprobable orreasonablypossible.

76

Alphabet 2023 Annual ReportPart I

Part II

Part IIIPart IV

Legal Matters

We record a liability when we believe that it is probable that a loss has been incurred, and the amount can be reasonably
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 thathas been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments asappropriate.
Certain outstanding matters seek speculative, substantial or indeterminate monetary amounts, substantial changes to ourbusiness practices and products, or structural remedies. Significant judgment is required to determine both the likelihoodof there being a loss and the estimated amount of a loss related to such matters, and we may be unable to estimate thereasonably possible loss or range of losses. The outcomes of outstanding legal matters are inherently unpredictable andsubject to significant uncertainties, and could, either individually or in aggregate, have a material adverse effect.
We expense legal fees in the period in which they are incurred.

Antitrust Investigations

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acharge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inthe firstquarterof2019.
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 their nature 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 our business. The
DOJ and a number of state Attorneys General filed a lawsuit in the U.S. District Court for the District of Columbia on
October 20, 2020 alleging that Google violated U.S. antitrust laws relating to Search and Search advertising. The trial
ended on November 16, 2023, and we expect a decision in 2024. Further, in June 2022, the Australian Competition andConsumer Commission (ACCC) and the United Kingdom’s Competition and Markets Authority (CMA) each opened aninvestigation 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, alongwith a number of state Attorneys General, filed an antitrust complaint in the U.S. District Court for the Eastern District ofVirginia alleging that Google’s digital advertising technology products violate U.S. antitrust laws, and on April 17, 2023,
a number of additional state Attorneys General joined the complaint. The EC, the CMA, and the ACCC each opened
Alphabet 2023 Annual Report77Part I

Part II

Part IIIPart IVa formal investigation into Google’s advertising technology business practices on June 22, 2021, May 25, 2022, andJune 29,2022,respectively.OnJune14,2023,theECissuedaStatement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.

• 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 settlement in principle with 50 state Attorneys
General and three territories. The U.S. District Court subsequently vacated the trial date with the states, and any final
approval of the settlement is expected to occur in 2024. 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 aformal 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 cooperatewith 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 of privacy
investigations and lawsuits ongoing in multiple jurisdictions. For example, there are ongoing investigations and litigationin the U.S. and the EU, 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 that certain of
our products, services, and technologies infringe others’ intellectual property rights. Adverse results in these lawsuits may
sinclude awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us fromoffering certain features, functionalities, products, or services. As a result, we may have to change our business practices
and develop non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm
our business. In addition, the U.S. International Trade Commission (ITC) has increasingly become an important forum tolitigate 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.

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 such claims, and may
require that we pay significant damages if there were an adverse ruling in any such claims. In addition, our customers andpartners may discontinue the use of our products, services, and technologies, as a result 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, in December 2023, a California jury delivered a
verdict in Epic Games v. Google finding that Google violated antitrust laws related to Google Play’s business. The presiding
judge will determine remedies in 2024, and the range of potential remedies vary widely. We plan to appeal. We also
periodically have data incidents that we report to relevant regulators as required by law.
These claims, consent orders, lawsuits, regulatory and 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 our business 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 havebeen 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.
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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 isprobable and reasonably estimable. 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. Due to the inherent complexity and uncertainty of these matters andjudicial process in certain jurisdictions, the final outcome may be materially different from our expectations.
See, Note 14 for information regarding income tax contingencies.

Note 11. Stockholders’ Equity

Class A and Class B Common Stock and Class C Capital Stock

Our Board of Directors has authorized three classes of stock, Class A and Class B common stock, and Class C capital stock.
The rights of the holders of each class of our common and capital stock are identical, except with respect to voting. EachshareofClass Acommonstockisentitledtoonevotepershare.Eachshareof ClassBcommonstockisentitledto10votes
per share. Class C capital stock has no voting rights, except as required by applicable law. Shares of Class B common stockmaybeconvertedatanytimeattheoptionofthestockholderandautomaticallyconvertuponsaleortransfertoClass A
common stock.

Share RepurchasesIntheyearsendedDecember 31,2021,2022,and2023,werepurchased$50.3billion,$59.3 billion,and$62.2 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anadditional$70.0 billionofitsClass A andClassCshares.As of December 31,2023,$36.3billion remainsavailablefor Class AandClassCshare
repurchases.
The following table presents Class A and Class C shares repurchased and subsequently retired (in millions):
Year Ended December 31, 2022
Class A share repurchases

Class C share repurchases
Total share repurchases

(1)

(1)

Shares
61

$

530

$

469

Shares repurchasedincludeunsettledrepurchasesas ofDecember 31,2023.

Amount6,719

52,57759,296

Year Ended December 31, 2023
Shares
78

$

528

$

450

Amount9,316

52,86862,184

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 volumesof the Class A and Class C shares. Repurchases are executed from time to time, subject to general 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.

Alphabet 2023 Annual Report79Part I

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Note 12. Net Income Per Share

WecomputenetincomepershareofClass A,ClassB,andClassCstockusingthetwo-classmethod.Basicnetincomepershare is computed using the weighted-average number of shares outstanding during the period. Diluted net income pershare is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding
during the period. Potentially dilutive securities consist of RSUs and other contingently issuable shares. The dilutive effectof outstanding RSUs and other contingently issuable shares is reflected in diluted earnings per share by application of thetreasurystockmethod. ThecomputationofthedilutednetincomepershareofClass A stockassumestheconversionofClass B stock, while the diluted net income per share of Class B stock does not assume the conversion of those shares.

Therights,includingtheliquidationanddividendrights,oftheholders ofourClass A, ClassB,andClass Cstockareidentical,
except with respect to voting. Furthermore, there are a number of safeguards built into our certificate of incorporation, as
well as Delaware law, which preclude our Board of Directors from declaring or paying unequal per share dividends on ourClass A,ClassB,andClass Cstock.Specifically,Delawarelawprovidesthatamendmentstoourcertificateofincorporation
which would have the effect of adversely altering the rights, powers, or preferences of a given class of stock must be
approved by the class of stock adversely affected by the proposed amendment. In addition, our certificate of incorporation
provides that before any such amendment may be put to a stockholder vote, it must be approved by the unanimous consent
of our Board of Directors. As a result, the undistributed earnings for each year are allocated based on the contractual
participationrightsoftheClass A,ClassB,andClass Cstockasifthe earningsfor the yearhadbeendistributed.Astheliquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.
Inthe yearsendedDecember31,2021,2022,and2023,thenetincomepershareamountsarethesamefor Class A,
Class B, and Class 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.

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):
Year Ended December 31,

Basic net income per share:
Numerator

Allocation of undistributed earnings

Denominator

Number of shares used in per share computation

Basic net income per share

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 toClass A shares
Reallocation of undistributed earnings

Allocation of undistributed earnings

Denominator

$

$

$

$

Weighted-average effect of dilutive securities
Add:

Conversion of Class B to Class A shares outstanding

Restricted stock units and other contingently issuable shares

Number of shares used in per share computation

80

Alphabet 2023 Annual Report

34,2006,006Class B

$

909

$

$

5.69

$

34,200

$

5,174

$

(581)

38,793

0

$

(77)

5,097

36,6596,438
5.69

36,6590$

581

37,240

6,006

909

6,438

909

0

0

0

$

5,174

Class C

5.69

5,174

Number of shares used in basic computation

Diluted net income per share

2021

Class A

6,915
5.61

0

$

909

5.61

200

$

6,638
5.61

Part I

Part II

Part IIIPart IV

Year Ended December 31,

Basic net income per share:
Numerator

Allocation of undistributed earnings

Denominator

Number of shares used in per share computation

Basic net income per share

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 ClassA sharesReallocation of undistributed earnings

Allocation of undistributed earnings

Denominator

$

$

$

$

Weighted-average effect of dilutive securities
Add:

Conversion of Class B to Class A shares outstanding

Restricted stock units and other contingently issuable shares

Number of shares used in per share computation

27,5185,994Class B

$

4,072
887

$

$

4.59

$

27,518

$

4,072

$

(230)

31,360

$

(30)

4,042

5,994

887

887

0

6,881
4.56

28,382
6,182
4.59

28,38200$Class C

4.59

4,072

Number of shares used in basic computation

Diluted net income per share

2022

Class A

0

$

887

4.56

28,612
6,182

0

0

$

230

96

$

6,278
4.56

Year Ended December 31,

Basic net income per share:
Numerator

Allocation of undistributed earnings

Denominator

Number of shares used in per share computation

Basic net income per share

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 ClassA sharesReallocation of undistributed earnings

Allocation of undistributed earnings

Denominator

$

$

$

$

Weighted-average effect of dilutive securities
Add:

Conversion of Class B to Class A shares outstanding

Restricted stock units and other contingently issuable shares

Diluted net income per share

34,601

Class B

5,124

5.84

$

5.84

$

34,601

$

5,124

$

5,922

(287)

39,438877$

34,0705,831
5.84

34,070

0

$

(37)

5,087

0

$

287

34,357

5,922

877

5,831

877

0

0

6,799

877

0

$

Class C$

5,124

Number of shares used in basic computation

Number of shares used in per share computation

2023

Class A

5.80

0

$

5.80

92

$

5,923

Alphabet 2023 Annual Report

5.80

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Part IIIPart IV

Note 13. Compensation Plans
Stock Plans

Our stock plans include the Alphabet Amended and Restated 2021 Stock Plan (“Alphabet 2021 Stock Plan”) and Other Bets
stock-based plans. Under our stock plans, RSUs and other types of awards may be granted. Under the Alphabet 2021 Stock
Plan, an RSU award is an agreement to issue shares of our Class C stock at the time the award vests. RSUs generally vest
over four years contingent upon employment on the vesting date.
AsofDecember 31,2023,therewere723millionsharesofClassCstockreserved for futureissuanceunderthe Alphabet2021 Stock Plan.

Stock-Based Compensation

FortheyearsendedDecember 31,2021, 2022, and2023, total SBCexpensewas$15.7 billion,$19.5billion,and$22.1 billion,
including amounts associated with awards we expect to settle in Alphabet stock of $15.0 billion, $18.8 billion, and$21.7billion,respectively.
DuringtheyearendedDecember 31,2023,total SBCexpenseincludes$432 millionassociated withworkforcereduction
costs. See Note 8 for further details.
FortheyearsendedDecember 31,2021,2022,and2023,werecognizedtaxbenefitsontotal SBC expense,whichare
reflectedintheprovisionforincometaxesintheConsolidatedStatementsofIncome,of$3.1billion,$3.9billion,and$4.5 billion, respectively.

FortheyearsendedDecember 31,2021,2022,and2023,taxbenefitrealizedrelatedtoawardsvestedorexercisedduringtheperiodwas$5.9billion,$4.7billion,and$5.6billion,respectively.Theseamountsdo notincludetheindirecteffectsof
stock-based awards, which primarily relate to the R&D tax credit.

Stock-Based Award Activities

Thefollowingtablesummarizestheactivities forunvestedAlphabetRSUsfor theyearendedDecember 31, 2023
(in millions, except per share amounts):
Unvested Restricted Stock Units

Unvested as of December 31, 2022
Granted
VestedForfeited/canceled

Unvested as of December 31, 2023

Number of
Shares324

Weighted-Average
Grant-Date Fair Value$

107.98(217) $

100.36263$(32) $

338

$

97.59

106.56104.93

The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2021 and 2022 was$97.46and$127.22,respectively.TotalfairvalueofRSUs,asoftheirrespectivevestingdates,duringtheyearsended
December31,2021,2022,and2023,were$28.8billion,$23.9billion,and$26.6 billion,respectively.
AsofDecember 31,2023,therewas$33.5billionofunrecognizedcompensationcostrelatedtounvestedRSUs.Thisamount is expected to be recognized over a weighted-average period of 2.5 years.

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Note 14. Income Taxes

Income from continuing operations before income taxes consisted of the following (in millions):
Year Ended December 31,

Domestic operations
Foreign operations
Total

$
$

2021

77,016$

90,734$

13,7182022

2023

61,307$

73,60071,328$

85,717

10,021

12,117

Provision for income taxes consisted of the following (in millions):
Year Ended December 31,

Current:

Federal and state
Foreign

2021
$

Total

Deferred:Federal and state

Foreign

Total

Provision for income taxes

10,126
2,692

2022

$

2,434

$

17,1252,526

12,81819,554

19,651

2,018(8,052)(7,482)

1,883(8,198)(7,729)(135)$

17,1202023

14,701(146)$

11,356(247)$

11,922

The reconciliation of federal statutory income tax rate to our effective income tax rate was as follows:Year Ended December 31,

U.S. federal statutory tax rate

Foreign income taxed at different rates

Foreign-derived intangible income deduction

Stock-based compensation expense

2021

2022

2023

0.2

3.0

0.3

21.0%
(2.5)

(2.5)

21.0%

21.0%

(5.4)

(4.6)

(1.2)

(0.8)

Federal research credit

(1.6)

(2.2)

(1.8)

State and local income taxes

1.0

0.8

1.0

Other

0.0

(1.0)

Deferred tax asset valuation allowance

Effect of tax law change
Effective tax rate

0.6

0.0
16.2%

0.9

0.6

0.0

15.9%

(1.4)

(0.4)

13.9%

In 2022, there was an increase in the U.S. Foreign Derived Intangible Income tax deduction from the effects of capitalization
andamortizationofR&Dexpensesstartingin2022asrequiredbythe2017 Tax CutsandJobs Act.
In 2023, the IRS issued a rule change allowing taxpayers to temporarily apply the regulations in effect prior to 2022
related to U.S. federal foreign tax credits as well as a separate rule change with interim guidance on the capitalization andamortization of R&D expenses. A cumulative one-time adjustment applicable to the prior period for these tax rule changes
was recorded in 2023.

Alphabet 2023 Annual Report83Part I

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Deferred Income Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets andliabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of ourdeferred tax assets and liabilities were as follows (in millions):
As of December 31,
2022

Deferred tax assets:

Accrued employee benefits

Accruals and reserves not currently deductible$Tax credits

Net operating losses

Operating leases

Capitalized research and development

1,956

$

1,855
2,481

6,002

6,609

2,711

3,526

2,557

2,965

10,381

17,757

Total deferred tax assets

26,85137,144

Total deferred tax assets net of valuation allowance

17,298

(1)

Other

2,289

Valuation allowance

1,951(9,553)(10,999)

Property and equipment, net(6,607)(8,189)Operating leases(2,491)(2,965)

Deferred tax liabilities:

Net investment gains

Total deferred tax liabilities

Net deferred tax assets (liabilities)

26,145(2,361)

Other

(1)

955

2023

(2,405)(1,092)$

(12,551)
4,747

(902)

$

(14,461)
11,684Asrequiredbythe2017 Tax CutsandJobs Act,effective January1,2022,ourresearchanddevelopmentexpenditureswerecapitalized
and amortized which resulted in substantially higher cash taxes starting in 2022 with an equal amount of deferred tax benefit.

AsofDecember 31,2023,ourfederal,state,andforeignnetoperatingloss carryforwards for incometaxpurposes
wereapproximately$7.1billion,$18.6billion,and$1.8billionrespectively.Ifnotutilized,thefederalnetoperatingloss
carryforwards will begin to expire in 2024, foreign net operating loss carryforwards will begin to expire in 2025 and thestatenetoperatinglosscarryforwards willbegintoexpirein2029.Itismorelikelythannotthatthemajorityofthenet
operating loss carryforwards will not be realized; therefore, we have recorded a valuation allowance against them. The net
operating loss carryforwards are subject to various annual limitations under the tax laws of the different jurisdictions.

AsofDecember 31,2023,ourFederalandCaliforniaresearchanddevelopment credit carryforwards for incometax
purposes wereapproximately$600 millionand$6.3billion,respectively.Ifnotutilized, the FederalR&Dcreditwillbegintoexpirein2037andtheCaliforniaR&Dcreditcanbecarriedoverindefinitely. Webelievethemajorityofthefederaltax
credit and state tax credit is not likely to be realized.

AsofDecember 31,2023, ourinvestmenttax creditcarryforwards for state income tax purposes were approximately$1.0 billionandwillbegintoexpirein2029.Weusetheflow-throughmethodofaccounting forinvestmenttaxcredits. We
believe this tax credit is not likely to be realized.

AsofDecember 31,2023, we maintainedavaluation allowance with respecttoCalifornia deferred tax assets, certain
federal net operating losses, certain state net operating losses and tax credits, net deferred tax assets relating to Other Bet
companies, and certain foreign net operating losses that we believe are not likely to be realized. We continue to reassess
the remaining valuation allowance quarterly, and if future evidence allows for a partial or full release of the valuation
allowance, a tax benefit will be recorded accordingly.

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Uncertain Tax Positions

The following table summarizes the activity related to our gross unrecognized tax benefits (in millions):
Year Ended December 31,

Beginning gross unrecognized tax benefits

Increases related to prior year tax positions

$

2021

3,837
529

$

2022

5,158
253

$

2023

7,055

740

Decreases related to prior year tax positions

(263)

(437)

(682)

Increases related to current year tax positions

1,384

2,221

2,346

Decreases related to settlement with tax authorities
Ending gross unrecognized tax benefits

(329)

$

5,158

(140)

$

7,055

(21)

$

9,438

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 gross unrecognized tax
benefitswas$5.2billion, $7.1 billion, and$9.4billionas ofDecember 31,2021,2022,and2023,respectively,ofwhich$3.7billion, $5.3billion,and$7.4billion,ifrecognized,wouldaffectoureffective taxrate,respectively.

AsofDecember 31,2022and2023,weaccrued$346 millionand$622millionininterest andpenaltiesinprovision forincome taxes, respectively.

We file income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. Our two major tax
jurisdictions are the U.S. federal and Ireland. We are subject to the continuous examination of our income tax returns by
the IRS and other tax authorities. The IRS is currently examining our 2016 through 2021 tax returns. We have also received
tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments or permanent establishment. We
continue to defend such claims as presented.
The tax years 2016 through 2022 remain subject to examination by the appropriate governmental agencies for Irish tax
purposes. There are other ongoing audits in various other jurisdictions that are not material to our financial statements.

We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy ofour provision for income taxes. We continue to monitor the progress of ongoing discussions with tax authorities and theeffect, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions.

We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However,
the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in amanner not consistent with management’s expectations, we could be required to adjust our provision for income taxes in
the period such resolutions occur. Although the timing of resolution, settlement, and closure of audits is not certain, it isreasonably possible that our unrecognized tax benefits from certain U.S. federal, state, and non U.S. tax positions could
decrease by approximately$700 million inthenext 12months.Positionsthatmayberesolved include various U.S. andnon-U.S. matters.

Alphabet 2023 Annual Report85Part I

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Part IIIPart IV

Note 15. 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; the sale of apps
and in-app purchases and devices.
• Google Cloud includes infrastructure and platform services, collaboration tools, and other services for enterprisecustomers. Google Cloud generates revenues primarily from consumption-based fees and subscriptions received
for Google Cloud Platform services, Google Workspace communication and collaboration tools, and other enterpriseservices.

• 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, anddevices, as well as certain operating expenses are directly attributable to our segments. Due to the integrated natureof Alphabet, other costs and expenses, such as technical infrastructure and office facilities, are managed centrally at aconsolidated level. These costs, including the associated depreciation and impairment, are allocated to operating segments
as a service cost generally based on usage, headcount, or revenue.
Reflecting DeepMind’s increasing collaboration with Google Services, Google Cloud, and Other Bets, beginning in thefirst quarter of 2023 DeepMind is reported as part of Alphabet-level activities instead of within Other Bets. Additionally,
beginning in the first quarter of 2023, we updated and simplified our cost allocation methodologies to provide our businessleaders with increased transparency for decision-making. Prior periods have been recast to conform to the current
presentation.
As announced on April 20, 2023, we brought together part of Google Research (the Brain team) and DeepMind to
significantly accelerate our progress in artificial intelligence (AI). The group, called Google DeepMind, is reported within
Alphabet-level activities prospectively beginning in the second quarter of 2023. Previously, the Brain team was included
within Google 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 suchas our philanthropic activities; corporate shared costs such as certain finance, human resource, and legal costs, including
certain fines and settlements. Charges associated with reductions in our workforce and office space during 2023 were notallocated 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.

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The following table presents information about our segments (in millions):
Year Ended December 31,

Revenues:

Google Services
Google Cloud

2021
$

Other Bets

Hedging gains (losses)

237,529
19,206

2022

$

753
149

253,528$26,2802023
272,543
33,088

1,068

1,527

1,960

236

Total revenues$257,637$

282,836$

307,394

Google Services$88,132$

82,699$

95,858Operating income (loss):
Google Cloud
Other Bets

Alphabet-level activities

Total income from operations(2,282)(4,051)$(3,085)78,714(1,922)

1,716(4,636)$(4,095)(1,299)74,842(9,186)$84,293

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 andoperating lease assets (in millions):
As of December 31,
Long-lived assets:
United States

International

Total long-lived assets

2022

2023

$

93,565$

110,053$

127,049$

148,436

33,48438,383Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.

Alphabet 2023 Annual Report87Part I

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Part IIIPart IV

Item 9A. 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 the end of
the period covered by this Annual Report on Form 10-K.

Basedon thisevaluation,ourchiefexecutiveofficerandchieffinancialofficer concludedthat,as of December 31,
2023, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide
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 thatsuch information is accumulated and communicated to our management, including our chief 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
December 31,2023that havemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontrolover
financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
defined in Rule 13a-15(f) of the Exchange Act. Our management conducted an evaluation of the effectiveness of ourinternal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation,
managementconcludedthat ourinternalcontroloverfinancial reportingwaseffectiveasofDecember 31,2023.
Management reviewed the results of its assessment with our Audit and Compliance Committee. The effectiveness of ourinternalcontroloverfinancial reporting as ofDecember 31,2023has beenaudited by Ernst & Young LLP, anindependent
registeredpublicaccounting firm,asstatedinitsreportwhichisincluded in Item 8of this AnnualReportonForm10-K.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls andprocedures, 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 areresource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls
and procedures relative to their costs.

Item 9B. Other Information
10b5-1 Trading Plans

During the fiscal quarter ended December 31, 2023, the following Section 16 officer and directors adopted, modified or
terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act):• John Hennessy, Chair of the Board of Directors, through the John L. Hennessy & Andrea J. Hennessy Revocable Trust,adopted a new trading plan on November 1, 2023 (with the first trade under the new plan scheduled for February 12, 2024).
ThetradingplanwillbeeffectiveuntilMarch12,2025to sell6,664sharesofClassCCapitalStockand11,336 sharesofClass A Common Stock.

• AnnMather,formermember of theBoardof Directors, terminated hertrading plan on October 30, 2023,effective with
herresignationfromtheBoardofDirectors. The tradingplanpreviouslypermittedthesaleof12,580sharesof Class C
Capital Stock and would have been effective until June 2, 2024.

• Ruth M. Porat, President and Chief Investment Officer; Chief Financial Officer, adopted a new trading plan on November 30,
2023 (with the first trade under the new plan scheduled for March 8, 2024). The trading plan will be effective until March 8,2025tosellallofthe(net)shares ofupto82,900(gross) Class CCapital StockissueduponthevestingofherAlphabet
2021 Performance Stock Units, as adjusted based on performance (net shares are net of tax withholding).
88

Alphabet 2023 Annual ReportPart I

Part II

Part IIIPart IV

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 December 31, 2023 by our directors and Section 16
officers. Each of the Rule 10b5-1 trading arrangements are in accordance with our Policy Against Insider Trading and actual
sale transactions made pursuant to such trading arrangements will be disclosed publicly in Section 16 filings with the SEC in
accordance with applicable securities laws, rules and regulations.

Required Disclosure Pursuant to Section 13(r) of the Exchange Act

As previously disclosed, Google LLC, a subsidiary of Alphabet, filed notifications with the Russian Federal Security Service
pursuant to Russian encryption control requirements, which must be complied with prior to the import of covered items.
The information provided pursuant to Section 13(r) of the Exchange Act in Part II, Item 5 of our Quarterly Report on Form
10-Q for the quarter ended September 30, 2023 is incorporated herein by reference.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Not applicable.

Alphabet 2023 Annual Report89PART III

Item 10. Directors, Executive Officers, and Corporate Governance
The information required by this item will be included under the caption “Directors, Executive Officers, and Corporate
Governance” in our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 daysof the fiscal year ended December 31, 2023 (2024 Proxy Statement) and is incorporated herein by reference. The
information required by this item regarding delinquent filers pursuant to Item 405 of Regulation S-K will be included under
the caption “Delinquent Section 16(a) Reports” in the 2024 Proxy Statement and is incorporated herein by reference.

Item 11.

Executive Compensation

The information required by this item will be included under the captions “Director Compensation,” “Executive
Compensation” and “Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board
Matters—Compensation Committee Interlocks and Insider Participation” in the 2024 Proxy Statement and is incorporated
herein by reference, except as to information disclosed therein pursuant to Item 402(v) of Regulation S-K relating to pay
versus performance.

Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters

The information required by this item will be included under the captions “Common Stock Ownership of Certain Beneficial
Owners and Management” and “Equity Compensation Plan Information” in the 2024 Proxy Statement and is incorporated
herein by reference.

Item 13. Certain Relationships and Related Transactions, andDirector Independence

The information required by this item will be included under the captions “Certain Relationships and Related Transactions”
and “Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board Matters—Director
Independence” in the 2024 Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information required by this item will be included under the caption “Independent Registered Public Accounting Firm”
in the 2024 Proxy Statement and is incorporated herein by reference.

90

Alphabet 2023 Annual ReportPART IV

Item 15. Exhibits, Financial Statement Schedules
We have filed the following documents as part of this Annual Report on Form 10-K:

1. Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

46

Financial Statements:

Consolidated Balance Sheets

49

Consolidated Statements of Comprehensive Income

51

Consolidated Statements of Income

50

Consolidated Statements of Stockholders’ Equity

52

Consolidated Statements of Cash Flows53

Notes to Consolidated Financial Statements

54

2. Financial Statement Schedules

Schedule II: Valuation and Qualifying Accounts

The table below details the activity of the allowance for credit losses and sales credits for the years ended December 31,
2021,2022,and2023 (inmillions):

Year ended December 31, 2021

$Year ended December 31, 2023

$Year ended December 31, 2022

$Balance at
Beginning of Year
1,344

$

1,213

$

1,389

$

Additions

Usage

2,092

$

(2,047)

$

3,115

$

(2,737)

$

2,125

$

(2,301)

Balance at
End of Year$

Note:  A
 dditionstotheallowanceforcreditlossesarechargedtoexpense. Additionstotheallowanceforsalescreditsarecharged
against revenues.

1,389
1,213
1,591

All other schedules have been omitted because they are not required, not applicable, or the required information isotherwise included.

Alphabet 2023 Annual Report91Part I

Part II

Part IIIPart IV

3. Exhibits
Exhibit
Number

2.01
3.01
3.02

Description

Agreement and Plan of Merger, dated October 2, 2015,
by and among Google Inc., the Registrant and Maple
Technologies Inc.

Amended and Restated Certificate of Incorporation of
the Registrant

Amended and Restated Bylaws of the Registrant, dated
October 19, 2022

4.01

Specimen Class A Common Stock certificate

4.02

Specimen Class C Capital Stock certificate

4.03

Alphabet Inc. Deferred Compensation Plan

4.04

Transfer Restriction Agreement, dated October 2,
2015, between the Registrant and Larry Page andcertain of his affiliates

4.05
4.06
4.07
4.08
4.09
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18

92

Transfer Restriction Agreement, dated October 2,
2015, between the Registrant and Sergey Brin andcertain of his affiliates

Joinder Agreement, dated December 31, 2021, among
the Registrant, Sergey Brin and certain of his affiliates

Transfer Restriction Agreement, dated October 2, 2015,
between the Registrant and Eric E. Schmidt and certainof its affiliates

Class C Undertaking, dated October 2, 2015, executedby the Registrant

Indenture, dated February 12, 2016, between theRegistrant and The Bank of New York Mellon Trust
Company, N.A., as Trustee

Registrant Registration Rights Agreement dated
December 14, 2015

Incorporated by reference herein
Form

Date

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

Current Report on Form 8-K(File No. 001-37580)

June 3, 2022

Current Report on Form 8-K(File No. 001-37580)

October 25, 2022

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

Current Report on Form 8-K(File No. 001-37580)

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

October 2, 2015

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

Annual Report on Form 10-K
(File No. 001-37580)

February 2, 2022

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

Registration Statement on Form S-3(File No. 333-209510)

February 12, 2016

Registration Statement on Form S-3(File No. 333-209518)

February 12, 2016

First Supplemental Indenture, dated April 27, 2016,
between the Registrant and The Bank of New York
Mellon Trust Company, N.A., as trustee

Current Report on Form 8-K(File No. 001-37580)

April 27, 2016

Form of the Registrant’s 1.998% Note due 2026

Current Report on Form 8-K(File No. 001-37580)

August 9, 2016

Form of the Registrant’s 3.375% Notes due 2024
(included in Exhibit 4.11)

Form of Global Note representing the Registrant’s
0.450% notes due 2025

Form of Global Note representing the Registrant’s
0.800% notes due 2027

Form of Global Note representing the Registrant’s
1.100% notes due 2030

Form of Global Note representing the Registrant’s
1.900% notes due 2040

Form of Global Note representing the Registrant’s
2.050% notes due 2050
Alphabet 2023 Annual Report

Current Report on Form 8-K(File No. 001-37580)

Current Report on Form 8-K(File No. 001-37580)

Current Report on Form 8-K(File No. 001-37580)

Current Report on Form 8-K(File No. 001-37580)

Current Report on Form 8-K(File No. 001-37580)

August 5, 2020
August 5, 2020
August 5, 2020
August 5, 2020
August 5, 2020

Part I

Part II

Exhibit
NumberDescription

4.19

Form of Global Note representing the Registrant’s
2.250% notes due 2060

4.20

Description of Registrant’s Securities

Offer Letter, dated March 20, 2015, between Ruth
Porat and Google Inc., as assumed by the Registrant on
October 2, 2015

Current Report on Form 8-K(File No. 001-36380)

March 26, 2015

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

u

10.04

u

10.05

u

10.06

u

Alphabet Inc. Deferred Compensation Plan

10.07

u

Alphabet Inc. Amended and Restated 2012 Stock Plan

10.08.2 u
10.08.3 u
10.08.4 u
10.08.5 u* Form of Offer Letter for Directors

Compensation Plan Agreement, dated October 2, 2015,
between Google Inc. and the Registrant

Director Arrangements Agreement, dated October 2,
2015, between Google Inc. and the Registrant

Alphabet Inc. Amended and Restated 2012 Stock Plan Form of Alphabet Restricted Stock Unit Agreement

Alphabet Inc. 2012 Stock Plan - Form of Alphabet
Restricted Stock Unit Agreement

Alphabet Inc. Amended and Restated 2021 Stock Plan
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 Restricted Stock Unit Agreement

Alphabet Inc. Amended and Restated 2021 Stock Plan Form of Alphabet 2022 CEO Performance Stock Unit
Agreement

Alphabet Inc. Amended and Restated 2021 Stock Plan Form of Alphabet 2022 Non-CEO Performance Stock
Unit Agreement

Alphabet Inc. Amended and Restated 2021 Stock Plan Form of Alphabet 2023 Non-CEO Performance Stock
Unit Agreement

10.09

u

Alphabet Inc. Company Bonus Plan, as amended

21.01

*

Subsidiaries of the Registrant

24.01

*

31.01

*

Power of Attorney (incorporated by reference to thesignature page of this Annual Report on Form 10-K)

23.01

*

August 5, 2020

October 2, 2015

10.03

10.08.1 uCurrent Report on Form 8-K(File No. 001-37580)

Date

Current Report on Form 8-K(File No. 001-37580)

u

u

Form

Form of Indemnification Agreement entered into
between the Registrant, its affiliates and its directors
and officers

10.02

10.08

Incorporated by reference herein

February 3, 2023

u10.07.2 uPart IV

Annual Report on Form 10-K
(File No. 001-37580)

10.01

10.07.1 uPart III

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

Current Report on Form 8-K(File No. 001-37580)

October 2, 2015

Annual Report on Form 10-K
(File No. 001-37580)

February 4, 2020

Current Report on Form 8-K(File No. 001-37580)

June 5, 2020

Quarterly Report on Form 10-Q
(File No. 001-37580)

November 3, 2016

Quarterly Report on Form 10-Q
(file No. 001-37580)

July 28, 2021

Current Report on Form 8-K(file No. 001-37580)

Quarterly Report on Form 10-Q
(File No. 001-37580)

June 3, 2022

July 26, 2023

Annual Report on Form 10-K
(File No. 001-37580)

February 3, 2023

Annual Report on Form 10-K
(File No. 001-37580)

February 4, 2020

Quarterly Report on Form 10-Q
(File No. 001-37580)
Annual Report on Form 10-K
(File No. 001-37350)

July 26, 2023
February 2, 2023

Consent of Independent Registered Public Accounting
Firm

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 SarbanesOxley Act of 2002

Alphabet 2023 Annual Report93Part I

Part II

Exhibit
Number

31.02

*

32.01

‡

97.01

*

101.INS*

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

u

Description

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 SarbanesOxley Act of 2002

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 SarbanesOxley Act of 2002
Clawback Policy

Inline XBRL Instance Document - the instance
document does not appear in the Interactive Data Filebecause its XBRL tags are embedded within the InlineXBRL document
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 (embedded within the
Inline XBRL document and contained in Exhibit 101)

Indicates management compensatory plan, contract, or arrangement.

* Filed herewith.

‡ Furnished herewith.

Item 16. Form 10-K Summary
None.

94

Alphabet 2023 Annual Report

Part IIIPart IV

Incorporated by reference herein
Form

Date

Part I

Part II

Part IIIPart IV

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: January 30,2024

ALPHABET INC.
By:

Power of Attorney/S/ SUNDAR PICHAI

Sundar Pichai
Chief Executive Officer(Principal Executive Officerof the Registrant)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Sundar
Pichai and Ruth M. Porat, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any
and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto andother documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming allthat each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuanttotherequirements of the SecuritiesExchange Actof1934,thisAnnualReportonForm10-Khasbeensigned
below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature/S/ SUNDAR PICHAI
Sundar Pichai/S/ RUTH M. PORAT
Ruth M. Porat/S/ AMIE THUENER O’TOOLE
Amie Thuener O’Toole/S/ FRANCES H. ARNOLDFrances H. Arnold/S/ SERGEY BRIN
Sergey Brin

/S/ R. MARTIN CHAVEZ
R. Martin Chávez/S/ L. JOHN DOERR
L. John Doerr/S/ ROGER W. FERGUSON JR.
Roger W. Ferguson Jr.

/S/ JOHN L. HENNESSY
John L. Hennessy/S/ LARRY PAGE
Larry Page

/S/ K. RAM SHRIRAM
K. Ram Shriram/S/ ROBIN L. WASHINGTON
Robin L. Washington

Title

Date

Chief Executive Officer and Director (Principal Executive Officer)

January 30, 2024

President and Chief Investment Officer; Chief Financial Officer(Principal Financial Officer)

January 30, 2024

Vice President, Corporate Controller and Principal Accounting Officer

January 30, 2024

Director

January 30, 2024

Co-Founder and Director

January 30, 2024

Director

January 30, 2024

Director

January 30, 2024

Director

January 30, 2024

Director, Chair

January 30, 2024

Co-Founder and Director

January 30, 2024

Director

January 30, 2024

Director

January 30, 2024

Alphabet 2023 Annual Report95This page intentionally left blank.

A note from Sundar,
April 2024
In 2023, we celebrated our 25th birthday as acompany. I wrote a letter in September 2023 tomark the occasion, reflecting on a quarter century
of technological progress. I believe it’s a greatcelebration of all we’ve achieved as a company overthe past 25 years – so we’re reprinting it here.
Since it was published, we’ve continued to makeincredible progress in building and deploying AI
across all of our products, including Search, Cloud,and YouTube. We’re also growing our subscriptions
business and seeing great momentum across
our Cloud business to bring AI advances toorganizations around the world. Thanks to ourstockholders, who have supported us and our
mission over the last 25 years – looking forward
to so much more to come!

Directors and executive
officers as of January 2024
Directors

Executive officers

Stockholder information

Larry Page
Co-Founder

Sundar Pichai
Chief Executive Officer
Alphabet and Google

For further information about
Alphabet Inc., contact:

Sergey Brin
Co-Founder
Sundar Pichai
Chief Executive Officer
Alphabet and Google
John L. Hennessy
Chair of the Board of Directors
Former President
Stanford University
Frances H. Arnold
Linus Pauling Professor ofChemical Engineering,
Bioengineering and Biochemistry
California Institute of Technology
R. Martin “Marty” Chávez
Partner and Vice Chairman
Sixth Street Partners
L. John Doerr
General Partner and Chair
Kleiner Perkins
Roger W. Ferguson Jr.
Former President andChief Executive Officer
TIAA
K. Ram ShriramManaging Partner
Sherpalo Ventures
Robin L. Washington
Former Executive Vice President andChief Financial Officer
Gilead Sciences

Ruth M. Porat
President and Chief Investment Officer;
Chief Financial Officer
Alphabet and Google
Prabhakar Raghavan
Senior Vice President
Knowledge and Information
GooglePhilipp Schindler
Senior Vice President
Chief Business Officer
GoogleKent Walker
President, Global Affairs,
Chief Legal Officer and Secretary
Alphabet and Google

Investor Relations
Alphabet Inc.
1600 Amphitheatre Parkway
Mountain View, California 94043
investor-relations@abc.xyz
You may also reach us by visiting theinvestor relations portion of our website at:
abc.xyz/investor/
Alphabet’s stock (GOOG, GOOGL) tradeson the Nasdaq Global Select Market
Transfer Agent and Registrar
First Class/Registered/Certified Mail:
Computershare Investor Services
P.O. Box 43006
Providence, RI 02940-3006
Courier Services:
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Shareholder Services Numbers:(866) 298-8535 (toll-free within the USA,
U.S. territories, and Canada) or(781) 575-2879
Investor Centre™ Portal:
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Independent Registered
Public Accounting Firm
Ernst & Young LLPAlphabet 2023 Annual Report