Company: GOOGL
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0001652044-25-000062
Chunk: 3

Company: Alphabet Inc.
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 2
Chunk 3
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 their properties.

•Other cost of revenues primarily includes:

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

◦depreciation expense related to our technical infrastructure;

◦employee compensation expenses related to our technical infrastructure and other operations such as content review and customer and product support;

◦inventory and other costs related to the devices we sell; and

◦other technical infrastructure operations costs, including network capacity, energy, and equipment costs.

TAC as a percentage of revenues generated from ads placed on Google Network properties are significantly higher than TAC as a percentage of revenues generated from ads placed on Google Search & other properties, because most of the advertiser revenues from ads served on Google Network properties are paid as TAC to our Google Network partners.

Operating Expenses

Operating expenses are generally incurred during our normal course of business, which we categorize as either R&D, sales and marketing, or general and administrative.

The main components of our R&D expenses are:

•depreciation;

•employee compensation expenses for engineering and technical employees responsible for R&D related to our existing and new products and services; and

•third-party services fees primarily relating to consulting and outsourced services in support of our engineering and product development efforts.

The main components of our sales and marketing expenses are:

•employee compensation expenses for employees engaged in sales and marketing, sales support, and certain customer service functions; and

•spend relating to our advertising and promotional activities in support of our products and services.

The main components of our general and administrative expenses are:

•employee compensation expenses for employees in finance, human resources, information technology, legal, and other administrative support functions; 

•expenses relating to legal and other matters, including certain fines and settlements; and 

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•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 value of our investments, see Note 1 of the Notes to Consolidated Financial Statements included