Company: GOOGL
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0001652044-25-000062
Chunk: 136

Company: Alphabet Inc.
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 8
Chunk 136
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 Cloud

Google Cloud revenues are comprised of the following:

•Google Cloud Platform, which generates consumption-based fees and subscriptions for infrastructure, platform, and other services. These services provide access to solutions such as AI offerings including our AI infrastructure, Vertex AI platform, and Gemini for Google Cloud: cybersecurity; and data and analytics;

•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 Gemini for Google Workspace; and 

•other enterprise services.

Fluctuations in our Google Cloud revenues have been, and may continue to be, affected by factors in addition to the general factors described above, such as changes in customer usage and demand.

Other Bets

Revenues from Other Bets are generated primarily from the sale of autonomous transportation services, healthcare-related services, and internet services.

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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, are generally less variable in nature and may not correlate to changes in revenue. Additionally, fluctuations in employee compensation expenses may not directly correlate with changes in headcount due to factors such as annual SBC awards that generally vest over four years.

Cost of Revenues

Cost of revenues is comprised of TAC and other costs of revenues.

•TAC includes: 

◦amounts paid to our distribution partners who make available our search access points 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:

◦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