Company: GOOGL
Filing Date: 2025-02-05
Form Type: 10-K
Source: 0001652044-25-000014
Chunk: 26

Company: Alphabet Inc.
Filing Date: 2025-02-05
Form: 10-K
Item: Item 8
Chunk 26
---
 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.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 of the cloud services.Arrangements with Multiple Performance ObligationsOur 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 CreditsCertain 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 related to customer incentives and credits.Sales CommissionsWe 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 are recorded within sales and marketing expenses.Cost of RevenuesCost 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:◦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;

58.  

Table of ContentsAlphabet Inc.

◦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