UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024


☐			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

Alphabet Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________


Delaware			61-1767919
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

1600 Amphitheatre Parkway

Mountain View, CA 94043

(Address of principal executive offices, including zip code)

(650) 253-0000

(Registrant's telephone number, including area code)


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 A Common Stock, $0.001 par value	GOOGL	Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)
Class C Capital Stock, $0.001 par value	GOOG	Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

Indicate by check mark 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 the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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). Yes ☒ No ☐

Indicate by check mark 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 17, 2023,~~April 18, 2024, there were ~~5,918~~5,874 million shares of Alphabet’s Class A stock outstanding, ~~873~~867 million shares of Alphabet's Class B stock outstanding, and ~~5,725~~5,617 million shares of Alphabet's Class C stock outstanding.


Table of Contents			Alphabet Inc.

Alphabet Inc.

Form 10-Q

For the Quarterly Period Ended ~~September 30, 2023~~March 31, 2024

TABLE OF CONTENTS


		Page No.
Note About Forward-Looking Statements		3

PART I. FINANCIAL INFORMATION
Item 1	Financial Statements	5
	Consolidated Balance Sheets - December 31, ~~2022~~2023 and ~~September 30, 2023~~March 31, 2024	5
	Consolidated Statements of Income - Three ~~and Nine~~ Months Ended ~~September 30~~March 31, ~~2022~~2023 and ~~2023~~2024	6
	Consolidated Statements of Comprehensive Income - Three ~~and Nine~~ Months Ended ~~September 30~~March 31, ~~2022~~2023 and ~~2023~~2024	7
	Consolidated Statements of Stockholders' Equity - Three ~~and Nine~~ Months Ended ~~September 30~~March 31, ~~2022~~2023 and ~~2023~~2024	8
	Consolidated Statements of Cash Flows - ~~Nine~~Three Months Ended ~~September 30~~March 31, ~~2022~~2023 and ~~2023~~2024	109
	Notes to Consolidated Financial Statements	1110
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3429
Item 3	Quantitative and Qualitative Disclosures About Market Risk	4942
Item 4	Controls and Procedures	4942

PART II. OTHER INFORMATION
Item 1	Legal Proceedings	5143
Item 1A	Risk Factors	5143
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	5144
Item 5	Other Information	5144
Item 6	Exhibits	5245
Signatures		5346


Table of Contents			Alphabet Inc.

Note About Forward-Looking Statements

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

•the growth of our business and revenues and our expectations about the factors that influence our success and 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 to online world will continue to benefit our business;

•our expectation that the portion of our revenues that we derive ~~from non-advertising revenues~~beyond advertising will continue to increase and may affect our margins;

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

•our expectation that our monetization trends will fluctuate, which could affect our revenues and margins;

•fluctuations in ~~our revenues, as well as the change in~~ paid clicks and cost-per-click ~~and the change in~~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 and impressions;

•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 performance obligations, including our estimate of the remaining amount of commitments and when we expect to recognize revenue;

•~~fluctuations in our capital expenditures;~~

•our expectation that weour capital expenditures will ~~continue to invest~~increase, including the expected increase in our technical ~~infrastructure;~~infrastructure investment to support the growth of our business 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, ~~systems, land~~ and ~~buildings for data centers, and infrastructure,~~systems, as well as to continue to invest in acquisitions and strategic investments;

•our pace of hiring and our plans to provide competitive compensation programs;

•our expectation that our cost of revenues, research and development (R&D) expenses, sales and marketing expenses, and general and administrative expenses may increase in amount and/or may increase as a percentage of 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 by market dynamics;

•~~fluctuations in~~our expectation that our effective tax ~~rate;~~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 to which 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 business practices and financial results;


Table of Contents			Alphabet Inc.

•our expectation that we will continue to face heightened regulatory scrutiny, and the sufficiency and timing of our proposed remedies in response to decisions from the European Commission (EC) and other regulators and governmental entities;

•the expected timing, amount, and effect of Alphabet Inc.'s share ~~repurchases;~~repurchases and dividends;

•our long-term sustainability and diversity goals;

•~~the unpredictability of the ongoing broader economic effects resulting from the war in Ukraine on our future financial results;~~

•~~the expected financial effect of our announced workforce reduction and office space optimization;~~

•~~our expectation that the change in estimated useful lives of servers and certain network equipment will have a favorable effect on our 2023 operating results;~~

as well as other statements regarding our future operations, financial condition and prospects, and business strategies. Forward-looking statements may appear throughout this report and other documents we file with the Securities and Exchange Commission (SEC), including without limitation, the following sections: Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023, as updated in this Quarterly Report on Form 10-Q. 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,~~" "may," "could,~~" "will likely result," and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form ~~10-Q,~~10-Q; the risks discussed in Part I, Item 1A, "Risk Factors" ~~and~~in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated in this Quarterly Report on Form 10-Q; the trends discussed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022,~~2023; and those discussed in other documents we file with 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 or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.


Table of Contents			Alphabet Inc.

PART I. FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

Alphabet Inc.

CONSOLIDATED BALANCE SHEETS

(in millions, except par value per share amounts)


		As of December 31, 2022			As of September 30, 2023
					(unaudited)
	As of December 31, 2023							As of December 31, 2023	As of March 31, 2024
				(unaudited)						(unaudited)
Assets	Assets
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	21,879		$	30,702
Marketable securities	Marketable securities	91,883			89,233
Total cash, cash equivalents, and marketable securities	Total cash, cash equivalents, and marketable securities	113,762			119,935
Accounts receivable, net	Accounts receivable, net	40,258			41,020
Inventory		2,670			2,957
Other current assets	Other current assets	8,105			12,398
Total current assets	Total current assets	164,795			176,310
Non-marketable securities	Non-marketable securities	30,492			30,907
Deferred income taxes	Deferred income taxes	5,261			10,983
Property and equipment, net	Property and equipment, net	112,668			125,705
Operating lease assets	Operating lease assets	14,381			14,199
Intangible assets, net		2,084			1,833
Goodwill	Goodwill	28,960			29,146
Other non-current assets	Other non-current assets	6,623			7,628
Total assets	Total assets	$	365,264		$	396,711
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	5,128		$	5,803

Accrued compensation and benefits
Accrued compensation and benefits
Accrued compensation and benefits	Accrued compensation and benefits	14,028			12,562
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	37,866			55,602
Accrued revenue share	Accrued revenue share	8,370			8,025
Deferred revenue	Deferred revenue	3,908			4,303
Total current liabilities	Total current liabilities	69,300			86,295
Long-term debt	Long-term debt	14,701			13,781
Deferred revenue, non-current	Deferred revenue, non-current	599			884
Income taxes payable, non-current	Income taxes payable, non-current	9,258			8,038
Deferred income taxes	Deferred income taxes	514			528
Operating lease liabilities	Operating lease liabilities	12,501			12,550
Other long-term liabilities	Other long-term liabilities	2,247			1,433
Total liabilities	Total liabilities	109,120			123,509
Commitments and contingencies (Note 9)
Commitments and Contingencies (Note 8)							Commitments and Contingencies (Note 8)
Stockholders’ equity:	Stockholders’ equity:
Preferred stock, $0.001 par value per share, 100 shares authorized; no shares issued and outstanding	Preferred stock, $0.001 par value per share, 100 shares authorized; no shares issued and outstanding	0			0
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 12,541 (Class A 5,922, Class B 874, Class C 5,745) shares issued and outstanding		68,184			74,591
Preferred stock, $0.001 par value per share, 100 shares authorized; no shares issued and outstanding
Preferred stock, $0.001 par value per share, 100 shares authorized; no shares issued 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); 12,460 (Class A 5,899, Class B 870, Class C 5,691) and 12,381 (Class A 5,879, Class B 867, Class C 5,635) shares issued and outstanding
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(7,603)			(7,036)
Retained earnings	Retained earnings	195,563			205,647
Total stockholders’ equity	Total stockholders’ equity	256,144			273,202
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	365,264		$	396,711

See accompanying notes.


Table of Contents			Alphabet Inc.

Alphabet Inc.

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts; unaudited)


		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
		2023
		2023
		2023
Revenues
Revenues
Revenues
Costs and expenses:
Costs and expenses:
Costs and expenses:
Cost of revenues
Cost of revenues
Cost of revenues
Research and development
Research and development
Research and development
Sales and marketing
Sales and marketing
Sales and marketing
General and administrative
General and administrative
General and administrative
Total costs and expenses
Total costs and expenses
Total costs and expenses
Income from operations
Income from operations
Income from operations
Other income (expense), net
Other income (expense), net
Other income (expense), net
Income before income taxes
Income before income taxes
Income before income taxes
Provision for income taxes
Provision for income taxes
Provision for income taxes
Net income
Net income
Net income

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
Revenues		$	69,092	$	76,693	$	206,788	$	221,084
Costs and expenses:
Cost of revenues		31,158		33,229		90,861		95,757
Research and development		10,273		11,258		29,233		33,314
Sales and marketing		6,929		6,884		19,384		20,198
General and administrative		3,597		3,979		10,628		11,219
Total costs and expenses		51,957		55,350		150,106		160,488
Income from operations		17,135		21,343		56,682		60,596
Other income (expense), net		(902)		(146)		(2,501)		709
Income before income taxes		16,233		21,197		54,181		61,305
Provision for income taxes		2,323		1,508		7,833		8,197
Net income		$	13,910	$	19,689	$	46,348	$	53,108
Basic 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

Basic 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	$	1.07	$	1.56	$	3.53	$	4.19

Diluted net income per share of Class A, Class B, and Class C stock	Diluted net income per share of Class A, Class B, and Class C stock	$	1.06	$	1.55	$	3.50	$	4.16

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

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

See accompanying notes.


Table of Contents			Alphabet Inc.

Alphabet Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions; unaudited)


		Three Months Ended
		Three Months Ended
		Three Months Ended



		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
Net income	Net income	$	13,910	$	19,689	$	46,348	$	53,108
Net income
Net income
Other comprehensive income (loss):	Other comprehensive income (loss):
Change in foreign currency translation adjustment		(2,175)		(1,169)		(3,801)		(338)
Other comprehensive income (loss):
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of income tax benefit (expense) of $47 and $(18)
Change in foreign currency translation adjustment, net of income tax benefit (expense) of $47 and $(18)
Change in foreign currency translation adjustment, net of income tax benefit (expense) of $47 and $(18)
Available-for-sale investments:
Available-for-sale investments:
Available-for-sale investments:	Available-for-sale investments:
Change in net unrealized gains (losses)	Change in net unrealized gains (losses)	(1,800)		(678)		(5,204)		(382)
Change in net unrealized gains (losses)
Change in net unrealized gains (losses)
Less: reclassification adjustment for net (gains) losses included in net income	Less: reclassification adjustment for net (gains) losses included in net income	362		255		743		745
Net change, net of income tax benefit (expense) of $409, $120, $1,269 and $(104)		(1,438)		(423)		(4,461)		363
Less: reclassification adjustment for net (gains) losses included in net income
Less: reclassification adjustment for net (gains) losses included in net income
Net change, net of income tax benefit (expense) of $(330) and $14
Net change, net of income tax benefit (expense) of $(330) and $14
Net change, net of income tax benefit (expense) of $(330) and $14
Cash flow hedges:
Cash flow hedges:
Cash flow hedges:	Cash flow hedges:
Change in net unrealized gains (losses)	Change in net unrealized gains (losses)	1,136		550		2,165		627
Change in net unrealized gains (losses)
Change in net unrealized gains (losses)
Less: reclassification adjustment for net (gains) losses included in net income	Less: reclassification adjustment for net (gains) losses included in net income	(547)		(3)		(1,132)		(85)
Net change, net of income tax benefit (expense) of $(159), $(134), $(228) and $(115)		589		547		1,033		542
Less: reclassification adjustment for net (gains) losses included in net income
Less: reclassification adjustment for net (gains) losses included in net income
Net change, net of income tax benefit (expense) of $30 and $(23)
Net change, net of income tax benefit (expense) of $30 and $(23)
Net change, net of income tax benefit (expense) of $30 and $(23)
Other comprehensive income (loss)
Other comprehensive income (loss)
Other comprehensive income (loss)	Other comprehensive income (loss)	(3,024)		(1,045)		(7,229)		567
Comprehensive income	Comprehensive income	$	10,886	$	18,644	$	39,119	$	53,675
Comprehensive income
Comprehensive income

See accompanying notes.


Table of Contents			Alphabet Inc.

Alphabet Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions; unaudited)


		Three Months Ended September 30, 2022									Three Months Ended March 31, 2023
		Class A, Class B, Class C Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity		Class A, Class B, Class C Stock and Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total Stockholders’ Equity
		Shares	Amount
Balance as of June 30, 2022		13,078	$	64,402	$	(5,828)	$	196,845	$	255,419
Balance as of December 31, 2022
Balance as of December 31, 2022
Balance as of December 31, 2022
Stock issued	Stock issued	31	0		0		0		0
Stock-based compensation expense	Stock-based compensation expense	0	5,018		0		0		5,018
Tax withholding related to vesting of restricted stock units and other	Tax withholding related to vesting of restricted stock units and other	0	(2,315)		0		0		(2,315)
Repurchases of stock	Repurchases of stock	(138)	(857)		0		(14,535)		(15,392)
Sale of interest in consolidated entities		0	10		0		0		10
Net income	Net income	0	0		0		13,910		13,910
Other comprehensive income (loss)	Other comprehensive income (loss)	0	0		(3,024)		0		(3,024)
Balance as of September 30, 2022		12,971	$	66,258	$	(8,852)	$	196,220	$	253,626
Balance as of March 31, 2023

Nine Months Ended September 30, 2022
Class A, Class B, Class C Stock and Additional Paid-In Capital Accumulated
Other
Comprehensive
Income (Loss) Retained
Earnings Total
Stockholders’
Equity
Shares Amount
Balance as of December 31, 2021 13,242 $ 61,774 $ (1,623) $ 191,484 $ 251,635
Stock issued 98 8 0 0 8
Stock-based compensation expense 0 14,388 0 0 14,388
Tax withholding related to vesting of restricted stock units and other 0 (7,644) 0 (1) (7,645)
Repurchases of stock (369) (2,278) 0 (41,611) (43,889)
Sale of interest in consolidated entities 0 10 0 0 10
Net income 0 0 0 46,348 46,348
Other comprehensive income (loss) 0 0 (7,229) 0 (7,229)
Balance as of September 30, 2022 12,971 $ 66,258 $ (8,852) $ 196,220 $ 253,626


~~Table of Contents~~			~~Alphabet Inc.~~

Three Months Ended September 30, 2023
Class A, Class B, Class C Stock and Additional Paid-In Capital Accumulated
Other
Comprehensive
Income (Loss) Retained
Earnings Total
Stockholders’
Equity
Shares Amount
Balance as of June 30, 2023 12,629 $ 72,248 $ (5,991) $ 200,884 $ 267,141
Stock issued 34 0 0 0 0
Stock-based compensation expense 0 5,777 0 0 5,777
Tax withholding related to vesting of restricted stock units and other 0 (2,442) 0 0 (2,442)
Repurchases of stock (122) (992) 0 (14,926) (15,918)
Net income 0 0 0 19,689 19,689
Other comprehensive income (loss) 0 0 (1,045) 0 (1,045)
Balance as of September 30, 2023 12,541 $ 74,591 $ (7,036) $ 205,647 $ 273,202


		Nine Months Ended September 30, 2023									Three Months Ended March 31, 2024
		Class A, Class B, Class C Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity		Class A, Class B, Class C Stock and Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total Stockholders’ Equity
		Shares	Amount
Balance as of December 31, 2022		12,849	$	68,184	$	(7,603)	$	195,563	$	256,144
Balance as of December 31, 2023
Balance as of December 31, 2023
Balance as of December 31, 2023
Stock issued	Stock issued	102	0		0		0		0
Stock-based compensation expense	Stock-based compensation expense	0	16,905		0		0		16,905
Tax withholding related to vesting of restricted stock units and other	Tax withholding related to vesting of restricted stock units and other	0	(7,366)		0		0		(7,366)
Repurchases of stock	Repurchases of stock	(410)	(3,132)		0		(43,024)		(46,156)
Net income	Net income	0	0		0		53,108		53,108
Other comprehensive income (loss)	Other comprehensive income (loss)	0	0		567		0		567
Balance as of September 30, 2023		12,541	$	74,591	$	(7,036)	$	205,647	$	273,202
Balance as of March 31, 2024

See accompanying notes.


Table of Contents			Alphabet Inc.

Alphabet Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)


		Nine Months Ended
		September 30,
		2022		2023
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2023					2023		2024
Operating activities	Operating activities
Net income	Net income	$	46,348	$	53,108
Net income
Net income
Adjustments:	Adjustments:
Depreciation and impairment of property and equipment		11,222		10,010
Amortization and impairment of intangible assets		505		373
Depreciation of property and equipment
Depreciation of property and equipment
Depreciation of property and equipment
Stock-based compensation expense	Stock-based compensation expense	14,262		16,801
Deferred income taxes	Deferred income taxes	(6,157)		(6,093)
Loss (gain) on debt and equity securities, net	Loss (gain) on debt and equity securities, net	3,856		1,294
Other	Other	369		912
Changes in assets and liabilities, net of effects of acquisitions:	Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net
Accounts receivable, net
Accounts receivable, net	Accounts receivable, net	2,298		(1,315)
Income taxes, net	Income taxes, net	(862)		10,392
Other assets	Other assets	(4,268)		(2,883)
Accounts payable	Accounts payable	735		237
Accrued expenses and other liabilities	Accrued expenses and other liabilities	491		(380)
Accrued revenue share	Accrued revenue share	(1,022)		(315)
Deferred revenue	Deferred revenue	104		690
Net cash provided by operating activities	Net cash provided by operating activities	67,881		82,831
Investing activities	Investing activities
Purchases of property and equipment	Purchases of property and equipment	(23,890)		(21,232)
Purchases of property and equipment
Purchases of property and equipment
Purchases of marketable securities	Purchases of marketable securities	(67,253)		(49,422)
Maturities and sales of marketable securities	Maturities and sales of marketable securities	84,087		52,642
Purchases of non-marketable securities	Purchases of non-marketable securities	(1,628)		(2,176)
Maturities and sales of non-marketable securities	Maturities and sales of non-marketable securities	131		743

Acquisitions, net of cash acquired, and purchases of intangible assets	Acquisitions, net of cash acquired, and purchases of intangible assets	(6,885)		(466)

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

Acquisitions, net of cash acquired, and purchases of intangible assets
Other investing activities	Other investing activities	1,367		(985)

Net cash used in investing activities	Net cash used in investing activities	(14,071)		(20,896)
Net cash used in investing activities
Net cash used in investing activities
Financing activities	Financing activities
Net payments related to stock-based award activities	Net payments related to stock-based award activities	(7,221)		(7,157)
Net payments related to stock-based award activities
Net payments related to stock-based award activities

Repurchases of stock
Repurchases of stock
Repurchases of stock	Repurchases of stock	(43,889)		(45,313)
Proceeds from issuance of debt, net of costs	Proceeds from issuance of debt, net of costs	44,322		9,298
Repayments of debt	Repayments of debt	(45,350)		(9,621)
Proceeds from sale of interest in consolidated entities, net	Proceeds from sale of interest in consolidated entities, net	10		8
Net cash used in financing activities	Net cash used in financing activities	(52,128)		(52,785)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(643)		(327)
Net increase in cash and cash equivalents		1,039		8,823
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	20,945		21,879
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	21,984	$	30,702

See accompanying notes.

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Alphabet Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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; sales of other products and services, such as fees received for subscription-based products, apps and in-app purchases, and ~~hardware; and fees received for subscription-based products.~~devices.

Basis of Consolidation

The consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated under the variable interest and voting models. Intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP), and in our opinion, include all adjustments of a normal recurring nature necessary for fair financial statement presentation. Interim results are not necessarily indicative of the results to be expected for the full year ending December 31, ~~2023.~~2024. We have made 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.

These consolidated financial statements and other information presented in this Form 10-Q should be read in conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023 filed with the SEC.

~~Change in~~Recent Accounting ~~Estimate~~Pronouncements

In January 2023, we completed an assessment of the useful lives of our servers and network equipment and adjusted the estimated useful life of our servers from four years to six years and the estimated useful life of certain network equipment from five years to six years. This change in accounting estimate was effective beginning in fiscal year 2023. Based on the carrying value of servers and certain network equipment as of December 31, 2022, and those placed in service during the nine months ended September 30,November 2023, the Financial Accounting Standards 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 ~~of this change in estimate was a reduction in depreciation expense of $977 million~~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" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and ~~$2.9 billion and an increase in net~~ income ~~of $761 million and $2.3 billion, or $0.06 and $0.18 per basic and $0.06 and $0.18 per diluted share,~~taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the ~~three and nine months ended September 30, 2023, respectively.~~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.

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Note 2. Revenues

Disaggregated Revenues

The following table presents revenues disaggregated by type (in millions):


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
		2023
		2023
		2023
Google Search & other
Google Search & other
Google Search & other	Google Search & other	$	39,539	$	44,026	$	119,846	$	127,013
YouTube ads	YouTube ads	7,071		7,952		21,280		22,310
YouTube ads
YouTube ads
Google Network
Google Network
Google Network	Google Network	7,872		7,669		24,305		23,015
Google advertising	Google advertising	54,482		59,647		165,431		172,338
Google other		6,895		8,339		20,259		23,894
Google advertising
Google advertising
Google subscriptions, platforms, and devices
Google subscriptions, platforms, and devices
Google subscriptions, platforms, and devices
Google Services total
Google Services total
Google Services total	Google Services total	61,377		67,986		185,690		196,232
Google Cloud	Google Cloud	6,868		8,411		18,965		23,896
Google Cloud
Google Cloud
Other Bets
Other Bets
Other Bets	Other Bets	209		297		842		870
Hedging gains (losses)	Hedging gains (losses)	638		(1)		1,291		86
Hedging gains (losses)
Hedging gains (losses)
Total revenues	Total revenues	$	69,092	$	76,693	$	206,788	$	221,084
Total revenues
Total revenues

The following table presents revenues disaggregated by geography, based on the addresses of our customers (in millions):


		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2022				2023				2022				2023
		March 31,
		March 31,
		March 31,



United States
United States
United States	United States	$	33,372	48	%	$	36,354	47	%	$	97,832	47	%	$	104,291	47	%
EMEA(1)	EMEA(1)	19,450		28		22,661		30		60,300		29		66,028		30
EMEA(1)
EMEA(1)
APAC(1)
APAC(1)
APAC(1)	APAC(1)	11,494		17		13,126		17		35,045		17		37,535		17
Other Americas(1)	Other Americas(1)	4,138		6		4,553		6		12,320		6		13,144		6
Other Americas(1)
Other Americas(1)
Hedging gains (losses)
Hedging gains (losses)
Hedging gains (losses)	Hedging gains (losses)	638		1		(1)		0		1,291		1		86		0
Total revenues	Total revenues	$	69,092	100	%	$	76,693	100	%	$	206,788	100	%	$	221,084	100	%
Total revenues
Total revenues

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

Revenue Backlog

As of ~~September 30, 2023,~~March 31, 2024, we had ~~$64.9~~$72.5 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 ~~amount~~estimated revenue backlog and timing of revenue recognition for these commitments is largely driven by our ability to deliver in accordance with relevant contract terms and when our customers utilize ~~services, which could affect our estimate of revenue backlog and when we expect to recognize such as revenue.~~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 ~~revenu~~e revenue currently recorded as well as amounts that will 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 ~~other.~~subscriptions, platforms, and devices. Total deferred revenue as of December 31, ~~2022~~2023 was ~~$4.5~~$5.0 billion, of which ~~$2.3~~$2.4 billion was recognized as revenues during the ~~nine~~three months ended ~~September 30, 2023.~~

March 31, 2024.


~~Table of Contents~~			~~Alphabet Inc.~~

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


Table of Contents			Alphabet Inc.

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 to determine fair value. For certain marketable debt securities, we have elected the fair value option for which changes in fair value are recorded in ~~other income (expense), net.~~OI&E. The fair value option was elected for these securities to align with the unrealized gains and losses 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):


					As of December 31, 2022
			Fair Value Hierarchy		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
				As of December 31, 2023																			As of December 31, 2023
		Fair Value Hierarchy															Fair Value Hierarchy	Adjusted Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value	Cash and Cash Equivalents		Marketable Securities
Fair value changes recorded in other comprehensive income	Fair value changes recorded in other comprehensive income
Time deposits
Time deposits
Time deposits	Time deposits		Level 2		$	5,297	$	0	$	0	$	5,297	$	5,293	$	4
Government bonds	Government bonds		Level 2		41,036		64		(2,045)		39,055		283		38,772
Corporate debt securities	Corporate debt securities		Level 2		28,578		8		(1,569)		27,017		1		27,016
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities		Level 2		16,176		5		(1,242)		14,939		0		14,939
Total investments with fair value change reflected in other comprehensive income(1)	Total investments with fair value change reflected in other comprehensive income(1)				$	91,087	$	77	$	(4,856)	$	86,308	$	5,577	$	80,731
Fair value adjustments recorded in net income	Fair value adjustments recorded in net income
Money market funds
Money market funds
Money market funds	Money market funds		Level 1								$	7,234	$	7,234	$	0
Current marketable equity securities(2)	Current marketable equity securities(2)		Level 1								4,013		0		4,013
Mutual funds	Mutual funds		Level 2								339		0		339
Government bonds	Government bonds		Level 2								1,877		440		1,437
Corporate debt securities	Corporate debt securities		Level 2								3,744		65		3,679
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities		Level 2								1,686		2		1,684
Total investments with fair value change recorded in net income	Total investments with fair value change recorded in net income										$	18,893	$	7,741	$	11,152
Cash	Cash										0		8,561		0
Total	Total				$	91,087	$	77	$	(4,856)	$	105,201	$	21,879	$	91,883

(1)Represents gross unrealized gains and losses for debt securities recorded to accumulated other comprehensive income (AOCI).

(2)The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of ~~$803 million~~$1.4 billion as of December 31, ~~2022~~2023 is included within other non-current assets.

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					As of September 30, 2023
			Fair Value Hierarchy		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable Securities
				As of March 31, 2024																						As of March 31, 2024
		Fair Value Hierarchy																	Fair Value Hierarchy	Adjusted Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value		Cash and Cash Equivalents				Marketable Securities
Fair value changes recorded in other comprehensive income	Fair value changes recorded in other comprehensive income
Time deposits
Time deposits
Time deposits	Time deposits		Level 2		$	2,987	$	0	$	0	$	2,987	$	2,987	$	0
Government bonds	Government bonds		Level 2		50,369		2		(1,916)		48,455		8,505		39,950
Corporate debt securities	Corporate debt securities		Level 2		22,746		2		(1,081)		21,667		0		21,667
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities		Level 2		17,652		1		(1,333)		16,320		0		16,320
Total investments with fair value change reflected in other comprehensive income(1)	Total investments with fair value change reflected in other comprehensive income(1)				$	93,754	$	5	$	(4,330)	$	89,429	$	11,492	$	77,937
Fair value adjustments recorded in net income	Fair value adjustments recorded in net income
Money market funds
Money market funds
Money market funds	Money market funds		Level 1								$	9,268	$	9,268	$	0
Current marketable equity securities(2)	Current marketable equity securities(2)		Level 1								3,706		0		3,706
Mutual funds	Mutual funds		Level 2								309		0		309		Mutual funds	Level 2						278			0	278		278
Government bonds	Government bonds		Level 2								2,141		555		1,586		Government bonds	Level 2						1,965			158	1,807		1,807
Corporate debt securities	Corporate debt securities		Level 2								3,483		93		3,390		Corporate debt securities	Level 2						3,772			80	3,692		3,692
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities		Level 2								2,305		0		2,305		Mortgage-backed and asset-backed securities	Level 2						2,691			0	2,691		2,691
Total investments with fair value change recorded in net income	Total investments with fair value change recorded in net income										$	21,212	$	9,916	$	11,296
Cash	Cash										0		9,294		0
Total	Total				$	93,754	$	5	$	(4,330)	$	110,641	$	30,702	$	89,233

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

(2)The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of ~~$958 million~~$1.4 billion as of ~~September 30, 2023~~March 31, 2024 is included within other non-current ~~assets~~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 been remeasured 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~~hierarchy. Non-marketable equity securities that have been remeasured due to impairment are classified within Level 3. Our valuation methods include option pricing models, market comparable approach, and common stock equivalent method, which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, expected time to exit, risk free rate, and the rights, and obligations of the securities we hold. ~~The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.~~These inputs significantly vary based on investment type.

As of ~~September 30, 2023,~~March 31, 2024, the carrying value of our non-marketable equity securities was ~~$28.8~~$31.4 billion, of which ~~$10.4~~$13.6 billion were remeasured at fair value during the three months ended ~~September 30, 2023~~March 31, 2024 and primarily classified aswithin Level 2.2 of the fair value hierarchy at the time of measurement.

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Debt Securities

The following table summarizes the estimated fair value of investments in available-for-sale marketable debt securities by effective contractual maturity dates (in millions):


	As of ~~September 30, 2023~~March 31, 2024
Due in 1 year or less	$	~~13,958~~8,551
Due in 1 year through 5 years	~~42,554~~42,755
Due in 5 years through 10 years	~~15,114~~13,972
Due after 10 years	~~13,592~~14,043
Total	$	~~85,218~~79,321

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												As of December 31, 2023
		Less than 12 Months				12 Months or Greater				Total				Less than 12 Months		12 Months or Greater			Total
		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
Government bonds	Government bonds	$	21,039	$	(1,004)	$	13,438	$	(1,041)	$	34,477	$	(2,045)
Corporate debt securities	Corporate debt securities	11,228		(440)		15,125		(1,052)		26,353		(1,492)
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	7,725		(585)		6,964		(657)		14,689		(1,242)
Total	Total	$	39,992	$	(2,029)	$	35,527	$	(2,750)	$	75,519	$	(4,779)


		As of September 30, 2023												As of March 31, 2024
		Less than 12 Months				12 Months or Greater				Total				Less than 12 Months		12 Months or Greater			Total
		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
Government bonds	Government bonds	$	15,506	$	(463)	$	19,121	$	(1,453)	$	34,627	$	(1,916)
Corporate debt securities	Corporate debt securities	4,163		(60)		17,162		(935)		21,325		(995)
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	6,888		(239)		9,212		(1,094)		16,100		(1,333)
Total	Total	$	26,557	$	(762)	$	45,495	$	(3,482)	$	72,052	$	(4,244)

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):


		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
Unrealized gain (loss) on fair value option debt securities	Unrealized gain (loss) on fair value option debt securities	$	(177)	$	(86)	$	(746)	$	35
Unrealized gain (loss) on fair value option debt securities
Unrealized gain (loss) on fair value option debt securities
Gross realized gain on debt securities
Gross realized gain on debt securities
Gross realized gain on debt securities	Gross realized gain on debt securities	14		8		83		93
Gross realized loss on debt securities	Gross realized loss on debt securities	(551)		(402)		(1,190)		(1,197)
Gross realized loss on debt securities
Gross realized loss on debt securities
(Increase) decrease in allowance for credit losses
(Increase) decrease in allowance for credit losses
(Increase) decrease in allowance for credit losses	(Increase) decrease in allowance for credit losses	(17)		(23)		(35)		(31)
Total gain (loss) on debt securities recognized in other income (expense), net	Total gain (loss) on debt securities recognized in other income (expense), net	$	(731)	$	(503)	$	(1,888)	$	(1,100)
Total gain (loss) on debt securities recognized in other income (expense), net
Total gain (loss) on debt securities recognized in other income (expense), net

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Equity Investments

The carrying value of equity securities is measured as the total initial cost plus the cumulative net gain (loss). ~~Our share of gains~~Gains and losses, including impairments, are included as a component of OI&E in the Consolidated Statements of Income. See Note 6 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						As of September 30, 2023
		Marketable Equity Securities		Non-Marketable Equity Securities		Total		Marketable Equity Securities		Non-Marketable Equity Securities		Total
	As of December 31, 2023															As of December 31, 2023			As of March 31, 2024
	Marketable Equity Securities													Marketable Equity Securities	Non-Marketable Equity Securities		Total	Marketable Equity Securities		Non-Marketable Equity Securities	Total
Total initial cost	Total initial cost	$	5,764	$	16,157	$	21,921	$	5,331	$	17,504	$	22,835
Cumulative net gain (loss)(1)	Cumulative net gain (loss)(1)	(608)		12,372		11,764		(358)		11,317		10,959
Carrying value	Carrying value	$	5,156	$	28,529	$	33,685	$	4,973	$	28,821	$	33,794

(1)Non-marketable equity securities cumulative net gain (loss) is comprised of ~~$16.8~~$18.1 billion gains and ~~$4.5~~$6.9 billion losses (including impairments) as of December 31, ~~2022~~2023 and ~~$18.0~~$20.6 billion gains and ~~$6.7~~$7.7 billion losses (including impairments) as of ~~September 30, 2023.~~March 31, 2024.

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 are summarized below (in millions):


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
		2023
		2023
		2023
Realized net gain (loss) on equity securities sold during the period
Realized net gain (loss) on equity securities sold during the period
Realized net gain (loss) on equity securities sold during the period	Realized net gain (loss) on equity securities sold during the period	$	(73)	$	42	$	(355)	$	348
Unrealized net gain (loss) on marketable equity securities	Unrealized net gain (loss) on marketable equity securities	(86)		(224)		(2,494)		136
Unrealized net gain (loss) on marketable equity securities
Unrealized net gain (loss) on marketable equity securities
Unrealized net gain (loss) on non-marketable equity securities(1)
Unrealized net gain (loss) on non-marketable equity securities(1)
Unrealized net gain (loss) on non-marketable equity securities(1)	Unrealized net gain (loss) on non-marketable equity securities(1)	(488)		(184)		881		(678)
Total gain (loss) on equity securities in other income (expense), net	Total gain (loss) on equity securities in other income (expense), net	$	(647)	$	(366)	$	(1,968)	$	(194)
Total gain (loss) on equity securities in other income (expense), net
Total gain (loss) on equity securities in other income (expense), net

(1)Unrealized gain (loss) on non-marketable equity securities accounted for under the measurement alternative is comprised of ~~$219~~$915 million and ~~$599 million~~$2.8 billion of upward adjustments and ~~$707~~$694 million and ~~$783~~$814 million of downward adjustments (including impairments) for the three months ended ~~September 30, 2022~~March 31, 2023 and 2023, respectively, and $3.2 billion and $1.6 billion of upward adjustments and $2.4 billion and $2.3 billion of downward adjustments (including impairments) for the nine months ended September 30, 2022 and 2023,2024, respectively.

In the table above, realized net gain (loss) on equity securities sold during the period reflects the difference between the sale 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 (in millions), 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 the period. Cumulative net gains (losses) are calculated as the difference between the sale price and the initial purchase price for the equity security sold during the period.

Equity Securities Sold
Three Months Ended Nine Months Ended
September 30, September 30,
2022 2023 2022 2023
Total sale price $ 296 $ 736 $ 1,631 $ 1,475
Total initial cost 310 549 738 916
Cumulative net gain (loss) $ (14) $ 187 $ 893 $ 559


~~Table of Contents~~			~~Alphabet Inc.~~


	Equity Securities Sold
	Three Months Ended
	March 31,
	2023		2024
Total sale price	$	312	$	1,090
Total initial cost	211		661
Cumulative net gains (losses)	$	101	$	429

Equity Securities Accounted for Under the Equity Method

As of December 31, ~~2022~~2023 and ~~September 30, 2023,~~March 31, 2024, equity securities accounted for under the equity method had a carrying value of approximately ~~$1.5~~$1.7 billion ~~for both periods.~~and $2.0 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 6 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 is foreign exchange risk. We use foreign currency contracts to reduce the risk that our cash flows, earnings, and investment in foreign 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 combination of 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.~~United States (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 our assessment of hedge effectiveness and amortize them on a straight-line basis over the life of the hedging instrument in revenues. The difference between fair value changes of the excluded component and the amount amortized to revenues is recorded in AOCI.

As of ~~September 30, 2023, t~~heMarch 31, 2024, the net accumulated gain on our foreign currency cash flow hedges before tax effect was ~~$691~~was $128 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 marketable securities 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 to our investment in foreign subsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI along with the foreign currency translation adjustment. We exclude forward points from the assessment 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, and 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 primarily reflected within the “other” component of OI&E. See Note 6 for further details.

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The gross notional amounts of outstanding derivative instruments were as follows (in millions):


		As of December 31, 2022		As of September 30, 2023
	As of December 31, 2023					As of December 31, 2023	As of March 31, 2024
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:
Foreign exchange contracts	Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts
Cash flow hedges
Cash flow hedges
Cash flow hedges	Cash flow hedges	$	15,972	$	17,225
Fair value hedges	Fair value hedges	$	2,117	$	1,384
Net investment hedges	Net investment hedges	$	8,751	$	9,547
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:
Foreign exchange contracts		$	34,979	$	36,585
Foreign exchange contracts(1)
Foreign exchange contracts(1)
Foreign exchange contracts(1)
Other contracts	Other contracts	$	7,932	$	11,572

(1) The gross notional amounts of these derivative instruments as of March 31, 2024 reflect a rollover in timing of settlement into our second quarter as a result of a holiday market closure.

The fair values of outstanding derivative instruments were as follows (in millions):


		As of December 31, 2022				As of September 30, 2023					As of December 31, 2023			As of March 31, 2024
		Assets(1)		Liabilities(2)		Assets(1)		Liabilities(2)			Assets(1)		Liabilities(2)			Assets(1)		Liabilities(2)
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:
Foreign exchange contracts	Foreign exchange contracts	$	271	$	556	$	1,102	$	14
Foreign exchange contracts
Foreign exchange contracts

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:
Derivatives not designated as hedging instruments:
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts	Foreign exchange contracts	365		207		123		496		134		156			317		221
Other contracts	Other contracts	40		47		149		85		Other contracts	114		47			164		40
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments	405		254		272		581
Total	Total	$	676	$	810	$	1,374	$	595

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

(2) 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 other comprehensive income (OCI) are summarized below (in millions):


		Three Months Ended
		Three Months Ended
		Three Months Ended

		Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
		2023
		2023
		2023
Derivatives in cash flow hedging relationship:
Derivatives in cash flow hedging relationship:
Derivatives in cash flow hedging relationship:	Derivatives in cash flow hedging relationship:
Foreign exchange contracts	Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts
Amount included in the assessment of effectiveness	Amount included in the assessment of effectiveness	$	1,486	$	652	$	2,752	$	591
Amount included in the assessment of effectiveness
Amount included in the assessment of effectiveness
Amount excluded from the assessment of effectiveness
Amount excluded from the assessment of effectiveness
Amount excluded from the assessment of effectiveness	Amount excluded from the assessment of effectiveness	(77)		16		(131)		143

Derivatives in net investment hedging relationship:	Derivatives in net investment hedging relationship:

Derivatives in net investment hedging relationship:

Derivatives in net investment hedging relationship:
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts	Foreign exchange contracts
Amount included in the assessment of effectiveness	Amount included in the assessment of effectiveness	760		336		1,418		62
Amount included in the assessment of effectiveness
Amount included in the assessment of effectiveness
Total	Total	$	2,169	$	1,004	$	4,039	$	796
Total
Total

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The table below presents the gains (losses) of our derivatives on the Consolidated Statements of Income: (in millions):
Gains (Losses) Recognized in Income
Three Months Ended
September 30,
2022 2023
Revenues Other income (expense), net Revenues Other income (expense), net
Total amounts in the Consolidated Statements of Income $ 69,092 $ (902) $ 76,693 $ (146)
Effect of cash flow hedges:
Foreign exchange contracts
Amount reclassified from AOCI to income $ 658 $ 0 $ (15) $ 0
Amount excluded from the assessment of effectiveness (amortized) (20) 0 14 0
Effect of fair value hedges:
Foreign exchange contracts
Hedged items 0 (226) 0 (48)
Derivatives designated as hedging instruments 0 226 0 48
Amount excluded from the assessment of effectiveness 0 6 0 2
Effect of net investment hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness 0 59 0 13
Effect of non designated hedges:
Foreign exchange contracts 0 (495) 0 (340)
Other contracts 0 34 0 83
Total gains (losses) $ 638 $ (396) $ (1) $ (242)


~~Table of Contents~~			~~Alphabet Inc.~~


		Gains (Losses) Recognized in Income
		Nine Months Ended
		September 30,
		2022				2023
		Revenues		Other income (expense), net		Revenues		Other income (expense), net
	Three Months Ended March 31, 2024												Three Months Ended March 31, 2024
	2023										2023			2024
	Revenues									Revenues		Other income (expense), net	Revenues		Other income (expense), net
Total amounts in the Consolidated Statements of Income	Total amounts in the Consolidated Statements of Income	$	206,788	$	(2,501)	$	221,084	$	709

Effect of cash flow hedges:	Effect of cash flow hedges:
Effect of cash flow hedges:
Effect of cash flow hedges:
Foreign exchange contracts	Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI to income		$	1,355	$	0	$	71	$	0
Foreign exchange contracts
Foreign exchange contracts
Amount reclassified from AOCI to income
Amount reclassified from AOCI to income
Amount reclassified from AOCI to income
Amount excluded from the assessment of effectiveness (amortized)	Amount excluded from the assessment of effectiveness (amortized)	(63)		0		16		0
Effect of fair value hedges:	Effect of fair value hedges:
Foreign exchange contracts	Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts
Hedged items
Hedged items
Hedged items	Hedged items	0		(349)		0		6
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments	0		350		0		(6)
Amount excluded from the assessment of effectiveness	Amount excluded from the assessment of effectiveness	0		9		0		12
Effect of net investment hedges:	Effect of net investment hedges:
Foreign exchange contracts	Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts
Amount excluded from the assessment of effectiveness
Amount excluded from the assessment of effectiveness
Amount excluded from the assessment of effectiveness	Amount excluded from the assessment of effectiveness	0		99		0		136
Effect of non designated hedges:	Effect of non designated hedges:
Foreign exchange contracts	Foreign exchange contracts	0		(891)		0		(186)
Foreign exchange contracts
Foreign exchange contracts
Other contracts	Other contracts	0		158		0		82
Total gains (losses)	Total gains (losses)	$	1,292	$	(624)	$	87	$	44

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.

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 the Consolidated Balance Sheets, but Have Legal Rights to Offset
		Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets			Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
	As of December 31, 2023																	As of December 31, 2023
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
		Gross Amounts Recognized
		Gross Amounts Recognized
		Gross Amounts Recognized													Gross Amounts Offset in the Consolidated Balance Sheets	Net Amounts Presented in the Consolidated Balance Sheets	Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged	Net Amounts
Derivatives assets	Derivatives assets	$	760	$	(84)	$	676		$	(463)	$	(132)	$	81
Derivatives liabilities	Derivatives liabilities	$	894	$	(84)	$	810		$	(463)	$	(28)	$	319

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		As of September 30, 2023
									Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
		Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets			Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
	As of March 31, 2024																	As of March 31, 2024
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
		Gross Amounts Recognized
		Gross Amounts Recognized
		Gross Amounts Recognized													Gross Amounts Offset in the Consolidated Balance Sheets	Net Amounts Presented in the Consolidated Balance Sheets	Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged	Net Amounts
Derivatives assets	Derivatives assets	$	1,396	$	(22)	$	1,374		$	(448)	$	(730)	$	196
Derivatives liabilities	Derivatives liabilities	$	617	$	(22)	$	595		$	(448)	$	(25)	$	122

(1)The balances as of December 31, ~~2022~~2023 and ~~September 30, 2023~~March 31, 2024 were related to derivatives allowed to be net settled in accordance with our master netting agreements.

Note 4. Variable Interest Entities (VIE)

Consolidated VIEs

We consolidate VIEs in which we hold a variable interest and are the primary beneficiary. The results of operations and financial 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~~2023 and ~~September 30, 2023,~~March 31, 2024, assets that can only be used to settle obligations of these VIEs were ~~$4.1~~$4.9 billion and ~~$2.6~~$4.1 billion, respectively, and the liabilities for which creditors only have recourse to the VIEs were ~~$2.6~~$2.5 billion and $2.2 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~~$3.4 billion and ~~$3.4~~$3.2 billion as of December 31, ~~2022~~2023 and ~~September 30, 2023,~~March 31, 2024, respectively, of which $1.1 billion and $1.0 billion is redeemable noncontrolling interest (RNCI) ~~for both periods.~~as of December 31, 2023 and March 31, 2024, respectively. NCI and RNCI 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 6 for further details on OI&E.

Unconsolidated VIEs

We have investments in VIEs in which we are not the primary beneficiary. These VIEs include private companies that are primarily 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 of operations and financial position of these VIEs are not included in our consolidated financial statements. We account for these 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~~5.7 billion and ~~$2.7~~$4.0 billion, respectively, as of December 31, ~~2022~~2023 and~~$5.5~~ $6.9 billion and~~$3.8~~ $5.3 billion, respectively, as of ~~September 30, 2023.~~March 31, 2024. The difference between the maximum exposure and the carrying value relates primarily to future funding commitments.

Note 5. Debt

Short-Term Debt

We have a 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. We had no commercial paper outstanding as of December 31, ~~2022~~2023 and ~~September 30, 2023.~~March 31, 2024.

Our short-term debt balance also includes the current portion of certain long-term debt.

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Long-Term Debt

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


			Maturity	Coupon Rate	Effective Interest Rate	As of December 31, 2022		As of September 30, 2023
		Maturity								Maturity	Coupon Rate	Effective Interest Rate	As of December 31, 2023	As of March 31, 2024
Debt	Debt
2014-2020 Notes issuances			2024 - 2060	0.45% - 3.38%	0.57% - 3.38%	$	13,000	$	13,000
2016-2020 Notes issuances
2016-2020 Notes issuances
2016-2020 Notes issuances
Future finance lease payments, net and other (1)	Future finance lease payments, net and other (1)					2,142		2,314
Total debt	Total debt					15,142		15,314
Unamortized discount and debt issuance costs	Unamortized discount and debt issuance costs					(143)		(133)
Less: Current portion of long-term notes(2)	Less: Current portion of long-term notes(2)					0		(1,000)
Less: Current portion of future finance lease payments, net and other current debt(1)(2)	Less: Current portion of future finance lease payments, net and other current debt(1)(2)					(298)		(400)
Total long-term debt	Total long-term debt					$	14,701	$	13,781

(1)Future finance lease payments are net of imputed interest.

(2)Total current portion of long-term debt is included within other accrued expenses and current liabilities. See Note 6 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 based on proceeds received with interest payable semi-annually.

The total estimated fair value of the outstanding notes was approximately ~~$9.9~~$10.3 billion and ~~$9.6~~$9.0 billion as of December 31, ~~2022~~2023 and ~~September 30, 2023,~~March 31, 2024, 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.

Credit Facility

As of ~~September 30, 2023,~~March 31, 2024, 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. In April 2024, we entered into a new $4.0 billion revolving credit facility expiring in April 2025. 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~~2023 and ~~September 30, 2023.~~March 31, 2024.

Note 6. Supplemental Financial Statement Information

Accounts Receivable

The allowance for credit losses on accounts receivable was $~~754~~771 million and $~~832~~745 million as of December 31, ~~2022~~2023 and ~~September 30, 2023,~~March 31, 2024, respectively.

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):


		As of December 31, 2022		As of September 30, 2023
	As of December 31, 2023					As of December 31, 2023	As of March 31, 2024
Land and buildings	Land and buildings	$	66,897	$	71,357
Information technology assets	Information technology assets	66,267		74,928
Construction in progress	Construction in progress	27,657		32,305
Leasehold improvements	Leasehold improvements	10,575		11,441
Furniture and fixtures	Furniture and fixtures	314		424
Property and equipment, gross	Property and equipment, gross	171,710		190,455
Less: accumulated depreciation	Less: accumulated depreciation	(59,042)		(64,750)
Property and equipment, net	Property and equipment, net	$	112,668	$	125,705

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Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):


		As of December 31, 2022		As of September 30, 2023
	As of December 31, 2023					As of December 31, 2023	As of March 31, 2024
European Commission fines(1)	European Commission fines(1)	$	9,106	$	9,143
Income taxes payable, net(2)		1,632		13,528
Accrued purchases of property and equipment
Accrued customer liabilities	Accrued customer liabilities	3,619		3,595
Accrued purchases of property and equipment		3,019		4,090
Current operating lease liabilities	Current operating lease liabilities	2,477		2,715
Income taxes payable, net
Other accrued expenses and current liabilities	Other accrued expenses and current liabilities	18,013		22,531
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	$	37,866	$	55,602

(1) While each ECEuropean Commission (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 foreign exchange and interest. See Note 98 for further details.

~~(2)~~ Income taxes payable, net as of the quarter ended September 30, 2023 includes balances related to the 2023 Internal Revenue Service (IRS) payment deferral relief made available to taxpayers headquartered in designated counties in California.

Accumulated Other Comprehensive Income (Loss)

Components of AOCI, net of income tax, were as follows (in millions):


		Foreign Currency Translation Adjustments		Unrealized Gains (Losses) on Available-for-Sale Investments		Unrealized Gains (Losses) on Cash Flow Hedges		Total
Balance as of December 31, 2021		$	(2,306)	$	236	$	447	$	(1,623)
	Foreign Currency Translation Adjustments									Foreign Currency Translation Adjustments	Unrealized Gains (Losses) on Available-for-Sale Investments	Unrealized Gains (Losses) on Cash Flow Hedges	Total
Balance as of December 31, 2022
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(3,801)		(5,204)		2,296		(6,709)
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		(131)		(131)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	0		743		(1,132)		(389)
Other comprehensive income (loss)	Other comprehensive income (loss)	(3,801)		(4,461)		1,033		(7,229)
Balance as of September 30, 2022		$	(6,107)	$	(4,225)	$	1,480	$	(8,852)
Balance as of March 31, 2023


		Foreign Currency Translation Adjustments		Unrealized Gains (Losses) on Available-for-Sale Investments		Unrealized Gains (Losses) on Cash Flow Hedges		Total
Balance as of December 31, 2022		$	(4,142)	$	(3,477)	$	16	$	(7,603)
	Foreign Currency Translation Adjustments									Foreign Currency Translation Adjustments	Unrealized Gains (Losses) on Available-for-Sale Investments	Unrealized Gains (Losses) on Cash Flow Hedges	Total
Balance as of December 31, 2023
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(338)		(382)		484		(236)
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		143		143
Amounts reclassified from AOCI	Amounts reclassified from AOCI	0		745		(85)		660
Other comprehensive income (loss)	Other comprehensive income (loss)	(338)		363		542		567
Balance as of September 30, 2023		$	(4,480)	$	(3,114)	$	558	$	(7,036)
Balance as of March 31, 2024

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The effects on net income of amounts reclassified from AOCI were as follows (in millions):


					Three Months Ended
					Three Months Ended
					Three Months Ended
			Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income
			Three Months Ended					Nine Months Ended
			September 30,					September 30,
AOCI Components	AOCI Components	Location	2022			2023		2022		2023
AOCI Components
AOCI Components
Unrealized gains (losses) on available-for-sale investments	Unrealized gains (losses) on available-for-sale investments
		Other income (expense), net	$	(464)		$	(327)	$	(953)	$	(955)
		Benefit (provision) for income taxes	102			72		210		210
		Net of income tax	(362)			(255)		(743)		(745)
Unrealized gains (losses) on available-for-sale investments
Unrealized gains (losses) on available-for-sale investments
		Other income (expense), net
		Other income (expense), net
		Other income (expense), net
		Benefit (provision) for income taxes
		Benefit (provision) for income taxes
		Benefit (provision) for income taxes
		Net of income tax
		Net of income tax
		Net of income tax
Unrealized gains (losses) on cash flow hedges
Unrealized gains (losses) on cash flow hedges
Unrealized gains (losses) on cash flow hedges	Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts	Foreign exchange contracts	Revenue	658			(15)		1,355		71
Foreign exchange contracts
Foreign exchange contracts
Interest rate contracts	Interest rate contracts	Other income (expense), net	2			2		5		5
		Benefit (provision) for income taxes	(113)			16		(228)		9
		Net of income tax	547			3		1,132		85
Interest rate contracts
Interest rate contracts
		Benefit (provision) for income taxes
		Benefit (provision) for income taxes
		Benefit (provision) for income taxes
		Net of income tax
		Net of income tax
		Net of income tax
Total amount reclassified, net of income tax	Total amount reclassified, net of income tax		$	185		$	(252)	$	389	$	(660)
Total amount reclassified, net of income tax
Total amount reclassified, net of income tax

Other Income (Expense), Net

Components of OI&E were as follows (in millions):


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
		March 31,
		March 31,
		March 31,



Interest income
Interest income
Interest income	Interest income	$	615	$	1,066	$	1,515	$	2,755
Interest expense(1)	Interest expense(1)	(101)		(116)		(267)		(239)
Interest expense(1)
Interest expense(1)
Foreign currency exchange gain (loss), net
Foreign currency exchange gain (loss), net
Foreign currency exchange gain (loss), net	Foreign currency exchange gain (loss), net	(136)		(311)		(469)		(789)
Gain (loss) on debt securities, net	Gain (loss) on debt securities, net	(731)		(503)		(1,888)		(1,100)
Gain (loss) on debt securities, net
Gain (loss) on debt securities, net
Gain (loss) on equity securities, net
Gain (loss) on equity securities, net
Gain (loss) on equity securities, net	Gain (loss) on equity securities, net	(647)		(366)		(1,968)		(194)
Performance fees	Performance fees	54		179		605		302
Performance fees
Performance fees
Income (loss) and impairment from equity method investments, net
Income (loss) and impairment from equity method investments, net
Income (loss) and impairment from equity method investments, net	Income (loss) and impairment from equity method investments, net	(99)		(215)		(306)		(372)
Other	Other	143		120		277		346
Other
Other
Other income (expense), net	Other income (expense), net	$	(902)	$	(146)	$	(2,501)	$	709
Other income (expense), net
Other income (expense), net

(1)Interest expense is net of interest capitalized of ~~$28~~$40 million and ~~$47~~$43 million for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023, respectively, and $99 million and $134 million for the nine months ended September 30, 2022 and 2023,~~2024, respectively.

Note 7. ~~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, we announced a reduction of our workforce. As a result, total employee severance and related charges recorded during the three and~~ ~~nine months ended September 30, 2023~~ ~~were $86 million~~ ~~and $2.1 billion, respectively.~~ ~~Substantially all of the employees affected were no longer included in our headcount as of September 30, 2023.~~

~~In addition, we are taking actions to optimize our global office space. As a result, exit charges recorded during the three and~~ ~~nine months ended September 30, 2023, were~~ ~~$16 million~~ ~~and $649 million, respectively, as reflected in the table below.~~ In addition to these exit charges, for the three and nine months ended September 30, 2023, we incurred $207 million in accelerated rent and accelerated depreciation, which are not included in the table below. ~~We may incur additional charges in the future as we further evaluate our real estate needs.~~


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~~Severance and office space exit charges are included within our consolidated statements of income as follows (in millions):~~

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023
Severance and Related (1)
Office Space Total
Severance and Related (1)
Office Space Total
Cost of revenues $ 17 $ 6 $ 23 $ 477 $ 246 $ 723
Research and development 15 7 22 847 268 1,115
Sales and marketing 50 1 51 494 59 553
General and administrative 4 2 6 263 76 339
Total charges $ 86 $ 16 $ 102 $ 2,081 $ 649 $ 2,730

~~(1)Severance includes amounts to be settled in cash, accounted for as one-time involuntary employee termination benefits,~~ ~~and stock based compensation.~~

~~For segment reporting, the substantial majority of these charges are included within unallocated corporate costs in our segment results.~~

~~For the nine months ended September 30, 2023, changes in liabilities resulting from the severance charges and related accruals were as follows (in millions):~~


	~~Severance and Related~~
~~Balance as of December 31, 2022~~	$	0
~~Charges(1)~~	~~1,652~~
~~Cash payments~~	~~(1,547)~~
~~Balance as of September 30, 2023(2)~~	$	~~105~~

~~(1)Excludes non-cash stock-based compensation of $429 million.~~

~~(2)Included in accrued compensation and benefits on the Consolidated Balance Sheets.~~

~~Note 8.~~ Goodwill ~~and Other Intangible Assets~~

Goodwill

Changes in the carrying amount of goodwill for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 were as follows (in millions):

Google Services Google Cloud Other Bets Total
Balance as of December 31, 2022 $ 20,847 $ 7,205 $ 908 $ 28,960
Acquisitions 240 3 0 243
Foreign currency translation and other adjustments (15) (13) (29) (57)
Balance as of September 30, 2023 $ 21,072 $ 7,195 $ 879 $ 29,146


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~~Other Intangible Assets~~

~~Information regarding intangible assets was as follows (in millions):~~
As of December 31, 2022 As of September 30, 2023
Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount
Patents and developed technology $ 1,164 $ 354 $ 810 $ 1,152 $ 453 $ 699
Customer relationships 862 235 627 868 335 533
Trade names and other 527 120 407 528 161 367
Total definite-lived intangible assets 2,553 709 1,844 2,548 949 1,599
Indefinite-lived intangible assets 240 0 240 234 0 234
Total intangible assets $ 2,793 $ 709 $ 2,084 $ 2,782 $ 949 $ 1,833

~~Amortization expense relating to intangible assets was $113 million and~~ ~~$129 million~~ ~~for the three months ended September 30, 2022 and 2023, respectively, and $505 million and~~ ~~$373 million~~ ~~for the nine months ended September 30, 2022 and 2023, respectively.~~

~~Expected amortization expense of definite-lived intangible assets held as of September 30, 2023 was as follows (in millions):~~

Remainder of 2023 $ 118
2024 466
2025 335
2026 257
2027 174
Thereafter 249
Total $ 1,599


	Google Services		Google Cloud		Other Bets		Total
Balance as of December 31, 2023	$	21,118	$	7,199	$	881	$	29,198
Acquisitions	9		0		0		9
Foreign currency translation and other adjustments	(22)		(2)		0		(24)
Balance as of March 31, 2024	$	21,105	$	7,197	$	881	$	29,183

Note 9.8. Commitments and Contingencies

Commitments

We have content licensing agreements with future fixed or minimum guaranteed commitments of ~~$11.1~~$10.1 billion as of ~~September 30, 2023,~~March 31, 2024, of which the majority is paid ~~over seven years ending in~~quarterly through 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 hold certain 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 indemnification agreements 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 have made 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~~claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period.

As of ~~September 30, 2023,~~March 31, 2024, we did not have any material indemnification claims that were probable or reasonably possible.


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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 that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate.

Certain outstanding matters seek speculative, substantial or indeterminate monetary amounts, substantial changes to our business practices and products, or structural remedies. Significant judgment is required to determine both the likelihood of there being a loss and the estimated amount of a loss related to such matters, and we may be unable to estimate the reasonably possible loss or range of losses. The outcomes of outstanding legal matters are inherently unpredictable and subject 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~~Matters

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 in the first quarter of 2019.

In addition, 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 we expect any final approval of the settlement would come in 2024.

In December 2023, a California jury delivered a verdict in a similar lawsuit in Epic Games v. Google. The jury found that Google violated antitrust laws related to Google Play's business. Epic did not seek monetary damages. The presiding judge will determine non-monetary remedies in 2024, and the range of potential remedies vary widely. We plan to appeal.

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. ~~For example:~~

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 ~~commenced~~ended on ~~September 12,~~November 16, 2023, and we expect a decision in 2024. Further, in June 2022, the Australian Competition and Consumer Commission (ACCC) and the United Kingdom's Competition and Markets Authority (CMA) each opened an investigation 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.~~technology, and a trial is scheduled for March 2025. Additionally, on January 24, 2023, the DOJ, along with a number of state Attorneys General, filed an antitrust complaint in the U.S. District Court for the Eastern District of Virginia 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. A trial is scheduled for September 2024. The EC, the CMA, and the ACCC each opened a formal investigation into Google's advertising technology


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business practices on June 22, 2021, May 25, 2022, and June 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 ~~will respond~~responded to the SO byon December ~~31,~~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 a formal review in May 2022 of Google's compliance with the new app store billing regulations. ~~On October 6, 2023, the Korea Communications Commission issued a preliminary decision that we are not in full compliance with the new regulations. We intend to respond in November 2023.~~

We believe we have strong arguments against these ~~complaints are without merit~~claims and will defend ourselves vigorously. We continue to cooperate with 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 litigation in the U.S. and the European Union, 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 include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering 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 to litigate 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 and partners 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 ~~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, consumer protection, and other matters. For example, we ~~currently have a number of privacy investigations and lawsuits ongoing in multiple jurisdictions. We also~~ periodically have data incidents that we report to relevant regulators as required by law. Such claims, consent orders, lawsuits, regulatory and government investigations, and other proceedings ~~and consent orders~~ 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 have been 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.

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 is probable 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


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and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from our expectations.

~~For~~See Note 12 for information regarding income tax ~~contingencies, see Note 13.~~contingencies.

Note ~~10.~~9. Stockholders' Equity

Share Repurchases

InDuring the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2024, we repurchased ~~$15.9~~$15.1 billion and ~~$46.2~~$16.1 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 billion of its Class A and Class C shares. As of ~~September 30, 2023, $52.3~~March 31, 2024, $20.4 billion ~~remains~~remained available for Class A and Class C share repurchases. In April 2024, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares.

The ~~following~~following table presents Class A and Class C shares repurchased and subsequently retired (in millions):


		Three Months Ended September 30, 2023			Nine Months Ended September 30, 2023
		Shares	Amount		Shares	Amount
		Three Months Ended March 31, 2024
		Three Months Ended March 31, 2024
		Three Months Ended March 31, 2024
		Shares
		Shares
		Shares
Class A share repurchases
Class A share repurchases
Class A share repurchases	Class A share repurchases	14	$	1,805	51	$	5,724
Class C share repurchases	Class C share repurchases	108	14,113		359	40,432
Class C share repurchases
Class C share repurchases
Total share repurchases(1)	Total share repurchases(1)	122	$	15,918	410	$	46,156
Total share repurchases(1)
Total share repurchases(1)

(1) Shares repurchased include unsettled repurchases as of ~~September 30, 2023.~~March 31, 2024.

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 volumes of 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.

2925


Dividends On April 25, 2024, the Board of Directors of Alphabet declared a cash dividend of $0.20 per share to be paid on June 17, 2024, to stockholders of record as of June 10, 2024, on each of the company’s Class A, Class B, and Class C shares. The company intends to pay quarterly cash dividends in the future, subject to review and approval by the company’s Board of Directors in its sole discretion. In connection with the cash dividend (and any future dividend the company’s Board of Directors may declare from time to time), the company will also award dividend equivalent units to holders of all unvested stock units in accordance with the Alphabet Inc. Amended and Restated 2021 Stock Plan and pursuant to each holder’s outstanding stock unit grant agreements, as amended. ~~Table of Contents~~			~~Alphabet Inc.~~

Note ~~11.~~10. Net Income Per Share

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):
Three Months Ended September 30,
2022 2023
Class A Class B Class C Class A Class B Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings $ 6,393 $ 946 $ 6,571 $ 9,271 $ 1,369 $ 9,049
Denominator
Number of shares used in per share computation 5,983 885 6,150 5,924 875 5,782
Basic net income per share $ 1.07 $ 1.07 $ 1.07 $ 1.56 $ 1.56 $ 1.56
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation $ 6,393 $ 946 $ 6,571 $ 9,271 $ 1,369 $ 9,049
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares 946 0 0 1,369 0 0
Reallocation of undistributed earnings (45) (6) 45 (96) (12) 96
Allocation of undistributed earnings $ 7,294 $ 940 $ 6,616 $ 10,544 $ 1,357 $ 9,145
Denominator
Number of shares used in basic computation 5,983 885 6,150 5,924 875 5,782
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A shares outstanding 885 0 0 875 0 0
Restricted stock units and other contingently issuable shares 0 0 79 0 0 115
Number of shares used in per share computation 6,868 885 6,229 6,799 875 5,897
Diluted net income per share $ 1.06 $ 1.06 $ 1.06 $ 1.55 $ 1.55 $ 1.55


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		Nine Months Ended September 30,
	Three Months Ended March 31,																		Three Months Ended March 31,
		2022						2023						2023			2024
		Class A		Class B		Class C		Class A		Class B		Class C		Class A	Class B	Class C		Class A		Class B	Class C
Basic net income per share:	Basic net income per share:
Numerator	Numerator
Numerator
Numerator
Allocation of undistributed earnings
Allocation of undistributed earnings
Allocation of undistributed earnings	Allocation of undistributed earnings	$	21,213	$	3,137	$	21,998	$	24,851	$	3,682	$	24,575

Denominator	Denominator
Denominator
Denominator
Number of shares used in per share computation
Number of shares used in per share computation
Number of shares used in per share computation	Number of shares used in per share computation	6,004		888		6,226		5,932		879		5,866

Basic net income per share	Basic net income per share	$	3.53	$	3.53	$	3.53	$	4.19	$	4.19	$	4.19

Basic net income per share

Basic net income per share
Diluted net income per share:	Diluted net income per share:
Numerator
Numerator
Numerator	Numerator

Allocation of undistributed earnings for basic computation	Allocation of undistributed earnings for basic computation	$	21,213	$	3,137	$	21,998	$	24,851	$	3,682	$	24,575

Allocation of undistributed earnings for basic computation

Allocation of undistributed earnings for basic computation

Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares

Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares

Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	3,137		0		0		3,682		0		0
Reallocation of undistributed earnings	Reallocation of undistributed earnings	(204)		(26)		204		(187)		(24)		187
Allocation of undistributed earnings	Allocation of undistributed earnings	$	24,146	$	3,111	$	22,202	$	28,346	$	3,658	$	24,762

Denominator	Denominator

Denominator

Denominator
Number of shares used in basic computation
Number of shares used in basic computation
Number of shares used in basic computation	Number of shares used in basic computation	6,004		888		6,226		5,932		879		5,866
Weighted-average effect of dilutive securities	Weighted-average effect of dilutive securities
Add:	Add:
Add:
Add:
Conversion of Class B to Class A shares outstanding
Conversion of Class B to Class A shares outstanding
Conversion of Class B to Class A shares outstanding	Conversion of Class B to Class A shares outstanding	888		0		0		879		0		0

Restricted stock units and other contingently issuable shares
Restricted stock units and other contingently issuable shares
Restricted stock units and other contingently issuable shares	Restricted stock units and other contingently issuable shares	0		0		111		0		0		84
Number of shares used in per share computation	Number of shares used in per share computation	6,892		888		6,337		6,811		879		5,950

Diluted net income per share	Diluted net income per share	$	3.50	$	3.50	$	3.50	$	4.16	$	4.16	$	4.16

Diluted net income per share

Diluted net income per share

For the periods presented above, 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 in liquidation in accordance with the Amended and Restated Certificate of Incorporation of Alphabet Inc.

Note ~~12.~~11. Compensation Plans

Stock-Based Compensation

For the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023,~~2024, total ~~stock-based~~stock based compensation (SBC) expense was ~~$5.0 billion and $5.8~~$5.3 billion, including amounts associated with awards we expect to settle in Alphabet stock of ~~$4.8~~$5.1 billion, and $5.6 billion, respectively. For the nine months ended September 30, 2022 and 2023, total SBC expense was $14.4 billion and $16.5 billion, including amounts associated with awards we expect to settle in Alphabet stock of $13.8 billion and $16.3 billion, respectively.for both periods.

~~During the nine months ended September 30, 2023,~~
~~total SBC expense includes~~ ~~$429 million~~ ~~associated with workforce reduction costs. See Note 7 for further information.~~

Stock-Based Award Activities

The following table summarizes the activities for unvested Alphabet restricted stock units (RSUs) for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 (in millions, except per share amounts):
Unvested Restricted Stock Units
Number of
Shares Weighted-
Average
Grant-Date
Fair Value
Unvested as of December 31, 2022 324 $ 107.98
Granted 255 $ 96.49
Vested (160) $ 100.31
Forfeited/canceled (26) $ 107.27
Unvested as of September 30, 2023 393 $ 103.71


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	Number of Shares	Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2023	338	$	104.93
Granted	159	$	133.43
Vested	(49)	$	107.61
Forfeited/canceled	(8)	$	106.64
Unvested as of March 31, 2024	440	$	114.91

As of ~~September 30, 2023,~~March 31, 2024, there was ~~$38.5~~$48.7 billion of unrecognized compensation cost related to unvested RSUs. This amount is expected to be recognized over a weighted-average period of ~~2.6~~2.9 years.

Note ~~13.~~12. Income Taxes

The following table presents provision for income taxes (in millions, except for effective tax rate):


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2022			2023			2022			2023
		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
		2023
		2023
		2023
Income before provision for income taxes
Income before provision for income taxes
Income before provision for income taxes	Income before provision for income taxes	$	16,233		$	21,197		$	54,181		$	61,305
Provision for income taxes	Provision for income taxes	$	2,323		$	1,508		$	7,833		$	8,197
Provision for income taxes
Provision for income taxes
Effective tax rate	Effective tax rate	14.3		%	7.1		%	14.5		%	13.4		%
Effective tax rate
Effective tax rate

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 ~~$7.1~~$9.4 billion and ~~$8.8~~$10.2 billion, ~~as of December 31, 2022 and September 30, 2023, respectively,~~ of which ~~$5.3~~$7.4 billion and ~~$6.8~~$8.1 billion, if recognized, would affect our effective tax rate, as of December 31, 2023 and March 31, 2024, respectively.

Note ~~14.~~13. 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, ~~hardware,~~devices, Google Maps, Google Play, Search, and YouTube. Google Services generates revenues primarily from advertising; ~~sales~~fees received for consumer subscription-based products such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One; the sale of apps and in-app purchases and ~~hardware; and fees received for subscription-based products such as YouTube Premium and YouTube TV.~~devices.

•Google Cloud includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. 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 enterprise services.

•Other Bets is a combination of multiple operating segments that are not individually material. Revenues from Other Bets are generated primarily from the sale of ~~health technology~~healthcare-related services and internet services.

Revenues, certain costs, such as costs associated with content and traffic acquisition, certain engineering activities, and ~~hardware,~~devices, as well as certain operating expenses are directly attributable to our segments. Due to the integrated nature of Alphabet, other costs and expenses, such as technical infrastructure and office facilities, are managed centrally at a consolidated 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 the first quarter of 2023 DeepMind is reported as part of Alphabet's unallocated corporate costs instead of within Other Bets. Additionally, beginning in the first quarter of 2023, we updated and simplified our cost allocation methodologies to provide our business leaders 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's unallocated corporate costs 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;~~activities, including development costs of our general AI models; corporate initiatives such as our philanthropic activities; corporate shared costs such as certain finance, human resource, and legal costs, including certain fines and settlements. Charges associated with ~~reductions in our workforce~~employee severance and office space ~~announced~~reductions during 2023 and employee severance in ~~January 2023 are~~the first quarter of 2024, were not allocated 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):


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
		March 31,
		March 31,
		March 31,



Revenues:
Revenues:
Revenues:	Revenues:
Google Services	Google Services	$	61,377	$	67,986	$	185,690	$	196,232
Google Services
Google Services
Google Cloud
Google Cloud
Google Cloud	Google Cloud	6,868		8,411		18,965		23,896
Other Bets	Other Bets	209		297		842		870
Other Bets
Other Bets
Hedging gains (losses)
Hedging gains (losses)
Hedging gains (losses)	Hedging gains (losses)	638		(1)		1,291		86
Total revenues	Total revenues	$	69,092	$	76,693	$	206,788	$	221,084
Total revenues
Total revenues


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
		March 31,
		March 31,
		March 31,



Operating income (loss):
Operating income (loss):
Operating income (loss):	Operating income (loss):
Google Services	Google Services	$	18,883	$	23,937	$	62,477	$	69,128
Google Services
Google Services
Google Cloud
Google Cloud
Google Cloud	Google Cloud	(440)		266		(1,736)		852
Other Bets	Other Bets	(1,225)		(1,194)		(3,399)		(3,232)
Corporate costs, unallocated		(83)		(1,666)		(660)		(6,152)
Other Bets
Other Bets
Alphabet-level activities
Alphabet-level activities
Alphabet-level activities
Total income from operations	Total income from operations	$	17,135	$	21,343	$	56,682	$	60,596
Total income from operations
Total income from operations

~~For~~See Note 2 for information relating to revenues by ~~geography, see Note 2.~~geography.

The following table presents long-lived assets by geographic area, which includes property and equipment, net and operating lease assets (in millions):


		As of December 31, 2022		As of September 30, 2023
	As of December 31, 2023					As of December 31, 2023	As of March 31, 2024
Long-lived assets:	Long-lived assets:
United States
United States
United States	United States	$	93,565	$	104,113
International	International	33,484		35,791
Total long-lived assets	Total long-lived assets	$	127,049	$	139,904

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ITEM 2.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 "Note About Forward-Looking Statements" and our consolidated financial statements and related notes included under Item 1 of this Quarterly Report on Form 10-Q as well as our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022,~~2023, including Part I, Item 1A "Risk ~~Factors.~~Factors," as updated in this Quarterly Report on Form 10-Q.

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 further details on our segments, see Note 1413 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.

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 fees received for subscription-based products, apps and in-app purchases, and ~~hardware; and fees received for subscription-based products.~~devices. For ~~details~~additional information on how we recognize revenue, see Note 1 of the Notes to Consolidated Financial Statements included in Part II, Item 8 in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023.

In addition to the long-term trends and their financial effect on our business ~~noted~~discussed in "Trends in Our Business and Financial Effect" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022,~~2023, fluctuations in our revenues have been and may continue to be affected by a combination of 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 other measures 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 ~~other~~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 ~~other~~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.), and other 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 and cost-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


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Play. Cost-per-click is defined 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, and counting the number of paid clicks and the number of impressions, and for identifying the revenues generated by the corresponding click and impression activity.

Fluctuations in our advertising revenues, as well as the change in paid clicks and cost-per-click on Google Search & other properties 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 ~~additional~~ factors in addition to the general factors described above, 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 ~~Other~~subscriptions, platforms, and devices

Google ~~other~~subscriptions, platforms, and devices revenues are comprised of the following:

•consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One;

•platforms, which primarily include revenues from Google Play ~~which includes~~from the sales of apps and in-app purchases;

•~~hardware,~~devices, which ~~includes~~primarily include sales of ~~Fitbit wearable devices, Google Nest home products, and~~the Pixel family of devices;

•~~YouTube non-advertising, which includes subscription revenues from services such as YouTube Premium and YouTube TV;~~ and

•other products and services.

Fluctuations in our Google ~~other~~subscriptions, platforms, and devices revenues have been, and may continue to be, affected by ~~additional~~ factors in addition to the general factors described above, such as changes in customer usage and demand, number of subscribers, and fluctuations in the timing of product launches.

Google Cloud

Google Cloud revenues are comprised of the following:

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

•Google Workspace, which includes ~~fees~~subscriptions for cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, ~~Calendar~~ and ~~Meet;~~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 ~~additional~~ factors in addition to the general factors described above, such as customer usage.

Other Bets

Revenues from Other Bets are generated primarily from the sale of ~~health technology~~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, are generally less variable in nature and may not correlate to changes in revenue.


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Additionally, fluctuations in compensation expenses may not directly correlate with changes in headcount, in particular due to 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~~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.~~developers; and

◦~~Amounts~~amounts paid to Google Network partners primarily for ads displayed on their properties.

•Other cost of revenues primarily includes:

◦~~Content~~compensation expense related to our data centers and other operations such as content review and customer and product 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).;

◦~~Expenses associated with~~depreciation expense related to our ~~data centers (including bandwidth, compensation expenses, depreciation, energy,~~technical infrastructure; and ~~other equipment costs) as well as other operations costs (such as content review as well as customer and product support costs).~~

◦~~Inventory~~inventory and other costs related to the ~~hardware~~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 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:

•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 and product 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 other administrative 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

~~Other income (expense),~~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 ~~details,~~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 in Part II, Item 8 and Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for


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the fiscal year ended December 31, ~~2022~~2023 as well as Note 3 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.

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 to reserves that are considered appropriate as well as the related net interest and penalties.

For additional ~~details,~~information, see Note 1 of the Notes to Consolidated Financial Statements included in Part II, Item 8 in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023 as well as Note 1312 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.

Executive Overview

The following table summarizes our consolidated financial results (in millions, except per share information and percentages):


			Three Months Ended
		September 30,
			2022			2023			$ Change		% Change
			Three Months Ended
			Three Months Ended
			Three Months Ended
		March 31,
		March 31,
		March 31,
			2023
			2023
			2023																	2024							$ Change							% Change
Consolidated revenues	Consolidated revenues		$	69,092		$	76,693		$	7,601	11	%	Consolidated revenues			$	69,787		$				$	80,539		$				$	10,752		15				15		%
Change in consolidated constant currency revenues(1)	Change in consolidated constant currency revenues(1)										11	%	Change in consolidated constant currency revenues(1)																												16	%

Cost of revenues	Cost of revenues		$	31,158		$	33,229		$	2,071	7	%
Cost of revenues
Cost of revenues																$	30,612						$	33,712						$	3,100					10		%
Operating expenses	Operating expenses		$	20,799		$	22,121		$	1,322	6	%	Operating expenses			$	21,760		$				$	21,355		$				$	(405)		(2)				(2)		%

Operating income
Operating income
Operating income	Operating income		$	17,135		$	21,343		$	4,208	25	%		$	17,415			$			$	25,472			$			$	8,057			46			46		%
Operating margin	Operating margin		25		%	28		%			3	%	Operating margin			25		%					32		%														7	%

Other income (expense), net	Other income (expense), net		$	(902)		$	(146)		$	756	(84)	%
Other income (expense), net
Other income (expense), net																$	790						$	2,843						$	2,053					260		%

Net Income
Net Income
Net Income	Net Income		$	13,910		$	19,689		$	5,779	42	%		$	15,051			$			$	23,662			$			$	8,611			57			57		%
Diluted EPS	Diluted EPS		$	1.06		$	1.55		$	0.49	46	%	Diluted EPS			$	1.17		$				$	1.89		$				$	0.72		62				62		%

(1) See "Use of Non-GAAP Constant Currency Measures" below for details relating to our use of constant currency information.

•Revenues were ~~$76.7~~$80.5 billion, an increase of ~~11%~~15% year over year, primarily driven by an increase in Google Services revenues of ~~$6.6~~$8.4 billion, or ~~11%~~14%, and an increase in Google Cloud revenues of ~~$1.5~~$2.1 billion, or ~~22%~~28%.

•Total constant currency revenues, which exclude the effect of hedging, increased ~~11%~~16% year over year.

•Cost of revenues was ~~$33.2~~$33.7 billion, an increase of 7% year over year, primarily driven by an increase in content acquisition costs and TAC. An overall increase in data center and other operations costs was partially offset by a reduction in depreciation expense due to the change in the estimated useful lives of our servers and certain network equipment.

•~~Operating expenses were $22.1 billion, an increase of 6%~~10% year over year, primarily driven by increases in TAC, content acquisition costs, and depreciation expense. These increases were partially offset by decreases in compensation expenses, largely ~~due~~the result of a reduction in employee severance and related charges, and charges related to ~~an increase~~our office space optimization efforts.

•Operating expenses were $21.4 billion, a decrease of 2% year over year, primarily driven by decreases in ~~stock-based~~charges related to our office space optimization efforts, compensation, expenses, largely the result of a reduction in employee severance and related charges, and charges related to legal ~~matters,~~matters. These decreases were partially offset by ~~a decrease in advertising and promotional activities. Additionally, operating expenses benefited from a reduction~~an increase in depreciation ~~expense due to the change in the estimated useful lives of our servers and certain network equipment.~~expense.

Other Information

•~~In January 2023, we announced~~On April 25, 2024, the Board of Directors of Alphabet approved the initiation of a ~~reduction~~cash dividend program, and declared a cash dividend of ~~our workforce,~~$0.20 per share that will be paid on June 17, 2024, to stockholders of record as of June 10, 2024, on each of the company’s Class A, Class B, and as a result we recorded employee severance and related charges of $86 million and $2.1 billion for the three and nine months ended September 30, 2023, respectively. In addition, we are taking actions to optimize our global office space. As a result, exit charges recorded during the three and nine months ended September 30, 2023 were $16 million and $649 million, respectively. ~~In addition to these exit charges, for the three and nine months ended September 30, 2023, we incurred $207 million in accelerated rent and accelerated depreciation. We may~~


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~~incur additional charges in the future as we further evaluate our real estate needs. For additional information, see~~Class C shares. See Note 79 of the Notes to Consolidated Financial Statements included in Item 18 of this ~~Quarterly~~Annual Report on Form ~~10-Q.~~

•~~In January 2023, we completed an assessment of the useful lives of our servers and network equipment, resulting in a change 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 $977 million and $2.9 billion for the three and nine months ended September 30, 2023, respectively, recognized primarily in cost of revenues and R&D expenses. For~~10-Q for additional ~~information, see Note 1 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.~~

•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 only applies to foreign taxes paid or accrued in the fiscal years 2022 and 2023. A cumulative one-time adjustment applicable to prior periods for this tax rule change was recorded in the third quarter of 2023 and resulted in our effective tax rate of 7.1% for the quarter ended September 30, 2023 and 13.4% for the nine months ended September 30, 2023.information.

•Repurchases of Class A and Class C shares were ~~$15.9~~$3.4 billion and $12.7 billion, respectively, totaling $16.1 billion for the three months ended ~~September 30, 2023. See~~March 31, 2024. In April 2024, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares. For additional information, see Note 109 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q for additional information.

•Compensation expenses included employee severance and related charges for the three months ended March 31, 2024 of $716 million, a $1.3 billion decrease in severance and related charges as compared to the three months ended March 31, 2023. For the first quarter of 2024, these charges are included within cost of revenues, research and development, sales and marketing, and general and administrative expenses in the amounts of $153 million, $247 million, $217 million, and $99 million, respectively.

•Operating cash flow was ~~$30.7~~$28.8 billion for the three months ended September 30, 2023, which reflects the 2023 IRS payment deferral relief made available to taxpayers headquartered in designated counties in California. On October 16, 2023, we made an estimated income tax payment to the IRS of $10.5 billion that will be reflected in our fourth quarter operating cash flow.March 31, 2024.

•Capital expenditures, which primarily reflected investments in technical infrastructure, were ~~$8.1~~$12.0 billion for the three months ended ~~September 30, 2023.~~March 31, 2024.

•As of ~~September 30, 2023,~~March 31, 2024, we had ~~182,381~~180,895 employees. ~~Substantially all of the employees affected by the reduction of our workforce were no longer included in our headcount as of September 30, 2023.~~


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Financial Results

Revenues

The following table presents revenues by type (in millions):


		Three Months Ended				Nine Months Ended				Three Months Ended
		September 30,				September 30,
	March 31,											March 31,
		2022		2023		2022		2023		2023	2024
Google Search & other	Google Search & other	$	39,539	$	44,026	$	119,846	$	127,013
YouTube ads	YouTube ads	7,071		7,952		21,280		22,310
Google Network	Google Network	7,872		7,669		24,305		23,015
Google advertising	Google advertising	54,482		59,647		165,431		172,338
Google other		6,895		8,339		20,259		23,894
Google subscriptions, platforms, and devices
Google Services total	Google Services total	61,377		67,986		185,690		196,232
Google Cloud	Google Cloud	6,868		8,411		18,965		23,896
Other Bets	Other Bets	209		297		842		870
Hedging gains (losses)	Hedging gains (losses)	638		(1)		1,291		86
Total revenues	Total revenues	$	69,092	$	76,693	$	206,788	$	221,084

Google Services

Google advertising revenues

Google Search & other

Google Search & other revenues increased ~~$4.5 billion and $7.2~~$5.8 billion from the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 to the three ~~and nine~~ months ended ~~September 30, 2023, respectively.~~March 31, 2024. 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 in advertiser ~~spending,~~spending; and improvements we have made in ad formats and delivery. ~~Growth was adversely affected by changes in foreign currency exchange rates for the nine months ended September 30, 2023, particularly during the first six months of the year.~~

YouTube ads

YouTube ads revenues increased ~~$881 million and $1.0~~$1.4 billion from the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 to the three ~~and nine~~ months ended ~~September 30, 2023, respectively.~~March 31, 2024. The growth was driven by our ~~brand advertising products followed by our~~ direct response and brand advertising products, both of which benefited from increased spending by our advertisers. ~~Growth was adversely affected by changes in foreign currency exchange rates for the nine months ended September 30, 2023, particularly during the first six months of the year.~~

Google Network

Google Network revenues decreased ~~$203~~$83 million ~~and $1.3 billion~~ from the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 to the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024 primarily driven by a decrease in ~~Google Ad Manager and~~ AdSense revenues. Additionally, Google Network revenues were adversely affected by changes in foreign currency exchange rates for the nine months ended September 30, 2023, particularly during the first six months of the year.

Monetization Metrics

~~Paid clicks and cost-per-click~~

The following table presents ~~year-over-year~~ 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 three months ended March 31, 2023 to three months ended March 31, 2024:


Google Search & other
Paid clicks change	5	%
Cost-per-click change	8	%
Google Network
Impressions change	(13)	%
Cost-per-impression change	14	%

Changes in paid clicks and ~~cost-per-click (expressed as a percentage):~~

Three Months Ended September 30, Nine Months Ended September 30,
2023 2023
Paid clicks change 7% 8%
Cost-per-click change 4% (2)%


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~~Paid clicks increased from the three months ended September 30, 2022 to the three months ended September 30, 2023~~impressions are driven by a number of interrelated factors, including ~~an increase~~changes in advertiser spending; ongoing product and policy changes; and, as it relates to paid clicks, fluctuations in search queries resulting from ~~growth~~changes in user adoption and usage, primarily on mobile ~~devices; growth~~devices.

Changes in ~~advertiser spending;~~cost-per-click and ~~ongoing product and policy changes. Cost-per-click increased from the three months ended September 30, 2022 to the three months ended September 30, 2023~~cost-per-impression are driven by a number of interrelated factors including changes in device mix, geographic mix, advertiser spending, ongoing product and policy changes, ~~and property mix.~~

Paid clicks increased from the nine months ended September 30, 2022 to the nine months ended September 30, 2023 driven by a number of interrelated factors, including an increase in search queries resulting from growth in user adoption and usage on mobile devices; growth in advertiser spending; and ongoing product and policy changes. Cost-per-click decreased from the nine months ended September 30, 2022 to the nine months ended September 30, 2023, driven by a number of interrelated factors, including changes in device mix, ~~geographic mix, advertiser spending, ongoing product and policy changes, and~~ property mix, ~~as well as by the adverse effect of~~and changes in foreign currency exchange ~~rates for the nine months ended September 30, 2023, particularly during the first six months of the year.~~rates.

~~Impressions~~Google subscriptions, platforms, and ~~cost-per-impression~~devices

~~The following table presents year-over-year changes in impressions~~Google subscriptions, platforms, and ~~cost-per-impression (expressed as a percentage):~~

Three Months Ended September 30, Nine Months Ended September 30,
2023 2023
Impressions change (3)% (2)%
Cost-per-impression change 1% (3)%

~~Impressions decreased~~devices revenues increased $1.3 billion from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023,~~March 31, 2024, primarily driven ~~by decreases in Google Ad Manager and AdSense, partially offset~~ by an increase in ~~AdMob.~~ ~~The increase~~subscription revenues, largely from growth in ~~cost-per-impression from~~ the ~~three months ended September 30, 2022 to the three months ended September 30, 2023~~ ~~was~~ ~~driven by a~~ number of ~~interrelated factors, including ongoing product and policy changes, changes in device mix, geographic mix, product mix, and property mix.~~

Impressions decreased from the nine months ended September 30, 2022 to the nine months ended September 30, 2023, driven by decreases in Google Ad Manager and AdSense, partially offset by an increase in AdMob. ~~The~~ ~~decrease in cost-per-impression~~ ~~from the nine months ended September 30, 2022 to the nine months ended September 30, 2023 was~~ driven by a number of interrelated factors, including ongoing product and policy changes, changes in device mix, geographic mix, product mix, and property mix, as well as the adverse effect of changes in foreign currency exchange ratespaid subscribers for ~~the nine months ended September 30, 2023, particularly during the first six months of the year.~~

~~Google other revenues~~

Google other revenues increased $1.4 billion and $3.6 billion from the three and nine months ended September 30, 2022 to the three and nine months ended September 30, 2023, primarily driven by growth in YouTube non-advertising, largely due to an increase in paid subscribers. Growth was adversely affected by changes in foreign currency exchange rates for the nine months ended September 30, 2023, particularly during the first six months of the year.services.

Google Cloud

Google Cloud revenues increased ~~$1.5 billion and $4.9~~$2.1 billion from the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 to the three ~~and nine~~ months ended ~~September 30, 2023, respectively.~~March 31, 2024. Growth was primarily driven by Google Cloud Platform followed by Google Workspace offerings. Google Cloud's infrastructure and platform services were the largest drivers of growth in Google Cloud Platform.


~~Table of Contents~~			~~Alphabet Inc.~~

Revenues by Geography

The following table presents revenues by geography as a percentage of revenues, determined based on the addresses of our customers:


		Three Months Ended
		Three Months Ended
		Three Months Ended



		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023
United States	United States	48	%	47	%	47	%	47	%
United States
United States
EMEA
EMEA
EMEA	EMEA	28	%	30	%	29	%	30	%
APAC	APAC	17	%	17	%	17	%	17	%
APAC
APAC
Other Americas
Other Americas
Other Americas	Other Americas	6	%	6	%	6	%	6	%
Hedging gains (losses)	Hedging gains (losses)	1	%	0	%	1	%	0	%
Hedging gains (losses)
Hedging gains (losses)

For ~~further details on revenues by geography,~~additional information, see Note 2 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.

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 percentage change 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 a constant currency basis in addition to GAAP results helps improve the ability to understand our performance, because it excludes the effects of foreign currency volatility that are not indicative of 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 constant currency revenues to determine the constant currency revenue percentage change on a year-on-year basis. Constant currency 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 over prior 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 by other companies and are not a measure of performance presented in accordance with GAAP.


~~Table of Contents~~			~~Alphabet Inc.~~

The following table presents the foreign currency exchange effect on international revenues and total revenues (in millions, except percentages):


							Three Months Ended September 30, 2023
													% Change from Prior Period
		Three Months Ended September 30,					Less FX Effect			Constant Currency Revenues			As Reported				Less Hedging Effect		Less FX Effect				Constant Currency Revenues
		2022		2023
						Three Months Ended March 31, 2024																																																											Three Months Ended March 31, 2024
																	% Change from Prior Period																																																					% Change from Prior Period
	Three Months Ended March 31,																																		Three Months Ended March 31,								Less FX Effect					Constant Currency Revenues							As Reported			Less Hedging Effect				Less FX Effect						Constant Currency Revenues
	2023
United States
United States
United States	United States	$	33,372	$	36,354			$	0		$	36,354		9		%				0		%		9		%	$	32,864		$		$	38,737			$		$	0		$		$	38,737	18				18	%									0	%				18		%
EMEA	EMEA	19,450		22,661			803			21,858			17		%				5		%		12		%	EMEA		21,078			23,788			23,788			204			204		23,584			23,584		13					13		%							1		%				12		%
APAC	APAC	11,494		13,126			(270)			13,396			14		%				(3)		%		17		%	APAC		11,681			13,289			13,289			(439)			(439)		13,728			13,728		14					14		%							(4)		%				18		%
Other Americas	Other Americas	4,138		4,553			(106)			4,659			10		%				(3)		%		13		%	Other Americas		4,080			4,653			4,653			(152)			(152)		4,805			4,805		14					14		%							(4)		%				18		%
Revenues, excluding hedging effect	Revenues, excluding hedging effect	68,454		76,694			427			76,267			12		%				1		%		11		%	Revenues, excluding hedging effect		69,703			80,467			80,467			(387)			(387)		80,854			80,854		15					15		%							(1)		%				16		%
Hedging gains (losses)	Hedging gains (losses)	638		(1)
Total revenues(1)	Total revenues(1)	$	69,092	$	76,693					$	76,267		11		%		(1)	%	1		%		11		%
Total revenues(1)
Total revenues(1)																												$	69,787				$	80,539											$	80,854					15		%			0	%		(1)	%				16		%

(1)Total constant currency revenues of ~~$76.3~~$80.9 billion for the three months ended ~~September 30, 2023~~March 31, 2024 increased ~~$7.8~~$11.2 billion compared to ~~$68.5~~$69.7 billion in revenues, excluding hedging effect, for the three months ended ~~September 30, 2022.~~March 31, 2023.

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, ~~and to a lesser extent the British pound,~~ 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 to the U.S. dollar strengthening relative to the Argentine peso.

Nine Months Ended September 30, 2023
% Change from Prior Period
Nine Months Ended September 30, Less FX Effect Constant Currency Revenues As Reported Less Hedging Effect Less FX Effect Constant Currency Revenues
2022 2023
United States $ 97,832 $ 104,291 $ 0 $ 104,291 7 % 0 % 7 %
EMEA 60,300 66,028 (645) 66,673 9 % (2) % 11 %
APAC 35,045 37,535 (1,669) 39,204 7 % (5) % 12 %
Other Americas 12,320 13,144 (579) 13,723 7 % (4) % 11 %
Revenues, excluding hedging effect 205,497 220,998 (2,893) 223,891 8 % (1) % 9 %
Hedging gains (losses) 1,291 86
Total revenues(1)
$ 206,788 $ 221,084 $ 223,891 7 % (1) % (1) % 9 %

~~(1)~~Total constant currency revenues of $223.9 billion for the nine months ended September 30, 2023 increased $18.4 billion compared to $205.5 billion in revenues, excluding hedging effect, for the nine months ended September 30, 2022.

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

~~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 to the U.S. dollar strengthening relative to the Argentine peso.~~

4235


~~Table of Contents~~			~~Alphabet Inc.~~

Costs and Expenses

Cost of Revenues

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


		Three Months Ended
		Three Months Ended
		Three Months Ended



		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2022			2023			2022			2023
TAC	TAC	$	11,826		$	12,642		$	36,030		$	36,900
TAC
TAC
Other cost of revenues
Other cost of revenues
Other cost of revenues	Other cost of revenues	19,332			20,587			54,831			58,857
Total cost of revenues	Total cost of revenues	$	31,158		$	33,229		$	90,861		$	95,757
Total cost of revenues
Total cost of revenues
Total cost of revenues as a percentage of revenues	Total cost of revenues as a percentage of revenues	45		%	43		%	44		%	43		%
Total cost of revenues as a percentage of revenues
Total cost of revenues as a percentage of revenues

Cost of revenues increased ~~$2.1~~$3.1 billion from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023~~March 31, 2024 due to an increase in other cost of revenues and TAC of ~~$1.3~~$1.9 billion and ~~$816 million, respectively. Cost of revenues increased $4.9~~$1.2 billion, ~~from the nine months ended September 30, 2022 to the nine months ended September 30, 2023, due to an increase in other cost of revenues and TAC of $4.0 billion and $870 million,~~ respectively.

The increase in TAC from the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 to the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 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 ~~21.7%~~21.5% to ~~21.2%~~21.0% from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023 and decreased from 21.8% to 21.4% from the nine months ended September 30, 2022 to the nine months ended September 30, 2023~~March 31, 2024 primarily due to a revenue mix shift from Google Network properties to Google Search & other properties. The TAC rate on Google Search & other revenues ~~and~~was substantially consistent from the three months ended March 31, 2023 to the three months ended March 31, 2024. The TAC rate on Google Network revenues ~~were both substantially consistent~~reflected a slight increase from the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 to the three ~~and nine~~ months ended ~~September 30, 2023.~~March 31, 2024 due to a combination of factors, none of which were individually significant.

The increase in other cost of revenues from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023~~March 31, 2024 was primarily due to increases in content acquisition costs, largely for YouTube. In addition, an overall increase in data center and other operations costs was partially offset by a reduction in depreciation expense due to the change in the estimated useful lives of our servers and certain network equipment.

~~The increase in other cost of revenues from the nine months ended September 30, 2022 to the nine months ended September 30, 2023~~ ~~was~~ primarily due to increases in content acquisition costs, largely for YouTube, and ~~data center~~depreciation expense. These increases were partially offset by decreases in compensation expenses, largely the result of a reduction in employee severance and ~~other operations costs. The overall increase in data center~~related charges of $308 million, and ~~other operations costs includes $723 million of~~ charges related to ~~employee severance associated with the reduction of our workforce and~~ our office space optimization efforts ~~partially offset by a reduction in depreciation expense due to the change in the estimated useful lives~~ of ~~our servers and certain network equipment.~~$220 million.

Research and Development

The following table presents R&D expenses (in millions, except percentages):


		Three Months Ended
		Three Months Ended
		Three Months Ended



		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2022			2023			2022			2023
Research and development expenses	Research and development expenses	$	10,273		$	11,258		$	29,233		$	33,314
Research and development expenses
Research and development expenses
Research and development expenses as a percentage of revenues	Research and development expenses as a percentage of revenues	15		%	15		%	14		%	15		%
Research and development expenses as a percentage of revenues
Research and development expenses as a percentage of revenues

R&D expenses increased ~~$985~~$435 million from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023,~~March 31, 2024, primarily driven by increases in ~~compensation expenses~~depreciation expense of ~~$375~~$308 million and ~~depreciation~~third-party services fees of ~~$223~~$253 million, partially offset by a decrease in charges associated with our office space optimization efforts of $247 million. The $375 million increase in compensation expenses was largely due to an increase in stock-based compensation. The $223 million increase in depreciation includes the benefit of the change in the estimated useful lives of our servers and network equipment.

~~R&D expenses increased $4.1 billion from the nine months ended September 30, 2022 to the nine months ended September 30, 2023, primarily driven by increases~~Additionally, a decrease in compensation expenses of ~~$2.4 billion and depreciation of $517 million. The $2.4 billion increase in compensation expenses~~$64 million was primarily the result of a ~~6% increase in average headcount, after adjusting for roles affected by the~~ reduction ~~in workforce, $847 million~~ in employee severance and related charges ~~associated with the reduction~~ of ~~our workforce, and~~$588 million. This decrease was partially offset by an increase in ~~stock-based compensation. The $517~~


~~Table of Contents~~			~~Alphabet Inc.~~

SBC expense of $320 million, ~~increase in depreciation includes the benefit of the change in the estimated useful lives of our servers~~excluding employee severance and ~~network equipment.~~related charges.

Sales and Marketing

The following table presents sales and marketing expenses (in millions, except percentages):


		Three Months Ended
		Three Months Ended
		Three Months Ended



		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2022			2023			2022			2023
Sales and marketing expenses	Sales and marketing expenses	$	6,929		$	6,884		$	19,384		$	20,198
Sales and marketing expenses
Sales and marketing expenses
Sales and marketing expenses as a percentage of revenues	Sales and marketing expenses as a percentage of revenues	10		%	9		%	9		%	9		%
Sales and marketing expenses as a percentage of revenues
Sales and marketing expenses as a percentage of revenues

Sales and marketing expenses decreased ~~$45~~$107 million from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023,~~March 31, 2024, primarily driven by a decrease in ~~advertising and promotional activities of $358 million, largely offset by an increase in~~ compensation expenses of ~~$331~~$85 million, ~~due to~~

largely the result of a ~~combination~~reduction in employee severance and related charges of ~~factors, none of which were individually significant.~~

~~Sales and marketing expenses increased $814~~$228 million, ~~from the nine months ended September 30, 2022 to the nine months ended September 30, 2023, primarily driven by an increase in compensation expenses of $1.4 billion,~~ partially offset by a decrease in advertising and promotional activities of $558 million. The $1.4 billion increase in compensation expenses was largely the result of $494 million in employee severance charges associated with the reduction in our workforce in addition to a combination of ~~other~~ factors, none of which were individually significant.

General and Administrative

The following table presents general and administrative expenses (in millions, except percentages):


		Three Months Ended
		Three Months Ended
		Three Months Ended



		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2022			2023			2022			2023
General and administrative expenses	General and administrative expenses	$	3,597		$	3,979		$	10,628		$	11,219
General and administrative expenses
General and administrative expenses
General and administrative expenses as a percentage of revenues	General and administrative expenses as a percentage of revenues	5		%	5		%	5		%	5		%
General and administrative expenses as a percentage of revenues
General and administrative expenses as a percentage of revenues

General and administrative expenses ~~increased $382~~decreased $733 million from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023,~~March 31, 2024, primarily driven by ~~an increase~~a reduction in charges related to legal matters of ~~$589 million.~~

General and administrative expenses increased $591 million from the nine months ended September 30, 2022 to the nine months ended September 30, 2023, primarily driven by increases in charges related to legal matters of $465$248 million and ~~compensation expenses of $331 million, largely due to $263 million in employee severance charges associated with the reduction in our workforce in addition to~~ a combination of ~~other~~ factors, none of which were individually significant.

Segment Profitability

The following table presents segment operating income (loss) (in millions):


		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
		2023
		2023
		2023

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2023		2022		2023

Operating income (loss):

Operating income (loss):

Operating income (loss):	Operating income (loss):
Google Services	Google Services	$	18,883	$	23,937	$	62,477	$	69,128
Google Services
Google Services
Google Cloud
Google Cloud
Google Cloud	Google Cloud	(440)		266		(1,736)		852
Other Bets	Other Bets	(1,225)		(1,194)		(3,399)		(3,232)
Corporate costs, unallocated(1)		(83)		(1,666)		(660)		(6,152)
Other Bets
Other Bets
Alphabet-level activities(1)
Alphabet-level activities(1)
Alphabet-level activities(1)
Total income from operations	Total income from operations	$	17,135	$	21,343	$	56,682	$	60,596
Total income from operations
Total income from operations

(1)In addition to the ~~Alphabet-level~~ costs included in ~~unallocated corporate costs,~~Alphabet-level activities, hedging gains (losses) related to revenue were~~$638~~ $84 million and ~~$(1)~~$72 million for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023,~~2024, respectively ~~and $1.3 billion and $86 million~~. For the ~~for the nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023, respectivel~~2024,~~y. For~~ Alphabet-level activities included substantially all of the ~~three and nine months~~


~~Table of Contents~~			~~Alphabet Inc.~~

~~ended September 30, 2023, unallocated corporate costs include~~ charges related to ~~the reductions in~~employee severance and our ~~workforce and~~ office space exit charges totaling $102 million and $2.7 billion, respectively. In addition, for the three and nine months ended September 30, 2023, we incurred $207 million in accelerated rent and accelerated depreciation. Seeoptimization efforts. For additional information relating to our segments, see Note 713 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q for more information relating to our workforce reduction and other initiatives. See also Note 14 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q for further information relating to our segments.10-Q.

Google Services

Google Services operating income increased ~~$5.1~~$6.2 billion from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023.~~March 31, 2024. The increase in operating income was primarily driven by an increase in revenues, partially offset by ~~an increase~~increases in TAC and content acquisition ~~costs and TAC.~~costs. Additionally, ~~operating income benefited from~~ a reduction in ~~costs driven by~~compensation expenses contributed to the ~~change~~increase in ~~the estimated useful lives of our servers and certain network equipment.~~operating income.

Google ~~Services~~Cloud

Google Cloud operating income increased ~~$6.7 billion~~$709 million from the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 to the ~~nine~~three months ended ~~September 30, 2023.~~March 31, 2024. The increase in operating income was primarily driven by an increase in revenues, partially offset by ~~an increase~~increases in compensation expenses, ~~and content acquisition costs. Additionally, operating income benefited from a reduction in costs~~largely driven by ~~the change in the estimated useful lives of our servers~~headcount growth, and ~~certain network equipment.~~

~~Google Cloud~~

~~Google Cloud operating income of $266 million~~usage costs for the three months ended September 30, 2023 compared to an operating loss of $440 million for the three months ended September 30, 2022 represents an increase of $706 million. Operating income of $852 million for the nine months ended September 30, 2023 compared to an operating loss of $1.7 billion for the nine months ended September 30, 2022 represents an increase of $2.6 billion. The increase in operating income was primarily driven by revenue growth, partially offset by an increase in compensation expenses. 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.technical infrastructure assets.

Other Bets

Other Bets operating loss decreased ~~$31~~$205 million from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023~~March 31, 2024 primarily due to ~~a combination of factors, none of which were individually significant.~~growth in revenues.

Other Bets operating loss decreased $167 million from the nine months ended September 30, 2022 to the nine months ended September 30, 2023, primarily driven by a reduction in valuation-based compensation liabilities related to certain Other Bets.

Other Income (Expense), Net

The following table presents OI&E (in millions):

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2023 2022 2023
Other income (expense), net $ (902) $ (146) $ (2,501) $ 709


	Three Months Ended
	March 31,
	2023		2024
Interest income	$	797	$	1,061
Interest expense	(80)		(94)
Foreign currency exchange gain (loss), net	(210)		(238)
Gain (loss) on debt securities, net	(293)		(462)
Gain (loss) on equity securities, net	377		2,243
Performance fees	118		104
Income (loss) and impairment from equity method investments, net	(51)		(26)
Other	132		255
Other income (expense), net	$	790	$	2,843

OI&E increased ~~$756 million~~$2.1 billion from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023~~March 31, 2024. The increase was primarily due to ~~changes~~net unrealized gains in non-marketable equity securities due to fair value adjustments related to observable transactions and increased interest income and gains and losses on equity securities, debt securities and foreign currency exchange. In the three months ended September 30, 2023, we recognized $1.1 billion of interest income. This was partially offset by $503 million of net losses on debt securities, $311 million net losses on foreign currency exchange, and $224 million of net unrealized losses on marketable equity securities. In the three months ended September 30, 2022, we recognized $731 million of net losses on debt securities and $488 million of net unrealized losses on non-marketable equity securities. This was partially offset by $615 million of interest income recognized.

~~OI&E increased $3.2 billion from the nine months ended September 30, 2022 to the nine months ended September 30, 2023, primarily~~ due to ~~unrealized gains and losses on equity securities and changes in~~ interest income. In the nine months ended September 30, 2023, we recognized $2.8 billion of interest income. This was partially offset by $678 million of net unrealized losses on non-marketable equity securities. In the nine months ended September 30, 2022, we recognized $2.5 billion of net unrealized losses on marketable equity securities. This was partially offset by $1.5 billion of interest income recognized.rates.


~~Table of Contents~~			~~Alphabet Inc.~~

~~See~~For additional information, see Note 6 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Provision for Income Taxes

The following table presents provision for income taxes (in millions, except effective tax rate):

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2023 2022 2023
Income before provision for income taxes $ 16,233 $ 21,197 $ 54,181 $ 61,305
Provision for income taxes $ 2,323 $ 1,508 $ 7,833 $ 8,197
Effective tax rate 14.3 % 7.1 % 14.5 % 13.4 %

On July 21, 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. This announcement only applies to foreign taxes paid or accrued in our fiscal years 2022 and 2023. Additionally, on September 8, 2023, the IRS issued a separate rule change with interim guidance on the capitalization and amortization of R&D expenses. A cumulative one-time adjustment applicable to prior periods for these tax rule changes was recorded in the third quarter of 2023.


	Three Months Ended
	March 31,
	2023			2024
Income before provision for income taxes	$	18,205		$	28,315
Provision for income taxes	$	3,154		$	4,653
Effective tax rate	17.3		%	16.4		%

The effective tax rate decreased from the three months ended ~~September 30, 2022~~March 31, 2023 to the three months ended ~~September 30, 2023, reflecting~~March 31, 2024, primarily due to the ~~effect of the two~~ tax rule ~~changes, particularly the~~ change related to U.S. federal foreign tax ~~credits. The effect of these~~credits issued by the IRS in July 2023 and an increase in stock-based compensation-related tax ~~rule changes was~~benefits, partially offset by a decrease in the U.S. federal Foreign Derived Intangible Income tax ~~deduction.~~deduction and an increase in taxes for certain U.S. jurisdictions.

The OECD is coordinating negotiations among more than 140 countries with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate ~~decreased from~~of 15%. Some countries have already implemented the ~~nine months ended September 30, 2022~~legislation effective January 1, 2024, and we expect others to follow, however we do not expect a material change to our income tax provision for the ~~nine months ended September 30, 2023, reflecting the effect~~2024 fiscal year. As additional jurisdictions enact such legislation, transitional rules lapse, and other provisions of the ~~two~~minimum tax ~~rule changes, particularly the change related to foreign~~legislation become effective, we expect our effective tax ~~credits. The effect of these~~rate and cash tax ~~rule changes was partially offset by changes~~payments could increase in ~~uncertain tax benefits, a decrease in the stock-based compensation-related tax benefit, and a decrease in the U.S. federal Foreign Derived Intangible Income tax deduction.~~future years.

Financial Condition

Cash, Cash Equivalents, and Marketable Securities

As of ~~September 30, 2023,~~March 31, 2024, we had ~~$119.9~~$108.1 billion in cash, cash equivalents, and short-term marketable securities. Cash equivalents 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):


		Nine Months Ended				Three Months Ended
		September 30,
	March 31,							March 31,
		2022		2023		2023	2024
Net cash provided by operating activities	Net cash provided by operating activities	$	67,881	$	82,831
Net cash used in investing activities	Net cash used in investing activities	$	(14,071)	$	(20,896)
Net cash used in financing activities	Net cash used in financing activities	$	(52,128)	$	(52,785)

Cash Provided by Operating Activities

Our largest source of cash provided by operations are advertising revenues generated by Google Search & other properties, Google Network properties, and YouTube properties. ~~Additionally,~~In Google Services, we also generate cash through ~~sales~~consumer subscriptions and the sale of apps and in-app purchases and ~~hardware; and licensing and service fees, including fees received for~~devices. In Google Cloud, ~~offerings~~we generate cash through consumption-based fees and ~~subscription-based products.~~


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subscriptions for infrastructure, platform, collaboration tools, and other cloud services.

Our primary uses of cash from operating activities include payments to distribution and Google Network partners, to employees for compensation, and to content providers. Other uses of cash from operating activities include payments to suppliers for ~~hardware,~~devices, to tax authorities for income taxes, and other general corporate expenditures.

Net cash provided by operating activities increased from the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 to the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 due to the increase in cash received from customers, ~~and the 2023 IRS payment deferral relief made available to taxpayers headquartered in designated counties in California,~~ partially offset by ~~increased~~an increase in cash payments for ~~costs~~cost of revenues and ~~expenses. On October 16, 2023, we made an estimated income tax payment to the IRS of $10.5 billion that will be reflected in our fourth quarter~~ operating ~~cash flow.~~expenses.

Cash Used in Investing Activities

Cash provided by investing activities consists primarily of maturities and sales of investments in marketable and non-marketable securities. 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 the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 to the ~~nine~~three months ended ~~September 30, 2023 as a result of~~March 31, 2024 primarily due to an increase in ~~net~~ purchases of property and ~~maturities and sales of marketable securities, partially offset by a decrease in payments for acquisitions and intangible assets.~~equipment.

Cash Used in Financing Activities

Cash provided by financing activities consists primarily of proceeds from issuance of debt and proceeds from the sale of ~~interest~~interests 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 the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 to the ~~nine~~three months ended ~~September 30, 2023 primarily~~March 31, 2024 due to ~~an increase~~increases in ~~repurchases of stock partially offset by a decrease in~~net repayments related to debt, net payments related to ~~debt.~~stock-based award activities, and repurchases of stock.

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 through purchases of property and equipment and lease arrangements to provide capacity for the growth of our services and products.

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 to years. For example, our data center construction projects are generally multi-year projects with multiple phases, where we acquire ~~qualified~~ land and buildings, construct buildings, and secure and install information technology assets.

During the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023,~~2024, we spent ~~$23.9~~$6.3 billion and ~~$21.2~~$12.0 billion on capital expenditures, respectively. We expect to ~~continue~~increase, relative to ~~invest~~2023, our investment in our technical infrastructure, including servers, network equipment, and data centers, ~~over the remainder of 2023 and into 2024~~ to support the growth of our business and our long-term initiatives, in particular in support of ~~AI.~~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 ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023,~~2024, our depreciation ~~and impairment expenses~~ on property and equipment ~~were $11.2~~was $2.6 billion and ~~$10.0~~$3.4 billion, respectively.

Leases


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For the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023,~~2024, we recognized total operating lease assets of ~~$3.4~~$1.1 billion and ~~$2.4~~$0.4 billion,, respectively. As of ~~September 30, 2023,~~March 31, 2024, the amount of total future lease payments under operating leases, which had a weighted average remaining lease term of ~~8.2~~8 years, was ~~$17.9 billion.~~ $17.2 billion.

As of ~~September 30, 2023,~~March 31, 2024, we have entered into leases that have not yet commenced with future lease payments of ~~$3.5~~$3.6 billion,, that are not yet recorded on our Consolidated Balance Sheets. These leases will commence between ~~2023~~2024 and 2026 with non-cancelable lease terms of 1one to 25 ~~years. As of September 30, 2023, our actions to optimize our office space did not affect our operating lease obligations.~~years.

For the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023,~~2024, our operating lease expenses (including variable lease costs) were ~~$2.7~~$1.1 billion and ~~$3.4~~$1.1 billion,, respectively. Finance lease costs were not material for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2023.~~2024.

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 ~~September 30, 2023,~~March 31, 2024, we had no commercial paper outstanding.

As of ~~September 30, 2023,~~March 31, 2024, we had $10.0 billion of revolving credit facilities, $4.0 billion expiring in April 2024 and $6.0 billion expiring in April 2028. In April 2024, we entered into a new $4.0 billion revolving credit facility expiring in April 2025.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.

As of ~~September 30, 2023,~~March 31, 2024, we had senior unsecured notes outstanding with a total carrying value of ~~$12.9~~$11.9 billion. ~~See~~For additional information, see Note 5 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form ~~10-Q for further information on our debt.~~10-Q.

We primarily utilize contract manufacturers for the assembly of our servers used in our technical infrastructure and ~~hardware products~~devices we sell. We have agreements where we may purchase components directly from suppliers and then supply these components to contract manufacturers for use in the assembly of the servers and ~~hardware products.~~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 1 of this Quarterly Report on Form 10-Q.

Share Repurchase Program

During the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, we repurchased and subsequently retired ~~122 million and 410~~111 million shares for $15.9 billion and $46.2 billion, respectively. Of the aggregate amount repurchased and subsequently retired during the three months ended September 30, 2023, 14 million shares were Class A stock for $1.8 billion and 108 million shares were Class C stock for $14.1 billion. Of the aggregate amount repurchased and subsequently retired during the nine months ended September 30, 2023, 51 million shares were Class A stock for $5.7 billion and 359 million shares were Class C stock for $40.4$16.1 billion.

In April 2023, the Board of Directors of Alphabet authorized the company to repurchase up to $70.0 billion of its Class A and Class C shares. As of March 31, 2024, $20.4 billion remained available for Class A and Class C share repurchases. In April 2024, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares. ~~As of September 30, 2023, $52.3 billion remains available for~~

The following table presents Class A and Class C ~~share repurchases.~~shares repurchased and subsequently retired (in millions):

~~See~~


	Three Months Ended March 31, 2024
	Shares	Amount
Class A share repurchases	23	$	3,350
Class C share repurchases	88	12,707
Total share repurchases(1)	111	$	16,057

(1) Shares repurchased include unsettled repurchases as of March 31, 2024.

For additional information, see Note 109 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.

Dividend Program

On April 25, 2024, the Board of Directors of Alphabet declared a cash dividend of $0.20 per share to be paid on June 17, 2024, to stockholders of record as of June 10, 2024, on each of the company’s Class A, Class B, and Class C shares.

The ~~U.S. Inflation Reduction Act~~company intends to pay quarterly cash dividends in the future, subject to review and approval by the company’s Board of ~~2022 was enacted on August 16, 2022~~Directors in its sole discretion. In connection with the cash dividend (and any future dividend the company’s Board of Directors may declare from time to time), the company will also award dividend equivalent units to holders of all unvested stock units in accordance with the Alphabet Inc. Amended and ~~requires a one percent excise tax on certain share repurchases in excess of shares issued for employee compensation made after December 31, 2022. We do not expect this provision~~Restated 2021 Stock Plan and pursuant to ~~have a material effect on our consolidated financial statements.~~each holder’s outstanding stock unit grant agreements, as amended.

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 fine from €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 ~~further details,~~additional information, see Note 98 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.


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Taxes

As of ~~September 30, 2023,~~March 31, 2024, we had ~~short-term and long-term~~ income taxes payable of ~~$3.6~~$4.2 billion, ~~and~~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 C~~uts~~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 ~~payab~~lepayable of ~~$5.9~~$7.1 billion ~~primarily~~primarily related to uncertain tax positions as of ~~September 30, 2023.~~

As a result of the 2023 IRS payment deferral relief made available to taxpayers headquartered in designated counties in California, we postponed our second and third quarter U.S. federal income tax payments. On October 16, 2023, we made an estimated income tax payment to the IRS of $10.5 billion. See Note 6 of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.March 31, 2024.

Purchase Commitments and Other Contractual Obligations

As of ~~September 30, 2023,~~March 31, 2024, we had material purchase commitments and other contractual ~~obligations~~obligations of ~~$44.3~~$44.0 billion, of which $29.4 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 to purchase 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 ~~September 30, 2023.~~March 31, 2024. In certain instances, the amount of our contractual obligations may change based on the expected timing of order fulfillment from our suppliers. For more information related to our content licenses, see Note 98 of the Notes to Consolidated Financial Statements included in Item I of this Quarterly Report on Form 10-Q.

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 not readily determinable.

Critical Accounting Estimates

See Part II, Item 7, "Critical Accounting Estimates" in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

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 members of the investment community. Our investor relations website also provides notifications of news or announcements regarding our financial performance and other items 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~~is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For quantitative and qualitative disclosures about market risk, refer to Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness 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 Quarterly Report on Form 10-Q.


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Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of ~~September 30, 2023,~~March 31, 2024, 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 that such 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 ~~September 30, 2023~~March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

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

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PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see Note 98 “Commitments and Contingencies - Legal Matters” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

ITEM 1A.RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our stock. Below are material changes to our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2023.

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 to customize 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 their available alternatives. Changes to our advertising policies and data privacy practices, such as our initiatives to phase out third-party cookies (which remain subject to review, affecting the timing), 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 developed that 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 digital advertising. Failing to provide superior value or deliver advertisements effectively and competitively could harm our business, 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.

Risks Related to Ownership of our Stock

We cannot guarantee that any share repurchase program or dividend program will be continuously active or fully consummated or will enhance long-term stockholder value, and share repurchases or dividends could increase the volatility of our stock prices and could 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. In April 2024, we announced the approval of a cash dividend to our Class A, Class B and Class C stockholders. Any and all future cash dividends are subject to declaration by the Board of Directors at their sole discretion, and in accordance with the requirements of any applicable laws, rules and regulations, including the Delaware General Corporation Law. Our cash dividend program does not require, and our Board of Directors may not declare, a cash dividend each quarter, and does not obligate our Board of Directors to declare a dividend in any specific dollar amount per share. Further, our share repurchases or dividends could affect our share trading prices, increase their volatility, reduce our cash reserves and may be suspended or terminated at any time, which may result in a decrease in the trading prices of our stock.

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, including, among others, the size or continuity of either our share repurchase or dividend programs, 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.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table presents information with respect to Alphabet's repurchases of Class A and Class C stock during the quarter ended ~~September 30, 2023.~~March 31, 2024.
Period
Total Number of Class A Shares Purchased
(in thousands) (1)
Total Number of Class C Shares Purchased
(in thousands) (1)
Average Price Paid per Class A Share (2)
Average Price Paid per Class C Share (2)
Total Number of Shares Purchased as Part of Publicly Announced Programs
(in thousands) (1)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
(in millions)
July 1 - 31 3,647 36,664 $ 124.11 $ 125.22 40,311 $ 63,066
August 1 - 31 4,043 39,758 $ 132.61 $ 132.16 43,801 $ 57,320
September 1 - 30 6,028 31,408 $ 135.44 $ 135.90 37,436 $ 52,267
Total 13,718 107,830 121,548


Period	Total Number of Class A Shares Purchased (in thousands) (1)	Total Number of Class C Shares Purchased (in thousands) (1)	Average Price Paid per Class A Share (2)		Average Price Paid per Class C Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Programs (in thousands) (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions)
January 1 - 31	9,717	29,623	$	145.11	$	146.28	39,340	$	30,648
February 1 - 29	7,568	28,804	$	143.82	$	144.75	36,372	$	25,429
March 1 - 31	5,949	29,230	$	143.08	$	143.86	35,179	$	20,404
Total	23,234	87,657					110,891

(1) 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. ~~See~~For additional information related to share repurchases, see Note 109 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form ~~10-Q for additional information related to share repurchases.~~10-Q.

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

ITEM 5.OTHER INFORMATION

10b5-1 Trading Plans

During the fiscal quarter ended ~~September 30, 2023, the following~~March 31, 2024, no Section 16 director or officer adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act):

•Sundar Pichai, Chief Executive Officer, together with the Pichai Family Foundation, adopted a new trading plan on August 31, 2023 (with the first trade under the new plan scheduled for as early as December 6, 2023). ~~The trading plan will be effective until December 20, 2024 to sell an aggregate of 636,000 shares of Class C Capital Stock).~~

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 ~~September 30, 2023~~March 31, 2024 by our directors and Section 16 officers. ~~Each~~

Compensatory Arrangements of Certain Officers

On April 16, 2024, the Leadership Development, Inclusion and Compensation Committee of the ~~Rule 10b5-1 trading arrangements are in accordance with our Policy Against Insider Trading and actual sale transactions made pursuant~~Board of Directors of Alphabet approved the accrual of dividend equivalent units to ~~such trading arrangements will be disclosed publicly in Section 16 filings with~~holders of all unvested stock units, subject to the ~~SEC in accordance with applicable securities laws, rules and regulations.~~

~~Required Disclosure Pursuant to Section 13(r)~~approval of a dividend declaration by the Board of Directors of the ~~Exchange Act~~

~~During~~Company (which was approved and announced on April 25, 2024). This approval covers both performance stock unit awards and Google stock unit awards, and applies both to currently outstanding and future equity awards. For the ~~quarter ended September 30, 2023, Google LLC, a subsidiary~~avoidance of ~~Alphabet, filed a notification with~~doubt, the ~~Russian Federal Security Service (FSB) pursuant to Russian encryption control requirements, which must be complied with prior~~corresponding amendments to the ~~import~~respective stock unit grant agreements will apply both to currently outstanding grant agreements and all future grant agreements. As stock units are not outstanding shares of ~~covered items. Neither we nor our subsidiaries generated~~stock and thus would not otherwise be entitled to participate in any ~~gross revenues or net profits directly from such activity~~dividends (including the one referenced above), the crediting of dividend equivalent units is intended to preserve the equity-based incentives intended by the Company when the stock units were granted and ~~neither we nor our subsidiaries sell~~ to treat the ~~FSB. In the ordinary course~~holders of ~~its business, Alphabet expects that Google LLC will continue to file these notifications as required under Russian law.~~stock units consistently with all stockholders.

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ITEM 6.EXHIBITS

Exhibit
Number

Description

Incorporated by reference herein

Form

Date

10.01

♦

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

10.02

♦

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

10.03

♦

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

31.01

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 Sarbanes-Oxley Act of 2002

31.02

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 Sarbanes-Oxley Act of 2002

32.01

‡

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 Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

__________________________



♦			Indicates management compensatory plan, contract, or arrangement.
*			Filed herewith.
‡			Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		ALPHABET INC.
~~October 24, 2023~~April 25, 2024	By:	/s/ RUTH M. PORAT
		Ruth M. Porat
		President and Chief Investment Officer; Chief Financial Officer


		ALPHABET INC.
~~October 24, 2023~~April 25, 2024	By:	/s/ AMIE THUENER O'TOOLE
		Amie Thuener O'Toole
		Vice President, Corporate Controller and Principal Accounting Officer

5346


	Nine Months Ended September 30, 2022
	Class A, Class B, Class C Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2021	13,242	$	61,774	$	(1,623)	$	191,484	$	251,635
Stock issued	98	8		0		0		8
Stock-based compensation expense	0	14,388		0		0		14,388
Tax withholding related to vesting of restricted stock units and other	0	(7,644)		0		(1)		(7,645)
Repurchases of stock	(369)	(2,278)		0		(41,611)		(43,889)
Sale of interest in consolidated entities	0	10		0		0		10
Net income	0	0		0		46,348		46,348
Other comprehensive income (loss)	0	0		(7,229)		0		(7,229)
Balance as of September 30, 2022	12,971	$	66,258	$	(8,852)	$	196,220	$	253,626


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
	Severance and Related (1)		Office Space		Total		Severance and Related (1)		Office Space		Total
Cost of revenues	$	17	$	6	$	23	$	477	$	246	$	723
Research and development	15		7		22		847		268		1,115
Sales and marketing	50		1		51		494		59		553
General and administrative	4		2		6		263		76		339
Total charges	$	86	$	16	$	102	$	2,081	$	649	$	2,730


	As of December 31, 2022						As of September 30, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	1,164	$	354	$	810	$	1,152	$	453	$	699
Customer relationships	862		235		627		868		335		533
Trade names and other	527		120		407		528		161		367
Total definite-lived intangible assets	2,553		709		1,844		2,548		949		1,599
Indefinite-lived intangible assets	240		0		240		234		0		234
Total intangible assets	$	2,793	$	709	$	2,084	$	2,782	$	949	$	1,833


Remainder of 2023	$	118
2024	466
2025	335
2026	257
2027	174
Thereafter	249
Total	$	1,599


	Unvested Restricted Stock Units
	Number of Shares	Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2022	324	$	107.98
Granted	255	$	96.49
Vested	(160)	$	100.31
Forfeited/canceled	(26)	$	107.27
Unvested as of September 30, 2023	393	$	103.71