What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-05 compared with 2024-01-31 · 354 added, 277 removed, 1087 unchanged (37% of the section changed)

18 unchanged sentences

generally accepted accounting principles.

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

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 4, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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Loss Contingencies

Description of the Matter The Company is regularly 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 its users, goods and services offered by advertisers or publishers using their platforms, personal injury, consumer protection, and other matters.

As described in Note 10 to the consolidated financial statements “Commitments and contingencies” such claims, lawsuits, regulatory and government investigations, other proceedings, and consent orders could result in adverse consequences.

Description of the Matter The Company is subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, and orders involving competition, intellectual property, data privacy and security, tax and related compliance, labor and employment, commercial disputes, content generated by its users, goods and services offered by advertisers or publishers using their platforms, personal injury, and other matters.

As described in Note 10 to the consolidated financial statements “Commitments and Contingencies” such claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, and orders could result in adverse consequences.

Significant judgment is required to determine both the likelihood and the estimated amount of a loss related to such matters.

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This included controls over management’s assessment of the probability of incurrence of a loss and whether the loss or range of loss was reasonably estimable and the development of related disclosures.

Our audit procedures included gaining an understanding of previous rulings and the status of ongoing lawsuits, reviewing letters addressing the matters from internal and external legal counsel, meeting with internal legal counsel to discuss the allegations, and obtaining a representation letter from management on these matters.

Our audit procedures included gaining an understanding of previous rulings and the status of ongoing lawsuits, reviewing letters from internal and external legal counsel addressing the matters, meeting with internal legal counsel to discuss the allegations, and obtaining a representation letter from management on these matters.

We also evaluated the Company’s disclosures in relation to these matters.

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San Jose, California

January 30, 2024

February 4, 2025

Alphabet Inc.

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

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

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2024 consolidated financial statements of the Company and our report dated February 4, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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San Jose, California

January 30, 2024

February 4, 2025

Alphabet Inc.

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Long-term debt 11,870 10,883

Deferred revenue, non-current 599 911

Income taxes payable, non-current 8,474 8,782

Deferred income taxes 514 485

Operating lease liabilities 12,460 11,691

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Net income $ 59,972 $ 73,795 $ 100,118

Basic net income per share of Class A, Class B, and Class C stock $ 5.69 $ 4.59 $ 5.84

Diluted net income per share of Class A, Class B, and Class C stock $ 5.61 $ 4.56 $ 5.80

Basic net income per share (Note 12)

$ 4.59 $ 5.84 $ 8.13

Diluted net income per share (Note 12)

$ 4.56 $ 5.80 $ 8.04

See accompanying notes.

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Other comprehensive income (loss):

Change in foreign currency translation adjustment ( 1,442 ) ( 1,836 ) 735

Change in foreign currency translation adjustment, net of income tax benefit (expense) of $( 134 ), $ 63 and $( 49 )

( 1,836 ) 735 ( 1,673 )

Available-for-sale investments:

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Balance as of December 31, 2021 13,242 $ 61,774 $ ( 1,623 ) $ 191,484 $ 251,635

13,504 $ 58,510 $ 633 $ 163,401 $ 222,544

Stock issued 137 8 0 0 8

Stock-based compensation expense 0 15,539 0 0 15,539

Stock-based compensation

0 19,525 0 0 19,525

Tax withholding related to vesting of restricted stock units and other 0 ( 9,754 ) 0 ( 1 ) ( 9,755 )

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Stock issued 139 0 0 0 0

Stock-based compensation expense 0 19,525 0 0 19,525

Stock-based compensation

0 22,578 0 0 22,578

Tax withholding related to vesting of restricted stock units and other 0 ( 10,164 ) 0 9 ( 10,155 )

Repurchases of stock ( 528 ) ( 4,064 ) 0 ( 58,120 ) ( 62,184 )

Sale of interest in consolidated entities 0 35 0 0 35

Net income 0 0 0 73,795 73,795

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Stock issued 130 0 0 0 0

Stock-based compensation expense 0 22,578 0 0 22,578

Stock-based compensation

0 22,937 0 0 22,937

Tax withholding related to vesting of restricted stock units and other 0 ( 12,507 ) 0 ( 16 ) ( 12,523 )

Repurchases of stock ( 379 ) ( 3,359 ) 0 ( 58,688 ) ( 62,047 )

Dividends and dividend equivalents declared ($ 0.60 per share)

0 41 0 ( 7,577 ) ( 7,536 )

Sale of interest in consolidated entities 0 1,154 0 0 1,154

Net income 0 0 0 100,118 100,118

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Deferred income taxes ( 8,081 ) ( 7,763 ) ( 5,257 )

(Gain) loss on debt and equity securities, net ( 12,270 ) 5,519 823

Loss (gain) on debt and equity securities, net 5,519 823 ( 2,671 )

Other 3,483 4,330 3,419

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Repurchases of stock ( 59,296 ) ( 61,504 ) ( 62,222 )

Dividend payments 0 0 ( 7,363 )

Proceeds from issuance of debt, net of costs 52,872 10,790 13,589

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Cash and cash equivalents at end of period $ 21,879 $ 24,048 $ 23,466

Supplemental disclosures of cash flow information

Cash paid for income taxes, net of refunds $ 13,412 $ 18,892 $ 19,164

See accompanying notes.

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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 consumer subscription-based products, apps and in-app purchases, and devices.

cloud-based solutions that provide enterprise customers of all sizes with infrastructure, platform services, and applications;

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

Basis of Consolidation

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On an ongoing basis, we evaluate our estimates, including those related to the allowance for credit losses;

content licenses;

contingent liabilities;

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We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, and the results of which form the basis for making judgments about the carrying values of assets and liabilities.

In January 2023, we completed an assessment of the useful lives of our servers and network equipment and adjusted 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 year ended December 31, 2023, the effect of this change in estimate was a reduction in depreciation expense of $ 3.9 billion and an increase in net income of $ 3.0 billion, or $ 0.24 per basic and $ 0.24 per diluted share, for the year ended December 31, 2023.

Revenue Recognition

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For ads placed on Google Network properties, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis).

Generally, we report advertising revenues for ads placed on Google Network properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues,

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and amounts paid to Google Network partners are recorded as cost of revenues.

Generally, we report advertising revenues for ads placed on Google Network properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues, and amounts paid to Google Network partners are recorded as cost of revenues.

Where we are the principal, we control the advertising inventory before it is transferred to our customers.

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Google subscriptions, platforms, and devices revenues consist of revenues from:

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

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

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• 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 sales of apps and in-app purchases;

• devices, which primarily include sales of the Pixel family of devices;

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Subscription revenues are recognized ratably over the period of the subscription, primarily monthly.

We report revenues from Google Play app sales and in-app purchases on a net basis, because our performance obligation is to facilitate a transaction between app developers and end users, for which we earn a service fee.

We report revenues from Google Play sales of apps and in-app purchases on a net basis because our performance obligation is to facilitate a transaction between app developers and end users for which we earn a service fee.

Google Cloud Revenues

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• Google Cloud Platform, which generates consumption-based fees and subscriptions for infrastructure, platform, and other services.

These services provide access to solutions such as cybersecurity, databases, analytics, and AI offerings including our AI infrastructure, Vertex AI platform, and Duet AI for Google Cloud;

• Google Workspace, which includes subscriptions for cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet, with integrated features like Duet AI in Google Workspace;

These services provide access to solutions such as AI offerings including our AI infrastructure, Vertex AI platform, and Gemini for Google Cloud;

cybersecurity;

and data and analytics;

• other enterprise services.

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We estimate these amounts based on the expected amount to be provided to customers and reduce revenues.

We believe that there will not be significant changes to our estimates of variable consideration.

We believe that there will not be significant changes to our estimates of variable consideration related to customer incentives and credits.

Sales Commissions

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

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• Other cost of revenues includes:

◦ 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);

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

◦ depreciation expense related to our technical infrastructure;

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

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

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

Software Development Costs

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We recognize RSU expense using the straight-line attribution method over the requisite service period and account for forfeitures as they occur.

RSUs are awarded dividend equivalents, which are subject to the same vesting conditions as the underlying award, and settled in Class C shares.

For RSUs, shares are issued on the vesting dates net of the applicable statutory income tax withholding to be paid by us on behalf of our employees.

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Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.

Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

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Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data.

Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Where applicable,

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these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

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Other financial assets and liabilities are carried at cost with fair value disclosed, if required.

We measure certain other instruments, including SBC awards settled in the stock of Other Bet companies, and certain assets and liabilities acquired in a business combination, also at fair value on a nonrecurring basis.

We measure certain other instruments, and certain assets and liabilities acquired in a business combination, also at fair value on a nonrecurring basis.

Financial Instruments

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

We are subject to credit risk primarily from cash equivalents, marketable debt securities, derivative financial instruments, including foreign exchange contracts, and accounts receivable.

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

We are subject to credit risk primarily from cash equivalents, marketable debt securities, derivative financial instruments, including foreign exchange contracts, accounts receivable, and convertible notes.

We manage our credit risk exposure through timely assessment of our counterparty creditworthiness, credit limits, and use of collateral management.

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Cash Equivalents

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

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

Marketable Securities

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For certain marketable debt securities we have elected the fair value option, for which changes in fair value are recorded in OI&E.

We determine any realized gains or losses on the sale of marketable debt securities on a specific identification method, and we record such gains and losses as a component of OI&E.

We determine any realized gains and losses on the sale of marketable debt securities on a specific identification method, and we record such gains and losses as a component of OI&E.

Our investments in marketable equity securities are measured at fair value with the related gains and losses, including unrealized, recognized in OI&E.

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We account for non-marketable equity securities through which we exercise significant influence but do not have control over the investee under the equity method.

All other non-marketable equity securities that we hold are primarily accounted for under the measurement alternative.

Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus

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changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

Other non-marketable equity securities that we hold are primarily accounted for under the measurement alternative.

Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

Adjustments are determined primarily based on a market approach as of the transaction date and are recorded as a component of OI&E.

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

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We also consider customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions.

Convertible Notes

Our investments in convertible notes are primarily recorded at amortized cost which includes unpaid principal balances, deferred origination costs, and any related discount or premium, net of allowances for credit losses, and are included within other non-current assets on our Consolidated Balance Sheets.

Our financial instruments also include debt and equity investments in companies with which we also entered into commercial arrangements at or near the same time.

For these transactions, judgment is required in assessing the substance of the arrangements, including assessing whether the components of the arrangements should be accounted for as separate transactions under the applicable GAAP, and determining the value of the components of the arrangements, including the fair value of the investments.

Additionally, if our investment in such companies becomes impaired, any remaining performance obligations would be reassessed and may be reduced.

Additionally, if our investment in such companies becomes impaired, we may need to re-evaluate the accounting for the commercial arrangement, including reducing any remaining performance obligations.

Impairment of Investments

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We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests is considered a variable interest entity (VIE).

We consolidate VIEs when we are the primary beneficiary.

We are the primary beneficiary of a VIE when we have the power to direct activities that most significantly affect the economic performance of the VIE and have the obligation to absorb the majority of their losses

We consolidate VIEs when we are

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the primary beneficiary.

If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP.

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Property and Equipment

Property and equipment includes the following categories:

land and buildings, information technology assets, construction in progress, leasehold improvements, and furniture and fixtures.

Land and buildings include land, offices, data centers, and related building improvements.

Information technology assets include servers and network equipment.

Construction in progress is the construction or development of property and equipment that have not yet been placed in service.

Property and equipment is comprised of technical infrastructure, office space, corporate and other assets currently in service, and assets not yet in service.

Technical infrastructure includes data center land, buildings and leasehold improvements, and servers and network equipment.

Office space includes office land, buildings and leasehold improvements.

Assets not yet in service are those that are not ready for our intended use, including data center buildings and servers in the process of construction or assembly.

Property and equipment are stated at cost less accumulated depreciation.

Depreciation is recorded using the straight-line method over the estimated useful lives of the assets, which we regularly evaluate.

Land is not depreciated.

We depreciate buildings over periods of seven to 25 years.

We depreciate information technology assets generally over a period of six years for servers and network equipment.

Depreciation commences once assets are ready for our intended use and is recorded using the straight-line method over the estimated useful lives of the assets, which we regularly evaluate for factors such as technological obsolescence and our planned use and utilization.

We depreciate data center and office buildings over periods of seven to 40 years.

We depreciate servers and network equipment generally over a period of six years .

We depreciate corporate and other assets over periods of two to 25 years.

We depreciate leasehold improvements over the shorter of the remaining lease term or the estimated useful lives of the assets.

Depreciation for buildings, information technology assets, leasehold improvements, and furniture and fixtures commences once they are ready for our intended use.

Land is not depreciated.

We allocate goodwill to reporting units based on the expected benefit from the business combination.

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Lease assets also include any prepaid lease payments and lease incentives.

Operating lease assets and liabilities are included on our Consolidated Balance Sheets.

Lease assets and liabilities are included on our Consolidated Balance Sheets.

The current portion of our operating lease liabilities is included in accrued expenses and other current liabilities, and the long-term portion is included in operating lease liabilities.

Finance lease assets are included in property and equipment, net.

Finance lease liabilities are included in accrued expenses and other current liabilities or long-term debt.

Finance lease liabilities are included in accrued expenses and other current liabilities or other long-term liabilities.

Operating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease term.

Finance lease expense is recognized on a straight-line basis over the shorter of the lease term or the useful life of the asset, and interest expense is recognized based on the incremental borrowing rate.

Impairment of Long-Lived Assets

We review leases, property and equipment, and intangible assets, excluding goodwill, for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable.

The evaluation is performed at the lowest level of identifiable cash flows independent of other assets.

We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected

The evaluation is performed

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at the lowest level of identifiable cash flows independent of other assets.

We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate.

If the carrying value of the assets or asset group is not recoverable, the impairment recognized is measured as the amount by which the carrying value exceeds its fair value.

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We translate the financial statements of our international subsidiaries to U.S.

dollars using month-end exchange rates for assets and liabilities, and average rates for the annual period derived from month-end exchange rates for revenues, costs, and expenses.

dollars using month-end exchange rates for assets and liabilities, and average rates for the period derived from month-end exchange rates for revenues, costs, and expenses.

We record translation gains and losses in AOCI as a component of stockholders’ equity.

We reflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency as a component of foreign currency exchange gain (loss) in OI&E.

Recent Accounting Pronouncements

In November 2023, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) 2023-07 "Segment Reporting (Topic 280):Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740):

Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.

W e are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 "Income Taxes (Topics 740):

Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes.

Upon adoption we will be required to disclose additional specified categories in the rate reconciliation in both percentage and dollar amounts.

We will also be required to disclose the amount of income taxes paid disaggregated by jurisdiction, among other disclosure requirements.

The standard can be applied either prospectively or retrospectively.

We will adopt the standard in our 2025 annual period and are currently assessing the effect that the updated standard will have on our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03 "Income Statement:

Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)" to improve the disclosures about an entity’s expenses.

Upon adoption, we will be required to disclose in the notes to the financial statements a disaggregation of certain expense categories included within the expense captions on the face of the income statement.

The standard is effective for our 2027 annual period, and our interim periods beginning in 2028, with early adoption permitted.

The standard can be applied either prospectively or retrospectively.

We are currently assessing adoption timing and the effect that the updated standard will have on our financial statement disclosures.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

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.

We adopted this ASU for our 2024 annual period with the comparative periods updated to reflect additional disclosures.

See Note 15 for further details.

Prior Period Reclassifications

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As of December 31, 2024, we had $ 93.2 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.

Revenue backlog represents commitments in customer contracts for future services that have not yet been recognized as revenue.

We expect to recognize approximately half of the revenue backlog as revenues over the next 24 months with the remainder to be recognized thereafter.

The 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.

We expect to recognize approximately half of the revenue backlog as revenues over the next 24 months with the remaining to be recognized thereafter.

Revenue backlog includes related deferred revenue currently recorded as well as amounts that will be invoiced in future periods, and excludes contracts with an original expected term of one year or less and cancellable contracts.

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Total deferred revenue as of December 31, 2023 was $ 5.0 billion, of which $ 3.9 billion was recognized as revenues for the year ended December 31, 2024.

Total deferred revenue as of December 31, 2024 was $ 6.0 billion.

Financial Instruments

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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

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and Level 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets.

Cash, cash equivalents, and marketable equity securities are measured at fair value and classified within Level 1 and Level 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets.

Debt securities are measured at fair value and classified within Level 2 in the fair value hierarchy, because we use quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value.

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(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 $ 803 million as of December 31, 2022 is included within other non-current assets.

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

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(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 $ 1.4 billion as of December 31, 2023 is included within other non-current assets.

(2) The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $ 266 million as of December 31, 2024 is included within other non-current assets.

Investments Measured at Fair Value on a Nonrecurring Basis

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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 valuation methods, including 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.

These inputs significantly vary based on investment type.

The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.

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

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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.

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.

These inputs vary significantly based on investment type.

As of December 31, 2024, the carrying value of our non-marketable equity securities was $ 35.5 billion, of which $ 19.9 billion were remeasured at fair value during the year ended December 31, 2024, and were primarily classified within Level 2 of the fair value hierarchy at the time of measurement.

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 December 31, 2023

Due in one year or less

Due in one year through five years

Due in five years through 10 years

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December 31, 2024

Due in 1 year or less $ 6,341

Due in 1 year through 5 years 37,221

Due in 5 years through 10 years 10,920

Due after 10 years 12,896

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Total gain (loss) on debt securities recognized in other income (expense), net $ ( 2,064 ) $ ( 1,215 ) $ ( 1,043 )

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Equity Investments

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See Note 7 for further details on OI&E.

Certain of our non-marketable equity securities include our investments in VIE where we are not the primary beneficiary.

See Note 5 for further details on VIE.

The carrying values for marketable and non-marketable equity securities are summarized below (in millions):

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As of December 31, 2023 As of December 31, 2024

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Carrying value $ 5,973 $ 28,766 $ 34,739 $ 5,079 $ 35,531 $ 40,610

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

(1) Non-marketable equity securities cumulative net gain (loss) is comprised of $ 18.1 billion and $ 22.7 billion of gains and $ 6.9 billion and $ 8.4 billion of losses (including impairments) as of December 31, 2023 and 2024, respectively.

Gains and Losses on Marketable and Non-marketable Equity Securities

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Year Ended December 31,

2022 2023 2024

Realized net gain (loss) on equity securities sold during the period $ ( 442 ) $ 690 $ 186

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Total gain (loss) on equity securities in other income (expense), net $ ( 3,455 ) $ 392 $ 3,714

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

(1) Unrealized gain (loss) on non-marketable equity securities accounted for under the measurement alternative is comprised of $ 3.3 billion, $ 1.8 billion, and $ 5.6 billion of upward adjustments and $ 3.0 billion, $ 2.9 billion, and $ 2.2 billion of downward adjustments (including impairments) for the years ended December 31, 2022, 2023, and 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.

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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 During the Year Ended December 31,

Total sale price $ 1,981 $ 2,827

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See Note 7 for further details on OI&E.

Certain of our equity method securities include our investments in VIEs where we are not the primary beneficiary.

See Note 4 for further details on VIEs.

Convertible Notes

As of December 31, 2023 and December 31, 2024 , we had investments in convertible notes of $ 921 million and $ 2.9 billion, respectively, the majority of which are convertible notes held for investment.

Our convertible notes held for investment are recorded at amortized cost which includes unpaid principal balances, deferred origination costs, and any related discount or premium, net of allowances for credit losses, and are included within other non-current assets on our Consolidated Balance Sheets.

Alphabet Inc.

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Gains and losses on these derivatives that are not designated as accounting hedges are primarily recorded in OI&E along with the foreign currency gains and losses on monetary assets and liabilities.

We also use derivatives not designated as hedging instruments to manage risks relating to interest rates, commodity prices, credit exposures, and to enhance investment returns.

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.

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Alphabet Inc.

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

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

(in millions):

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Revenues Other income (expense), net Revenues Other income (expense), net Revenues Other income (expense), net

Total amounts in the Consolidated Statements of Income $ 257,637 $ 12,020 $ 282,836 $ ( 3,514 ) $ 307,394 $ 1,424

Total amounts included in the Consolidated Statements of Income $ 282,836 $ ( 3,514 ) $ 307,394 $ 1,424 $ 350,018 $ 7,425

Effect of cash flow hedges:

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

We have entered into operating lease agreements primarily for data centers, land, and offices throughout the world with lease periods expiring between 2024 and 2063.

Components of operating lease expense were as follows (in millions):

We have entered into operating and finance lease agreements primarily for data centers, land, and offices throughout the world with varying lease terms.

Components of lease costs were as follows (in millions):

Year Ended December 31,

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Operating lease cost $ 2,900 $ 3,362 $ 3,304

Finance lease cost:

Amortization of lease assets 474 469 413

Interest on lease liabilities 34 35 31

Finance lease cost 508 504 444

Variable lease cost 838 1,182 1,425

Total operating lease cost $ 3,425 $ 3,738 $ 4,544

Supplemental information related to operating leases was as follows (in millions):

Total lease cost $ 4,246 $ 5,048 $ 5,173

Supplemental balance sheet information related to leases was as follows (in millions):

Weighted average remaining lease term

Operating leases 8.1 years 7.8 years

Finance leases 10.7 years 10.4 years

Weighted average discount rate

Operating leases 3.1 % 3.4 %

Finance leases 2.0 % 2.8 %

Alphabet Inc.

Operating leases:

Operating lease assets $ 14,091 $ 13,588

Accrued expenses and other liabilities $ 2,791 $ 2,887

Operating lease liabilities 12,460 11,691

Total operating lease liabilities $ 15,251 $ 14,578

Finance Leases:

Property and equipment, at cost $ 4,403 $ 4,622

Accumulated depreciation ( 1,652 ) ( 2,037 )

Property and equipment, net $ 2,751 $ 2,585

Accrued expenses and other liabilities $ 283 $ 235

Other long-term liabilities 1,383 1,442

Total finance lease liabilities $ 1,666 $ 1,677

Supplemental cash flow information related to leases was as follows (in millions):

Year Ended December 31,

2022 2023 2024

Cash payments for operating leases $ 2,489 $ 2,722 $ 3,173

New operating lease assets obtained in exchange for operating lease liabilities $ 2,951 $ 4,383 $ 2,877

Alphabet Inc.

As of December 31, 2023 , our operating leases had a weighted average remaining lease term of 8.1 years and a weighted average discount rate of 3.1 %.

Future lease payments under operating leases as of December 31, 2023 were as follows (in millions):

Cash payments for lease liabilities:

Operating cash flows used for operating leases

$ 2,722 $ 3,173 $ 3,425

Operating cash flows used for finance leases

$ 34 $ 35 $ 31

Financing cash flows used for finance leases (1)

$ 586 $ 705 $ 405

Assets obtained in exchange for lease liabilities:

Operating leases $ 4,383 $ 2,877 $ 2,510

Finance leases $ 577 $ 564 $ 313

(1) Financing cash flows used for financing leases are included within financing activities of the Consolidated Statements of Cash Flows as repayments of debt.

Future lease payments as of December 31, 2024 were as follows (in millions):

Operating Leases Finance

2025 $ 3,162 $ 257

2026 2,824 208

2027 2,311 208

2028 1,838 197

2029 1,448 166

Thereafter 5,455 852

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Total lease liability balance $ 14,578 $ 1,677

As of December 31, 2023 , we have entered into leases that have not yet commenced with short-term and long-term future lease payments of $ 657 million and $ 3.3 billion that are not yet recorded on our Consolidated Balance Sheets.

As of December 31, 2024 , we have entered into leases that have not yet commenced with short-term and long-term future lease payments of $ 773 million and $ 6.5 billion, respectively, that are not yet recorded on our Consolidated Balance Sheets.

These leases will commence between 2025 and 2028 with non-cancelable lease terms between one and 25 years.

Variable Interest Entities

Consolidated Variable Interest Entities

Consolidated VIEs

Alphabet Inc.

We consolidate VIEs in which we hold a variable interest and are the primary beneficiary.

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For certain consolidated VIEs, their assets are not available to us, and their creditors do not have recourse to us.

As of December 31, 2022 and 2023, assets that can only be used to settle obligations of these VIEs were $ 4.1 billion and $ 4.9 billion, respectively, and the liabilities for which creditors only have recourse to the VIEs were $ 2.6 billion and $ 2.5 billion, respectively.

As of December 31, 2023 and 2024, assets that can only be used to settle obligations of these VIEs were $ 4.9 billion and $ 8.7 billion, respectively and are primarily included in cash and cash equivalents on our Consolidated Balance Sheets.

As of December 31, 2023 and 2024, liabilities for which creditors only have recourse to the VIEs were $ 2.5 billion and $ 2.3 billion, respectively.

We may continue to fund ongoing operations of certain VIEs that are included within Other Bets.

Total noncontrolling interests (NCI) in our consolidated subsidiaries were $ 3.8 billion and $ 3.4 billion as of December 31, 2022 and 2023, respectively, of which $ 1.1 billion is redeemable noncontrolling interest (RNCI) for both periods.

Waymo, a fully autonomous driving technology company and a consolidated VIE, received $ 5.6 billion in funding during the year ended December 31, 2024, the majority of which was funded by Alphabet.

Investments from external parties were accounted for as equity transactions and resulted in recognition of noncontrolling interests.

As of December 31, 2023 and 2024, total noncontrolling interests (NCI) in our consolidated subsidiaries were $ 3.4 billion and $ 4.2 billion, respectively, of which $ 1.1 billion was redeemable noncontrolling interests (RNCI) for both periods.

NCI and RNCI are included within additional paid-in capital.

Net loss attributable to noncontrolling interests was not material for an y period presented and is included within the "other" component of OI&E.

Net loss attributable to noncontrolling interests was not material for any period presented and is included within the "other" component of OI&E.

See Note 7 for further details on OI&E.

Unconsolidated Variable Interest Entities

Unconsolidated VIEs

We have investments in VIEs in which we are not the primary beneficiary.

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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.

We account for these investments primarily as non-marketable equity securities or equity method investments, which are included within non-marketable securities on our Consolidated Balance Sheets.

The maximum exposure of these unconsolidated VIEs is generally based on the current carrying value of the investments and any future funding commitments.

The maximum exposure and carrying value of these unconsolidated VIEs were $ 2.8 billion and $ 2.7 billion, respectively, as of December 31, 2022 and $ 5.7 billion and $ 4.0 billion, respectively, as of December 31, 2023.

The difference between the maximum exposure and the carrying value relates primarily to future funding commitments.

As of December 31, 2023 and 2024, our future funding commitments related to unconsolidated VIE investments were $ 1.7 billion and $ 1.5 billion, respectively.

Short-Term Debt

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Net proceeds from this program are used for general corporate purposes.

We had no commercial paper outstanding as of December 31, 2022 and 2023.

We had no c ommercial paper outstanding as of December 31, 2023 and $ 2.3 billion of commercial paper outstanding with a weighted-average effective interest rate of 4.4 % as of December 31, 2024 .The estimated fair value of the commercial paper approximated its carrying value as of December 31, 2024

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

Alphabet Inc.

Long-Term Debt

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

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

Effective Interest Rate As of December 31,

Maturity Coupon Rate 2023 2024

2014-2020 Notes issuances 2024 - 2060 0.45 % - 3.38 %

2014 Notes issuance 2024 3.38 % 3.38 % $ 1,000 $ 0

2016 Notes issuance 2026 2.00 % 2.23 % 2,000 2,000

2020 Notes issuance 2025 - 2060 0.45 % - 2.25 %

0.57 % - 2.33 %

10,000 10,000

Future finance lease payments, net and other (1)

Total debt 15,142 14,746

Total face value of long-term debt 13,000 12,000

Unamortized discount and debt issuance costs ( 130 ) ( 118 )

Current portion of long-term notes (1)

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

( 1,000 ) ( 999 )

Total long-term debt $ 11,870 $ 10,883

(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.

Alphabet Inc.

(1) Total current portion of long-term debt is included within accrued expenses and other current liabilities.

See Note 7 for further details.

The notes in the table above are fixed-rate senior unsecured obligations and generally rank equally with each other.

The notes in the table above are fixed-rate senior unsecured obligations and rank equally with each other.

We may redeem the notes at any time in whole or in part at specified redemption prices.

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The fair value was determined based on observable market prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy.

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

As of December 31, 2024, the future principal payments for long-term debt were as follows (in millions):

Thereafter 8,000

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As of December 31, 2024, we had $ 10.0 billion of revolving credit facilities, of which $ 4.0 billion expires in April 2025 and $ 6.0 billion expires in April 2028.

The interest rates for all credit facilities are determined based on a formula using certain market rates, as well as our progress toward the achievement of certain sustainability goals.

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 goa ls.

No amounts were outstanding under the credit facilities as of December 31, 2023 and 2024.

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The allowance for credit losses on accounts receivable was $ 771 million and $ 879 million as of December 31, 2023 and 2024, respectively.

Alphabet Inc.

Property and Equipment, Net

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As of December 31,

Land and buildings $ 66,897 $ 74,083

Information technology assets 66,267 80,594

Construction in progress 27,657 35,229

Leasehold improvements 10,575 11,425

Furniture and fixtures 314 472

Property and equipment, gross 171,710 201,803

Technical infrastructure $ 112,504 $ 139,596

Office space 40,435 43,714

Corporate and other assets 13,728 16,519

Property and equipment, in service 166,667 199,829

accumulated depreciation ( 67,458 ) ( 79,390 )

assets not yet in service 35,136 50,597

Property and equipment, net $ 134,345 $ 171,036

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

Accrued Expenses and Other Current Liabilities

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

Alphabet Inc.

As of December 31,

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Accrued expenses and other current liabilities $ 46,168 $ 51,228

(1) While each EC decision is under appeal, the fines are included in accrued expenses and other current liabilities on our Consolidated Balance Sheets, as we provided bank guarantees (in lieu of a cash payment) for the fines.

(1) The amounts related to the EC fines, including any under appeal, are included in accrued expenses and other current liabilities on our Consolidated Balance Sheets.

Amounts include the effects of foreign exchange and interest.

Se e Note 10 for further details.

Alphabet Inc.

In the third quarter of 2024 we made a cash payment of $ 3.0 billion for the 2017 EC shopping fine.

See Note 10 for further details.

(2) Additional property and equipment purchases of $ 2.8 billion and $ 3.2 billion as of December 31, 2023 and 2024, respectively, were included in accounts payable.

Accumulated Other Comprehensive Income (Loss)

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

Gains (Losses) Reclassified from AOCI to the Consolidated Statements of Income

Alphabet Inc.

Year Ended December 31,

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Total amount reclassified, net of income tax $ 699 $ ( 954 ) $ ( 616 )

Alphabet Inc.

Other Income (Expense), Net

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(1) Interest expense is net of interest capitalized of $ 128 million, $ 181 million, and $ 194 million for the years ended December 31, 2022, 2023, and 2024, respectively.

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 year ended December 31, 2023 were $ 2.1 billion.

Substantially all of the employees affected were no longer included in our headcount as of December 31, 2023.

In addition, we are taking actions to optimize our global office space.

As a result, exit charges recorded during the year ended December 31, 2023, were $ 1.8 billion as reflected in the table below.

In addition to these exit charges, for the year ended December 31, 2023, we incurred $ 269 million in accelerated rent and accelerated depreciation, which are not included in the table below.

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

Year Ended December 31, 2023

Severance and Related (1)

Office Space Total

Cost of revenues $ 479 $ 481 $ 960

Research and development 848 870 1,718

Sales and marketing 497 257 754

General and administrative 264 237 501

Total charges $ 2,088 $ 1,845 $ 3,933

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

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

For the year ended December 31, 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

Cash payments ( 1,579 )

Balance as of December 31, 2023 (2)

(1) Excludes non-cash SBC of $ 432 million.

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

Alphabet Inc.

Business Combinations

In accordance with the accounting requirements under Accounting Standards Codification Topic 805, for the year ended December 31, 2024, we recorded $ 2.7 billion of goodwill and $ 413 million of intangible assets resulting from a transaction with character.ai (“Character”).

In August 2024, we entered into a license agreement with Character pursuant to which we obtained a non-exclusive license to its then current large language model technology.

We paid Character $ 2.7 billion in cash and canceled our convertible instruments.

We also hired certain employees of Character.

Goodwill was recorded in Google Services and Google Cloud and is deductible for tax purposes.

Changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2024 were as follows (in millions):

Alphabet Inc.

Google Services Google Cloud Other Bets Total

Balance as of December 31, 2022 $ 20,847 $ 7,205 $ 908 $ 28,960

Acquisitions 1,176 4,876 119 6,171

Foreign currency translation and other adjustments 31 ( 9 ) ( 27 ) ( 5 )

Balance as of December 31, 2023 21,118 7,199 881 29,198

Acquisitions 240 3 0 243

2,441 295 0 2,736

Foreign currency translation and other adjustments ( 38 ) ( 4 ) ( 7 ) ( 49 )

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Commitments and Contingencies

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

We have content licensing agreements with future fixed or minimum guaranteed commitments of $ 8.8 billion as of December 31, 2024, of which the majority is paid quarterly through the first quarter of 2030.

Indemnifications

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We expense legal fees in the period in which they are incurred.

Antitrust Matters

We are subject to formal and informal inquiries and investigations as well as litigation on various competition matters by regulatory authorities and private parties in the U.S., Europe, and other jurisdictions globally, including the following:

In June 2017, the EC announced its decision that certain actions taken by Google relating to its display and ranking of shopping search results and ads infringed European antitrust laws and imposed a € 2.4 billion fine.

We appealed the EC decision and implemented product changes to bring shopping ads into

Alphabet Inc.

Antitrust Investigations

On November 30, 2010, the EC's Directorate General for Competition opened an investigation into various antitrust-related complaints against us.

On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display and ranking of shopping search results and ads infringed European competition law.

The EC decision imposed a € 2.4 billion ($ 2.7 billion as of June 27, 2017) fine.

On September 11, 2017, we appealed the EC decision to the General Court, and on September 27, 2017, we implemented product changes to bring shopping ads into compliance with the EC's decision.

We recognized a charge of $ 2.7 billion for the fine in the second quarter of 2017.

On November 10, 2021, the General Court rejected our appeal, and we subsequently filed an appeal with the European Court of Justice on January 20, 2022.

On July 18, 2018, the EC announced its decision that certain provisions in Google’s Android-related distribution agreements infringed European competition law.

The EC decision imposed a € 4.3 billion ($ 5.1 billion as of June 30, 2018) fine and directed the termination of the conduct at issue.

On October 9, 2018, we appealed the EC decision, and on October 29, 2018, we implemented changes to certain of our Android distribution practices.

On September 14, 2022, the General Court reduced the fine from € 4.3 billion to € 4.1 billion.

We subsequently filed an appeal with the European Court of Justice.

compliance with the EC's decision.

In September 2024, the European Court of Justice rejected our appeal and upheld the € 2.4 billion fine.

In the third quarter of 2024, we made a cash payment of $ 3.0 billion for the fine.

In July 2018, the EC announced its decision that certain provisions in Google’s Android-related distribution agreements infringed European antitrust laws, imposed a € 4.3 billion fine, and directed the termination of the conduct at issue.

We appealed the EC decision and implemented changes to certain of our Android distribution practices.

In September 2022, the General Court affirmed the EC decision but reduced the fine from € 4.3 billion to € 4.1 billion.

We subsequently appealed the General Court's affirmation of the EC decision with the European Court of Justice, which remains pending.

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.

From time to time we are subject to formal and informal inquiries and investigations on various competition matters by regulatory authorities in the U.S., Europe, and other jurisdictions globally.

Examples, for which given their nature we cannot estimate a possible loss, include:

• In August 2019, we began receiving civil investigative demands from the U.S.

Department of Justice (DOJ) requesting information and documents relating to our prior antitrust investigations and certain aspects of our business.

The DOJ and a number of state Attorneys General filed a lawsuit in the U.S.

District Court for the District of Columbia on October 20, 2020 alleging that Google violated U.S.

• AdSense for Search:

In March 2019, the EC announced its decision that certain provisions in Google's agreements with AdSense for Search partners infringed European antitrust laws, imposed a fine of € 1.5 billion, and directed actions related to AdSense for Search partners' agreements, which we implemented prior to the decision.

In 2019, we recognized a charge of $ 1.7 billion for the fine and appealed the EC decision.

In September 2024, the General Court overturned the EC decision and annulled the € 1.5 billion fine.

The EC has appealed the General Court's decision with the European Court of Justice.

In October 2020, the DOJ and a number of state Attorneys General filed a lawsuit in the U.S.

District Court for the District of Columbia alleging that Google violated U.S.

antitrust laws relating to Search and Search advertising.

The trial ended on November 16, 2023, and we expect a decision in 2024.

Further, in June 2022, the Australian Competition 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.

In August 2024, the U.S.

District Court for the District of Columbia ruled that Google violated such U.S.

antitrust laws.

A separate proceeding is being held to determine remedies, the range of which vary widely.

The DOJ has proposed a high level remedy framework, which includes alterations to our products and services and our business models and operations, including structural remedies, and/or our distribution arrangements, among other changes, some of which could have a material adverse effect on our business.

We have filed our own remedies proposal ahead of a hearing on remedies in April 2025.

We expect a decision likely in the second half of 2025, after which we intend to appeal.

Further, in June 2022, the Australian Competition and Consumer Commission and in October 2023, the Japanese Fair Trade Commission each opened an investigation into Search distribution practices.

Given the nature of these matters, we cannot estimate a possible loss.

• Advertising Technology:

In December 2020, a number of state Attorneys General filed a lawsuit in the U.S.

District Court for the Eastern District of Texas alleging that Google violated U.S.

antitrust laws as well as state deceptive trade laws relating to its advertising technology, and a trial is scheduled for March 2025.

Additionally, on January 24, 2023, the DOJ, 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.

The EC, the CMA, and the ACCC each opened a formal investigation into Google's advertising technology 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 responded to the SO on December 1, 2023.

• On July 7, 2021, a number of state Attorneys General filed an antitrust complaint in the U.S.

Additionally, in January 2023, the DOJ, along with a number of state Attorneys General, filed a lawsuit in the U.S.

District Court for the Eastern District of Virginia alleging that Google violated U.S.

antitrust laws relating to its advertising technology, and a number of additional state Attorneys General subsequently joined the lawsuit.

The trial ended in September 2024, and we expect a decision in early 2025.

Further, in June 2023, the EC issued a Statement of Objections informing Google of its preliminary view that Google violated European antitrust laws relating to its advertising technology, to which we responded.

Given the nature of these matters, we cannot estimate a possible loss.

• Google Play:

In July 2021, a number of state Attorneys General filed a lawsuit 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.

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.

We believe we have strong arguments against these 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.

In September 2023, we reached a settlement in principle with 50 state Attorneys General and three territories and recognized a charge.

Final approval of the settlement remains pending before the court.

In May 2024, we funded the settlement amount to an escrow agent.

In December 2023, a California jury delivered a verdict in Epic Games v.

Google finding that Google violated U.S.

antitrust laws related to Google Play's business.

Epic did not seek monetary damages.

The presiding judge issued a remedies decision in October 2024, ordering a variety of alterations to our business models and operations and contractual agreements for Android and Google Play.

We are appealing the verdict and the trial court judge temporarily paused the implementation of the remedies while the Court of Appeals considers our request to pause implementation of the remedies pending the duration of the appeal.

Given the nature of this matter, we cannot estimate a possible loss.

Alphabet Inc.

• European Digital Markets Act:

In March 2024, the EC opened two investigations regarding Google's compliance with certain provisions of EU's Digital Markets Act relating to Google Play and Search.

Given the preliminary stages of this matter, we cannot estimate a possible loss.

In addition to these proceedings, private individual and collective actions that overlap with claims pursued by regulatory authorities are pending in the U.S.

and in several other jurisdictions.

We believe we have strong arguments against these open 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

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For example, there are ongoing investigations and litigation in the U.S.

and the EU, including those relating to our collection and use of location information and advertising practices, which could result in significant fines, judgments, and product changes.

and the EU, including those relating to our collection and use of location information, alleged violations of state biometric statutes, the choices we offer users, and advertising practices, which could result in significant fines, judgments, and product changes.

Patent and Intellectual Property Claims

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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.

We are subject to claims, lawsuits, regulatory and government investigations, other proceedings, and consent orders involving competition, intellectual property, data security, tax and related compliance, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, personal injury, consumer protection, and other matters.

For example, in December 2023, a California jury delivered a verdict in Epic Games v.

Google finding that Google violated antitrust laws related to Google Play's business.

The presiding judge will determine remedies in 2024, and the range of potential remedies vary widely.

We plan to appeal.

We also periodically have data incidents that we report to relevant regulators as required by law.

These claims, consent orders, lawsuits, regulatory and government investigations, and other proceedings could result in substantial fines and penalties, injunctive relief, ongoing monitoring and auditing obligations, changes to our products and services, alterations to our business models and operations, and collateral related civil litigation or other adverse consequences, all of which could harm our business, reputation, financial condition, and operating results.

Further, 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.

We are subject to claims, lawsuits, regulatory and government inquiries and 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 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 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.

For example, some matters concern civil judgments that include compounding penalties imposed upon us in connection with disputes regarding the termination of accounts, including those of sanctioned parties.

We do not expect these ongoing legal matters will have a material adverse effect.

Non-Income Taxes

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Share Repurchases

In the years ended December 31, 2021, 2022, and 2023 , we repurchased $ 50.3 billion, $ 59.3 billion, and $ 62.2 billion, respectively, of Alphabet's Class A and Class C shares.

In the years ended December 31, 2022, 2023, and 2024 , we continued to repurchase both Class A and Class C shares 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.

During the years ended December 31, 2022, 2023, and 2024, we repurchased $ 59.3 billion, $ 62.2 billion, and $ 62.0 billion, respectively, of Alphabet's Class A and Class C shares.

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 December 31, 2023, $ 36.3 billion remains available for Class A and Class C share repurchases.

As of December 31, 2024, $ 44.7 billion remained available for Class A and Class C share repurchases.

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

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528 $ 62,184 379 $ 62,047

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

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.

(1) Shares repurchased include unsettled repurchases.

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.

During the year ended December 31, 2024, total cash dividends, which were first paid in June 2024, were $ 3.5 billion, $ 519 million, and $ 3.3 billion for Class A, Class B, and Class C shares, respectively.

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.

Net Income Per Share

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The computation of the diluted net income per share of Class A stock assumes the conversion of Class B stock, while the diluted net income per share of Class B stock does not assume the conversion of those shares.

The rights, including the liquidation and dividend rights, of the holders of our Class A, Class B, and Class C stock are identical, except with respect to voting.

In accordance with our certificate of incorporation, the rights, including the liquidation and dividend rights, of the holders of our Class A, Class B, and Class C stock are identical, except with respect to voting.

Furthermore, there are a number of safeguards built into our certificate of incorporation, as well as Delaware law, which preclude our Board of Directors from declaring or paying unequal per share dividends on our Class A, Class B, and Class C stock.

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In addition, our certificate of incorporation provides that before any such amendment may be put to a stockholder vote, it must be approved by the unanimous consent of our Board of Directors.

As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A, Class B, and Class C stock as if the earnings for the year had been distributed.

As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.

In the years ended December 31, 2021, 2022, and 2023, the net income per share amounts are the same for Class A, Class B, and Class C stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Amended and Restated Certificate of Incorporation of Alphabet Inc.

Alphabet Inc.

The following table sets forth the computation of basic and diluted net income per share of Class A, Class B, and Class C stock (in millions, except per share amounts):

Immaterial differences in net income per share across our Class A, Class B, and Class C shares may arise due to the allocation of distributed earnings, which is based on the holders as of the record date, compared with the allocation of undistributed earnings and number of shares, which is based on the weighted average shares outstanding over the periods.

The following tables set forth the computation of basic and diluted net income per share of Class A, Class B, and Class C stock (in millions, except per share amounts):

Year Ended December 31, 2022

Class A Class B Class C

Class A Class B Class C Consolidated

Basic net income per share:

Allocation of distributed earnings (cash dividends paid) $ 0 $ 0 $ 0 $ 0

Allocation of undistributed earnings 27,518 4,072 28,382 59,972

Net income $ 27,518 $ 4,072 $ 28,382 $ 59,972

Number of shares used in per share computation 5,994 887 6,182 13,063

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Diluted net income per share:

Allocation of undistributed earnings for basic computation $ 34,200 $ 5,174 $ 36,659

Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares 5,174 0 0

Allocation of total earnings for basic computation $ 27,518 $ 4,072 $ 28,382 $ 59,972

Reallocation of total earnings as a result of conversion of Class B to Class A shares 4,072 0 0 _ (1)

Reallocation of undistributed earnings ( 230 ) ( 30 ) 230 _ (1)

Allocation of undistributed earnings $ 38,793 $ 5,097 $ 37,240

Net income $ 31,360 $ 4,042 $ 28,612 $ 59,972

Number of shares used in basic computation 5,994 887 6,182 13,063

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Diluted net income per share $ 4.56 $ 4.56 $ 4.56 $ 4.56

(1) Not applicable for consolidated net income per share.

Alphabet Inc.

Year Ended December 31, 2023

Class A Class B Class C

Class A Class B Class C Consolidated

Basic net income per share:

Allocation of distributed earnings (cash dividends paid) $ 0 $ 0 $ 0 $ 0

Allocation of undistributed earnings 34,601 5,124 34,070 73,795

Net income $ 34,601 $ 5,124 $ 34,070 $ 73,795

Number of shares used in per share computation 5,922 877 5,831 12,630

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Diluted net income per share:

Allocation of undistributed earnings for basic computation $ 27,518 $ 4,072 $ 28,382

Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares 4,072 0 0

Allocation of total earnings for basic computation $ 34,601 $ 5,124 $ 34,070 $ 73,795

Reallocation of total earnings as a result of conversion of Class B to Class A shares 5,124 0 0 _ (1)

Reallocation of undistributed earnings ( 287 ) ( 37 ) 287 _ (1)

Allocation of undistributed earnings $ 31,360 $ 4,042 $ 28,612

Net income $ 39,438 $ 5,087 $ 34,357 $ 73,795

Number of shares used in basic computation 5,922 877 5,831 12,630

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Diluted net income per share $ 5.80 $ 5.80 $ 5.80 $ 5.80

Alphabet Inc.

(1) Not applicable for consolidated net income per share.

Year Ended December 31, 2024

Class A Class B Class C

Class A Class B Class C Consolidated

Basic net income per share:

Allocation of distributed earnings (cash dividends paid) $ 3,509 $ 519 $ 3,335 $ 7,363

Allocation of undistributed earnings 44,085 6,520 42,150 92,755

Net income $ 47,594 $ 7,039 $ 45,485 $ 100,118

Number of shares used in per share computation 5,855 866 5,598 12,319

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Diluted net income per share:

Allocation of undistributed earnings for basic computation $ 34,601 $ 5,124 $ 34,070

Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares 5,124 0 0

Allocation of total earnings for basic computation $ 47,594 $ 7,039 $ 45,485 $ 100,118

Reallocation of total earnings as a result of conversion of Class B to Class A shares 7,039 0 0 _ (1)

Reallocation of undistributed earnings ( 520 ) ( 67 ) 520 _ (1)

Allocation of undistributed earnings $ 39,438 $ 5,087 $ 34,357

Net income $ 54,113 $ 6,972 $ 46,005 $ 100,118

Number of shares used in basic computation 5,855 866 5,598 12,319

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Diluted net income per share $ 8.05 $ 8.05 $ 8.03 $ 8.04

(1) Not applicable for consolidated net income per share.

Alphabet Inc.

Compensation Plans

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RSUs generally vest over four years contingent upon employment on the vesting date.

RSUs are awarded dividend equivalents, which are subject to the same vesting conditions as the underlying award, and settled in Class C shares.

As of December 31, 2024, there were 633 million shares of Class C stock reserved for future issuance under the Alphabet 2021 Stock Plan.

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For the years ended December 31, 2022, 2023, and 2024, total SBC expense was $ 19.5 billion, $ 22.1 billion, and $ 22.8 billion, including amounts associated with awards we expect to settle in Alphabet stock of $ 18.8 billion, $ 21.7 billion, and $ 22.0 billion, respectively.

During the year ended December 31, 2023, total SBC expense includes $ 432 million associated with workforce reduction costs.

See Note 8 for further details.

For the years ended December 31, 2022, 2023, and 2024, we recognized tax benefits on total SBC expense, which are reflected in the provision for income taxes in the Consolidated Statements of Income, of $ 3.9 billion, $ 4.5 billion, and $ 4.6 billion, respectively.

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Stock-Based Award Activities

Alphabet Inc.

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

Unvested Restricted Stock Units

The following table summarizes the activities for unvested Alphabet RSUs, which include dividend equivalents awarded to holders of unvested stock, for the year ended December 31, 2024 (in millions, except per share amounts):

Shares Weighted-

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Total $ 71,328 $ 85,717 $ 119,815

Alphabet Inc.

Provision for income taxes consisted of the following (in millions):

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Provision for income taxes $ 11,356 $ 11,922 $ 19,697

Alphabet Inc.

The reconciliation of federal statutory income tax rate to our effective income tax rate was as follows:

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Effective tax rate 15.9 % 13.9 % 16.4 %

In 2022, there was an increase in the U.S.

Foreign Derived Intangible Income tax deduction from the effects of capitalization and amortization of R&D expenses starting in 2022 as required by the 2017 Tax Cuts and Jobs Act.

In 2023, the IRS issued a rule change allowing taxpayers to temporarily apply the regulations in effect prior to 2022 related to U.S.

federal foreign tax credits as well as a separate rule change with interim guidance on the capitalization and amortization of R&D expenses.

A cumulative one-time adjustment applicable to the prior period for these tax rule changes was recorded in 2023.

federal foreign tax credits as well as a separate rule change with guidance on the capitalization and amortization of R&D expenses.

A cumulative one-time adjustment for these tax rule changes was recorded in 2023.

Alphabet Inc.

Deferred Income Taxes

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Net deferred tax assets (liabilities) $ 11,684 $ 16,460

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

As of December 31, 2024, our federal, state, and foreign net operating loss carryforwards for income tax purposes were approximately $ 8.4 billion, $ 19.4 billion, and $ 2.5 billion respectively.

If not utilized, the federal net

Alphabet Inc.

operating loss carryforwards will begin to expire in 2024, foreign net operating loss carryforwards will begin to expire in 2025 and the state net operating loss carryforwards will begin to expire in 2029.

If not utilized, the federal net operating loss carryforwards will begin to expire in 2025, foreign net operating loss carryforwards will begin to expire in 2025 and the state net operating loss carryforwards will begin to expire in 2033.

It is more likely than not that the majority of the net operating loss carryforwards will not be realized.

therefore, we have recorded a valuation allowance against them.

The net operating loss carryforwards are subject to various annual limitations under the tax laws of the different jurisdictions.

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We continue to reassess the remaining valuation allowance quarterly, and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.

Cash paid for income taxes, net of refunds, was $ 18.9 billion, $ 19.2 billion, and $ 27.4 billion as of December 31, 2022, 2023, and 2024, respectively.

Alphabet Inc.

Uncertain Tax Positions

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The total amount of gross unrecognized tax benefits was $ 7.1 billion, $ 9.4 billion, and $ 12.6 billion as of December 31, 2022 , 2023, and 2024, respectively, of which $ 5.3 billion, $ 7.4 billion, and $ 10.0 billion, if recognized, would affect our effective tax rate, respectively.

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

As of December 31, 2023 and 2024, we accrued $ 622 million and $ 1.1 billion in interest and penalties in provision for income taxes, respectively.

We file income tax returns in the U.S.

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If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust our provision for income taxes in the period such resolutions occur.

Although the timing of resolution, settlement, and closure of audits is not certain, it is reasonably possible that our unrecognized tax benefits from certain U.S.

Although the timing of resolution, settlement, and closure of audits is not certain, we do not believe it is reasonably possible that our unrecognized tax benefits from certain U.S.

federal, state, and non U.S.

tax positions could decrease by approximately $ 700 million in the next 12 months.

Positions that may be resolved include various U.S.

Alphabet Inc.

tax positions will materially change in the next 12 months.

Information about Segments and Geographic Areas

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Google Services generates revenues primarily from advertising;

fees received for consumer subscription-based products such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket;

the sale of apps and in-app purchases and devices.

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

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;

• Google Cloud includes infrastructure and platform services, applications, 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.

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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-level activities instead of within Other Bets.

Additionally, beginning in the first quarter of 2023, we updated and simplified our cost allocation methodologies to provide our 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-level activities prospectively beginning in the second quarter of 2023.

Previously, the Brain team was included within Google Services.

These costs, including the associated depreciation, are allocated to operating segments as a service cost generally based on usage, headcount, or revenue.

Alphabet Inc.

As announced in April 2024, we consolidated teams that focus on building general AI models across Google Research and Google DeepMind to further accelerate our progress in AI.

General AI model development teams previously under Google Research in our Google Services segment are reported within Alphabet-level activities prospectively beginning in the second quarter of 2024.

As further announced, in October 2024, the Gemini app team that is developing the direct consumer interface to our Gemini models joined Google DeepMind.

The costs associated with the Gemini app team continue to be reported within our Google Services segment.

Certain costs are not allocated to our segments because they represent Alphabet-level activities.

These costs primarily include AI-focused shared R&D activities, including development costs of our general AI models;

These costs primarily include certain AI-focused shared R&D 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 and office space during 2023 were not allocated to our segments.

Charges associated with employee severance and office space reductions during 2023 and 2024 were also not allocated to our segments.

Additionally, hedging gains (losses) related to revenue are not allocated to our segments.

Our Chief Operating Decision Maker (CODM) is our Chief Executive Officer, Sundar Pichai.

Our CODM uses segment operating income (loss) to allocate resources to our segments in our annual planning process and to assess the performance of our segments, primarily by monitoring actual results versus the annual plan.

Our operating segments are not evaluated using asset information.

The following table presents information about our segments (in millions):

The following table presents revenue, profitability, and expense information about our segments (in millions):

Year Ended December 31,

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Total income from operations $ 74,842 $ 84,293 $ 112,390

Supplemental information about our segment expenses:

Google Services:

Employee compensation expenses

$ 43,529 $ 46,224 $ 44,560

Other costs and expenses

127,300 130,461 139,107

Total Google Services costs and expenses

$ 170,829 $ 176,685 $ 183,667

Google Cloud:

Employee compensation expenses

$ 16,132 $ 19,054 $ 20,519

Other costs and expenses

12,070 12,318 16,598

Total Google Cloud costs and expenses

$ 28,202 $ 31,372 $ 37,117

Google Services and Google Cloud employee compensation expenses include the costs associated with direct and allocated employees.

Google Services and Google Cloud other costs and expenses primarily include direct costs, such as advertising and promotional activities and third party services fees as well as allocated costs, such as technical infrastructure and office facilities usage costs.

Additionally, Google Services other costs and expenses include content and traffic acquisition costs and device costs.

See Note 2 for information relating to revenues by geography.

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Total long-lived assets $ 148,436 $ 184,624

Subsequent Event

In January 2025, we recognized an $ 8.0 billion unrealized gain on our non-marketable equity securities related to our investment in a private company.

The unrealized gain reflects an increase in the fair value measurement of our investment following an observable transaction in January 2025.

See Note 3 and Note 7 for further details on equity investments and OI&E.

Alphabet Inc.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data