What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-05 compared with 2025-02-05 · 429 added, 351 removed, 1090 unchanged (42% of the section changed)

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Alphabet Inc.

Loss Contingencies

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.

Description of the Matter The Company is subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, and consent orders.

As described in Note 10 to the consolidated financial statements, such claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, and consent 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 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.

Our audit procedures included, among others, 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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Balance as of December 31, 2022

12,849 $ 68,184 $ ( 7,603 ) $ 195,563 $ 256,144

Stock issued 139 0 0 0 0

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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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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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Cash and cash equivalents at end of period $ 24,048 $ 23,466 $ 30,708

Supplemental disclosures of non-cash investing activities:

Purchases of property and equipment included in accrued liabilities and accounts payable $ 7,435 $ 10,326 $ 15,090

See accompanying notes.

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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.

and 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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Sales and other similar taxes are excluded from revenues.

Advertising Revenues

We generate advertising revenues primarily by delivering advertising on:

Google Advertising

Google advertising revenues consist of revenues from:

• Google Search and other properties, including revenues from traffic generated by search distribution partners who use Google.com as their default search in browsers, toolbars, etc.

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Alphabet Inc.

• 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;

• 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, which offers access to our most capable Gemini models;

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

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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

Google Cloud revenues consist of revenues from:

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

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

cybersecurity;

and data and analytics;

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

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

These services provide access to solutions such as AI offerings including our enterprise AI infrastructure, Vertex AI platform, and Gemini Enterprise;

cybersecurity offerings;

and data and analytics solutions;

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

• other enterprise services.

Our cloud services are generally provided on either a consumption or subscription basis and may have contract terms longer than a year.

Revenues related to cloud services provided on a consumption basis are recognized when the customer utilizes the services, based on the quantity of services consumed.

Revenues related to cloud services provided on a consumption basis are recognized when the customer utilizes the services, based on the quantity of services consumed using the relative standalone selling price allocation.

Revenues related to cloud services provided on a subscription basis are recognized ratably over the contract term as the customer receives and consumes the benefits of the cloud services.

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For such arrangements, we allocate revenues to each performance obligation based on its relative standalone selling price.

We generally determine standalone selling prices based on the prices charged to customers.

We generally determine standalone selling prices based on observable prices of our products and services sold or priced separately in comparable circumstances to similar customers.

Customer Incentives and Credits

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• TAC includes:

◦ amounts paid to our distribution partners who make available our search access points and services.

◦ amounts paid to our distribution partners who make available our search access points and other ad-supported services.

Our distribution partners include browser providers, mobile carriers, original equipment manufacturers, and software developers;

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• Other cost of revenues includes:

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

◦ depreciation expense related to our technical infrastructure;

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◦ depreciation expense, primarily related to our technical infrastructure;

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

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

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

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

Software Development Costs

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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.

As a result, fewer shares are issued than the number of RSUs outstanding, and the income tax withholding is recorded as a reduction to additional paid-in capital.

As a result, fewer shares are issued than the number of RSUs vested, and the income tax withholding is recorded as a reduction to additional paid-in capital.

Additionally, SBC includes other stock-based awards, such as performance stock units (PSUs) that include market conditions and awards that may be settled in cash or the stock of certain Other Bet companies.

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For the years ended December 31, 2023 , 2024, and 2025, advertising and promotional expenses totaled approximately $ 8.7 billion, $ 8.7 billion, and $ 9.9 billion, respectively.

Performance Fees

Performance fees refer to compensation arrangements with payouts based on realized returns from certain investments.

We record compensation expense based on the estimated payouts on an ongoing basis, which may result in expense recognized before investment returns are realized and compensation is paid and may require the use of unobservable inputs.

Performance fees are recorded as a component of OI&E.

Fair Value Measurements

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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,

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.

Alphabet Inc.

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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The determination of fair value involves the use of appropriate valuation methods and relevant inputs into valuation models.

Our financial assets and liabilities that are measured at fair value on a recurring basis include cash equivalents, marketable securities, derivative financial instruments, and certain non-marketable debt securities.

Our financial assets and liabilities that are measured at fair value on a recurring basis include cash equivalents, marketable securities, and derivative financial instruments.

Our financial assets measured at fair value on a nonrecurring basis include non-marketable equity securities.

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Financial Instruments

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.

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

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

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

Foreign exchange contracts are transacted with various financial institutions with high credit standing.

Accounts receivable are typically unsecured and are derived from revenues earned from customers located around the world.

We manage our credit risk exposure by performing ongoing evaluations to determine customer credit and we limit the amount of credit we extend.

We manage the concentration of our credit risk exposure by performing ongoing evaluations to determine customer credit and we limit the amount of credit we extend.

We generally do not require collateral from our customers.

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Marketable Securities

We classify all marketable debt securities that have effective maturities of three months or less from the date of purchase as cash equivalents and those with effective maturities of greater than three months as marketable securities on our Consolidated Balance Sheets.

We determine the appropriate classification of our investments in marketable debt securities at the time of purchase and reevaluate such designation at each balance sheet date.

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After consideration of our risk versus reward objectives, as well as our liquidity requirements, we may sell these debt securities prior to their effective maturities.

As we view these securities as available to support current operations, we classify highly liquid securities with maturities beyond 12 months as current assets under the caption marketable securities on the Consolidated Balance Sheets.

We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for the changes in allowance for expected credit losses, which are recorded in OI&E.

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

We classify our marketable equity securities subject to long-term lock-up restrictions beyond 12 months as other non-current assets on the Consolidated Balance Sheets.

Non-Marketable Securities

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

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

Alphabet Inc.

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

Derivative Financial Instruments

See Note 3 for the accounting policy pertaining to derivative financial instruments.

Financial Guarantees

In certain arrangements, we provide reimbursements for costs incurred by third parties during power generation project development phases if specified trigger events occur.

We recognize a noncontingent liability for the fair value of our obligation to stand ready to perform, reported in other long-term liabilities.

We also recognize a contingent liability when it becomes probable that a payment will be required and the amount can be reasonably estimated.

Accounts Receivable

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The term between invoicing and when payment is due is not significant.

For certain products or services and customers, we require payment before the products or services are delivered to the customer.

Additionally, accounts receivable includes amounts for services performed in advance of the right to invoice the customer.

We maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are classified as general and administrative expense in the Consolidated Statements of Income.

We maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are classified as general and administrative expense.

We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues.

In determining the amount of the allowance for credit losses, we consider historical collectibility based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations.

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

With respect to current accounts receivables, we elected to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.

In determining the amount of the allowance for credit losses for those assets, we adjust historical loss information to reflect current market conditions and customer-specific information to the extent that historical loss information does not reflect current 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.

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Impairment of Investments

We periodically review our debt and non-marketable equity securities for impairment.

We periodically review our debt securities with unrealized gains and losses recorded as a component of stockholders' equity and non-marketable equity securities for impairment.

For debt securities in an unrealized loss position, we determine whether a credit loss exists.

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Inventory consists primarily of finished goods and is stated at the lower of cost and net realizable value.

Cost is computed using the first-in, first-out method.

Cost is generally computed using the first-in, first-out method.

Alphabet Inc.

Variable Interest Entities

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

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the primary beneficiary.

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 or benefits.

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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.

Assets not yet in service are those that are not ready for their 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 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.

Depreciation commences once assets are ready for their 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.

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Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.

Our lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Our lease terms and payments include periods under options to purchase, extend, or terminate the lease when it is reasonably certain that we will exercise that option.

We generally use the base, non-cancelable, lease term when determining the lease assets and liabilities.

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

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.

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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.

Alphabet Inc.

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

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

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 to generate.

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Foreign Currency

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 period derived from month-end exchange rates for revenues, costs, and expenses.

We translate the financial statements of our international subsidiaries to US 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.

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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:

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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.

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

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.

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

In September 2025, the FASB issued ASU 2025-06 "Intangibles:

Goodwill and Other‒Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software" to modernize the accounting for software costs under Subtopic 350-40, Intangibles‒Goodwill and Other‒Internal-Use Software (referred to as “internal-use software”).

Upon adoption, we will be required to account for internal-use software under the updated capitalization criteria.

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

The standard can be applied either prospectively, retrospectively, or under a modified transition approach.

We are currently assessing adoption timing, the method of adoption, and the effect that the updated standard will have on our consolidated financial statements.

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.

Alphabet Inc.

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

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

We adopted this ASU for our 2025 annual period with the comparative periods updated to reflect additional disclosures.

See Note 15 for further details.

See Note 14 for the revised disclosures consistent with the new standard.

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation.

Alphabet Inc.

Disaggregated Revenues

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As of December 31, 2025, we had $ 242.8 billion of remaining performance obligations (“revenue backlog"), primarily related to Google Cloud.

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.

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

We expect to recognize just over 50 % 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 contract duration, our ability to deliver in accordance with relevant contract terms, and when our customers utilize services.

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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Deferred revenues primarily relate to Google Cloud and Google subscriptions, platforms, and devices.

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, of which $ 4.6 billion was

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recognized as revenues for the year ended December 31, 2025.

Total deferred revenue as of December 31, 2025 was $ 8.6 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 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 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.

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

The fair value option was elected for these securities to align with the unrealized gains and losses from related derivative contracts.

The following tables summarize our cash, cash equivalents, and marketable securities measured at fair value on a recurring basis (in millions):

As of December 31, 2024

Fair Value Hierarchy Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities

Fair value changes recorded in other comprehensive income

Quoted Prices in

Active Markets

for Identical Assets

Significant Other

Observable Inputs

Cash equivalents:

Money market funds

$ 8,154 $ 0 $ 8,154

Time deposits

Level 2 $ 2,628 $ 0 $ 0 $ 2,628 $ 2,628 $ 0

Government bonds Level 2 38,106 233 ( 679 ) 37,660 1,993 35,667

Corporate debt securities Level 2 22,457 112 ( 637 ) 21,932 0 21,932

Mortgage-backed and asset-backed securities Level 2 17,243 88 ( 634 ) 16,697 0 16,697

Total investments with fair value change reflected in other comprehensive income (1)

0 2,081 2,081

Fair value adjustments recorded in net income

Money market funds Level 1 6,480 6,480 0

Current marketable equity securities (2)

Level 1 4,282 0 4,282

Mutual funds Level 2 311 0 311

Government bonds Level 2 1,952 347 1,605

Corporate debt securities Level 2 3,782 91 3,691

Mortgage-backed and asset-backed securities Level 2 2,683 0 2,683

Total investments with fair value change recorded in net income

Government bonds 0 746 746

Corporate debt securities 0 78 78

Total cash and cash equivalents

8,154 2,905 23,466

Cash 0 12,509 0

Marketable securities:

Marketable equity securities (1)

4,708 105 4,813

Time deposits

Government bonds 0 28,709 28,709

Corporate debt securities 0 21,116 21,116

Mortgage-backed and asset-backed securities 0 17,417 17,417

Total marketable securities

4,708 67,483 72,191

Total $ 12,862 $ 70,388 $ 95,657

(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.

(1) 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.

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As of December 31, 2025

Fair Value Hierarchy Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities

Fair value changes recorded in other comprehensive income

Quoted Prices in

Active Markets

for Identical Assets

Significant Other

Observable Inputs

Cash equivalents:

Money market funds $ 11,349 $ 0 $ 11,349

Time deposits 0 3,353 3,353

Level 2 $ 2,217 $ 0 $ 0 $ 2,217 $ 2,081 $ 136

Government bonds Level 2 27,551 83 ( 214 ) 27,420 50 27,370

Corporate debt securities Level 2 18,300 79 ( 222 ) 18,157 0 18,157

Mortgage-backed and asset-backed securities Level 2 14,437 63 ( 385 ) 14,115 0 14,115

Total investments with fair value change reflected in other comprehensive income (1)

Government bonds 0 602 602

Corporate debt securities 0 99 99

Total cash and cash equivalents

11,349 4,054 30,708

Fair value adjustments recorded in net income

Money market funds Level 1 $ 8,154 $ 8,154 $ 0

Current marketable equity securities (2)

Level 1 4,708 0 4,708

Mutual funds Level 2 105 0 105

Government bonds Level 2 2,035 696 1,339

Corporate debt securities Level 2 3,037 78 2,959

Mortgage-backed and asset-backed securities Level 2 3,302 0 3,302

Total investments with fair value change recorded in net income

Marketable securities:

Marketable equity securities

4,402 1,911 6,313

Cash 0 12,407 0

Time deposits 0 0 0

Government bonds 0 50,549 50,549

Corporate debt securities 0 21,565 21,565

Mortgage-backed and asset-backed securities 0 17,708 17,708

Total marketable securities

4,402 91,733 96,135

Total $ 15,751 $ 95,787 $ 126,843

(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 $ 266 million as of December 31, 2024 is included within other non-current assets.

Investments Measured at Fair Value on a Nonrecurring Basis

Our non-marketable equity securities are investments in privately held companies without readily determinable market values.

The carrying value of our non-marketable equity securities is adjusted to fair value upon observable transactions for identical or similar investments of the same issuer or impairment.

Non-marketable equity securities that have been remeasured during the period based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy.

Non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.

Non-marketable equity securities accounted for under the measurement alternative are investments in privately held companies without readily determinable market values.

The carrying value of these non-marketable equity securities is adjusted upward or downward 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, and remeasurements 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.

As of December 31, 2025, the carrying value of our non-marketable equity securities accounted for under the measurement alternative was $ 64.1 billion, of which $ 45.6 billion were remeasured at fair value during the year ended December 31, 2025, and were primarily classified within Level 2 of the fair value hierarchy at the time of measurement.

Debt and Equity Securities

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):

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December 31, 2025

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Total $ 89,822

The following tables present fair values and gross unrealized gains and losses recorded to AOCI, less any expected credit losses, aggregated by investment category (in millions):

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As of December 31, 2024

Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Time deposits $ 2,217 $ 0 $ 0 $ 2,217

Government bonds 27,551 83 ( 214 ) 27,420

Corporate debt securities 18,300 79 ( 222 ) 18,157

Mortgage-backed and asset-backed securities 14,437 63 ( 385 ) 14,115

Total investments with fair value change reflected in other comprehensive income

$ 62,505 $ 225 $ ( 821 ) $ 61,909

As of December 31, 2025

Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Time deposits $ 3,353 $ 0 $ 0 $ 3,353

Government bonds 49,087 443 ( 26 ) 49,504

Corporate debt securities 18,346 242 ( 32 ) 18,556

Mortgage-backed and asset-backed securities 14,337 174 ( 128 ) 14,383

Total investments with fair value change reflected in other comprehensive income

$ 85,123 $ 859 $ ( 186 ) $ 85,796

The following tables present fair values and gross unrealized losses recorded to AOCI, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

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Total $ 6,522 $ ( 13 ) $ 6,638 $ ( 165 ) $ 13,160 $ ( 178 )

Alphabet Inc.

We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method.

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

The fair value option was elected for these securities to align with the unrealized gains and losses from related derivative contracts.

The following table summarizes gains and losses for debt securities, reflected as a component of OI&E (in millions):

6 unchanged sentences

(Increase) decrease in allowance for credit losses

( 22 ) 50 ( 2 )

Total gain (loss) on debt securities recognized in other income (expense), net $ ( 1,215 ) $ ( 1,043 ) $ 540

Equity Investments

The carrying value of equity securities is measured as the total initial cost plus the cumulative net gain (loss).

Gains and losses, including impairments, are included as a component of OI&E in the Consolidated Statements of Income.

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):

Alphabet Inc.

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

Marketable Equity Securities Non-Marketable Equity Securities Total Marketable Equity Securities Non-Marketable Equity Securities Total

Total initial cost $ 5,418 $ 17,616 $ 23,034 $ 4,767 $ 21,240 $ 26,007

Cumulative net gain (loss) (1)

Non-marketable Securities

Our non-marketable securities primarily consist of non-marketable equity securities accounted for under the measurement alternative.

The carrying value is measured at the total initial cost plus the cumulative net upward and downward adjustments (including impairments).

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.

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

See Note 5 for further details on VIEs.

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.

All gains and losses, including impairments, are included as components of OI&E.

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

As of December 31,

Non-marketable securities:

Total initial cost of non-marketable equity securities accounted for under the measurement alternative

$ 20,940 $ 28,429

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 $ 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

Gains and losses (including impairments), net, for marketable and non-marketable equity securities included in OI&E are summarized below (in millions):

Cumulative upward adjustments

22,709 44,485

Cumulative downward adjustments (including impairments)

( 8,431 ) ( 8,820 )

Carrying value of non-marketable equity securities accounted for under the measurement alternative

35,218 64,094

Equity method investments and other

Total non-marketable securities

$ 37,982 $ 68,687

Gains and Losses on Equity Securities

Gains and losses (including impairments), net, for equity securities included in OI&E are summarized below (in millions):

Alphabet Inc.

Year Ended December 31,

2023 2024 2025

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

Unrealized net gain (loss) on marketable equity securities ( 3,242 ) 790 156

Unrealized net gain (loss) on non-marketable equity securities (1)

Gross unrealized gain on non-marketable equity securities accounted for under the measurement alternative

$ 1,806 $ 5,582 $ 22,666

Gross unrealized loss (including impairments) on non-marketable equity securities accounted for under the measurement alternative

( 2,894 ) ( 2,210 ) ( 1,271 )

Unrealized net gain (loss) on non-marketable equity securities accounted for under the measurement alternative

( 1,088 ) 3,372 21,395

Unrealized net gain (loss) on marketable and other equity securities

790 156 1,907

Realized net gain (loss) on marketable and non-marketable equity securities sold during the period

Total gain (loss) on equity securities in other income (expense), net (1)

(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.

Cumulative net gains (losses) on equity securities sold during the period, which is summarized in the following table (in millions), represents the total net gains (losses) recognized after the initial purchase date of the equity security sold during the period.

While these net gains (losses) may have been reflected in periods prior to the period of sale, we believe they are important supplemental information as they reflect the economic net gains (losses) on the securities sold during the period.

Cumulative net gains (losses) are calculated as the difference between the sale price and the initial purchase price for the equity security sold during the period.

Total sale price $ 1,981 $ 2,827

Total initial cost 1,512 2,079

Cumulative net gains (losses)

Equity Securities Accounted for Under the Equity Method

As of December 31, 2023 and 2024, equity securities accounted for under the equity method had a carrying value of approximately $ 1.7 billion and $ 2.0 billion, respectively.

Our share of gains and losses, including impairments, are included as a component of OI&E, in the Consolidated Statements of Income.

See Note 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.

$ 392 $ 3,714 $ 24,080

(1) Excludes income (loss) and impairment from equity method investments.

Refer to Note 7 for further details.

Cumulative net gains (losses), calculated as the difference between the sales price and purchase price, represent the total net gains (losses) recognized after the initial purchase date.

This represents the total economic impact of the investment, regardless of when the gains or losses were previously recognized.

Cumulative net gains on equity securities sold were $ 748 million and $ 387 million for the years ended December 31, 2024 and 2025 , respectively.

Derivative Financial Instruments

We use derivative instruments to manage risks relating to our ongoing business operations.

The primary risk managed is foreign exchange risk.

We use foreign currency contracts to reduce the risk that our cash flows, earnings, and investment in foreign subsidiaries will be adversely affected by foreign currency exchange rate fluctuations.

We also enter into derivative instruments to partially offset our exposure to other risks and enhance investment returns.

We recognize derivative instruments in the Consolidated Balance Sheets at fair value and classify the derivatives primarily within Level 2 in the fair value hierarchy.

We present our collar contracts (an option strategy comprised of a combination of purchased and written options) at net fair values and present all other derivatives at gross fair values.

We primarily use derivative instruments to manage risks relating to our ongoing business operations, including foreign currencies, interest rates, commodity prices, credit exposures, and market prices of certain marketable equity securities.

Additionally, we enter into derivatives to enhance investment returns.

We also enter into derivatives as a result of agreements with third parties to backstop certain obligations related to data center leases.

These backstop agreements are accounted for as credit derivatives.

We recognize derivative instruments in the Consolidated Balance Sheets at fair value and classify them primarily within Level 2 in the fair value hierarchy.

We present our foreign currency collars (an option strategy comprised of a combination of purchased and written options) at net fair values and present all other derivatives at gross fair values.

The accounting treatment for derivatives is based on the intended use and hedge designation.

Cash Flow Hedges

We designate foreign currency forward and option contracts (including collars) as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S.

We designate foreign currency forwards and options (including collars) as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the US dollar.

These contracts have maturities of 24 months or less.

Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI and subsequently reclassified to revenue when the hedged item is recognized in earnings.

We exclude forward points and time value from our assessment of hedge effectiveness and amortize them on a straight-line basis over the life of the hedging instrument in revenues.

Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI and reclassified to revenue when the hedged item is recognized in earnings.

Hedge components excluded from our assessment of hedge effectiveness are amortized on a straight-line basis over the life of the hedging instrument in revenues.

The difference between fair value changes of the excluded component and the amount amortized to revenues is recorded in AOCI.

As of December 31, 2024 , the net accumulated gain on our foreign currency cash flow hedges before tax effect was $ 731 million, which is expected to be reclassified from AOCI into revenues within the next 12 months.

As of December 31, 2025 , the net accumulated loss on our foreign currency cash flow hedges before tax effect was $ 60 million, which is expected to be reclassified from AOCI into revenues within the next 12 months.

Additionally, we may designate interest rate derivatives as cash flow hedges to manage our exposure to certain interest rate risks.

Changes in the fair value of these derivatives are deferred in AOCI and reclassified to OI&E when the hedged item is recognized in earnings.

Fair Value Hedges

We designate foreign currency forward contracts as fair value hedges to hedge foreign currency risks for our marketable securities denominated in currencies other than the U.S.

Fair value hedge amounts included in the assessment of hedge effectiveness are recognized in OI&E, along with the offsetting gains and losses of the related hedged items.

We exclude forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in OI&E.

We designate foreign currency forwards as fair value hedges to hedge foreign currency risks for our marketable debt securities denominated in currencies other than the US dollar.

Fair value hedge amounts included and excluded from the assessment of hedge effectiveness are recognized in OI&E.

Net Investment Hedges

We designate foreign currency forward contracts as net investment hedges to hedge the foreign currency risks related to our investment in foreign subsidiaries.

Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI along with the foreign currency translation adjustment.

We exclude forward points from the assessment of hedge effectiveness and recognize changes in the excluded component in OI&E.

Other Derivatives

We enter into foreign currency forward and option contracts that are not designated as hedging instruments to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary.

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

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

From time to time, we enter into derivatives to hedge the market price risk on certain of our marketable equity securities.

We designate foreign currency forwards, options (including collars), cross-currency swaps, and foreign currency-denominated debt as net investment hedges to hedge the foreign currency risks related to our investments in foreign

Alphabet Inc.

subsidiaries.

Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI.

Changes in the fair value of hedge components of forward and option contracts that are excluded from the assessment of hedge effectiveness are recognized in OI&E.

Hedge components of cross-currency swaps that are excluded from the assessment of hedge effectiveness are amortized over the life of the hedging instrument and recognized in OI&E.

The difference between fair value changes of the excluded component and the amount amortized to OI&E is recorded in AOCI.

We had no foreign currency-denominated debt as of December 31, 2024 and $ 15.4 billion carrying value of foreign currency-denominated debt designated as net investment hedges as of December 31, 2025 .

Derivatives Not Designated as Hedging Instruments

We enter into derivatives not designated as hedging instruments to manage risks related to our ongoing business operations.

The primary risk managed is foreign exchange risk related to the remeasurement of monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary.

Gains and losses on these foreign exchange derivatives are recorded within the “foreign currency exchange gain (loss), net” component of OI&E.

We also enter into derivatives to manage other risks, to enhance investment returns, and as a result of agreements with certain third parties to backstop certain obligations relating to data center leases.

Gains and losses arising from other derivatives are primarily reflected within the “other” component of OI&E.

See Note 7 for further details.

Alphabet Inc.

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

7 unchanged sentences

Foreign exchange contracts $ 44,227 $ 56,085

Credit derivatives (1)

Other contracts $ 15,082 $ 15,900

(1) Notional amounts for credit derivatives are the backstop obligations related to certain third-party data center leases and represent the maximum potential amount of future payments that could be required in the event of certain default scenarios over remaining agreement periods of up to 15 years.

In the event we are required to make payments under certain backstop obligations, we may receive equity in or cash payments from certain counterparties, the amounts for which are not reflected in the notional amounts for credit derivatives.

See Note 5 for further details.

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

8 unchanged sentences

Total derivatives not designated as hedging instruments

Total $ 453 $ 445 $ 1,728 $ 612

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

(2) Derivative liabilities are recorded as accrued expenses and other liabilities, current and non-current in the Consolidated Balance Sheets.

The gains (losses) on derivatives in cash flow hedging and net investment hedging relationships recognized in other comprehensive income (OCI) are summarized below (in millions):

674 612 416 182

$ 1,728 $ 612 $ 732 $ 379

(1) Derivative assets are recorded as other current and non-current assets.

(2) Derivative liabilities are recorded as accrued expenses and other liabilities, current and non-current.

Alphabet Inc.

The gains (losses) on derivatives and non-derivative financial instruments in cash flow hedging and net investment hedging relationships recognized in other comprehensive income are summarized below (in millions):

Year Ended December 31,

2023 2024 2025

Derivatives in cash flow hedging relationship:

Foreign exchange contracts

Cash flow hedging relationship:

Foreign exchange and other contracts

Amount included in the assessment of effectiveness $ 90 $ 857 $ ( 978 )

Amount excluded from the assessment of effectiveness 84 77 ( 45 )

Derivatives in net investment hedging relationship:

Net investment hedging relationship:

Amounts included in the assessment of effectiveness

Foreign exchange contracts

Amount included in the assessment of effectiveness 608 ( 287 ) 223

( 287 ) 223 ( 765 )

Foreign currency-denominated debt

Amounts excluded from the assessment of effectiveness

Foreign exchange contracts 0 0 11

Total $ ( 113 ) $ 1,157 $ ( 2,170 )

Alphabet Inc.

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

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

(in millions):

2 unchanged sentences

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

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

Total amounts included on the Consolidated Statements of Income

$ 307,394 $ 1,424 $ 350,018 $ 7,425 $ 402,836 $ 29,787

Effect of cash flow hedges:

Foreign exchange contracts

Amount reclassified from AOCI to income

Amount included in the assessment of effectiveness 213 0 174 0 ( 233 ) 0

Amount excluded from the assessment of effectiveness

24 0 37 0 107 0

Amount excluded from the assessment of effectiveness (amortized) ( 85 ) 0 24 0 37 0

Effect of fair value hedges:

1 unchanged sentence

Hedged items 0 59 0 ( 59 ) 0 ( 9 )

Derivatives designated as hedging instruments 0 163 0 ( 59 ) 0 58

Amount included in the assessment of effectiveness

0 ( 59 ) 0 58 0 9

Amount excluded from the assessment of effectiveness 0 15 0 13 0 1

6 unchanged sentences

Total gains (losses) $ 237 $ 262 $ 211 $ 658 $ ( 126 ) $ 487

$ 1,961 $ ( 63 ) $ 237 $ 262 $ 211 $ 658

Alphabet Inc.

Offsetting of Derivatives

1 unchanged sentence

Cash collateral received related to derivative instruments under our collateral security arrangements are included in other current assets with a corresponding liability .

Cash and non-cash collateral pledged related to derivative instruments under our collateral security arrangements are included in other current assets.

Alphabet Inc.

Cash and non-cash collateral pledged related to derivative instruments under our collateral security arrangements are primarily included in other current assets.

The gross amounts of derivative instruments subject to master netting arrangements with various counterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (in millions):

24 unchanged sentences

Total lease cost $ 5,048 $ 5,173 $ 5,702

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

Alphabet Inc.

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

Weighted-average remaining lease term:

4 unchanged sentences

Finance leases 2.8 % 3.1 %

Alphabet Inc.

Operating leases:

10 unchanged sentences

Total finance lease liabilities $ 1,677 $ 2,500

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

Year Ended December 31,

10 unchanged sentences

Finance leases $ 564 $ 313 $ 1,606

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

(1) Financing cash flows used for financing leases are included within financing activities as repayments of debt.

The year ended December 31, 2025 includes $ 1.1 billion of prepayments for finance leases not yet commenced.

Alphabet Inc.

Future lease payments as of December 31, 2025 were as follows (in millions):

6 unchanged sentences

Thereafter 5,654 1,143

Total future lease payments 17,038 1,888

Less imputed interest ( 2,460 ) ( 211 )

Total undiscounted lease payments

imputed interest

( 2,297 ) ( 369 )

Total lease liability balance $ 15,954 $ 2,500

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.

As of December 31, 2025 , we have entered into leases primarily related to data centers that have not yet commenced with short-term and long-term future lease payments of $ 5.8 billion and $ 52.7 billion, respectively, that are not yet recorded.

These leases will commence between 2026 and 2031 with non-cancelable lease terms primarily between one and 25 years.

In January 2026, we executed a power purchase agreement which we expect to be accounted for as a lease resulting in future payments depending on certain agreement terms of $ 9.9 billion between 2027 and 2047.

If certain contractual conditions for the project are not met, we would instead make a one-time payment of approximately $ 3.5 billion and assume ownership of the power generating assets.

Variable Interest Entities

Consolidated VIEs

Alphabet Inc.

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

1 unchanged sentence

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

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, 2024 and 2025, assets that can only be used to settle obligations of these VIEs were $ 8.7 billion and $ 5.6 billion, respectively, and are primarily included in cash and cash equivalents.

As of December 31, 2024 and 2025, liabilities for which creditors only have recourse to the VIEs were $ 2.3 billion and $ 2.0 billion, respectively.

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

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.

We may continue to fund ongoing operations, including the potential funding of employee compensation programs, of certain VIEs that are included within Other Bets.

In February 2026, Waymo, a consolidated VIE, announced an investment round of $ 16.0 billion, the significant majority of which was funded by Alphabet.

Investments from external parties will be accounted for as equity transactions and will result in recognition of noncontrolling interests.

Total noncontrolling interests (NCI) in our consolidated subsidiaries were $ 4.2 billion and $ 3.4 billion as of December 31, 2024 and 2025, respectively, of which $ 1.1 billion and $ 841 million were redeemable noncontrolling interests (RNCI) as of December 31, 2024 and 2025, respectively.

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

2 unchanged sentences

Unconsolidated VIEs

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

These VIEs include private companies that are primarily early stage companies and certain renewable energy entities in which activities involve power generation using renewable sources.

We have determined that the governance structures of these entities do not allow us to direct the activities that would significantly affect their economic performance.

Therefore, we are not the primary beneficiary, and the results of operations and financial position of these VIEs are not included in our consolidated financial statements.

We account for these investments primarily as non-marketable equity securities or equity method investments, 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.

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.

We hold various forms of interests in Variable Interest Entities (VIEs), including certain of our investments in private companies and renewable energy entities, certain leases and credit backstops with data center entities, and certain backstops with energy infrastructure entities.

Because we have determined that we do not direct the activities that most significantly impact the economic performance of these entities, we are not the primary beneficiary.

Therefore, these VIEs are not consolidated within our financial statements.

Our investments in private companies and renewable energy VIEs are primarily accounted for as non-marketable securities under the measurement alternative or the equity method.

The carrying value of these investments are included within non-marketable securities on our Consolidated Balance Sheets.

See Note 3 for further details on investments.

The maximum exposure to these VIEs is generally limited to the current carrying value plus future funding commitments.

As of December 31, 2024 and 2025, future funding commitments were $ 1.5 billion and $ 1.1 billion, respectively.

Alphabet Inc.

Leases with data center leasing VIEs are accounted for as finance leases and are included within total lease obligations disclosed in Note 4.

The maximum exposure arising from leases with VIEs is limited to the net carrying value of commenced finance lease assets, plus the undiscounted future obligations for leases that have not yet commenced.

See Note 4 for further details on leases.

Credit backstops we have provided to data center VIEs are accounted for as credit derivatives.

The maximum exposure arising from credit backstops with VIEs is limited to the financial risk over the remaining period of the arrangements, as reflected by the credit derivative notional value.

See Note 3 for further details on credit derivatives.

Backstop agreements we have provided to energy infrastructure VIEs are accounted for as financial guarantees.

The maximum exposure to these VIEs is limited to the potential amount of future payments under these arrangements.

See Note 10 for further details on financial guarantees.

Short-Term Debt

We have a debt financing program of up to $ 10.0 billion through the issuance of commercial paper.

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

We had no 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

We have a commercial paper program of up to $ 25.0 billion, which is used for general corporate purposes.

We had $ 2.3 billion of commercial paper outstanding with a weighted-average effective interest rate of 4.4 % as of December 31, 2024 and no commercial paper outstanding as of December 31, 2025.

The 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.

Long-Term Debt

During 2025, we issued $ 22.5 billion of US dollar-denominated senior unsecured notes and € 13.25 billion of euro-denominated senior unsecured notes for general corporate purposes.

In May 2025, we issued $ 5.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of 4.89 %, and a weighted-average maturity of approximately 24 years.

Additionally, in May 2025, we issued € 6.75 billion of euro-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of 3.31 %, and a weighted-average maturity of approximately 14 years.

In November 2025, we issued $ 500 million of US dollar-denominated floating-rate senior unsecured notes and $ 17.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of 4.92 % and a weighted-average maturity of approximately 20 years.

Additionally in November 2025, we issued € 6.5 billion of euro-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of 3.44 % and a weighted-average maturity of approximately 16 years.

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

1 unchanged sentence

Maturity Coupon Rate 2024 2025

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 %

2016 US dollar notes 2026 2.00 % 2.23 % $ 2,000 $ 2,000

2020 US dollar notes 2027 - 2060 0.80 % - 2.25 %

0.93 % - 2.33 %

2025 US dollar notes (1)

2028 - 2075 3.88 % - 5.70 %

4.00 % - 5.79 %

2025 Euro notes (2)

2028 - 2064 2.38 % - 4.38 %

2.57 % - 4.51 %

Total face value of long-term debt 12,000 49,085

Unamortized discount and debt issuance costs (2)

( 118 ) ( 542 )

current portion of long-term notes (3)

1 unchanged sentence

Total long-term debt $ 10,883 $ 46,547

Alphabet Inc.

(1) Includes $ 500 million of floating-rate notes due in 2028.

Interest is calculated using the compounded Secured Overnight Financing Rate (SOFR) plus 0.52 %, reset quarterly.

(2) Principal, unamortized discount, and debt issuance costs for the euro-denominated notes include the effect of foreign exchange rates.

(3) 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 rank equally with each other.

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

The effective interest rates are based on proceeds received with interest payable semi-annually.

Alphabet Inc.

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

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

The floating-rate notes are not redeemable prior to maturity.

Interest is payable quarterly for the floating-rate notes, semi-annually for the US dollar-denominated fixed-rate notes, and annually for the euro-denominated fixed-rate notes.

The effective interest rates are based on proceeds received and contractual interest payments.

The total estimated fair value of the outstanding notes was approximately $ 9.0 billion and $ 45.6 billion as of December 31, 2024 and December 31, 2025, respectively.

5 unchanged sentences

As of December 31, 2025, we had $ 10.0 billion of revolving credit facilities, of which $ 4.0 billion expires in April 2026 and $ 6.0 billion expires in April 2030.

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.

The interest rates for all credit facilities are determined based on a formula using certain market rates .

No amounts were outstanding under the credit facilities as of December 31, 2024 and 2025.

6 unchanged sentences

Technical infrastructure (1)

$ 141,852 $ 203,679

Office space 45,403 48,348

4 unchanged sentences

Property and equipment, net $ 171,036 $ 246,597

(1) As of December 31, 2024 and 2025, approximately 60 % of technical infrastructure assets were comprised of servers and network equipment.

The remaining balance was comprised of data center land and buildings and related assets.

Accrued Expenses and Other Current Liabilities

2 unchanged sentences

As of December 31,

European Commission fines (1)

Accrued fines and settlements (1)

$ 9,830 $ 15,594

1 unchanged sentence

Accrued customer liabilities 4,304 5,029

Current operating lease liabilities 2,791 2,887

Payables to brokers for unsettled investment trades 3,866 950

Income taxes payable, net 2,905 523

1 unchanged sentence

Accrued expenses and other current liabilities $ 51,228 $ 55,557

(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.

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.

(1) See Legal Matters in Note 10 for further details.

Accumulated Other Comprehensive Income (Loss)

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Gain (loss) on equity securities, net 392 3,714 24,080

Performance fees 798 257 218

Income (loss) and impairment from equity method investments, net ( 628 ) ( 188 ) 281

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(1) Interest expense is net of interest capitalized of $ 181 million, $ 194 million, and $ 447 million for the years ended December 31, 2023, 2024, and 2025, respectively.

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.

Pending Acquisitions

In March 2025, we entered into a definitive agreement to acquire Wiz, a leading cloud security platform, for $ 32.0 billion, subject to closing adjustments, in an all-cash transaction.

The acquisition of Wiz is expected to close in 2026, subject to customary closing conditions, including the receipt of regulatory approvals.

Upon the close of the acquisition, Wiz will be part of the Google Cloud segment.

In December 2025, we entered into a definitive agreement to acquire Intersect, which provides data center and energy infrastructure solutions, for $ 4.8 billion in cash, plus the assumption of debt.

The acquisition of Intersect is expected to close in the first half of 2026, subject to customary closing conditions.

Changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2025 were as follows (in millions):

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

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 $ 8.8 billion as of December 31, 2024, of which the majority is paid quarterly through the first quarter of 2030.

We have certain content licensing agreements with future fixed or minimum guaranteed commitments of $ 7.7 billion as of December 31, 2025, of which the majority is paid quarterly through the first quarter of 2030.

Financial Guarantees

We provide financial guarantees to certain counterparties, in the form of backstop agreements with varying terms through August 2026.

These backstop agreements support counterparty procurement of long-lead time equipment for our future power purchase agreements.

As of December 31, 2025, our maximum potential amount of future payments under these guarantees was $ 5.7 billion, upon which we may receive certain assets.

The fair value of these obligations was not material.

Indemnifications

In the normal course of business, including to facilitate transactions in our services and products and corporate activities, we indemnify certain parties, including advertisers, Google Network partners, distribution partners, customers of Google Cloud offerings, lessors, and service providers with respect to certain matters.

We have agreed to defend and/or hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties.

We have agreed to defend and/or indemnify certain parties against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties.

Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim.

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

Alphabet Inc.

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:

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 US, 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.

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 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.

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• 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 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 € 1.5 billion fine, 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.

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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.

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.

In October 2020, the DOJ and a number of state Attorneys General filed a lawsuit in the US District Court for the District of Columbia concerning Google's Search and Search advertising practices and its compliance with US antitrust laws.

In August 2024, the US District Court for the District of Columbia ruled against Google.

A final judgment was entered in December 2025, which, among other things, imposes restrictions on how Google distributes its services and requires Google to share certain search data with and offer syndication services to certain competitors.

In January 2026, we appealed the final judgment and moved to pause implementation of certain remedies.

In February 2026, the DOJ and state Attorneys General also appealed.

Further, in June 2022, the Australian Competition and Consumer Commission (ACCC) opened an investigation into Search distribution practices.

In August 2025, we agreed to a settlement with the ACCC requiring, among other things, changes to our Android agreements.

We recognized a charge in the second quarter of 2025, and the settlement was approved by the court in December 2025.

In October 2023, the Japanese Fair Trade Commission (JFTC) opened an investigation into Search distribution practices.

In April 2025, the JFTC issued a cease-and-desist order requiring us to make changes to our Android agreements to ensure they are consistent with Japanese antitrust law.

The JFTC did not impose monetary penalties.

• 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, 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.

In December 2020, a number of state Attorneys General filed a lawsuit in the US District Court for the Eastern District of Texas concerning Google's advertising technology and its compliance with US antitrust laws and state deceptive trade laws.

In January 2023, the DOJ, along with a number of state Attorneys General, filed a lawsuit in the US District Court for the Eastern District of Virginia concerning Google's advertising technology and its compliance with US antitrust laws, and a number of additional state Attorneys General subsequently joined the lawsuit.

In April 2025, the US District Court for the Eastern District of Virginia issued a mixed decision in the DOJ case against Google, ruling that neither Google's advertiser tools nor the DoubleClick and AdMeld acquisitions were anticompetitive, but that Google's publisher tools unfairly excluded rivals.

A separate proceeding to determine remedies, the range of which vary widely, took place in September 2025, with the parties presenting differing remedy proposals.

The DOJ's remedy proposal includes structural remedies that could have a material adverse effect on our business.

Closing arguments were held in November 2025, and we are awaiting a final judgment.

After that judgment, we plan to appeal the adverse portion of the April 2025 decision and potentially aspects of the remedies decision.

A trial in the state Attorneys General case in the Eastern District of Texas will take place after a decision on remedies is issued in the DOJ case.

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

Further, in September 2025, the EC announced its decision that Google had infringed European competition laws through "self-preferencing" practices on the buy-side and the sell-side relating to Google's advertising technology business.

The EC decision imposed a € 3.0 billion fine and directed Google to cease and desist the alleged "self-preferencing" practices.

We appealed the ruling in November 2025.

We recognized a charge of

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$ 3.5 billion in the third quarter of 2025, and we placed bank guarantees in the fourth quarter of 2025 in lieu of cash payment.

In September 2024, the UK also issued a Statement of Objections concerning Google's advertising technology and its compliance with UK antitrust laws, to which we responded.

• 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 July 2021, a number of state Attorneys General filed a lawsuit in the US District Court for the Northern District of California concerning Google’s operation of Android and Google Play and its compliance with US 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 and recognized a charge.

Final approval of the settlement remains pending before the court.

The court preliminarily approved the settlement in November 2025, and final approval 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.

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

Google 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.

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We appealed the judgment, including the jury verdict and aspects of the remedies ordered, and in July 2025, the Court of Appeals denied our appeal.

We are in the process of appealing that decision to the US Supreme Court, and we implemented the ordered remedies in October 2025 while the appeal is pending.

In October 2025, we reached a settlement with Epic to modify the remedies in this case and resolve certain other lawsuits Epic has filed regarding Google Play's business.

The settlement is contingent on the court approving a proposed modified injunction.

Epic and Google filed a joint motion to modify the injunction in November 2025, which is currently pending before the court.

• 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.

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

In March 2025, the EC issued preliminary findings of non-compliance in both investigations, to which we responded.

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

In addition to these antitrust proceedings, private individual and collective actions that overlap with claims pursued by regulatory authorities are pending in the US and in several other jurisdictions, including across Europe.

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

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.

We continue to cooperate with federal and state regulators in the US, the EC, and other regulators around the world.

Privacy Matters

We are subject to a number of privacy-related laws and regulations, and we currently are party to a number of privacy investigations and lawsuits ongoing in multiple jurisdictions.

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

and the 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.

For example, there are ongoing investigations and litigation in the US and the EU, including those relating to our collection and use of location information, the choices we offer users, and advertising practices, which could result in significant fines, judgments, and product changes.

In October 2025, we finalized a $ 1.4 billion settlement of certain privacy matters.

Patent and Intellectual Property Claims

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As a result, we may have to change our business practices and develop non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business.

In addition, the U.S.

International Trade Commission (ITC) has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss in an ITC action can result in a prohibition on importing infringing products into the U.S.

Because the U.S.

is an important market, a prohibition on importation could have an adverse effect on us, including preventing us from importing many important products into the U.S.

or necessitating workarounds that may limit certain features of our products.

In addition, the ITC has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss in an ITC action can result in a prohibition on importing infringing products into the US.

Because the US is an important market, a prohibition on importation could have an adverse effect on us, including preventing us from importing many important products into the US or necessitating workarounds that may limit certain features of our products.

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.

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, design of our products and services, personal injury and other tort and nuisance theories, consumer protection, including how we moderate content on our platforms, AI, and other matters.

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For example, we periodically have data incidents that we report to relevant regulators as required by law.

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

See Note 14 for information regarding income tax contingencies.

Alphabet Inc.

See Note 14 for further details regarding income tax contingencies.

Stockholders' Equity

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In the years ended December 31, 2023, 2024, and 2025 , 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.

In April 2024, the company's Board of Directors authorized a $ 70.0 billion share repurchase program for its Class A and Class C shares.

In April 2025, the company's Board of Directors authorized an additional $ 70.0 billion share repurchase program for its Class A and Class C shares.

As of December 31, 2025, $ 69.5 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):

Year Ended December 31, 2023 Year Ended December 31, 2024

Shares Amount Shares Amount

Year Ended December 31,

2023 2024 2025

Shares Amount Shares Amount Shares Amount

Class A share repurchases 78 $ 9,316 73 $ 11,855 37 $ 6,501

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528 $ 62,184 379 $ 62,047 240 $ 45,398

(1) Shares repurchased include unsettled repurchases.

(1) Shares repurchased include any 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.

The repurchase programs do not have an expiration date.

During the year ended December 31, 2025, total cash dividends were $ 4.8 billion for Class A, $ 703 million for Class B, and $ 4.5 billion for Class C shares, respectively.

Alphabet Inc.

In April 2025, the company's Board of Directors increased the quarterly cash dividend by 5 % to $ 0.21 per share of outstanding Class A, Class B, and Class C shares.

The company has declared a quarterly cash dividend in the current quarter, and 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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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.

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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.

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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):

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

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Year Ended December 31, 2025

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

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Compensation Plans

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For the years ended December 31, 2023, 2024, and 2025, total SBC expense was $ 22.1 billion, $ 22.8 billion, and $ 27.1 billion, including amounts associated with awards we expect to settle in Alphabet stock of $ 21.7 billion, $ 22.0 billion, and $ 24.1 billion, respectively.

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.

For the years ended December 31, 2023, 2024, and 2025, we recognized tax benefits on total SBC expense, which are reflected in the provision for income taxes, of $ 4.5 billion, $ 4.6 billion, and $ 5.0 billion, respectively.

For the years ended December 31, 2023, 2024, and 2025, tax benefit realized related to awards vested or exercised during the period was $ 5.6 billion, $ 6.8 billion, and $ 8.1 billion, respectively.

These amounts do not include the indirect effects of stock-based awards, which primarily relate to the R&D tax credit.

These amounts do not include the indirect effects of stock-based awards, which primarily relate to the research and development tax credit.

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Stock-Based Award Activities

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Total $ 85,717 $ 119,815 $ 158,826

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

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Provision for income taxes $ 11,922 $ 19,697 $ 26,656

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

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2023 2024 2025

federal statutory tax rate 21.0 % 21.0 % 21.0 %

Foreign income taxed at different rates 3.0 0.3 0.5

US federal statutory rate 18,001 21.0 % 25,161 21.0 % 33,353 21.0 %

State and local income taxes, net of federal income tax effect (1)

823 1.0 % 1,199 1.0 % 1,606 1.0 %

Foreign tax effects:

Withholding taxes 1,064 1.2 % 1,041 0.9 % 1,384 0.9 %

Other 62 0.1 % 12 0.0 % 23 0.0 %

Other foreign jurisdictions ( 74 ) ( 0.1 ) % 353 0.3 % 396 0.2 %

Effect of change in tax laws or rates enacted in the current period ( 829 ) ( 1.0 ) % 0 0.0 % 0 0.0 %

Effect of cross-border tax laws:

Foreign-derived intangible income deduction ( 3,980 ) ( 4.6 ) % ( 4,568 ) ( 3.8 ) % ( 3,931 ) ( 2.5 ) %

Stock-based compensation expense ( 1.2 ) ( 0.8 ) ( 1.5 )

Other 215 0.2 % 321 0.3 % 295 0.2 %

Federal research credit ( 1,575 ) ( 1.8 ) % ( 1,792 ) ( 1.5 ) % ( 2,088 ) ( 1.3 ) %

Deferred tax asset valuation allowance 0.9 0.6 0.4

State and local income taxes 0.8 1.0 1.1

Effect of tax law change 0.0 ( 1.4 ) 0.0

Foreign tax credits ( 1,396 ) ( 1.6 ) % ( 1,373 ) ( 1.1 ) % ( 1,684 ) ( 1.1 ) %

Other ( 498 ) ( 0.6 ) % ( 198 ) ( 0.2 ) % ( 98 ) ( 0.1 ) %

Effective tax rate 15.9 % 13.9 % 16.4 %

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 guidance on the capitalization and amortization of R&D expenses.

Changes in valuation allowances 513 0.6 % 603 0.5 % 1,170 0.7 %

Nontaxable or nondeductible items:

Stock-based compensation expense ( 602 ) ( 0.7 ) % ( 1,743 ) ( 1.5 ) % ( 2,601 ) ( 1.6 ) %

Other 169 0.2 % 203 0.2 % 955 0.6 %

Changes in unrecognized tax benefits 432 0.5 % 689 0.6 % ( 1,123 ) ( 0.7 ) %

Other adjustments ( 403 ) ( 0.5 ) % ( 211 ) ( 0.2 ) % ( 1,002 ) ( 0.6 ) %

Total $ 11,922 13.9 % $ 19,697 16.4 % $ 26,656 16.8 %

(1) The tax effect in this category primarily reflects state and local taxes in New York state, New York city, Pennsylvania, Minnesota, Illinois, New Jersey and Wisconsin.

In 2023, the IRS issued a rule change allowing taxpayers to temporarily apply the regulations in effect prior to 2022 related to US federal foreign tax credits as well as a separate rule change with guidance on the capitalization and amortization of research and development expenses.

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

Changes to US tax law enacted on July 4, 2025, allow for immediate expensing of domestic research and experimentation costs, accelerated depreciation on eligible capital expenditures, and other tax law changes impacting 2025 with certain changes effective in 2026.

These changes are reflected in our results for the year ended December 31, 2025 .

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As of December 31, 2025, our federal, state, and foreign net operating loss carryforwards for income tax purposes were approximately $ 13.0 billion, $ 25.1 billion, and $ 2.9 billion respectively.

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.

If not utilized, the federal, foreign and state net operating loss carryforwards will all begin to expire in 2026.

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

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As of December 31, 2025 , our Federal and California research and development credit carryforwards for income tax purposes were approximately $ 771 million and $ 6.4 billion, respectively.

If not utilized, the Federal R&D credit will begin to expire in 2037 and the California R&D credit can be carried over indefinitely.

If not utilized, the Federal research and development credit will begin to expire in 2037 and the California research and development credit can be carried over indefinitely.

We believe the majority of the federal tax credit and state tax credit is not likely to be realized.

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We believe this tax credit is not likely to be realized.

As of December 31, 2024, we maintained a valuation allowance with respect to California deferred tax assets, certain federal net operating losses, certain state net operating losses and tax credits, net deferred tax assets relating to Other Bet companies, and certain foreign net operating losses that we believe are not likely to be realized.

As of December 31, 2025, we maintained a valuation allowance with respect to California deferred tax assets, certain federal net operating losses, certain state net operating losses and tax credits, net deferred tax assets relating to certain Other Bet companies, and certain foreign net operating losses that we believe are not likely to be realized.

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.

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Cash paid for income taxes, net of refunds, were as follows (in millions):

Year Ended December 31,

2023 2024 2025

US federal $ 13,689 $ 19,921 $ 13,658

US state and local 1,224 2,697 2,919

1,264 1,101 1,368

Other 2,987 3,634 3,581

Total foreign 4,251 4,735 4,949

Total cash paid for income taxes, net of refunds $ 19,164 $ 27,353 $ 21,526

Uncertain Tax Positions

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Ending gross unrecognized tax benefits $ 9,438 $ 12,619 $ 11,512

We are subject to income taxes in the U.S.

and foreign jurisdictions.

We are subject to income taxes in the US and foreign jurisdictions.

Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes.

The total amount of gross unrecognized tax benefits was $ 9.4 billion, $ 12.6 billion, and $ 11.5 billion as of December 31, 2023 , 2024, and 2025, respectively, of which $ 7.4 billion, $ 10.0 billion, and $ 9.7 billion, if recognized, would affect our effective tax rate, 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.

federal jurisdiction and in many state and foreign jurisdictions.

Our two major tax jurisdictions are the U.S.

federal and Ireland.

As of December 31, 2024 and 2025, we accrued $ 1.1 billion and $ 1.2 billion in interest and penalties in provision for income taxes, respectively.

We are subject to the continuous examination of our income tax returns by the IRS and other tax authorities.

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We continue to defend such claims as presented.

The tax years 2016 through 2023 remain subject to examination by the appropriate governmental agencies for Irish tax purposes.

There are other ongoing audits in various other jurisdictions that are not material to our financial statements.

We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.

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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, 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 will materially change in the next 12 months.

Information about Segments and Geographic Areas

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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.

Alphabet Inc.

• Other Bets is a combination of multiple operating segments that are not individually material.

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

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

Revenues, certain costs, such as costs associated with content and traffic acquisition, certain engineering activities, and devices, as well as certain operating expenses are directly attributable to our segments.

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

These costs primarily include:

• certain AI-focused shared research and development activities, including employee compensation expenses and technical infrastructure usage costs associated with the development 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 employee severance and office space reductions during 2023 and 2024 were also not allocated to our segments.

Charges associated with employee severance and office space reductions are also not allocated to our segments.

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

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Google Services

$ 95,858 $ 121,263 $ 139,404

Google Cloud 1,716 6,112 13,910

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Total income from operations $ 84,293 $ 112,390 $ 129,039

Supplemental information about our segment expenses:

Supplemental information about segment expenses:

Google Services:

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$ 31,372 $ 37,117 $ 44,795

Alphabet Inc.

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.

Google Services and Google Cloud other costs and expenses primarily include direct costs, such as advertising and promotional activities, legal and other matters, 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.

Alphabet Inc.

See Note 2 for further details relating to revenues by geography.

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

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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.

In January 2026, we recognized approximately $ 32.0 billion of unrealized gains in our non-marketable investments.

These unrealized gains reflect an estimated increase in the fair value measurement following observable transactions that occurred in January 2026, and are subject to change as we finalize related valuations.

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

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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