Alphabet(GOOGL) - 2024 Q3 - Quarterly Report

Revenue and Net Income - Total revenues for the nine months ended September 30, 2024, were $253.549 billion, compared to$221.084 billion in the same period in 2023[12] - Net income for the nine months ended September 30, 2024, was $73.582 billion, up from$53.108 billion in the same period in 2023[12] - Net income for the three months ended September 2023 was $19.689 billion, increasing to$26.301 billion for the same period in 2024[14] - Comprehensive income for the nine months ended September 2023 was $53.675 billion, rising to$74.756 billion for the same period in 2024[14] - Net income for the nine months ended September 2024 was $73.582 billion[20] - Net income increased from$53.108 billion in September 2023 to $73.582 billion in September 2024[22] - Total revenues for the three months ended September 30, 2024, were$88,268 million, compared to $76,693 million for the same period in 2023[61] - Total revenues for the nine months ended September 30, 2024, were$253,549 million, compared to $221,084 million for the same period in 2023[63] - Revenues for the nine months ended September 30, 2024, increased to$253.549 billion from $221.084 billion in the same period in 2023[12] - Net income for the nine months ended September 30, 2024, rose to$73.582 billion from $53.108 billion in 2023[12] - Total revenues increased from$76.693 billion in September 2023 to $88.268 billion in September 2024[30] Cash and Investments - Total cash, cash equivalents, and marketable securities as of September 30, 2024, were$93.230 billion, down from $110.916 billion as of December 31, 2023[9] - Total investments with fair value change recorded in net income amounted to$19.49 billion, with $6.918 billion in gains and$12.572 billion in losses[38] - The carrying value of non-marketable equity securities was $33.7 billion as of September 30, 2024, with$13.7 billion remeasured at fair value during the quarter[42] - Total investments with fair value change reflected in other comprehensive income were $63.585 billion, including$880 million in gains and $534 million in losses[40] - The estimated fair value of available-for-sale marketable debt securities was$68.047 billion, with $5.439 billion due in 1 year or less and$13.220 billion due after 10 years[43] - Gross unrealized losses on government bonds, corporate debt securities, and mortgage-backed securities totaled $1.910 billion as of December 31, 2023[44] - The carrying value of marketable and non-marketable equity securities was$39.141 billion as of September 30, 2024, with cumulative net gains of $14.350 billion[48] - Total gain (loss) on debt securities recognized in other income (expense) was$160 million for the three months ended September 30, 2024[45] - The long-term portion of marketable equity securities subject to lock-up restrictions was $1.4 billion as of December 31, 2023[38] - Gross realized gains on debt securities were$426 million for the nine months ended September 30, 2024[45] - Non-marketable equity securities cumulative net gain (loss) included $22.4 billion gains and$8.5 billion losses as of September 30, 2024[48] - Realized net gain on equity securities sold during the three months ended September 30, 2023 was $42 million, compared to$41 million for the same period in 2024[49] - Unrealized net gain on non-marketable equity securities for the nine months ended September 30, 2024 was $3.038 billion, compared to a loss of$678 million for the same period in 2023[49] - Total cumulative net gains on equity securities sold during the nine months ended September 30, 2024 were $672 million, compared to$559 million for the same period in 2023[50] - Equity securities accounted for under the equity method had a carrying value of $2.0 billion as of September 30, 2024, up from$1.7 billion as of December 31, 2023[51] - Investments in convertible notes increased to $2.8 billion as of September 30, 2024, from$921 million as of December 31, 2023[52] - The net accumulated loss on foreign currency cash flow hedges before tax effect was $433 million as of September 30, 2024, expected to be reclassified into revenues within the next 12 months[54] - Gross notional amounts of outstanding foreign exchange contracts designated as cash flow hedges increased to$22.693 billion as of September 30, 2024, from $18.039 billion as of December 31, 2023[58] - Total fair value of outstanding derivative instruments increased to$645 million in assets and $770 million in liabilities as of September 30, 2024, compared to$453 million in assets and $445 million in liabilities as of December 31, 2023[58] - Amount included in the assessment of effectiveness for derivatives in cash flow hedging relationship was a loss of$738 million for the three months ended September 30, 2024, compared to a gain of $652 million for the same period in 2023[59] - Total investments with fair value change recorded in net income amounted to$19.49 billion, with $6.918 billion in gains and$12.572 billion in losses[38] - The long-term portion of marketable equity securities subject to long-term lock-up restrictions was $1.4 billion as of December 31, 2023[38] - Total investments with fair value change reflected in other comprehensive income were$63.585 billion, with $880 million in gains and$534 million in losses[40] - The carrying value of non-marketable equity securities was $33.7 billion as of September 30, 2024, with$13.7 billion remeasured at fair value during the three months ended September 30, 2024[42] - The estimated fair value of investments in available-for-sale marketable debt securities was $68.047 billion as of September 30, 2024, with$5.439 billion due in 1 year or less[43] - Total unrealized losses on government bonds, corporate debt securities, and mortgage-backed securities were $1.910 billion as of December 31, 2023[44] - Total unrealized losses on government bonds, corporate debt securities, and mortgage-backed securities were$520 million as of September 30, 2024[44] - Gross realized gain on debt securities was $426 million for the nine months ended September 30, 2024[45] - The carrying value of marketable and non-marketable equity securities was$39.141 billion as of September 30, 2024, with $14.350 billion in cumulative net gains[48] - Realized net gain on equity securities sold during the three months ended September 30, 2023 was$42 million, compared to $41 million for the same period in 2024[49] - Unrealized net gain on non-marketable equity securities for the three months ended September 30, 2024 was$1.462 billion, a significant increase from a loss of $184 million in 2023[49] - Cumulative net gains on equity securities sold during the nine months ended September 30, 2024 were$672 million, up from $559 million in 2023[50] - The carrying value of equity securities accounted for under the equity method increased from$1.7 billion as of December 31, 2023 to $2.0 billion as of September 30, 2024[51] - Investments in convertible notes grew substantially from$921 million as of December 31, 2023 to $2.8 billion as of September 30, 2024[52] - The net accumulated loss on foreign currency cash flow hedges before tax effect was$433 million as of September 30, 2024, expected to be reclassified into revenues within the next 12 months[54] - Gross notional amounts of outstanding foreign exchange contracts designated as cash flow hedges increased from $18.039 billion as of December 31, 2023 to$22.693 billion as of September 30, 2024[58] - Total fair value of outstanding derivative instruments rose from $453 million as of December 31, 2023 to$645 million as of September 30, 2024[58] - Amount included in the assessment of effectiveness for derivatives in cash flow hedging relationship was a loss of $738 million for the three months ended September 30, 2024, compared to a gain of$652 million in 2023[59] - Total comprehensive income related to derivatives in hedging relationships was a loss of $1.265 billion for the three months ended September 30, 2024, compared to a gain of$1.004 billion in 2023[59] Expenses and Costs - Research and development expenses for the nine months ended September 30, 2024, were $36.210 billion, up from$33.314 billion in the same period in 2023[12] - Cost of revenues for the nine months ended September 30, 2024, was $105.693 billion, compared to$95.757 billion in the same period in 2023[12] - Total costs and expenses for the nine months ended September 30, 2024, were $172.131 billion, up from$160.488 billion in 2023[12] - Stock-based compensation expense for the nine months ended September 2023 was $16.905 billion[17] - Stock-based compensation expense for the nine months ended September 30, 2024, was$17.104 billion, up from $16.905 billion in 2023[20] - Total stock-based compensation (SBC) expense was$5.8 billion for the three months ended September 30, 2023, and $5.9 billion for the same period in 2024[109] - Total SBC expense was$16.5 billion for the nine months ended September 30, 2023, and $17.0 billion for the same period in 2024[109] - Provision for income taxes increased from$1.508 billion in 2023 to $5.405 billion in 2024 for the three months ended September 30[111] - Effective tax rate increased from 7.1$430.266 billion, up from $402.392 billion as of December 31, 2023[9] - Property and equipment, net, increased to$161.270 billion as of September 30, 2024, from $134.345 billion as of December 31, 2023[9] - Total stockholders' equity increased from$267.141 billion as of June 30, 2023, to $273.202 billion as of September 30, 2023[16] - Total stockholders' equity as of September 30, 2024, was$314.119 billion[20] - Retained earnings as of September 30, 2024, increased to $235.317 billion from$211.247 billion at the end of 2023[20] - Other comprehensive income (loss) for the nine months ended September 30, 2024, was $1.174 billion, compared to$567 million in 2023[20] - Total long-term debt as of September 30, 2024, was $12,297 million, compared to$13,253 million as of December 31, 2023[73] - The estimated fair value of the outstanding notes was approximately $10.3 billion as of December 31, 2023, and$9.5 billion as of September 30, 2024[73] - The company had $10.0 billion of revolving credit facilities as of September 30, 2024, with$4.0 billion expiring in April 2025 and $6.0 billion expiring in April 2028[74] - The allowance for credit losses on accounts receivable increased from$771 million as of December 31, 2023, to $857 million as of September 30, 2024[75] - Property and equipment, net, increased from$134,345 million as of December 31, 2023, to $161,270 million as of September 30, 2024[76] - Accrued expenses and other current liabilities increased from$46,168 million as of December 31, 2023, to $46,585 million as of September 30, 2024[77] - Goodwill increased from$29,198 million as of December 31, 2023, to $31,935 million as of September 30, 2024, with additions of$2,730 million[85] - The company has content licensing agreements with future fixed or minimum guaranteed commitments of $9.2 billion as of September 30, 2024[86] - Long-lived assets in the United States increased to$129.32 billion as of September 30, 2024, up 17.5% from $110.05 billion as of December 31, 2023[116] - Total long-lived assets grew to$174.83 billion as of September 30, 2024, an 17.8% increase from $148.44 billion as of December 31, 2023[116] Share Repurchases and Dividends - Repurchases of stock for the nine months ended September 2023 totaled$46.156 billion[17] - Repurchases of stock for the nine months ended September 30, 2024, totaled $46.954 billion, compared to$46.156 billion in 2023[20] - The company repurchased $15.3 billion and$47.0 billion of Class A and Class C shares in the three and nine months ended September 30, 2024, respectively[100] - As of September 30, 2024, $59.7 billion remained available for Class A and Class C share repurchases under the April 2024 authorization[100] - The company paid$1.2 billion and $2.3 billion in cash dividends for Class A shares in the three and nine months ended September 30, 2024, respectively[103] - The company paid$1.1 billion and $2.2 billion in cash dividends for Class C shares in the three and nine months ended September 30, 2024, respectively[103] Legal and Regulatory Matters - The company paid a$3.0 billion cash payment in Q3 2024 for the 2017 EC shopping fine of €2.4 billion ($2.7 billion as of June 27, 2017)[91] - The company recognized a charge of$5.1 billion in 2018 for the EC Android fine, later reduced by $217 million in 2022[91] - The company recognized a charge of$1.7 billion in Q1 2019 for the EC AdSense fine, which was overturned in September 2024[91] - The company funded a settlement amount to an escrow agent in May 2024 related to a U.S. antitrust complaint filed by state Attorneys General[91] - The company is subject to ongoing privacy investigations and lawsuits in the U.S. and EU, which could result in significant fines and product changes[95] - The company is under audit by various domestic and foreign tax authorities regarding non-income tax matters, with potential material differences in outcomes[99] Business Segments and Revenue Growth - Google Search & other revenues grew from $44.026 billion in September 2023 to$49.385 billion in September 2024[30] - YouTube ads revenues increased from $7.952 billion in September 2023 to$8.921 billion in September 2024[30] - Google Cloud revenues rose from $8.411 billion in September 2023 to$11.353 billion in September 2024[30] - United States revenues grew from $36.354 billion in September 2023 to$43.139 billion in September 2024[31] - EMEA revenues increased from $22.661 billion in September 2023 to$25.472 billion in September 2024[31] - APAC revenues rose from $13.126 billion in September 2023 to$14.547 billion in September 2024[31] - Revenue backlog as of September 30, 2024, was $86.8 billion, primarily related to Google Cloud[32] - Deferred revenue as of December 31, 2023, was$5.0 billion, with $3.4 billion recognized as revenue during the nine months ended September 30, 2024[33] - Google Services revenue increased to$76.51 billion in Q3 2024, up from $67.99 billion in Q3 2023, representing a 12.5$11.35 billion in Q3 2024, a 35% increase compared to $8.41 billion in Q3 2023[115] - Other Bets revenue rose to$388 million in Q3 2024, up 30.6% from $297 million in Q3 2023[115] - Total revenues for Alphabet reached$88.27 billion in Q3 2024, a 15.1% increase from $76.69 billion in Q3 2023[115] - Google Services operating income grew to$30.86 billion in Q3 2024, up 28.9% from $23.94 billion in Q3 2023[115] - Google Cloud operating income surged to$1.95 billion in Q3 2024, a 632% increase from $266 million in Q3 2023[115] AI and Technology Investments - The company expects capital expenditures to increase, particularly in technical infrastructure investment to support AI products and services[5] - The company plans to continue investing in new businesses, products, services, technologies, and acquisitions[5] - Alphabet consolidated AI model development teams from Google Research and Google DeepMind to accelerate AI progress, effective Q2 2024[113] - Alphabet expects capital expenditures to increase, particularly in