Workflow
Alphabet(GOOG) - 2024 Q4 - Annual Report
GOOGAlphabet(GOOG)2025-02-05 01:41

Innovation and Technology - Alphabet invested over 150billioninresearchanddevelopmentoverthelastfiveyearstosupportinnovationandproductdevelopment[20]−Gemini,themultimodalAImodel,wasintroducedin2023andisnowintegratedintoallsevenofAlphabet′stwobillion−userproducts,includingSearchandYouTube[22]−AIOverviewshavebeenreleasedinover100countries,reachingmorethanonebillionusers,enhancingthesearchexperience[39]−TheintroductionofAlphaFold3in2024buildsonpreviousmodelstopredictmolecularstructures,showcasingAI′spotentialinscientificchallenges[24]−ThelatestPixeldevicesincorporateGeminiNano,enhancingAI−assistedexperiencesforusers[33]−Waymo,Alphabet′sautonomousdrivingtechnologycompany,isnowprovidingfullyautonomous,paidride−hailingservicesinmultiplecities[34]FinancialPerformance−Consolidatedrevenuesincreasedfrom150 billion in research and development over the last five years to support innovation and product development[20] - Gemini, the multimodal AI model, was introduced in 2023 and is now integrated into all seven of Alphabet's two billion-user products, including Search and YouTube[22] - AI Overviews have been released in over 100 countries, reaching more than one billion users, enhancing the search experience[39] - The introduction of AlphaFold 3 in 2024 builds on previous models to predict molecular structures, showcasing AI's potential in scientific challenges[24] - The latest Pixel devices incorporate Gemini Nano, enhancing AI-assisted experiences for users[33] - Waymo, Alphabet's autonomous driving technology company, is now providing fully autonomous, paid ride-hailing services in multiple cities[34] Financial Performance - Consolidated revenues increased from 307,394 million in 2023 to 350,018millionin2024,agrowthof350,018 million in 2024, a growth of 42,624 million or 14%[221] - Operating income rose by 33%, from 84,293millionin2023to84,293 million in 2023 to 112,390 million in 2024[221] - Net income increased by 36%, from 73,795millionin2023to73,795 million in 2023 to 100,118 million in 2024[221] - Diluted EPS grew from 5.80in2023to5.80 in 2023 to 8.04 in 2024, reflecting a 39% increase[221] - Revenues for the year ended December 31, 2024, were 350.0billion,a14350.0 billion, a 14% increase year over year, driven by a 32.4 billion (12%) increase in Google Services and a 10.1billion(3110.1 billion (31%) increase in Google Cloud revenues[223] - Google Search & other revenues increased by 23.1 billion from 2023 to 2024, attributed to growth in search queries and advertiser spending[225] - YouTube ads revenues rose by 4.6billionfrom2023to2024,supportedbyincreasedspendingonbrandanddirectresponseadvertising[226]−GoogleCloudrevenuesincreasedby4.6 billion from 2023 to 2024, supported by increased spending on brand and direct response advertising[226] - Google Cloud revenues increased by 10.1 billion from 2023 to 2024, primarily due to growth in infrastructure services[231] Costs and Expenditures - Total cost of revenues for 2024 was 146.3billion,a146.3 billion, a 13.0 billion increase from 2023, with TAC increasing by 4.0billionandothercostsrisingby4.0 billion and other costs rising by 9.0 billion[240] - Research and development expenses for 2024 were 49.3billion,up49.3 billion, up 3.9 billion from 2023, representing 14% of total revenues[244] - Capital expenditures for 2024 were 52.5billion,reflectinginvestmentsintechnicalinfrastructure[223]−Employeeseveranceandrelatedchargesdecreasedto52.5 billion, reflecting investments in technical infrastructure[223] - Employee severance and related charges decreased to 1.0 billion in 2024, down 1.1billionfrom2023[223]−GoogleServicesoperatingincomeincreasedby1.1 billion from 2023[223] - Google Services operating income increased by 25.4 billion from 2023 to 2024, driven by revenue growth, despite higher content acquisition costs and TAC[249] - Google Cloud operating income rose by 4.4billionfrom2023to2024,primarilyduetoincreasedrevenues,offsetbyhigherusagecostsandemployeecompensationexpenses[250]−OtherBetsoperatinglossincreasedby4.4 billion from 2023 to 2024, primarily due to increased revenues, offset by higher usage costs and employee compensation expenses[250] - Other Bets operating loss increased by 349 million from 2023 to 2024, mainly due to higher employee compensation expenses[251] Cash Flow and Shareholder Returns - Operating cash flow for the year ended December 31, 2024, was 125.3billion[223]−Netcashprovidedbyoperatingactivitiesincreasedfrom125.3 billion[223] - Net cash provided by operating activities increased from 101.7 billion in 2023 to 125.3billionin2024,attributedtohighercashreceivedfromcustomers[261]−During2024,thecompanyrepurchased379millionsharesfor125.3 billion in 2024, attributed to higher cash received from customers[261] - During 2024, the company repurchased 379 million shares for 62.0 billion, with an additional 70.0billionauthorizedforfuturerepurchases[275]−Totalcashdividendspaidin2024amountedto70.0 billion authorized for future repurchases[275] - Total cash dividends paid in 2024 amounted to 3.5 billion for Class A, 519millionforClassB,and519 million for Class B, and 3.3 billion for Class C shares[276] - As of December 31, 2024, the company held 95.7billionincash,cashequivalents,andmarketablesecurities[257]EnvironmentalandSocialResponsibility−Thecompanyaimstoreduce5095.7 billion in cash, cash equivalents, and marketable securities[257] Environmental and Social Responsibility - The company aims to reduce 50% of its combined Scope 1, Scope 2, and Scope 3 absolute emissions by 2030 compared to 2019 levels[53] - The goal is to achieve net-zero emissions across all operations and value chain by 2030, with significant investments in carbon removal solutions[53] - The company has set a target to run on 24/7 carbon-free energy by 2030, with ongoing implementation of carbon removals strategy starting in 2023[54] Employee and Organizational Insights - As of December 31, 2024, Alphabet had 183,323 employees, emphasizing the importance of a supportive work environment for talent retention[59] - The effective tax rate increased from 13.9% in 2023 to 16.4% in 2024, influenced by tax rule changes and a decrease in certain tax deductions[254] - As of December 31, 2024, the company had income taxes payable of 2.7 billion related to a one-time transition tax due in 2025[280] - The company reported long-term taxes payable of $8.8 billion primarily related to uncertain tax positions as of December 31, 2024[280] Legal and Compliance Matters - The company is subject to claims and lawsuits, and records a liability when it is probable that a loss has been incurred and can be reasonably estimated[294] - The company evaluates legal matters regularly to determine the likelihood and estimated amount of potential losses, which may be material[295]