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Alphabet(GOOGL) - 2024 Q4 - Annual Report
GOOGLAlphabet(GOOGL)2025-02-05 01:41

Innovation and Product Development - Alphabet invested over 150billioninresearchanddevelopmentoverthelastfiveyearstosupportinnovationandproductdevelopment[20]−In2024,AlphabetlaunchedGemini2.0,amultimodalAImodelthatpowersfeaturesacrossallsevenofitstwobillion−userproducts,includingSearchandYouTube[22]−GoogleSearchhasevolvedtoprovideanimprovedexperienceusingGemini,withAIOverviewsreleasedinover100countries,reachingmorethanonebillionusers[39]−TheintroductionofAIfeaturesinGoogleWorkspaceaimstoimproveproductivityandcollaborationforusers[31]−Alphabet′scybersecuritysolutionsutilizeAItohelpcustomersanalyzeandrespondtoabroadrangeofthreats[46]−Alphabet′sadvertisingsolutionsleverageAItechnologies,helpingadvertisersfinduntappedconversionopportunitiesthroughproductslikeDemandGenandPerformanceMax[43]FinancialPerformance−Consolidatedrevenuesincreasedfrom150 billion in research and development over the last five years to support innovation and product development[20] - In 2024, Alphabet launched Gemini 2.0, a multimodal AI model that powers features across all seven of its two billion-user products, including Search and YouTube[22] - Google Search has evolved to provide an improved experience using Gemini, with AI Overviews released in over 100 countries, reaching more than one billion users[39] - The introduction of AI features in Google Workspace aims to improve productivity and collaboration for users[31] - Alphabet's cybersecurity solutions utilize AI to help customers analyze and respond to a broad range of threats[46] - Alphabet's advertising solutions leverage AI technologies, helping advertisers find untapped conversion opportunities through products like Demand Gen and Performance Max[43] 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, primarily due to increases in employee compensation and depreciation expenses[244] - Capital expenditures for 2024 were 52.5billion,reflectinginvestmentsintechnicalinfrastructure[223]−Employeeseveranceandrelatedchargesdecreasedby52.5 billion, reflecting investments in technical infrastructure[223] - Employee severance and related charges decreased by 1.1 billion to 1.0billionfortheyearendedDecember31,2024[223]EmployeeandWorkforce−Thecompanyemploys183,323individualsasofDecember31,2024,emphasizingacommitmenttoemployeewell−beingandcareerdevelopment[59]−GoogleServicesoperatingincomeincreasedby1.0 billion for the year ended December 31, 2024[223] Employee and Workforce - The company employs 183,323 individuals as of December 31, 2024, emphasizing a commitment to employee well-being and career development[59] - 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] Tax and Legal Matters - Provision for income taxes increased from 11.9billionin2023to11.9 billion in 2023 to 19.7 billion in 2024, with an effective tax rate rising from 13.9% to 16.4%[254] - The provision for income taxes includes the effect of reserve provisions and changes to reserves, which are subject to examination by tax authorities[293] - The company is subject to various claims and lawsuits, and liabilities are recorded when a loss is probable and can be reasonably estimated[294] - Significant judgment is required to determine the likelihood and estimated amount of losses related to legal matters[295] Environmental Goals - 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 company has set a goal to achieve net-zero emissions across all operations and value chain by 2030[53] - The company plans to run on 24/7 carbon-free energy by 2030, with ongoing implementation of its carbon removals strategy[54] Financial Position and Cash Flow - Cash, cash equivalents, and marketable securities totaled 95.7billionasofDecember31,2024[257]−Netcashprovidedbyoperatingactivitiesincreasedfrom95.7 billion as of December 31, 2024[257] - Net cash provided by operating activities increased from 101.7 billion in 2023 to 125.3billionin2024[258]−During2024,thecompanyrepurchased379millionsharesfor125.3 billion in 2024[258] - 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] Other Financial Commitments - The company reported material purchase commitments and other contractual obligations of 55.4billion,with55.4 billion, with 32.5 billion classified as short-term[281] - The company regularly enters into multi-year, non-cancellable agreements to purchase renewable energy, although these agreements do not include a minimum dollar commitment[283] - Long-term taxes payable amounted to $8.8 billion primarily related to uncertain tax positions as of December 31, 2024[280] - Non-marketable equity securities are evaluated for impairment based on qualitative factors, and adjustments may require the use of unobservable inputs[287] - The company has accrued expenses related to outstanding EC fines, including those under appeal, which are included in current liabilities[279]