Alphabet(US:GOOG)2025-07-23 23:44PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents Alphabet's unaudited consolidated financial statements for Q2 2025, highlighting a 14% revenue increase to $96.4 billion, significant growth in property and equipment for AI, and a pending $32.0 billion acquisition of Wiz, Inc Consolidated Balance Sheets As of June 30, 2025, total assets increased to $502.1 billion, driven by property and equipment, while total liabilities rose to $139.1 billion and stockholders' equity grew to $362.9 billion Consolidated Balance Sheet Highlights (in millions) | Account | Dec 31, 2024 | June 30, 2025 | Change | | :--- | :--- | :--- | :--- | | Total cash, cash equivalents, and marketable securities | $95,657 | $95,148 | -$509 | | Property and equipment, net | $171,036 | $203,231 | +$32,195 | | Goodwill | $31,885 | $32,335 | +$450 | | Total assets | $450,256 | $502,053 | +$51,797 | | Total current liabilities | $89,122 | $87,310 | -$1,812 | | Long-term debt | $10,883 | $23,607 | +$12,724 | | Total liabilities | $125,172 | $139,137 | +$13,965 | | Total stockholders' equity | $325,084 | $362,916 | +$37,832 | Consolidated Statements of Income For Q2 2025, revenues grew 14% to $96.4 billion and net income increased 19% to $28.2 billion, with diluted EPS of $2.31 Q2 2025 vs Q2 2024 Performance (in millions, except per share) | Metric | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $84,742 | $96,428 | 13.8% | | Income from operations | $27,425 | $31,271 | 14.0% | | Net income | $23,619 | $28,196 | 19.4% | | Diluted EPS | $1.89 | $2.31 | 22.2% | H1 2025 vs H1 2024 Performance (in millions, except per share) | Metric | H1 2024 | H1 2025 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $165,281 | $186,662 | 13.0% | | Income from operations | $52,897 | $61,877 | 17.0% | | Net income | $47,281 | $62,736 | 32.7% | | Diluted EPS | $3.78 | $5.12 | 35.4% | Consolidated Statements of Cash Flows For H1 2025, net cash from operating activities increased to $63.9 billion, while net cash used in investing activities significantly rose to $40.7 billion due to increased capital expenditures Six Months Ended June 30, Cash Flow Summary (in millions) | Activity | 2024 | 2025 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $55,488 | $63,897 | +$8,409 | | Net cash used in investing activities | ($11,345) | ($40,738) | -$29,393 | | Net cash used in financing activities | ($40,603) | ($26,033) | +$14,570 | | Net (decrease) in cash and cash equivalents | $3,177 | ($2,430) | -$5,607 | - Purchases of property and equipment increased significantly to $39.6 billion in H1 2025 from $25.2 billion in H1 2024, reflecting accelerated investment in technical infrastructure29 - The company issued $31.4 billion in new debt while repaying $18.4 billion in H1 2025, compared to issuing $4.9 billion and repaying $5.5 billion in H1 202429 Notes to Consolidated Financial Statements These notes detail accounting policies, segment revenues with strong Google Cloud (32% YoY) and Google Services (12% YoY) growth, a $108.2 billion revenue backlog, debt structure, the pending $32.0 billion Wiz acquisition, legal contingencies, and capital returns Disaggregated Revenues by Segment (Q2, in millions) | Segment | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Google Search & other | $48,509 | $54,190 | 11.7% | | YouTube ads | $8,663 | $9,796 | 13.1% | | Google Network | $7,444 | $7,354 | -1.2% | | Google advertising | $64,616 | $71,340 | 10.4% | | Google subscriptions, platforms, and devices | $9,312 | $11,203 | 20.3% | | Google Services total | $73,928 | $82,543 | 11.7% | | Google Cloud | $10,347 | $13,624 | 31.7% | | Other Bets | $365 | $373 | 2.2% | - The company has a revenue backlog of $108.2 billion as of June 30, 2025, primarily from Google Cloud, with approximately 55% expected to be recognized over the next 24 months40 - In March 2025, Alphabet entered a definitive agreement to acquire Wiz, a cloud security platform, for $32.0 billion in an all-cash transaction, expected to close in 202693 - The company is subject to numerous antitrust legal proceedings globally, with a $1.4 billion agreement in principle reached to settle certain privacy matters in April 2025102104109 - In Q2 2025, the company repurchased $13.3 billion of its stock, and the Board increased the quarterly cash dividend by 5% to $0.21 per share in April 2025117119 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 financial results, highlighting 14% revenue growth to $96.4 billion driven by Google Services and Cloud, a 14% increase in operating income to $31.3 billion, and significant capital expenditures of $39.6 billion for AI infrastructure Financial Results Q2 2025 revenues increased 14% to $96.4 billion, driven by Google Services (12% growth) and Google Cloud (32% growth), resulting in a 14% increase in operating income to $31.3 billion Q2 2025 vs Q2 2024 Revenue Performance (in millions) | Segment | Q2 2024 | Q2 2025 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Google Services | $73,928 | $82,543 | +$8,615 | 11.7% | | Google Cloud | $10,347 | $13,624 | +$3,277 | 31.7% | | Other Bets | $365 | $373 | +$8 | 2.2% | | Total Revenues | $84,742 | $96,428 | +$11,686 | 13.8% | - Google Search & other revenue growth was driven by increased search queries on mobile devices, higher advertiser spending, and ad format improvements166 - General and administrative expenses increased by $2.1 billion YoY, primarily due to a $2.3 billion increase in expenses for legal matters, including a settlement193 Q2 2025 vs Q2 2024 Segment Operating Income (in millions) | Segment | Q2 2024 | Q2 2025 | $ Change | | :--- | :--- | :--- | :--- | | Google Services | $29,674 | $33,063 | +$3,389 | | Google Cloud | $1,172 | $2,826 | +$1,654 | | Other Bets | ($1,134) | ($1,246) | -$112 | | Alphabet-level activities | ($2,287) | ($3,372) | -$1,085 | | Total Income from Operations | $27,425 | $31,271 | +$3,846 | Financial Condition, Liquidity and Capital Resources As of June 30, 2025, Alphabet maintained strong liquidity with $95.1 billion in cash, generated $63.9 billion from operations, increased capital expenditures to $39.6 billion for AI infrastructure, and returned $28.6 billion to shareholders - Capital expenditures for the first six months of 2025 were $39.6 billion, a significant increase from $25.2 billion in the same period of 2024, with investment in technical infrastructure expected to continue increasing219 - In May 2025, the company issued $5.0 billion in USD-denominated notes and €6.75 billion in euro-denominated notes for general corporate purposes223 - The company repurchased $28.6 billion of its Class A and Class C shares in the first six months of 2025, with $86.3 billion remaining available under the repurchase authorization as of June 30, 2025228229 - The company has material purchase commitments of $72.5 billion as of June 30, 2025, primarily for technical infrastructure, content licenses, and inventory237 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to market risk disclosures provided in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - The report directs readers to Item 7A of the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for quantitative and qualitative disclosures about market risk244 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective at a reasonable assurance level246 - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, these controls247 PART II. OTHER INFORMATION Item 1. Legal Proceedings This section incorporates by reference the description of material pending legal proceedings from Note 10 of the financial statements, detailing ongoing antitrust, privacy, and intellectual property matters - For a description of material pending legal proceedings, the report refers to Note 10, "Commitments and Contingencies - Legal Matters" in Part I, Item 1250 Item 1A. Risk Factors This section refers to the risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, and directs to the Legal Proceedings section for litigation updates - The report directs readers to Part I, Item 1A, "Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2024, for a full description of risks and uncertainties251 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, Alphabet repurchased approximately 80.7 million shares of its Class A and Class C stock as part of a publicly announced program Share Repurchases for Quarter Ended June 30, 2025 | Period | Class A Shares Purchased (thousands) | Class C Shares Purchased (thousands) | Total Shares Purchased (thousands) | | :--- | :--- | :--- | :--- | | April 1 - 30 | 8,471 | 24,689 | 33,160 | | May 1 - 31 | 4,529 | 22,447 | 26,976 | | June 1 - 30 | 2,710 | 17,853 | 20,563 | | Total | 15,710 | 64,989 | 80,699 | Item 5. Other Information This section discloses that two Section 16 officers, Amie Thuener O'Toole and Kent Walker, adopted new Rule 10b5-1 trading plans during Q2 2025 - Amie Thuener O'Toole, VP and Principal Accounting Officer, adopted a new Rule 10b5-1 trading plan on May 23, 2025255 - Kent Walker, President of Global Affairs and Chief Legal Officer, adopted a new Rule 10b5-1 trading plan on May 5, 2025255 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including debt indentures, CEO and CFO certifications, and XBRL data files - The report includes exhibits such as forms of global notes for recent debt issuances, CEO/CFO certifications (Sections 302 and 906 of Sarbanes-Oxley), and Inline XBRL documents257258