goog-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 001-37580

________________________________________________________________________________________

Alphabet Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________


Delaware			61-1767919
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

1600 Amphitheatre Parkway

Mountain View, CA 94043

(Address of principal executive offices, including zip code)

(650) 253-0000

(Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.001 par value	GOOGL	Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)
Class C Capital Stock, $0.001 par value	GOOG	Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

________________________________________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 18, 2024, there were 5,874 million shares of Alphabet’s Class A stock outstanding, 867 million shares of Alphabet's Class B stock outstanding, and 5,617 million shares of Alphabet's Class C stock outstanding.


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Alphabet Inc.

Form 10-Q

For the Quarterly Period Ended March 31, 2024

TABLE OF CONTENTS


		Page No.
Note About Forward-Looking Statements		3

PART I. FINANCIAL INFORMATION
Item 1	Financial Statements	5
	Consolidated Balance Sheets - December 31, 2023 and March 31, 2024	5
	Consolidated Statements of Income - Three Months Ended March 31, 2023 and 2024	6
	Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2023 and 2024	7
	Consolidated Statements of Stockholders' Equity - Three Months Ended March 31, 2023 and 2024	8
	Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2024	9
	Notes to Consolidated Financial Statements	10
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4	Controls and Procedures	42

PART II. OTHER INFORMATION
Item 1	Legal Proceedings	43
Item 1A	Risk Factors	43
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 5	Other Information	44
Item 6	Exhibits	45
Signatures		46


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Note About Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, among other things, statements regarding:

•the growth of our business and revenues and our expectations about the factors that influence our success and trends in our business;

•fluctuations in our revenues and margins and various factors contributing to such fluctuations;

•our expectation that the continuing shift from an offline to online world will continue to benefit our business;

•our expectation that the portion of our revenues that we derive beyond advertising will continue to increase and may affect our margins;

•our expectation that our traffic acquisition costs (TAC) and the associated TAC rate will fluctuate, which could affect our overall margins;

•our expectation that our monetization trends will fluctuate, which could affect our revenues and margins;

•fluctuations in paid clicks and cost-per-click as well as impressions and cost-per-impression, and various factors contributing to such fluctuations;

•our expectation that we will continue to periodically review, refine, and update our methodologies for monitoring, gathering, and counting the number of paid clicks and impressions;

•our expectation that our results will be affected by our performance in international markets as users in developing economies increasingly come online;

•our expectation that our foreign exchange risk management program will not fully offset our net exposure to fluctuations in foreign currency exchange rates;

•the expected variability of gains and losses related to hedging activities under our foreign exchange risk management program;

•the amount and timing of revenue recognition from customer contracts with commitments for performance obligations, including our estimate of the remaining amount of commitments and when we expect to recognize revenue;

•our expectation that our capital expenditures will increase, including the expected increase in our technical infrastructure investment to support the growth of our business and our long-term initiatives, in particular in support of artificial intelligence (AI) products and services;

•our plans to continue to invest in new businesses, products, services and technologies, and systems, as well as to continue to invest in acquisitions and strategic investments;

•our pace of hiring and our plans to provide competitive compensation programs;

•our expectation that our cost of revenues, research and development (R&D) expenses, sales and marketing expenses, and general and administrative expenses may increase in amount and/or may increase as a percentage of revenues and may be affected by a number of factors;

•estimates of our future compensation expenses;

•our expectation that our other income (expense), net (OI&E), will fluctuate in the future, as it is largely driven by market dynamics;

•our expectation that our effective tax rate and cash tax payments could increase in future years;

•seasonal fluctuations in internet usage and advertiser expenditures, underlying business trends such as traditional retail seasonality, which are likely to cause fluctuations in our quarterly results;

•the sufficiency of our sources of funding;

•our potential exposure in connection with new and pending investigations, proceedings, and other contingencies, including the possibility that certain legal proceedings to which we are a party could harm our business, financial condition, and operating results;

•our expectation that we will continue to face heightened regulatory scrutiny, and changes in regulatory conditions, laws, and public policies, which could affect our business practices and financial results;


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•the expected timing, amount, and effect of Alphabet Inc.'s share repurchases and dividends;

•our long-term sustainability and diversity goals;

as well as other statements regarding our future operations, financial condition and prospects, and business strategies. Forward-looking statements may appear throughout this report and other documents we file with the Securities and Exchange Commission (SEC), including without limitation, the following sections: Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated in this Quarterly Report on Form 10-Q. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "predicts," "projects," "will be," "will continue," "will likely result," and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q; the risks discussed in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated in this Quarterly Report on Form 10-Q; the trends discussed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023; and those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

As used herein, "Alphabet," "the company," "we," "us," "our," and similar terms include Alphabet Inc. and its subsidiaries, unless the context indicates otherwise.

"Alphabet," "Google," and other trademarks of ours appearing in this report are our property. We do not intend our use or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.


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PART I. FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

Alphabet Inc.

CONSOLIDATED BALANCE SHEETS

(in millions, except par value per share amounts)


	As of December 31, 2023		As of March 31, 2024
			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	24,048	$	24,493
Marketable securities	86,868		83,597
Total cash, cash equivalents, and marketable securities	110,916		108,090
Accounts receivable, net	47,964		44,552
Other current assets	12,650		12,829
Total current assets	171,530		165,471
Non-marketable securities	31,008		33,994
Deferred income taxes	12,169		11,687
Property and equipment, net	134,345		143,182
Operating lease assets	14,091		13,768
Goodwill	29,198		29,183
Other non-current assets	10,051		10,065
Total assets	$	402,392	$	407,350
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	7,493	$	6,198

Accrued compensation and benefits	15,140		9,703
Accrued expenses and other current liabilities	46,168		48,603
Accrued revenue share	8,876		8,520
Deferred revenue	4,137		3,973
Total current liabilities	81,814		76,997
Long-term debt	13,253		13,228
Deferred revenue, non-current	911		921
Income taxes payable, non-current	8,474		9,234
Deferred income taxes	485		486
Operating lease liabilities	12,460		11,957
Other long-term liabilities	1,616		1,683
Total liabilities	119,013		114,506
Commitments and Contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value per share, 100 shares authorized; no shares issued and outstanding	0		0
Class A, Class B, and Class C stock and additional paid-in capital, $0.001 par value per share: 300,000 shares authorized (Class A 180,000, Class B 60,000, Class C 60,000); 12,460 (Class A 5,899, Class B 870, Class C 5,691) and 12,381 (Class A 5,879, Class B 867, Class C 5,635) shares issued and outstanding	76,534		77,913
Accumulated other comprehensive income (loss)	(4,402)		(4,839)
Retained earnings	211,247		219,770
Total stockholders’ equity	283,379		292,844
Total liabilities and stockholders’ equity	$	402,392	$	407,350

See accompanying notes.


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Alphabet Inc.

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts; unaudited)


	Three Months Ended
	March 31,
	2023		2024
Revenues	$	69,787	$	80,539
Costs and expenses:
Cost of revenues	30,612		33,712
Research and development	11,468		11,903
Sales and marketing	6,533		6,426
General and administrative	3,759		3,026
Total costs and expenses	52,372		55,067
Income from operations	17,415		25,472
Other income (expense), net	790		2,843
Income before income taxes	18,205		28,315
Provision for income taxes	3,154		4,653
Net income	$	15,051	$	23,662




Basic net income per share of Class A, Class B, and Class C stock	$	1.18	$	1.91









Diluted net income per share of Class A, Class B, and Class C stock	$	1.17	$	1.89

See accompanying notes.


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Alphabet Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions; unaudited)


	Three Months Ended
	March 31,
	2023		2024
Net income	$	15,051	$	23,662
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of income tax benefit (expense) of $47 and $(18)	596		(503)
Available-for-sale investments:
Change in net unrealized gains (losses)	866		(360)
Less: reclassification adjustment for net (gains) losses included in net income	292		311
Net change, net of income tax benefit (expense) of $(330) and $14	1,158		(49)
Cash flow hedges:
Change in net unrealized gains (losses)	(74)		186
Less: reclassification adjustment for net (gains) losses included in net income	(77)		(71)
Net change, net of income tax benefit (expense) of $30 and $(23)	(151)		115
Other comprehensive income (loss)	1,603		(437)
Comprehensive income	$	16,654	$	23,225

See accompanying notes.


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Alphabet Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions; unaudited)


	Three Months Ended March 31, 2023
	Class A, Class B, Class C Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2022	12,849	$	68,184	$	(7,603)	$	195,563	$	256,144
Stock issued	30	0		0		0		0
Stock-based compensation expense	0	5,313		0		0		5,313
Tax withholding related to vesting of restricted stock units and other	0	(2,093)		0		0		(2,093)
Repurchases of stock	(157)	(1,135)		0		(13,989)		(15,124)
Net income	0	0		0		15,051		15,051
Other comprehensive income (loss)	0	0		1,603		0		1,603
Balance as of March 31, 2023	12,722	$	70,269	$	(6,000)	$	196,625	$	260,894


	Three Months Ended March 31, 2024
	Class A, Class B, Class C Stock and Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2023	12,460	$	76,534	$	(4,402)	$	211,247	$	283,379
Stock issued	32	0		0		0		0
Stock-based compensation expense	0	5,293		0		0		5,293
Tax withholding related to vesting of restricted stock units and other	0	(2,996)		0		0		(2,996)
Repurchases of stock	(111)	(918)		0		(15,139)		(16,057)
Net income	0	0		0		23,662		23,662
Other comprehensive income (loss)	0	0		(437)		0		(437)
Balance as of March 31, 2024	12,381	$	77,913	$	(4,839)	$	219,770	$	292,844

See accompanying notes.


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Alphabet Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)


	Three Months Ended
	March 31,
	2023		2024
Operating activities
Net income	$	15,051	$	23,662
Adjustments:
Depreciation of property and equipment	2,635		3,413
Stock-based compensation expense	5,284		5,264
Deferred income taxes	(1,854)		419
Loss (gain) on debt and equity securities, net	(84)		(1,781)
Other	1,104		334
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net	4,454		3,167
Income taxes, net	4,069		3,011
Other assets	(746)		(1,000)
Accounts payable	(1,105)		(2,124)
Accrued expenses and other liabilities	(4,496)		(5,054)
Accrued revenue share	(602)		(322)
Deferred revenue	(201)		(141)
Net cash provided by operating activities	23,509		28,848
Investing activities
Purchases of property and equipment	(6,289)		(12,012)
Purchases of marketable securities	(14,227)		(20,684)
Maturities and sales of marketable securities	18,327		24,985
Purchases of non-marketable securities	(626)		(1,206)
Maturities and sales of non-marketable securities	36		313


Acquisitions, net of cash acquired, and purchases of intangible assets	(42)		(61)
Other investing activities	(125)		101

Net cash used in investing activities	(2,946)		(8,564)
Financing activities
Net payments related to stock-based award activities	(1,989)		(2,929)

Repurchases of stock	(14,557)		(15,696)
Proceeds from issuance of debt, net of costs	6,927		1,982
Repayments of debt	(6,952)		(3,079)
Proceeds from sale of interest in consolidated entities, net	3		8
Net cash used in financing activities	(16,568)		(19,714)
Effect of exchange rate changes on cash and cash equivalents	50		(125)
Net increase (decrease) in cash and cash equivalents	4,045		445
Cash and cash equivalents at beginning of period	21,879		24,048
Cash and cash equivalents at end of period	$	25,924	$	24,493

See accompanying notes.


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Alphabet Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Nature of Operations

Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. ("Alphabet") became the successor issuer to Google.

We generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide enterprise customers with infrastructure and platform services as well as communication and collaboration tools; sales of other products and services, such as fees received for subscription-based products, apps and in-app purchases, and devices.

Basis of Consolidation

The consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated under the variable interest and voting models. Intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP), and in our opinion, include all adjustments of a normal recurring nature necessary for fair financial statement presentation. Interim results are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. We have made estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates.

These consolidated financial statements and other information presented in this Form 10-Q should be read in conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 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. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

Prior Period Reclassifications

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


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Note 2. Revenues

Disaggregated Revenues

The following table presents revenues disaggregated by type (in millions):


	Three Months Ended
	March 31,
	2023		2024
Google Search & other	$	40,359	$	46,156
YouTube ads	6,693		8,090
Google Network	7,496		7,413
Google advertising	54,548		61,659
Google subscriptions, platforms, and devices	7,413		8,739
Google Services total	61,961		70,398
Google Cloud	7,454		9,574
Other Bets	288		495
Hedging gains (losses)	84		72
Total revenues	$	69,787	$	80,539

The following table presents revenues disaggregated by geography, based on the addresses of our customers (in millions):


	Three Months Ended
	March 31,
	2023				2024
United States	$	32,864	47	%	$	38,737	48	%
EMEA(1)	21,078		30		23,788		30
APAC(1)	11,681		17		13,289		16
Other Americas(1)	4,080		6		4,653		6
Hedging gains (losses)	84		0		72		0
Total revenues	$	69,787	100	%	$	80,539	100	%

(1) Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America ("Other Americas").

Revenue Backlog

As of March 31, 2024, we had $72.5 billion of remaining performance obligations (“revenue backlog”), primarily related to Google Cloud. Our revenue backlog represents commitments in customer contracts for future services that have not yet been recognized as revenue. 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. We expect to recognize approximately half of the revenue backlog as revenues over the next 24 months with the remaining to be recognized thereafter. 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.

Deferred Revenues

We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. 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 $2.4 billion was recognized as revenues during the three months ended March 31, 2024.

Note 3. Financial Instruments

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


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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, 2023
	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
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)		$	80,434	$	433	$	(1,950)	$	78,917	$	4,621	$	74,296
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								$	19,490	$	6,918	$	12,572
Cash								0		12,509		0
Total		$	80,434	$	433	$	(1,950)	$	98,407	$	24,048	$	86,868

(1)Represents gross unrealized gains and losses for debt securities recorded to accumulated other comprehensive income (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.


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		As of March 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
Time deposits	Level 2	$	2,812	$	0	$	0	$	2,812	$	2,812	$	0
Government bonds	Level 2	36,336		88		(595)		35,829		2,724		33,105
Corporate debt securities	Level 2	22,085		64		(546)		21,603		0		21,603
Mortgage-backed and asset-backed securities	Level 2	17,018		47		(642)		16,423		0		16,423
Total investments with fair value change reflected in other comprehensive income(1)		$	78,251	$	199	$	(1,783)	$	76,667	$	5,536	$	71,131
Fair value adjustments recorded in net income
Money market funds	Level 1							$	6,890	$	6,890	$	0
Current marketable equity securities(2)	Level 1							3,998		0		3,998
Mutual funds	Level 2							278		0		278
Government bonds	Level 2							1,965		158		1,807
Corporate debt securities	Level 2							3,772		80		3,692
Mortgage-backed and asset-backed securities	Level 2							2,691		0		2,691
Total investments with fair value change recorded in net income								$	19,594	$	7,128	$	12,466
Cash								0		11,829		0
Total		$	78,251	$	199	$	(1,783)	$	96,261	$	24,493	$	83,597

(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 March 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. 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 significantly vary based on investment type.

As of March 31, 2024, the carrying value of our non-marketable equity securities was $31.4 billion, of which $13.6 billion were remeasured at fair value during the three months ended March 31, 2024 and primarily classified within Level 2 of the fair value hierarchy at the time of measurement.


Table of Contents			Alphabet Inc.

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):


	As of March 31, 2024
Due in 1 year or less	$	8,551
Due in 1 year through 5 years	42,755
Due in 5 years through 10 years	13,972
Due after 10 years	14,043
Total	$	79,321

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):


	As of December 31, 2023
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	1,456	$	(22)	$	13,897	$	(657)	$	15,353	$	(679)
Corporate debt securities	827		(5)		15,367		(592)		16,194		(597)
Mortgage-backed and asset-backed securities	2,945		(26)		7,916		(608)		10,861		(634)
Total	$	5,228	$	(53)	$	37,180	$	(1,857)	$	42,408	$	(1,910)


	As of March 31, 2024
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Government bonds	$	14,539	$	(116)	$	9,276	$	(479)	$	23,815	$	(595)
Corporate debt securities	2,653		(8)		13,022		(494)		15,675		(502)
Mortgage-backed and asset-backed securities	4,895		(79)		6,851		(563)		11,746		(642)
Total	$	22,087	$	(203)	$	29,149	$	(1,536)	$	51,236	$	(1,739)

We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method. The following table summarizes gains and losses for debt securities, reflected as a component of OI&E (in millions):


	Three Months Ended
	March 31,
	2023		2024
Unrealized gain (loss) on fair value option debt securities	$	145	$	(46)
Gross realized gain on debt securities	57		68
Gross realized loss on debt securities	(492)		(480)
(Increase) decrease in allowance for credit losses	(3)		(4)
Total gain (loss) on debt securities recognized in other income (expense), net	$	(293)	$	(462)


Table of Contents			Alphabet Inc.

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 6 for further details on OI&E.

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


	As of December 31, 2023						As of March 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	$	5,083	$	18,505	$	23,588
Cumulative net gain (loss)(1)	555		11,150		11,705		570		12,925		13,495
Carrying value	$	5,973	$	28,766	$	34,739	$	5,653	$	31,430	$	37,083

(1)Non-marketable equity securities cumulative net gain (loss) is comprised of $18.1 billion gains and $6.9 billion losses (including impairments) as of December 31, 2023 and $20.6 billion gains and $7.7 billion losses (including impairments) as of March 31, 2024.

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):


	Three Months Ended
	March 31,
	2023		2024
Realized net gain (loss) on equity securities sold during the period	$	105	$	95
Unrealized net gain (loss) on marketable equity securities	51		164
Unrealized net gain (loss) on non-marketable equity securities(1)	221		1,984
Total gain (loss) on equity securities in other income (expense), net	$	377	$	2,243

(1)Unrealized gain (loss) on non-marketable equity securities accounted for under the measurement alternative is comprised of $915 million and $2.8 billion of upward adjustments and $694 million and $814 million of downward adjustments (including impairments) for the three months ended March 31, 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.


	Equity Securities Sold
	Three Months Ended
	March 31,
	2023		2024
Total sale price	$	312	$	1,090
Total initial cost	211		661
Cumulative net gains (losses)	$	101	$	429

Equity Securities Accounted for Under the Equity Method

As of December 31, 2023 and March 31, 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 6 for further details on OI&E.

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. 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 United States (U.S.) 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. The difference between fair value changes of the excluded component and the amount amortized to revenues is recorded in AOCI.

As of March 31, 2024, the net accumulated gain on our foreign currency cash flow hedges before tax effect was $128 million, which is expected to be reclassified from AOCI into revenues within the next 12 months.

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. dollar. 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.

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. Gains and losses arising from other derivatives are primarily reflected within the “other” component of OI&E. See Note 6 for further details.

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


	As of December 31, 2023		As of March 31, 2024
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges	$	18,039	$	17,726
Fair value hedges	$	2,065	$	1,847
Net investment hedges	$	9,472	$	9,321
Derivatives not designated as hedging instruments:
Foreign exchange contracts(1)	$	39,722	$	107,978
Other contracts	$	10,818	$	10,902

(1) The gross notional amounts of these derivative instruments as of March 31, 2024 reflect a rollover in timing of settlement into our second quarter as a result of a holiday market closure.

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


	As of December 31, 2023				As of March 31, 2024
	Assets(1)		Liabilities(2)		Assets(1)		Liabilities(2)
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	205	$	242	$	150	$	125

Derivatives not designated as hedging instruments:
Foreign exchange contracts	134		156		317		221
Other contracts	114		47		164		40
Total derivatives not designated as hedging instruments	248		203		481		261
Total	$	453	$	445	$	631	$	386

(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):


	Three Months Ended
	March 31,
	2023		2024
Derivatives in cash flow hedging relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	$	(138)	$	155
Amount excluded from the assessment of effectiveness	47		58

Derivatives in net investment hedging relationship:
Foreign exchange contracts
Amount included in the assessment of effectiveness	(215)		82
Total	$	(306)	$	295

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


	Three Months Ended March 31, 2024
	2023				2024
	Revenues		Other income (expense), net		Revenues		Other income (expense), net
Total amounts in the Consolidated Statements of Income	$	69,787	$	790	$	80,539	$	2,843

Effect of cash flow hedges:
Foreign exchange contracts
Amount reclassified from AOCI to income	$	88	$	0	$	74	$	0
Amount excluded from the assessment of effectiveness (amortized)	(4)		0		(2)		0
Effect of fair value hedges:
Foreign exchange contracts
Hedged items	0		32		0		(16)
Derivatives designated as hedging instruments	0		(32)		0		15
Amount excluded from the assessment of effectiveness	0		5		0		3
Effect of net investment hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	0		51		0		36
Effect of non designated hedges:
Foreign exchange contracts	0		30		0		21
Other contracts	0		3		0		76
Total gains (losses)	$	84	$	89	$	72	$	135

Offsetting of Derivatives

We enter into master netting arrangements and collateral security arrangements to reduce credit risk. 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.

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):


	As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
Derivatives assets	$	535	$	(82)	$	453	$	(213)	$	(75)	$	165
Derivatives liabilities	$	527	$	(82)	$	445	$	(213)	$	(16)	$	216


	As of March 31, 2024
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments(1)		Cash and Non-Cash Collateral Received or Pledged		Net Amounts
Derivatives assets	$	705	$	(74)	$	631	$	(179)	$	(264)	$	188
Derivatives liabilities	$	460	$	(74)	$	386	$	(179)	$	(9)	$	198

(1)The balances as of December 31, 2023 and March 31, 2024 were related to derivatives allowed to be net settled in accordance with our master netting agreements.

Note 4. Variable Interest Entities (VIE)

Consolidated VIEs

We consolidate VIEs in which we hold a variable interest and are the primary beneficiary. The results of operations and financial position of these VIEs are included in our consolidated financial statements.

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 March 31, 2024, assets that can only be used to settle obligations of these VIEs were $4.9 billion and $4.1 billion, respectively, and the liabilities for which creditors only have recourse to the VIEs were $2.5 billion and $2.2 billion, respectively. We may continue to fund ongoing operations of certain VIEs that are included within Other Bets.

Total noncontrolling interests (NCI) in our consolidated subsidiaries were $3.4 billion and $3.2 billion as of December 31, 2023 and March 31, 2024, respectively, of which $1.1 billion and $1.0 billion is redeemable noncontrolling interest (RNCI) as of December 31, 2023 and March 31, 2024, respectively. NCI and RNCI are included within additional paid-in capital. Net loss attributable to noncontrolling interests was not material for any period presented and is included within the "other" component of OI&E. See Note 6 for further details on OI&E.

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.

The maximum exposure of these unconsolidated VIEs is generally based on the current carrying value of the investments and any future funding commitments. The maximum exposure and carrying value of these unconsolidated VIEs were $5.7 billion and $4.0 billion, respectively, as of December 31, 2023 and $6.9 billion and $5.3 billion, respectively, as of March 31, 2024. The difference between the maximum exposure and the carrying value relates primarily to future funding commitments.

Note 5. Debt

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 commercial paper outstanding as of December 31, 2023 and March 31, 2024.

Our short-term debt balance also includes the current portion of certain long-term debt.

Long-Term Debt

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


	Maturity	Coupon Rate	Effective Interest Rate	As of December 31, 2023		As of March 31, 2024
Debt
2016-2020 Notes issuances	2025 - 2060	0.45% - 2.25%	0.57% - 2.33%	$	13,000	$	12,000
Future finance lease payments, net and other (1)				1,746		1,672
Total debt				14,746		13,672
Unamortized discount and debt issuance costs				(130)		(127)
Less: Current portion of long-term notes(2)				(1,000)		0
Less: Current portion of future finance lease payments, net and other current debt(1)(2)				(363)		(317)
Total long-term debt				$	13,253	$	13,228

(1)Future finance lease payments are net of imputed interest.

(2)Total current portion of long-term debt is included within other accrued expenses and current liabilities. See Note 6 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.

The total estimated fair value of the outstanding notes was approximately $10.3 billion and $9.0 billion as of December 31, 2023 and March 31, 2024, respectively. The fair value was determined based on observable market prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy.

Credit Facility

As of March 31, 2024, we had $10.0 billion of revolving credit facilities, of which $4.0 billion expires in April 2024 and $6.0 billion expires in April 2028. In April 2024, we entered into a new $4.0 billion revolving credit facility expiring in April 2025. 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 goals. No amounts were outstanding under the credit facilities as of December 31, 2023 and March 31, 2024.

Note 6. Supplemental Financial Statement Information

Accounts Receivable

The allowance for credit losses on accounts receivable was $771 million and $745 million as of December 31, 2023 and March 31, 2024, respectively.

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):


	As of December 31, 2023		As of March 31, 2024
Land and buildings	$	74,083	$	77,421
Information technology assets	80,594		85,976
Construction in progress	35,229		37,679
Leasehold improvements	11,425		11,576
Furniture and fixtures	472		534
Property and equipment, gross	201,803		213,186
Less: accumulated depreciation	(67,458)		(70,004)
Property and equipment, net	$	134,345	$	143,182

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):


	As of December 31, 2023		As of March 31, 2024
European Commission fines(1)	$	9,525	$	9,475
Accrued purchases of property and equipment	4,679		5,666
Accrued customer liabilities	4,140		4,355
Current operating lease liabilities	2,791		2,874
Income taxes payable, net	2,748		4,926
Other accrued expenses and current liabilities	22,285		21,307
Accrued expenses and other current liabilities	$	46,168	$	48,603

(1) While each European Commission (EC) decision is under appeal, the fines are included in accrued expenses and other current liabilities on our Consolidated Balance Sheets, as we provided bank guarantees (in lieu of a cash payment) for the fines. Amounts include the effects of foreign exchange and interest. See Note 8 for further details.

Accumulated Other Comprehensive Income (Loss)

Components of AOCI, net of income tax, were as follows (in millions):


	Foreign Currency Translation Adjustments		Unrealized Gains (Losses) on Available-for-Sale Investments		Unrealized Gains (Losses) on Cash Flow Hedges		Total
Balance as of December 31, 2022	$	(4,142)	$	(3,477)	$	16	$	(7,603)
Other comprehensive income (loss) before reclassifications	596		866		(121)		1,341
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		47		47
Amounts reclassified from AOCI	0		292		(77)		215
Other comprehensive income (loss)	596		1,158		(151)		1,603
Balance as of March 31, 2023	$	(3,546)	$	(2,319)	$	(135)	$	(6,000)


	Foreign Currency Translation Adjustments		Unrealized Gains (Losses) on Available-for-Sale Investments		Unrealized Gains (Losses) on Cash Flow Hedges		Total
Balance as of December 31, 2023	$	(3,407)	$	(965)	$	(30)	$	(4,402)
Other comprehensive income (loss) before reclassifications	(503)		(360)		128		(735)
Amounts excluded from the assessment of hedge effectiveness recorded in AOCI	0		0		58		58
Amounts reclassified from AOCI	0		311		(71)		240
Other comprehensive income (loss)	(503)		(49)		115		(437)
Balance as of March 31, 2024	$	(3,910)	$	(1,014)	$	85	$	(4,839)

The effects on net income of amounts reclassified from AOCI were as follows (in millions):


		Three Months Ended
		March 31,
AOCI Components	Location	2023		2024
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	(374)	$	(399)
	Benefit (provision) for income taxes	82		88
	Net of income tax	(292)		(311)
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts	Revenue	88		74
Interest rate contracts	Other income (expense), net	2		1
	Benefit (provision) for income taxes	(13)		(4)
	Net of income tax	77		71
Total amount reclassified, net of income tax		$	(215)	$	(240)

Other Income (Expense), Net

Components of OI&E were as follows (in millions):


	Three Months Ended
	March 31,
	2023		2024
Interest income	$	797	$	1,061
Interest expense(1)	(80)		(94)
Foreign currency exchange gain (loss), net	(210)		(238)
Gain (loss) on debt securities, net	(293)		(462)
Gain (loss) on equity securities, net	377		2,243
Performance fees	118		104
Income (loss) and impairment from equity method investments, net	(51)		(26)
Other	132		255
Other income (expense), net	$	790	$	2,843

(1)Interest expense is net of interest capitalized of $40 million and $43 million for the three months ended March 31, 2023 and 2024, respectively.

Note 7. Goodwill

Goodwill

Changes in the carrying amount of goodwill for the three months ended March 31, 2024 were as follows (in millions):


	Google Services		Google Cloud		Other Bets		Total
Balance as of December 31, 2023	$	21,118	$	7,199	$	881	$	29,198
Acquisitions	9		0		0		9
Foreign currency translation and other adjustments	(22)		(2)		0		(24)
Balance as of March 31, 2024	$	21,105	$	7,197	$	881	$	29,183

Note 8. Commitments and Contingencies

Commitments

We have content licensing agreements with future fixed or minimum guaranteed commitments of $10.1 billion as of March 31, 2024, of which the majority is paid quarterly through the first quarter of 2030.

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. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.

It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows, or financial position. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period.

As of March 31, 2024, we did not have any material indemnification claims that were probable or reasonably possible.

Legal Matters

We record a liability when we believe that it is probable that a loss has been incurred, and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate.

Certain outstanding matters seek speculative, substantial or indeterminate monetary amounts, substantial changes to our business practices and products, or structural remedies. Significant judgment is required to determine both the likelihood of there being a loss and the estimated amount of a loss related to such matters, and we may be unable to estimate the reasonably possible loss or range of losses. The outcomes of outstanding legal matters are inherently unpredictable and subject to significant uncertainties, and could, either individually or in aggregate, have a material adverse effect.

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

Antitrust Matters

On November 30, 2010, the EC's Directorate General for Competition opened an investigation into various antitrust-related complaints against us.

•On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display and ranking of shopping search results and ads infringed European competition law. The EC decision imposed a €2.4 billion ($2.7 billion as of June 27, 2017) fine. On September 11, 2017, we appealed the EC decision to the General Court, and on September 27, 2017, we implemented product changes to bring shopping ads into compliance with the EC's decision. We recognized a charge of $2.7 billion for the fine in the second quarter of 2017. On November 10, 2021, the General Court rejected our appeal, and we subsequently filed an appeal with the European Court of Justice on January 20, 2022.

•On July 18, 2018, the EC announced its decision that certain provisions in Google’s Android-related distribution agreements infringed European competition law. The EC decision imposed a €4.3 billion ($5.1 billion as of June 30, 2018) fine and directed the termination of the conduct at issue. On October 9, 2018, we appealed the EC decision, and on October 29, 2018, we implemented changes to certain of our Android distribution practices. On September 14, 2022, the General Court reduced the fine from €4.3 billion to €4.1 billion. We subsequently filed an appeal with the European Court of Justice. In 2018, we recognized a charge of $5.1 billion for the fine, which we reduced by $217 million in 2022.

•On March 20, 2019, the EC announced its decision that certain contractual provisions in agreements that Google had with AdSense for Search partners infringed European competition law. The EC decision imposed a fine of €1.5 billion ($1.7 billion as of March 20, 2019) and directed actions related to AdSense for Search partners' agreements, which we implemented prior to the decision. On June 4, 2019, we appealed the EC decision. We recognized a charge of $1.7 billion for the fine in the first quarter of 2019.

In addition, on July 7, 2021, a number of state Attorneys General filed an antitrust complaint 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 September 2023, we reached a settlement in principle with 50 state Attorneys General and three territories. The U.S. District Court subsequently vacated the trial date with the states, and we expect any final approval of the settlement would come in 2024.

In December 2023, a California jury delivered a verdict in a similar lawsuit in Epic Games v. Google. The jury found that Google violated antitrust laws related to Google Play's business. Epic did not seek monetary damages. The presiding judge will determine non-monetary remedies in 2024, and the range of potential remedies vary widely. We plan to appeal.

From time to time we are subject to formal and informal inquiries and investigations on various competition matters by regulatory authorities in the U.S., Europe, and other jurisdictions globally. Examples, for which given their nature we cannot estimate a possible loss include:

•In August 2019, we began receiving civil investigative demands from the U.S. Department of Justice (DOJ) requesting information and documents relating to our prior antitrust investigations and certain aspects of our business. The DOJ and a number of state Attorneys General filed a lawsuit in the U.S. District Court for the District of Columbia on October 20, 2020 alleging that Google violated U.S. antitrust laws relating to Search and Search advertising. The trial ended on November 16, 2023, and we expect a decision in 2024. Further, in June 2022, the Australian Competition and Consumer Commission (ACCC) and the United Kingdom's Competition and Markets Authority (CMA) each opened an investigation into Search distribution practices.

•On December 16, 2020, a number of state Attorneys General filed an antitrust complaint 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, on January 24, 2023, the DOJ, along with a number of state Attorneys General, filed an antitrust complaint in the U.S. District Court for the Eastern District of Virginia alleging that Google’s digital advertising technology products violate U.S. antitrust laws, and on April 17, 2023, a number of additional state Attorneys General joined the complaint. A trial is scheduled for September 2024. The EC, the CMA, and the ACCC each opened a formal investigation into Google's advertising technology business practices on June 22, 2021, May 25, 2022, and June 29, 2022, respectively. On June 14, 2023, the EC issued a Statement of Objections (SO) informing Google of its preliminary view that Google violated European antitrust laws relating to its advertising technology. We responded to the SO on December 1, 2023.

•In May 2022, the EC and the CMA each opened investigations into Google Play’s business practices. Korean regulators are investigating Google Play's billing practices, including a formal review in May 2022 of Google's compliance with the new app store billing regulations.

We believe we have strong arguments against these 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.

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 European Union, including those relating to our collection and use of location information and advertising practices, which could result in significant fines, judgments, and product changes.

Patent and Intellectual Property Claims

We have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe others' intellectual property rights. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering certain features, functionalities, products, or services. 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.

Furthermore, many of our agreements with our customers and partners require us to indemnify them against certain intellectual property infringement claims, which would increase our costs as a result of defending such claims, and may require that we pay significant damages if there were an adverse ruling in any such claims. In addition, 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.

Other

We are subject to claims, lawsuits, regulatory and government investigations, other proceedings, and consent orders involving competition, intellectual property, data 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. For example, we periodically have data incidents that we report to relevant regulators as required by law. Such claims, consent orders, lawsuits, regulatory and government investigations, and other proceedings could result in substantial fines and penalties, injunctive relief, ongoing monitoring and auditing obligations, changes to our products and services, alterations to our business models and operations, and collateral related civil litigation or other adverse consequences, all of which could harm our business, reputation, financial condition, and operating results.

We have ongoing legal matters relating to Russia. For example, civil judgments that include compounding penalties have been imposed upon us in connection with disputes regarding the termination of accounts, including those of sanctioned parties. We do not believe these ongoing legal matters will have a material adverse effect.

Non-Income Taxes

We are under audit by various domestic and foreign tax authorities with regards to non-income tax matters. The subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to the sale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We accrue non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. 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 12 for information regarding income tax contingencies.

Note 9. Stockholders' Equity

Share Repurchases

During the three months ended March 31, 2023 and 2024, we repurchased $15.1 billion and $16.1 billion, respectively, of Alphabet's Class A and Class C shares.

In April 2023, the Board of Directors of Alphabet authorized the company to repurchase up to $70.0 billion of its Class A and Class C shares. As of March 31, 2024, $20.4 billion remained available for Class A and Class C share repurchases. 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.

The following table presents Class A and Class C shares repurchased and subsequently retired (in millions):


	Three Months Ended March 31, 2024
	Shares	Amount
Class A share repurchases	23	$	3,350
Class C share repurchases	88	12,707