EX-99.1 2 googexhibit991q42023.htm EX-99.1 Document
Exhibit 99.1
Alphabet Announces Fourth Quarter and Fiscal Year 2023 Results
MOUNTAIN VIEW, Calif. – January 30, 2024 – Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter and fiscal year ended December 31, 2023.
Sundar Pichai, CEO, said: “We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come.”
Ruth Porat, President and Chief Investment Officer; CFO said: “We ended 2023 with very strong fourth quarter financial results, with Q4 consolidated revenues of $86 billion, up 13% year over year. We remain committed to our work to durably re-engineer our cost base as we invest to support our growth opportunities.”
Q4 2023 Financial Highlights
The following table summarizes our consolidated financial results for the quarters and years ended December 31, 2022 and 2023 (in millions, except for per share information and percentages).
Quarter Ended December 31,Year Ended
December 31,
2022202320222023
(unaudited)(unaudited)
Revenues$76,048 $86,310 $282,836 $307,394 
Change in revenues year over year1 %13 %10 %9 %
Change in constant currency revenues year over year(1)
7 %13 %14 %10 %
Operating income$18,160 $23,697 $74,842 $84,293 
Operating margin24 %27 %26 %27 %
Other income (expense), net
$(1,013)$715 $(3,514)$1,424 
Net income$13,624 $20,687 $59,972 $73,795 
Diluted EPS$1.05 $1.64 $4.56 $5.80 
(1)    Non-GAAP measure. See the table captioned “Reconciliation from GAAP revenues to non-GAAP constant currency revenues and GAAP percentage change in revenues to non-GAAP percentage change in constant currency revenues” for more details.


Q4 2023 Supplemental Information (in millions, except for number of employees; unaudited)
Revenues, Traffic Acquisition Costs (TAC), and Number of Employees

Quarter Ended December 31,
20222023
Google Search & other$42,604 $48,020 
YouTube ads7,963 9,200 
Google Network8,475 8,297 
Google advertising59,042 65,517 
Google subscriptions, platforms, and devices(1)
8,796 10,794 
Google Services total67,838 76,311 
Google Cloud7,315 9,192 
Other Bets226 657 
Hedging gains (losses)669 150 
Total revenues$76,048 $86,310 
Total TAC$12,925 $13,986 
Number of employees
190,234 182,502 
(1)    Formerly “Google other.”
Segment Operating Results

Quarter Ended December 31,
20222023
Operating income (loss):
Google Services$20,222 $26,730 
Google Cloud(186)864 
Other Bets(1,237)(863)
Alphabet-level activities(1)
(639)(3,034)
Total income from operations$18,160 $23,697 
(1)Formerly “corporate costs, unallocated.” In addition to the costs included in Alphabet-level activities, hedging gains (losses) related to revenue were $669 million and $150 million for the three months ended December 31, 2022 and 2023, respectively. For the quarter ended December 31, 2023, Alphabet-level activities included charges related to the reduction in force and our office space optimization efforts totaling $1.2 billion and $62 million in accelerated rent and accelerated depreciation.
Additional Information Relating to the Quarter Ended December 31, 2023 (unaudited)
Reductions in Our Workforce and Office Space
In January 2023, we announced a reduction of our workforce, and as a result we recorded employee severance and related charges of $2.1 billion for the twelve months ended December 31, 2023. In addition, we are taking actions to optimize our global office space. As a result, exit charges recorded during the three and twelve months ended December 31, 2023, were $1.2 billion and $1.8 billion, respectively. In addition to these exit charges, for the three and twelve months ended December 31, 2023, we incurred $62 million and $269 million, respectively, in accelerated rent and accelerated depreciation.
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Severance and office space exit charges are included within our consolidated statements of income as follows (in millions):
Quarter Ended December 31, 2023
Year Ended December 31, 2023
Severance and Related
Office SpaceTotal
Severance and Related
Office SpaceTotal
Cost of revenues$2 $235 $237 $479 $481 $960 
Research and development1 602 603 848870 1,718 
Sales and marketing3 198 201 497257 754 
General and administrative1 161 162 264237 501 
Total charges$7 $1,196 $1,203 $2,088 $1,845 $3,933 
For segment reporting, the substantial majority of these charges are included within Alphabet-level activities in our segment results.
Change in Useful Lives of Our Server and Network Equipment
In January 2023, we completed an assessment of the useful lives of our servers and network equipment and adjusted the estimated useful life of our servers from four years to six years and the estimated useful life of certain network equipment from five years to six years. This change in accounting estimate was effective beginning in fiscal year 2023, and the effect was a reduction in depreciation expense of $983 million and $3.9 billion and an increase in net income of $765 million and $3.0 billion, or $0.06 and $0.24 per basic and $0.06 and $0.24 per diluted share for the three and twelve months ended December 31, 2023, respectively.
Webcast and Conference Call Information
A live audio webcast of our fourth quarter 2023 earnings release call will be available on YouTube at https://www.youtube.com/watch?v=b4alwdVvn4Q. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, is also available at http://abc.xyz/investor.
We also provide announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs, on our investor relations website (http://abc.xyz/investor).
We also share Google news and product updates on Google’s Keyword blog at https://www.blog.google/, which may be of interest or material to our investors.
Forward-Looking Statements
This press release may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 and our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, which are on file with the SEC and are available on our investor relations website at http://abc.xyz/investor and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2023, and may be set forth in other reports and filings we make with the SEC. All information provided in this release and in the attachments is as of January 30, 2024. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: free cash flow; constant currency revenues; and percentage change in constant currency revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful
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supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results, such as our revenues excluding the effect of foreign exchange rate movements and hedging activities, which are recognized at the consolidated level. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors’ operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
There are a number of limitations related to the use of non-GAAP financial measures. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant financial measures in accordance with GAAP.
For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliation from GAAP net cash provided by operating activities to non-GAAP free cash flow” and “Reconciliation from GAAP revenues to non-GAAP constant currency revenues and GAAP percentage change in revenues to non-GAAP percentage change in constant currency revenues” included at the end of this release.
Contact
Investor relations
Media
investor-relations@abc.xyzpress@abc.xyz

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Alphabet Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except par value per share amounts)
As of December 31,
20222023
(unaudited)
Assets
Current assets:
Cash and cash equivalents$21,879 $24,048 
Marketable securities91,883 86,868 
Total cash, cash equivalents, and marketable securities113,762 110,916 
Accounts receivable, net40,258 47,964 
Other current assets10,775 12,650 
Total current assets164,795 171,530 
Non-marketable securities30,492 31,008 
Deferred income taxes5,261 12,169 
Property and equipment, net112,668 134,345 
Operating lease assets14,381 14,091 
Goodwill28,960 29,198 
Other non-current assets8,707 10,051 
Total assets$365,264 $402,392 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$5,128 $7,493 
Accrued compensation and benefits14,028 15,140 
Accrued expenses and other current liabilities37,866 46,168 
Accrued revenue share8,370 8,876 
Deferred revenue3,908 4,137 
Total current liabilities69,300 81,814 
Long-term debt14,701 13,253 
Deferred revenue, non-current599 911 
Income taxes payable, non-current9,258 8,474 
Deferred income taxes514 485 
Operating lease liabilities12,501 12,460 
Other long-term liabilities2,247 1,616 
Total liabilities109,120 119,013 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value per share, 100 shares authorized; no shares issued and outstanding0 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); 12,849 (Class A 5,964, Class B 883, Class C 6,002) and 12,460 (Class A 5,899, Class B 870, Class C 5,691) shares issued and outstanding
68,184 76,534 
Accumulated other comprehensive income (loss)(7,603)(4,402)
Retained earnings195,563 211,247 
Total stockholders’ equity256,144 283,379 
Total liabilities and stockholders’ equity$365,264 $402,392 
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Alphabet Inc.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
Quarter Ended December 31,
Year Ended December 31,
2022202320222023
(unaudited)(unaudited)
Revenues$76,048 $86,310 $282,836 $307,394 
Costs and expenses:
Cost of revenues35,342 37,575 126,203 133,332 
Research and development10,267 12,113 39,500 45,427 
Sales and marketing7,183 7,719 26,567 27,917 
General and administrative5,096 5,206 15,724 16,425 
Total costs and expenses57,888 62,613 207,994 223,101 
Income from operations18,160 23,697 74,842 84,293 
Other income (expense), net(1,013)715 (3,514)1,424 
Income before income taxes17,147 24,412 71,328 85,717 
Provision for income taxes3,523 3,725 11,356 11,922 
Net income$13,624 $20,687 $59,972 $73,795 
Basic earnings per share of Class A, Class B, and Class C stock$1.06 $1.66 $4.59 $5.84 
Diluted earnings per share of Class A, Class B, and Class C stock$1.05 $1.64 $4.56 $5.80 
Number of shares used in basic earnings per share calculation12,897 12,488 13,063 12,630 
Number of shares used in diluted earnings per share calculation12,947 12,602 13,159 12,722 

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Alphabet Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Quarter Ended December 31,
Year Ended December 31,
2022202320222023
(unaudited)(unaudited)
Operating activities
Net income$13,624 $20,687 $59,972 $73,795 
Adjustments:
Depreciation of property and equipment3,602 3,316 13,475 11,946 
Stock-based compensation expense5,100 5,659 19,362 22,460 
Deferred income taxes(1,924)(1,670)(8,081)(7,763)
(Gain) loss on debt and equity securities, net1,663 (471)5,519 823 
Other1,260 1,665 3,483 4,330 
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net(4,615)(6,518)(2,317)(7,833)
Income taxes, net
1,446 (9,869)584 523 
Other assets(778)740 (5,046)(2,143)
Accounts payable(28)427 707 664 
Accrued expenses and other liabilities3,424 4,317 3,915 3,937 
Accrued revenue share577 797 (445)482 
Deferred revenue263 (165)367 525 
Net cash provided by operating activities23,614 18,915 91,495 101,746 
Investing activities
Purchases of property and equipment(7,595)(11,019)(31,485)(32,251)
Purchases of marketable securities(11,621)(28,436)(78,874)(77,858)
Maturities and sales of marketable securities13,735 34,030 97,822 86,672 
Purchases of non-marketable securities(903)(851)(2,531)(3,027)
Maturities and sales of non-marketable securities19 204 150 947 
Acquisitions, net of cash acquired, and purchases of intangible assets(84)(29)(6,969)(495)
Other investing activities222 (66)1,589 (1,051)
Net cash used in investing activities(6,227)(6,167)(20,298)(27,063)
Financing activities
Net payments related to stock-based award activities(2,079)(2,680)(9,300)(9,837)
Repurchases of stock(15,407)(16,191)(59,296)(61,504)
Proceeds from issuance of debt, net of costs8,550 1,492 52,872 10,790 
Repayments of debt(8,718)(1,929)(54,068)(11,550)
Proceeds from sale of interest in consolidated entities, net25 0 35 8 
Net cash used in financing activities(17,629)(19,308)(69,757)(72,093)
Effect of exchange rate changes on cash and cash equivalents137 (94)(506)(421)
Net increase (decrease) in cash and cash equivalents(105)(6,654)934 2,169 
Cash and cash equivalents at beginning of period21,984 30,702 20,945 21,879 
Cash and cash equivalents at end of period$21,879 $24,048 $21,879 $24,048 

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Segment Results
The following table presents our segment revenues and operating income (loss) (in millions; unaudited):
Quarter Ended December 31,
20222023
Revenues:
Google Services$67,838 $76,311 
Google Cloud7,315 9,192 
Other Bets226 657 
Hedging gains (losses)669 150 
Total revenues$76,048 $86,310 
Operating income (loss):
Google Services$20,222 $26,730 
Google Cloud(186)864 
Other Bets(1,237)(863)
Alphabet-level activities
(639)(3,034)
Total income from operations$18,160 $23,697 
We report our segment results as Google Services, Google Cloud, and Other Bets:
•Google Services includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. Google Services generates revenues primarily from advertising; fees received for consumer subscription-based products such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket; the sale of apps and in-app purchases and devices.
•Google Cloud includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Google Cloud generates revenues primarily from consumption-based fees and subscriptions received for Google Cloud Platform services, Google Workspace communication and collaboration tools, and other enterprise services.
•Other Bets is a combination of multiple operating segments that are not individually material. Revenues from Other Bets are generated primarily from the sale of healthcare-related services and internet services.
Certain costs are not allocated to our segments because they represent Alphabet-level activities. These costs primarily include AI-focused shared R&D activities, including development costs of our general AI models; corporate initiatives such as our philanthropic activities; corporate shared costs such as certain finance, human resource, and legal costs, including certain fines and settlements. Charges associated with reductions in our workforce and office space during 2023 were not allocated to our segments. Additionally, hedging gains (losses) related to revenue are not allocated to our segments.
Other Income (Expense), Net
The following table presents our other income (expense), net (in millions; unaudited):
Quarter Ended December 31,
20222023
Interest income$659 $1,110 
Interest expense(90)(69)
Foreign currency exchange gain (loss), net(185)(449)
Gain (loss) on debt securities, net(176)(115)
Gain (loss) on equity securities, net(1)
(1,487)586 
Performance fees193 (45)
Income (loss) and impairment from equity method investments, net(31)(256)
Other104 (47)
Other income (expense), net$(1,013)$715 
(1)Includes all gains and losses, unrealized and realized, on equity securities. For Q4 2023, the net effect of the gain on equity securities of $586 million and the $45 million of performance fees related to certain investments increased the provision for
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income tax, net income, and diluted EPS by $114 million, $427 million, and $0.03, respectively. Fluctuations in the value of our investments may be affected by market dynamics and other factors and could significantly contribute to the volatility of OI&E in future periods.
Reconciliation from GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow (in millions; unaudited):
We provide non-GAAP free cash flow because it is a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in our business and acquisitions, and to strengthen our balance sheet.
Quarter Ended December 31, 2023
Net cash provided by operating activities$18,915 
Less: purchases of property and equipment(11,019)
Free cash flow$7,896 
Free cash flow: We define free cash flow as net cash provided by operating activities less capital expenditures.

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Reconciliation from GAAP Revenues to Non-GAAP Constant Currency Revenues and GAAP Percentage Change in Revenues to Non-GAAP Percentage Change in Constant Currency Revenues (in millions, except percentages; unaudited):
We provide non-GAAP constant currency revenues (“constant currency revenues”) and non-GAAP percentage change in constant currency revenues (“percentage change in constant currency revenues”), because they facilitate the comparison of current results to historic performance by excluding the effect of foreign exchange rate movements (“FX Effect”) as well as hedging activities, which are recognized at the consolidated level, as they are not indicative of our core operating results.
Non-GAAP constant currency revenues is defined as revenues excluding the effect of foreign exchange rate movements and hedging activities and is calculated by translating current period revenues using prior period exchange rates and excluding any hedging effect recognized in the current period. We calculate the percentage change in constant currency revenues by comparing constant currency revenues to the prior year comparable period revenues, excluding any hedging effect recognized in the prior period.
Revenues by Geography
Comparison from the Quarter Ended December 31, 2022 to the Quarter Ended December 31, 2023
Quarter Ended December 31, 2023
% Change from Prior Period
Quarter Ended December 31,Less FX EffectConstant Currency RevenuesAs ReportedLess Hedging EffectLess FX EffectConstant Currency Revenues
20222023
United States$36,982 $41,995 $0 $41,995 14 %0 %14 %
EMEA21,762 25,010 1,105 23,905 15 %5 %10 %
APAC11,979 13,979 (90)14,069 17 %0 %17 %
Other Americas4,656 5,176 (75)5,251 11 %(2)%13 %
Revenues, excluding hedging effect
75,379 86,160 940 85,220 14 %1 %13 %
Hedging gains (losses)669 150 
Total revenues(1)
$76,048 $86,310 $85,220 13 %(1)%1 %13 %
(1)Total constant currency revenues of $85.2 billion for the quarter ended December 31, 2023 increased $9.8 billion compared to $75.4 billion in revenues, excluding hedging effect for the quarter ended December 31, 2022.
Comparison from the Quarter Ended September 30, 2023 to the Quarter Ended December 31, 2023
Quarter Ended December 31, 2023
% Change from Prior Period
Quarter EndedLess FX EffectConstant Currency RevenuesAs ReportedLess Hedging EffectLess FX EffectConstant Currency Revenues
September 30, 2023December 31, 2023
United States$36,354 $41,995 $0 $41,995 16 %0 %16 %
EMEA22,661 25,010 (508)25,518 10 %(3)%13 %
APAC13,126 13,979 (196)14,175 6 %(2)%8 %
Other Americas4,553 5,176 (151)5,327 14 %(3)%17 %
Revenues, excluding hedging effect76,694 86,160 (855)87,015 12 %(1)%13 %
Hedging gains (losses)(1)150 
Total revenues(1)
$76,693 $86,310 $87,015 13 %1 %(1)%13 %
(1)Total constant currency revenues of $87.0 billion for the quarter ended December 31, 2023 increased $10.3 billion compared to $76.7 billion in revenues, excluding hedging effect for the quarter ended September 30, 2023.

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Comparison from the Year Ended December 31, 2022 to the Year Ended December 31, 2023
Year Ended December 31, 2023
% Change from Prior Period
Year Ended December 31,Less FX EffectConstant Currency RevenuesAs ReportedLess Hedging EffectLess FX EffectConstant Currency Revenues
20222023
United States$134,814 $146,286 $0 $146,286 9 %0 %9 %
EMEA82,062 91,038 460 90,578 11 %1 %10 %
APAC47,024 51,514 (1,759)53,273 10 %(3)%13 %
Other Americas16,976 18,320 (654)18,974 8 %(4)%12 %
Revenues, excluding hedging effect280,876 307,158 (1,953)309,111 9 %(1)%10 %
Hedging gains (losses)1,960 236 
Total revenues(1)
$282,836 $307,394 $309,111 9 %0 %(1)%10 %
(1)Total constant currency revenues of $309.1 billion for the year ended December 31, 2023 increased $28.2 billion compared to $280.9 billion in revenues, excluding hedging effect for the year ended December 31, 2022.
Total Revenues — Prior Year Comparative Periods
Comparison from the Quarter Ended December 31, 2021 to the Quarter Ended December 31, 2022
Quarter Ended December 31, 2022
Quarter Ended December 31,% Change from Prior Period
 Less FX EffectConstant Currency RevenuesAs ReportedLess Hedging EffectLess FX EffectConstant Currency Revenues
20212022
Revenues excluding hedging effect$75,122 $75,379 $(4,733)$80,112 0 %(7)%7 %
Hedging gains (losses)203 669 
Total revenues$75,325 $76,048 $80,112 1 %1 %(7)%7 %
Comparison from the Year Ended December 31, 2021 to the Year Ended December 31, 2022
Year Ended December 31, 2022
% Change from Prior Period
 Year Ended December 31,Less FX EffectConstant Currency RevenuesAs ReportedLess Hedging EffectLess FX EffectConstant Currency Revenues
20212022
Revenues excluding hedging effect$257,488 $280,876 $(13,324)$294,200 9 %(5)%14 %
Hedging gains (losses)149 1,960 
Total revenues$257,637 $282,836 $294,200 10 %1 %(5)%14 %
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