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Q4 |
Fiscal Year |
|||||||||||||||||||||
2018 |
2019 |
2017 |
2018 |
2019 |
||||||||||||||||||
Google Search & other |
$23,320 |
$27,185 |
$69,811 |
$85,296 |
$98,115 |
|||||||||||||||||
YouTube ads(1)
|
3,605 |
4,717 |
8,150 |
11,155 |
15,149 |
|||||||||||||||||
Google properties |
26,925 |
31,902 |
77,961 |
96,451 |
113,264 |
|||||||||||||||||
Google Network Members' properties |
5,593 |
6,032 |
17,616 |
20,010 |
21,547 |
|||||||||||||||||
Google advertising |
32,518 |
37,934 |
95,577 |
116,461 |
134,811 |
|||||||||||||||||
Google Cloud |
1,709 |
2,614 |
4,056 |
5,838 |
8,918 |
|||||||||||||||||
Google other(1)
|
4,771 |
5,264 |
10,914 |
14,063 |
17,014 |
|||||||||||||||||
Google revenues |
38,998 |
45,812 |
110,547 |
136,362 |
160,743 |
|||||||||||||||||
Other Bets revenues |
154 |
172 |
477 |
595 |
659 |
|||||||||||||||||
Hedging gains (losses)(2)
|
124 |
91 |
(169 |
) |
(138 |
) |
455 |
|||||||||||||||
Total revenues |
$39,276 |
$46,075 |
$110,855 |
$136,819 |
$161,857 |
|||||||||||||||||
(1) YouTube non-advertising revenues are included in Google other revenues.
|
||||||||||||||||||||||
(2) Hedging gains (losses) were previously included in Google revenues.
|
Quarter Ended
December 31,
|
Year Ended
December 31,
|
||||||||||||||
2018 |
2019 |
2018 |
2019 |
||||||||||||
Revenues |
$39,276 |
$46,075 |
$136,819 |
$161,857 |
|||||||||||
Increase in revenues year over year |
22 |
% |
17 |
% |
23 |
% |
18 |
% |
|||||||
Increase in constant currency revenues year over year |
23 |
% |
19 |
% |
22 |
% |
20 |
% |
|||||||
Operating income |
$8,221 |
$9,266 |
$27,524 |
$34,231 |
|||||||||||
Operating margin |
21 |
% |
20 |
% |
20 |
% |
21 |
% |
|||||||
Other income (expense), net |
$1,851 |
$1,438 |
$7,389 |
$5,394 |
|||||||||||
Net income(1)
|
$8,948 |
$10,671 |
$30,736 |
$34,343 |
|||||||||||
Diluted EPS |
$12.77 |
$15.35 |
$43.70 |
$49.16 |
(1)
|
Included in net income is the provision for income taxes. Our effective tax rate was 12% and 13% for the years ended December 31, 2018 and 2019, respectively, and was 11% and 0% (reflective of discrete items, including the resolution of multi-year audits) for the quarters ended December 31, 2018 and 2019, respectively. |
Quarter Ended December 31, |
|||||||
2018 |
2019 |
||||||
Google Search & other |
$23,320 |
$27,185 |
|||||
YouTube ads(1)
|
3,605 |
4,717 |
|||||
Google properties |
26,925 |
31,902 |
|||||
Google Network Members' properties |
5,593 |
6,032 |
|||||
Google advertising |
32,518 |
37,934 |
|||||
Google Cloud |
1,709 |
2,614 |
|||||
Google other(1)
|
4,771 |
5,264 |
|||||
Google revenues |
38,998 |
45,812 |
|||||
Other Bets revenues |
154 |
172 |
|||||
Hedging gains (losses) |
124 |
91 |
|||||
Total revenues |
$39,276 |
$46,075 |
|||||
Total TAC |
$7,436 |
$8,501 |
|||||
Number of employees |
98,771 |
118,899 |
(1)
|
YouTube non-advertising revenues are included in Google other revenues. |
Quarter Ended December 31, |
|||||||
2018 |
2019 |
||||||
Google operating income |
$9,576 |
$11,459 |
|||||
Other Bets operating loss |
($1,328 |
) |
($2,026 |
) |
Investor relations |
Media |
investor-relations@abc.xyz |
press@abc.xyz |
As of December 31, |
|||||||
2018 |
2019 |
||||||
(unaudited) |
|||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
16,701 |
$ |
18,498 |
|||
Marketable securities |
92,439 |
101,177 |
|||||
Total cash, cash equivalents, and marketable securities |
109,140 |
119,675 |
|||||
Accounts receivable, net of allowance of $729 and $753 |
20,838 |
25,326 |
|||||
Income taxes receivable, net |
355 |
2,166 |
|||||
Inventory |
1,107 |
999 |
|||||
Other current assets |
4,236 |
4,412 |
|||||
Total current assets |
135,676 |
152,578 |
|||||
Non-marketable investments |
13,859 |
13,078 |
|||||
Deferred income taxes |
737 |
721 |
|||||
Property and equipment, net |
59,719 |
73,646 |
|||||
Operating lease assets |
0 |
10,941 |
|||||
Intangible assets, net |
2,220 |
1,979 |
|||||
Goodwill |
17,888 |
20,624 |
|||||
Other non-current assets |
2,693 |
2,342 |
|||||
Total assets |
$ |
232,792 |
$ |
275,909 |
|||
Liabilities and Stockholders’ Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
4,378 |
$ |
5,561 |
|||
Accrued compensation and benefits |
6,839 |
8,495 |
|||||
Accrued expenses and other current liabilities |
16,958 |
23,067 |
|||||
Accrued revenue share |
4,592 |
5,916 |
|||||
Deferred revenue |
1,784 |
1,908 |
|||||
Income taxes payable, net |
69 |
274 |
|||||
Total current liabilities |
34,620 |
45,221 |
|||||
Long-term debt |
4,012 |
4,554 |
|||||
Deferred revenue, non-current |
396 |
358 |
|||||
Income taxes payable, non-current |
11,327 |
9,885 |
|||||
Deferred income taxes |
1,264 |
1,701 |
|||||
Operating lease liabilities |
0 |
10,214 |
|||||
Other long-term liabilities |
3,545 |
2,534 |
|||||
Total liabilities |
55,164 |
74,467 |
|||||
Commitments and contingencies |
|||||||
Stockholders’ equity: |
|||||||
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding |
0 |
0 |
|||||
Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 695,556 (Class A 299,242, Class B 46,636, Class C 349,678) and 688,335 (Class A 299,828, Class B 46,441, Class C 342,066) shares issued and outstanding |
45,049 |
50,552 |
|||||
Accumulated other comprehensive loss |
(2,306 |
) |
(1,232 |
) |
|||
Retained earnings |
134,885 |
152,122 |
|||||
Total stockholders’ equity |
177,628 |
201,442 |
|||||
Total liabilities and stockholders’ equity |
$ |
232,792 |
$ |
275,909 |
Quarter Ended
December 31,
|
Year Ended
December 31,
|
||||||||||||||
2018 |
2019 |
2018 |
2019 |
||||||||||||
(unaudited) |
(unaudited) |
||||||||||||||
Revenues |
$ |
39,276 |
$ |
46,075 |
$ |
136,819 |
$ |
161,857 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenues |
17,918 |
21,020 |
59,549 |
71,896 |
|||||||||||
Research and development |
6,034 |
7,222 |
21,419 |
26,018 |
|||||||||||
Sales and marketing |
5,100 |
5,738 |
16,333 |
18,464 |
|||||||||||
General and administrative |
2,003 |
2,829 |
6,923 |
9,551 |
|||||||||||
European Commission fines |
0 |
0 |
5,071 |
1,697 |
|||||||||||
Total costs and expenses |
31,055 |
36,809 |
109,295 |
127,626 |
|||||||||||
Income from operations |
8,221 |
9,266 |
27,524 |
34,231 |
|||||||||||
Other income (expense), net |
1,851 |
1,438 |
7,389 |
5,394 |
|||||||||||
Income before income taxes |
10,072 |
10,704 |
34,913 |
39,625 |
|||||||||||
Provision for income taxes |
1,124 |
33 |
4,177 |
5,282 |
|||||||||||
Net income |
$ |
8,948 |
$ |
10,671 |
$ |
30,736 |
$ |
34,343 |
|||||||
Basic earnings per share of Class A and B common stock and Class C capital stock |
$ |
12.87 |
$ |
15.49 |
$ |
44.22 |
$ |
49.59 |
|||||||
Diluted earnings per share of Class A and B common stock and Class C capital stock |
$ |
12.77 |
$ |
15.35 |
$ |
43.70 |
$ |
49.16 |
|||||||
Number of shares used in basic earnings per share calculation |
695,239 |
688,806 |
695,140 |
692,596 |
|||||||||||
Number of shares used in diluted earnings per share calculation |
700,899 |
695,194 |
703,285 |
698,556 |
Quarter Ended
December 31,
|
Year Ended
December 31,
|
||||||||||||||
2018 |
2019 |
2018 |
2019 |
||||||||||||
(unaudited) |
(unaudited) |
||||||||||||||
Operating activities |
|||||||||||||||
Net income |
$ |
8,948 |
$ |
10,671 |
$ |
30,736 |
$ |
34,343 |
|||||||
Adjustments: |
|||||||||||||||
Depreciation and impairment of property and equipment |
2,373 |
3,082 |
8,164 |
10,856 |
|||||||||||
Amortization and impairment of intangible assets |
207 |
331 |
871 |
925 |
|||||||||||
Stock-based compensation expense |
2,253 |
2,645 |
9,353 |
10,794 |
|||||||||||
Deferred income taxes |
55 |
(208 |
) |
778 |
173 |
||||||||||
Gain on debt and equity securities, net |
(1,237 |
) |
(399 |
) |
(6,650 |
) |
(2,798 |
) |
|||||||
Other |
(107 |
) |
(473 |
) |
(189 |
) |
(592 |
) |
|||||||
Changes in assets and liabilities, net of effects of acquisitions: |
|||||||||||||||
Accounts receivable |
(2,887 |
) |
(4,365 |
) |
(2,169 |
) |
(4,340 |
) |
|||||||
Income taxes, net |
(360 |
) |
(3,338 |
) |
(2,251 |
) |
(3,128 |
) |
|||||||
Other assets |
33 |
166 |
(1,207 |
) |
(621 |
) |
|||||||||
Accounts payable |
774 |
814 |
1,067 |
428 |
|||||||||||
Accrued expenses and other liabilities |
2,157 |
4,243 |
8,614 |
7,170 |
|||||||||||
Accrued revenue share |
679 |
1,072 |
483 |
1,273 |
|||||||||||
Deferred revenue |
99 |
186 |
371 |
37 |
|||||||||||
Net cash provided by operating activities |
12,987 |
14,427 |
47,971 |
54,520 |
|||||||||||
Investing activities |
|||||||||||||||
Purchases of property and equipment |
(7,081 |
) |
(6,052 |
) |
(25,139 |
) |
(23,548 |
) |
|||||||
Purchases of marketable securities |
(12,818 |
) |
(19,347 |
) |
(50,158 |
) |
(100,315 |
) |
|||||||
Maturities and sales of marketable securities |
13,581 |
23,042 |
48,507 |
97,825 |
|||||||||||
Purchases of non-marketable investments |
(955 |
) |
(433 |
) |
(2,073 |
) |
(1,932 |
) |
|||||||
Maturities and sales of non-marketable investments |
407 |
108 |
1,752 |
405 |
|||||||||||
Acquisitions, net of cash acquired, and purchases of intangible assets |
(39 |
) |
(2,142 |
) |
(1,491 |
) |
(2,515 |
) |
|||||||
Other investing activities |
29 |
121 |
98 |
589 |
|||||||||||
Net cash used in investing activities |
(6,876 |
) |
(4,703 |
) |
(28,504 |
) |
(29,491 |
) |
|||||||
Financing activities |
|||||||||||||||
Net payments related to stock-based award activities |
(1,041 |
) |
(1,199 |
) |
(4,993 |
) |
(4,765 |
) |
|||||||
Repurchases of capital stock |
(2,650 |
) |
(6,098 |
) |
(9,075 |
) |
(18,396 |
) |
|||||||
Proceeds from issuance of debt, net of costs |
0 |
0 |
6,766 |
317 |
|||||||||||
Repayments of debt |
(5 |
) |
(47 |
) |
(6,827 |
) |
(585 |
) |
|||||||
Proceeds from sale of interest in consolidated entities |
950 |
18 |
950 |
220 |
|||||||||||
Net cash used in financing activities |
(2,746 |
) |
(7,326 |
) |
(13,179 |
) |
(23,209 |
) |
|||||||
Effect of exchange rate changes on cash and cash equivalents |
(107 |
) |
68 |
(302 |
) |
(23 |
) |
||||||||
Net increase in cash and cash equivalents |
3,258 |
2,466 |
5,986 |
1,797 |
|||||||||||
Cash and cash equivalents at beginning of period |
13,443 |
16,032 |
10,715 |
16,701 |
|||||||||||
Cash and cash equivalents at end of period |
$ |
16,701 |
$ |
18,498 |
$ |
16,701 |
$ |
18,498 |
Quarter Ended December 31, 2019 |
|||
Net cash provided by operating activities |
$ |
14,427 |
|
Less: purchases of property and equipment |
(6,052 |
) |
|
Free cash flow |
$ |
8,375 |
Quarter Ended December 31, 2019 |
|||||||
YoY (using Q4'18's FX rates) |
QoQ (using Q3'19's FX rates) |
||||||
EMEA revenues (GAAP) |
$ |
14,099 |
$ |
14,099 |
|||
Exclude foreign exchange effect on Q4'19 revenues using Q4'18 rates |
363 |
N/A |
|||||
Exclude foreign exchange effect on Q4'19 revenues using Q3'19 rates |
N/A |
55 |
|||||
EMEA constant currency revenues (non-GAAP) |
$ |
14,462 |
$ |
14,154 |
|||
Prior period EMEA revenues (GAAP) |
$ |
12,251 |
$ |
12,565 |
|||
EMEA revenue growth (GAAP) |
15 |
% |
12 |
% |
|||
EMEA constant currency revenue growth (non-GAAP) |
18 |
% |
13 |
% |
|||
APAC revenues (GAAP) |
$ |
7,482 |
$ |
7,482 |
|||
Exclude foreign exchange effect on Q4'19 revenues using Q4'18 rates |
(45 |
) |
N/A |
||||
Exclude foreign exchange effect on Q4'19 revenues using Q3'19 rates |
N/A |
40 |
|||||
APAC constant currency revenues (non-GAAP) |
$ |
7,437 |
$ |
7,522 |
|||
Prior period APAC revenues (GAAP) |
$ |
6,031 |
$ |
6,814 |
|||
APAC revenue growth (GAAP) |
24 |
% |
10 |
% |
|||
APAC constant currency revenue growth (non-GAAP) |
23 |
% |
10 |
% |
|||
Other Americas revenues (GAAP) |
$ |
2,666 |
$ |
2,666 |
|||
Exclude foreign exchange effect on Q4'19 revenues using Q4'18 rates |
99 |
N/A |
|||||
Exclude foreign exchange effect on Q4'19 revenues using Q3'19 rates |
N/A |
57 |
|||||
Other Americas constant currency revenues (non-GAAP) |
$ |
2,765 |
$ |
2,723 |
|||
Prior period Other Americas revenues (GAAP) |
$ |
2,201 |
$ |
2,290 |
|||
Other Americas revenue growth (GAAP) |
21 |
% |
16 |
% |
|||
Other Americas constant currency revenue growth (non-GAAP) |
26 |
% |
19 |
% |
|||
United States revenues (GAAP) |
$ |
21,737 |
$ |
21,737 |
|||
United States revenue growth (GAAP) |
16 |
% |
16 |
% |
|||
Hedging gains (losses) |
$ |
91 |
$ |
91 |
|||
Revenues (GAAP) |
$ |
46,075 |
$ |
46,075 |
|||
Constant currency revenues (non-GAAP) |
$ |
46,401 |
$ |
46,136 |
|||
Prior period revenues, excluding hedging effect (non-GAAP)(1)
|
$ |
39,152 |
$ |
40,380 |
|||
Revenue growth (GAAP) |
17 |
% |
14 |
% |
|||
Constant currency revenue growth (non-GAAP) |
19 |
% |
14 |
% |
(1)
|
Total revenues and hedging gains (losses) for the quarter ended December 31, 2018 were $39,276 million and $124 million, respectively. Total revenues and hedging gains (losses) for the quarter ended September 30, 2019 were $40,499 million and $119 million, respectively. |
Quarter Ended |
|||||||
December 31, |
|||||||
2018 |
2019 |
||||||
Interest income |
$ |
542 |
$ |
621 |
|||
Interest expense |
(29 |
) |
(17 |
) |
|||
Foreign currency exchange gain (loss), net |
32 |
40 |
|||||
Gain (loss) on debt securities, net |
1,252 |
4 |
|||||
Gain (loss) on equity securities, net(1)(2)
|
(15 |
) |
395 |
||||
Performance fees(3)
|
(18 |
) |
7 |
||||
Gain (loss) and impairment from equity method investments, net |
19 |
460 |
|||||
Other |
68 |
(72 |
) |
||||
Other income (expense), net |
$ |
1,851 |
$ |
1,438 |
(1) |
$488 million of the gain on equity securities for Q4 2019 represents unrealized gains on equity investments that we hold. Fluctuations in the value of our investments could significantly contribute to the volatility of OI&E in future periods.
|
(2)
|
ASU 2016-01, effective January 1, 2018, requires that all gains and losses, unrealized and realized, on equity security investments are recognized in OI&E. For Q4 2019, the net effect of the gain on equity securities of $395 million and the performance fees reversal of $7 million increased income tax, net income, and diluted EPS by $84 million, $318 million, and $0.46, respectively.
|
(3)
|
Q4 2018 results have been recast to reflect the reclassification of performance fees from general and administrative expenses to OI&E to conform to the current period presentation. |
Quarter Ended |
|||||||
December 31, |
|||||||
2018 |
2019 |
||||||
Revenues: |
|||||||
Google(1)
|
$ |
38,998 |
$ |
45,812 |
|||
Other Bets |
154 |
172 |
|||||
Hedging gains (losses)(1)
|
124 |
91 |
|||||
Total revenues |
$ |
39,276 |
$ |
46,075 |
|||
Operating income (loss): |
|||||||
Google(1)
|
$ |
9,576 |
$ |
11,459 |
|||
Other Bets |
(1,328 |
) |
(2,026 |
) |
|||
Reconciling items(1), (2)
|
(27 |
) |
(167 |
) |
|||
Total income from operations |
$ |
8,221 |
$ |
9,266 |
|||
Stock-based compensation(3):
|
|||||||
Google |
$ |
2,092 |
$ |
2,503 |
|||
Other Bets |
125 |
109 |
|||||
Reconciling items(4)
|
36 |
32 |
|||||
Total stock-based compensation |
$ |
2,253 |
$ |
2,644 |
|||
Capital expenditures: |
|||||||
Google |
$ |
6,849 |
$ |
6,593 |
|||
Other Bets |
61 |
86 |
|||||
Reconciling items(5)
|
171 |
(627 |
) |
||||
Total capital expenditures |
$ |
7,081 |
$ |
6,052 |
|||
Depreciation, amortization, and impairment: |
|||||||
Google |
$ |
2,499 |
$ |
3,036 |
|||
Other Bets |
81 |
320 |
|||||
Reconciling items(4)
|
0 |
57 |
|||||
Total depreciation, amortization, and impairment |
$ |
2,580 |
$ |
3,413 |
(1) |
Certain items have been reclassified for the prior period to conform with current period presentation: (i) hedging gains (losses) were previously included in Google revenues, and (ii) performance fees previously included in reconciling items were reclassified from general and administrative expenses to OI&E. |
(2) |
Reconciling items are generally comprised of corporate administrative costs, hedging gains (losses) and other miscellaneous items that are not allocated to individual segments. |
(3) |
For purposes of segment reporting, SBC represents awards that we expect to settle in Alphabet stock. |
(4) |
Reconciling items are primarily related to corporate administrative and other costs that are not allocated to individual segments. |
(5) |
Reconciling items are related to timing differences of payments, as segment capital expenditures are on an accrual basis while total capital expenditures shown on the Consolidated Statements of Cash Flows are on a cash basis, and other miscellaneous differences. |