Alphabet(GOOGL) - 2024 Q4 - Annual Report

Innovation and Product Development - Alphabet invested over $150 billion in research and development over the last five years to support innovation and product development[20] - In 2024, Alphabet launched Gemini 2.0, a multimodal AI model that powers features across all seven of its two billion-user products, including Search and YouTube[22] - Google Search has evolved to provide an improved experience using Gemini, with AI Overviews released in over 100 countries, reaching more than one billion users[39] - The introduction of AI features in Google Workspace aims to improve productivity and collaboration for users[31] - Alphabet's cybersecurity solutions utilize AI to help customers analyze and respond to a broad range of threats[46] - Alphabet's advertising solutions leverage AI technologies, helping advertisers find untapped conversion opportunities through products like Demand Gen and Performance Max[43] Financial Performance - Consolidated revenues increased from $307,394 million in 2023 to $350,018 million in 2024, a growth of $42,624 million or 14%[221] - Operating income rose by 33%, from $84,293 million in 2023 to $112,390 million in 2024[221] - Net income increased by 36%, from $73,795 million in 2023 to $100,118 million in 2024[221] - Diluted EPS grew from $5.80 in 2023 to $8.04 in 2024, reflecting a 39% increase[221] - Revenues for the year ended December 31, 2024, were $350.0 billion, a 14% increase year over year, driven by a $32.4 billion (12%) increase in Google Services and a $10.1 billion (31%) increase in Google Cloud revenues[223] - Google Search & other revenues increased by $23.1 billion from 2023 to 2024, attributed to growth in search queries and advertiser spending[225] - YouTube ads revenues rose by $4.6 billion from 2023 to 2024, supported by increased spending on brand and direct response advertising[226] - Google Cloud revenues increased by $10.1 billion from 2023 to 2024, primarily due to growth in infrastructure services[231] Costs and Expenditures - Total cost of revenues for 2024 was $146.3 billion, a $13.0 billion increase from 2023, with TAC increasing by $4.0 billion and other costs rising by $9.0 billion[240] - Research and development expenses for 2024 were $49.3 billion, up $3.9 billion from 2023, primarily due to increases in employee compensation and depreciation expenses[244] - Capital expenditures for 2024 were $52.5 billion, reflecting investments in technical infrastructure[223] - Employee severance and related charges decreased by $1.1 billion to $1.0 billion for the year ended December 31, 2024[223] Employee and Workforce - The company employs 183,323 individuals as of December 31, 2024, emphasizing a commitment to employee well-being and career development[59] - Google Services operating income increased by $25.4 billion from 2023 to 2024, driven by revenue growth, despite higher content acquisition costs and TAC[249] - Google Cloud operating income rose by $4.4 billion from 2023 to 2024, primarily due to increased revenues, offset by higher usage costs and employee compensation expenses[250] - Other Bets operating loss increased by $349 million from 2023 to 2024, mainly due to higher employee compensation expenses[251] Tax and Legal Matters - Provision for income taxes increased from $11.9 billion in 2023 to $19.7 billion in 2024, with an effective tax rate rising from 13.9% to 16.4%[254] - The provision for income taxes includes the effect of reserve provisions and changes to reserves, which are subject to examination by tax authorities[293] - The company is subject to various claims and lawsuits, and liabilities are recorded when a loss is probable and can be reasonably estimated[294] - Significant judgment is required to determine the likelihood and estimated amount of losses related to legal matters[295] Environmental Goals - The company aims to reduce 50% of its combined Scope 1, Scope 2, and Scope 3 absolute emissions by 2030 compared to 2019 levels[53] - The company has set a goal to achieve net-zero emissions across all operations and value chain by 2030[53] - The company plans to run on 24/7 carbon-free energy by 2030, with ongoing implementation of its carbon removals strategy[54] Financial Position and Cash Flow - Cash, cash equivalents, and marketable securities totaled $95.7 billion as of December 31, 2024[257] - Net cash provided by operating activities increased from $101.7 billion in 2023 to $125.3 billion in 2024[258] - During 2024, the company repurchased 379 million shares for $62.0 billion, with an additional $70.0 billion authorized for future repurchases[275] - Total cash dividends paid in 2024 amounted to $3.5 billion for Class A, $519 million for Class B, and $3.3 billion for Class C shares[276] Other Financial Commitments - The company reported material purchase commitments and other contractual obligations of $55.4 billion, with $32.5 billion classified as short-term[281] - The company regularly enters into multi-year, non-cancellable agreements to purchase renewable energy, although these agreements do not include a minimum dollar commitment[283] - Long-term taxes payable amounted to $8.8 billion primarily related to uncertain tax positions as of December 31, 2024[280] - Non-marketable equity securities are evaluated for impairment based on qualitative factors, and adjustments may require the use of unobservable inputs[287] - The company has accrued expenses related to outstanding EC fines, including those under appeal, which are included in current liabilities[279]