Alphabet Inc.

Alphabet Inc. operates as a collection of businesses, the largest of which is Google, reporting in two segments: Google Services and Google Cloud, with all non-Google businesses collectively reported as Other Bets. The company's mission is to organize the world's information and make it universally accessible and useful, and it has evolved from a company that helps people find answers to one that also helps them get things done. Alphabet is focused on building an even more helpful Google for everyone, aspiring to give everyone the tools they need to increase their knowledge, health, happiness, and success. The company believes AI is a profound platform shift that can bring meaningful and positive change to people and societies across the world, and to its business. Alphabet aims to build the most advanced, safe, and responsible AI through its full-stack approach, which spans AI-optimized infrastructure, world-class research including models and tooling, and products and platforms that bring AI to billions of people, developers, and enterprises. The company's technical infrastructure allows it to use and offer customers a range of AI accelerator options, including specialized Graphics Processing Units (GPUs) and its own custom-built Tensor Processing Units (TPUs), such as Ironwood, its seventh-generation TPU. Alphabet has invested more than $200 billion ¹ in research and development in the last five years.

Alphabet faces formidable competition in every aspect of its business, characterized by rapid change as well as new and disruptive technologies. Competitors include general purpose search engines and information services; vertical search engines and e-commerce providers; online advertising platforms and networks, including online shopping and streaming services; other forms of advertising such as billboards, magazines, newspapers, radio, and television; digital content and application platform providers; providers of enterprise cloud services; AI model developers and providers of AI products and services; companies that design, manufacture, and market consumer hardware products; providers of digital video services; social networks; and providers of workspace communication and connectivity products. Competing successfully depends heavily on Alphabet's ability to continually develop and distribute innovative products and technologies to the marketplace across its businesses. For advertising, competing successfully depends on attracting and retaining users, for whom other products and services are literally one click away, on the basis of the relevance of its advertising, as well as the general usefulness, security, and availability of its products and services; advertisers, primarily based on its ability to generate sales leads, and ultimately customers, and to deliver their advertisements in an efficient and effective manner across a variety of distribution channels; and content providers, primarily based on the quality of its advertiser base, its ability to help these partners generate revenues from advertising, and the terms of its agreements with them.

Alphabet generates revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide enterprise customers of all sizes with infrastructure, platform services, and applications; and sales of other products and services, such as fees received for subscription-based products, apps and in-app purchases, and devices. Google Services generates revenues primarily by delivering both performance and brand advertising that appears on Google Search & other properties, YouTube, and Google Network partners' properties. Google Services also generates revenues from products and services beyond advertising, including consumer subscriptions, which primarily include revenues from YouTube services such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One; platforms, which primarily include revenues from Google Play sales of apps and in-app purchases; and devices, which primarily include sales of the Pixel family of devices. Google Cloud generates revenues primarily from consumption-based fees and subscriptions for infrastructure, platform, applications, and other cloud services through its Google Cloud Platform and Google Workspace offerings. Revenues from Other Bets are generated primarily from the sale of autonomous transportation and internet services.

Google Services' core products and platforms include ads, Android, Chrome, devices, Gmail, Google Drive, Google Gemini, Google Maps, Google Photos, Google Play, Search, and YouTube. Google Search has been transformed into a dynamic, multimodal experience, with AI Overviews making it easier to ask Google anything and get a helpful response, and AI Mode allowing users to ask more nuanced questions using Gemini's advanced reasoning, thinking, and multimodal capabilities. Google Services generates revenues primarily by delivering both performance and brand advertising. Performance advertising creates and delivers relevant ads that users will click on leading to direct engagement with advertisers, while brand advertising helps enhance users' awareness of and affinity for advertisers' products and services through videos, text, images, and other interactive ads. Google Services also generates revenues from consumer subscriptions, platforms, and devices. For the year ended December 31, 2025, Google Services total revenues were $342.721 billion ², compared to $304.930 billion ³ in 2024. Google advertising revenues were $294.691 billion ⁴ in 2025, comprised of Google Search & other of $224.532 billion ⁵, YouTube ads of $40.367 billion ⁶, and Google Network of $29.792 billion ⁷. Google subscriptions, platforms, and devices revenues were $48.030 billion ⁸ in 2025.

Google Cloud generates revenues through Google Cloud Platform and Google Workspace offerings, providing AI-optimized infrastructure, a developer platform via Vertex AI, cybersecurity solutions, data and analytics solutions, and agents such as Gemini Enterprise and Gemini for Google Workspace. Google Cloud Platform primarily generates consumption-based fees and subscriptions for infrastructure, platform, and other services, providing access to solutions such as AI offerings including enterprise AI infrastructure, Vertex AI platform, and Gemini Enterprise; cybersecurity offerings; and data and analytics solutions. Google Workspace includes subscriptions for cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Calendar, Drive, and Meet, with integrated features like Gemini for Google Workspace. For the year ended December 31, 2025, Google Cloud revenues were $58.705 billion ⁹, compared to $43.229 billion ¹⁰ in 2024. Other Bets revenues were $1.537 billion ¹¹ in 2025, compared to $1.648 billion ¹² in 2024. Other Bets include businesses at various stages of development, from those in the research and development phase, such as X, to those scaling commercialization, such as Waymo, which is providing fully autonomous, paid ride-hailing services to customers in multiple cities and expanding to more cities domestically, entering international markets, and further scaling operations.

In 2025, Alphabet entered into definitive agreements to acquire Wiz, a leading cloud security platform, for $32.0 billion ¹³, and Intersect, a provider of data center and energy infrastructure solutions, for $4.8 billion ¹⁴ in cash plus the assumption of debt. Both acquisitions are expected to close in 2026, subject to customary closing conditions, including the receipt of regulatory approvals. In 2025, Alphabet issued senior unsecured notes for net proceeds of $37.3 billion ¹⁵, to be used for general corporate purposes. Repurchases of Class A and Class C shares were $6.5 billion ¹⁶ and $38.9 billion ¹⁷, respectively, totaling $45.4 billion ¹⁸ for the year ended December 31, 2025. In April 2025, the company's Board of Directors authorized an additional $70.0 billion ¹⁹ share repurchase program for its Class A and Class C shares. As of December 31, 2025, $69.5 billion ²⁰ remained available for Class A and Class C share repurchases. During the year ended December 31, 2025, total cash dividends were $4.8 billion ²¹ for Class A, $703 million ²² for Class B, and $4.5 billion ²³ for Class C shares. In April 2025, the company's Board of Directors increased the quarterly cash dividend by 5% ²⁴ to $0.21 ²⁵ per share of outstanding Class A, Class B, and Class C shares. Other Bets operating loss of $7.5 billion ²⁶ for the year ended December 31, 2025 included a $2.1 billion ²⁷ employee compensation charge recognized in the fourth quarter for Waymo, primarily reflected in research and development expenses, based on estimated stock valuation. In February 2026, Waymo announced an investment round of $16.0 billion ²⁸, the significant majority of which was funded by Alphabet.

For the fiscal year ended December 31, 2025, Alphabet reported consolidated revenues of $402.836 billion ²⁹, an increase of 15% ³⁰ year over year from $350.018 billion ³¹ in 2024. Net income was $132.170 billion ³² in 2025, compared to $100.118 billion ³³ in 2024. Diluted net income per share was $10.81 ³⁴ in 2025, compared to $8.04 ³⁵ in 2024. Operating income was $129.039 billion ³⁶ in 2025, compared to $112.390 billion ³⁷ in 2024, with operating margin remaining flat at 32% ³⁸ for both years. Other income (expense), net was $29.787 billion ³⁹ in 2025, compared to $7.425 billion ⁴⁰ in 2024, primarily due to net gains on equity securities of $24.1 billion ⁴¹, largely related to unrealized gains on non-marketable equity securities. Operating cash flow was $164.7 billion ⁴² for the year ended December 31, 2025. Capital expenditures, which primarily reflected investments in technical infrastructure, were $91.4 billion ⁴³ for the year ended December 31, 2025. As of December 31, 2025, Alphabet had 190,820 ⁴⁴ employees.

The filing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, identified by words such as 'anticipates,' 'believes,' 'could,' 'estimates,' 'expects,' 'intends,' 'may,' 'plans,' 'predicts,' 'projects,' 'will be,' 'will continue,' and 'will likely result,' but A major growth vector is the continued expansion of AI offerings across Alphabet's products and services. The company states that the continuing evolution of the online world, including user engagement with AI products and services, is expected to continue to benefit its business and revenues. As Alphabet continues to incorporate AI into its products and services, such as with AI Overviews and AI Mode in Search, and with enterprise AI solutions on its Google Cloud Platform, it may monetize differently than its historical consumer and enterprise offerings, which could affect revenue growth rates and margin trends. The company is focused on bringing its latest AI advances to its products and platforms, embedding the power of generative AI and Gemini into its products and platforms. Today, all 15 ⁴⁵ of its half-billion-user products — including seven with two billion users — use its Gemini models. For Google Cloud customers, offerings such as Gemini Enterprise and Gemini for Google Workspace are helping organizations stay at the forefront of innovation. The company also continues to invest in frontier technologies such as quantum computing.

Another significant growth vector is the expansion of Google Cloud, which saw revenues increase by 36% ⁴⁶ year over year in 2025, driven primarily by growth in Google Cloud Platform largely from infrastructure and platform services. The company expects revenues from cloud, consumer subscriptions, platforms, and devices, which may have differing characteristics than its advertising revenues, to continue growing at a rate higher than its advertising revenues, becoming a larger percentage of consolidated revenues. Within Google Cloud, Alphabet is devoting significant resources to develop and deploy its enterprise-ready cloud services, including Google Cloud Platform and Google Workspace, and is advancing its AI platforms and models to support these tools and technologies, including the development of its custom TPUs. The company is also expanding its autonomous driving technology company, Waymo, which is now providing fully autonomous, paid ride-hailing services to customers in multiple cities, expanding to more cities domestically, entering international markets, and further scaling operations. In February 2026, Waymo announced an investment round of $16.0 billion ⁴⁷, the significant majority of which was funded by Alphabet.

Alphabet expects to experience downward pressure on its operating margin resulting from a variety of factors, including increasing costs for many aspects of its business resulting from a higher level of investment in technical infrastructure, increasing regulations, and increasing competition. The company may also face margin compression from an increase in the mix of lower-margin products and services, in particular from the continued expansion of its business into new fields, including products and services such as Google Cloud, its devices, and consumer subscription products, as well as significant investments in Other Bets. Margins on its devices have had, and may continue to have, an adverse effect on its consolidated margins due to pricing pressures and higher cost of sales. The costs associated with operating its technical infrastructure — depreciation, energy, equipment, and network capacity — are expected to significantly increase as developing and serving AI offerings require more compute power than its historical consumer and enterprise offerings. While technical infrastructure costs increase, the company expects to continue to drive efficiencies in its data centers, for example, through the design of its AI models and its TPU and GPU-based technical infrastructure.

Alphabet continues to invest heavily in capital expenditures as it scales its technical infrastructure, in particular for AI, to meet the demand of its users and enterprise customers and to support research internally. The company invested heavily in capital expenditures in 2025, and in 2026, it expects to significantly increase, relative to 2025, its investment in its technical infrastructure, including servers and network equipment, and data centers. During the years ended December 31, 2024 and 2025, Alphabet spent $52.5 billion ⁴⁸ and $91.4 billion ⁴⁹ on capital expenditures, respectively. The company continues to make significant research and development investments in areas of strategic focus as it seeks to develop new, innovative offerings and improve its existing offerings across its businesses. Acquisitions and strategic investments remain important elements in its use of capital. Alphabet has raised capital through external financing in the form of debt and may continue to seek debt or other forms of financing in the future to support its capital and operating needs. In 2025, the company raised capital through the issuance of debt and expects to continue to assess the use of debt and other forms of financing in the future. The company expects to continue to enter into finance leases, primarily for data centers.

Alphabet's capital allocation strategy includes significant investment in research and development, capital expenditures, share repurchases, and dividends. The company has invested more than $200 billion ⁵⁰ in research and development in the last five years. In 2026, Alphabet expects to significantly increase, relative to 2025, its investment in its technical infrastructure, including servers and network equipment, and data centers. In April 2025, the company's Board of Directors authorized an additional $70.0 billion ⁵¹ share repurchase program for its Class A and Class C shares. As of December 31, 2025, $69.5 billion ⁵² remained available for Class A and Class C share repurchases. In April 2025, the company's Board of Directors increased the quarterly cash dividend by 5% ⁵³ to $0.21 ⁵⁴ per share of outstanding Class A, Class B, and Class C shares. The company intends to pay quarterly cash dividends in the future, subject to review and approval by the company's Board of Directors in its sole discretion.

Alphabet faces several structural headwinds and execution risks that management has explicitly flagged. The company generates a significant portion of its revenues from advertising, with more than 70% ⁵⁵ of total revenues from online advertising in 2025. Reduced spending by advertisers, a loss of partners, shifts in online advertising, new and evolving advertising formats, or new or existing technologies that block ads online or affect the company's ability to personalize ads could harm its business. Many of its advertisers, companies that distribute its products and services, digital publishers, and content providers can terminate their contracts at any time. The company faces intense competition, and its business environment is rapidly evolving and intensely competitive. To compete successfully, it must accurately anticipate technology developments and deliver innovative, relevant, and useful products, services, and technologies in a timely manner. The company's increasing investment in new businesses, products, services, and technologies is inherently risky and could divert management attention and harm its business. The investments it is making across its businesses — such as building AI-optimized infrastructure, including its custom TPUs, and integrating AI capabilities into new and existing products and services — may ultimately not be commercially viable or may not result in an adequate return of capital.

Alphabet's international operations expose it to additional risks, as international revenues accounted for approximately 52% ⁵⁶ of consolidated revenues in 2025. These risks include restrictions on foreign ownership and investments, stringent foreign exchange controls, sanctions, tariffs, import and export controls, political unrest, geopolitical tensions, changes in regimes, or armed conflict. The company is subject to a variety of new, existing, and changing laws and regulations worldwide that could harm its business, and it will likely be subject to an even broader scope of laws and regulations as it continues to expand its business. Governments around the world have proposed and adopted a large number of new laws and regulations relevant to the digital economy, particularly in the areas of data privacy and security, competition, AI, and online content. The costs of compliance with these measures are high and are likely to increase in the future. The company is subject to claims, lawsuits, regulatory and government inquiries and investigations, enforcement actions, consent orders, and other forms of regulatory scrutiny and legal liability, including competition matters, that could harm its business. For example, the US Department of Justice and a number of state Attorneys General filed a lawsuit concerning its Search and Search advertising practices, and in August 2024, the US District Court for the District of Columbia ruled against Google, with a final judgment entered in December 2025 imposing restrictions on how it distributes its services and requiring it to share certain search data with and offer syndication services to certain competitors.

Alphabet's most material risks include its heavy reliance on advertising, which generated more than 70% ⁵⁷ of total revenues in 2025, making it vulnerable to reduced advertiser spending, shifts in online advertising, and technologies that block ads or affect ad personalization. The company faces intense competition in AI, cloud, and search, requiring significant investment in technical infrastructure, including $91.4 billion ⁵⁸ in capital expenditures in 2025, with expectations to significantly increase investment in 2026, and these investments may not be commercially viable. Alphabet is subject to numerous legal and regulatory proceedings, including antitrust lawsuits that have already resulted in adverse rulings, such as the US District Court ruling against Google in the Search case, which imposed restrictions on distribution and data sharing, and the EC's $3.5 billion ⁵⁹ fine for advertising technology practices. The company's international operations expose it to foreign exchange risk, with international revenues accounting for approximately 52% ⁶⁰ of consolidated revenues, and it faces evolving and sometimes conflicting laws and regulations globally regarding AI, data privacy, and competition, which could increase compliance costs and limit business practices.

The overall tone of management's message, as conveyed through the filing, emphasizes Alphabet's unconventional spirit and its commitment to tackling big problems and investing in moonshots, with a focus on being an AI-first company since 2016. Key themes include the belief that AI is a profound platform shift that can bring meaningful and positive change, and the company's full-stack approach to building the most advanced, safe, and responsible AI. Management highlights the development of Gemini 3, described as its most intelligent AI model yet, designed to deliver advanced multimodal understanding and representing its most capable iteration of agentic and generative coding technologies. The strategic priorities emphasized for the period ahead include continuing to invest for the long term, most notably for the application of AI to its products and services, as well as other frontier technologies such as quantum computing. Management also underscores the importance of the company's structure as a collection of businesses, with Google as the largest, reporting in two segments (Google Services and Google Cloud), and all non-Google businesses collectively as Other Bets, with centralized AI-related research and development reported in Alphabet-level activities. The filing does not contain specific forward-looking guidance ranges from management in the form of quoted figures.