Exhibit 99.1
Alphabet Announces Third Quarter 2021 Results
MOUNTAIN VIEW, Calif. – October 26, 2021 – Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter ended September 30, 2021.
Sundar Pichai, CEO of Alphabet and Google, said: “Five years ago, I laid out our vision to become an AI-first company. This quarter’s results show how our investments there are enabling us to build more helpful products for people and our partners. Ongoing improvements to Search, and the new Pixel 6, are great examples. And as the digital transformation and shift to hybrid work continue, our Cloud services are helping organizations collaborate and stay secure.”
Ruth Porat, CFO of Alphabet and Google, said: “Our consistent investments to support long-term growth are reflected in strong financial performance, with revenues of $65.1 billion in the quarter. We continued to deliver across our business by providing helpful and valuable experiences for both consumers and our partners.”
Q3 2021 financial highlights
The following table summarizes our consolidated financial results for the quarters ended September 30, 2020 and 2021 (in millions, except for per share information and percentages; unaudited).
Quarter Ended September 30,
20202021
Revenues$46,173 $65,118 
Increase in revenues year over year14 %41 %
Increase in constant currency revenues year over year(1)
15 %39 %
Operating income$11,213 $21,031 
Operating margin24 %32 %
Other income (expense), net
$2,146 $2,033 
Net income$11,247 $18,936 
Diluted EPS$16.40 $27.99 
(1)    Non-GAAP measure. See the table captioned “Reconciliation from GAAP revenues to non-GAAP constant currency revenues” for more details.





Q3 2021 supplemental information (in millions, except for number of employees; unaudited)
Revenues, Traffic Acquisition Costs (TAC) and number of employees
Quarter Ended September 30,
20202021
Google Search & other$26,338 $37,926 
YouTube ads5,037 7,205 
Google Network5,720 7,999 
Google advertising37,095 53,130 
Google other5,478 6,754 
Google Services total42,573 59,884 
Google Cloud3,444 4,990 
Other Bets178 182 
Hedging gains (losses)(22)62 
Total revenues$46,173 $65,118 
Total TAC$8,166 $11,498 
Number of employees132,121 150,028 
Segment Operating Results
Quarter Ended September 30,
20202021
Operating income (loss):
Google Services$14,453 $23,973 
Google Cloud(1,208)(644)
Other Bets(1,103)(1,288)
Corporate costs, unallocated(929)(1,010)
Total income from operations$11,213 $21,031 
Change in the useful lives of our server and network equipment (unaudited)
In January 2021, we completed an assessment of the useful lives of our servers and network equipment and adjusted the estimated useful life of our servers from three years to four years and the estimated useful life of certain network equipment from three years to five years. This change in accounting estimate was effective beginning in fiscal year 2021, and the effect for the three and nine months ended September 30, 2021, respectively, was a reduction in depreciation expense of $591 million and $2.1 billion and an increase in net income of $460 million and $1.7 billion, or $0.69 and $2.50 per basic share and $0.68 and $2.46 per diluted share.
Share Repurchases (unaudited)
During the three months ended September 30, 2021, we repurchased and subsequently retired 4.6 million aggregate shares for $12.6 billion, consisting of 0.5 million shares or $1.5 billion of Class A stock and 4.1 million shares or $11.1 billion of Class C stock.
Webcast and conference call information
A live audio webcast of our third quarter 2021 earnings release call will be available on YouTube at https://youtu.be/mw05JQ0HYAs. 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.
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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, 2020 and our most recent Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. All information provided in this release and in the attachments is as of October 26, 2021. 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 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. 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 net cash provided by operating activities to free cash flow” and “Reconciliation from GAAP revenues to non-GAAP constant currency revenues” included at the end of this release.
Contact
Investor relations
Media
investor-relations@abc.xyzpress@abc.xyz

3


Alphabet Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts which are reflected in thousands and par value per share amounts)
As of December 31,As of September 30,
20202021
(unaudited)
Assets
Current assets:
Cash and cash equivalents$26,465 $23,719 
Marketable securities110,229 118,284 
Total cash, cash equivalents, and marketable securities136,694 142,003 
Accounts receivable, net30,930 34,047 
Income taxes receivable, net454 753 
Inventory728 1,278 
Other current assets5,490 6,029 
Total current assets174,296 184,110 
Non-marketable investments20,703 26,101 
Deferred income taxes1,084 1,195 
Property and equipment, net84,749 94,631 
Operating lease assets12,211 12,918 
Intangible assets, net1,445 1,549 
Goodwill21,175 22,623 
Other non-current assets3,953 4,276 
Total assets$319,616 $347,403 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$5,589 $4,616 
Accrued compensation and benefits11,086 12,170 
Accrued expenses and other current liabilities28,631 30,113 
Accrued revenue share7,500 7,745 
Deferred revenue2,543 2,968 
Income taxes payable, net1,485 4,170 
Total current liabilities56,834 61,782 
Long-term debt13,932 14,288 
Deferred revenue, non-current481 510 
Income taxes payable, non-current8,849 8,984 
Deferred income taxes3,561 3,551 
Operating lease liabilities11,146 11,471 
Other long-term liabilities2,269 2,250 
Total liabilities97,072 102,836 
Contingencies
Stockholders’ equity:
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding
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); 675,222 (Class A 300,730, Class B 45,843, Class C 328,649) and 664,682 (Class A 300,801, Class B 45,261, Class C 318,620) shares issued and outstanding
58,510 61,193 
Accumulated other comprehensive income (loss)633 (408)
Retained earnings163,401 183,782 
Total stockholders’ equity222,544 244,567 
Total liabilities and stockholders’ equity$319,616 $347,403 

4


Alphabet Inc.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except share amounts which are reflected in thousands and per share amounts)
Quarter Ended September 30,Year To Date September 30,
2020202120202021
(unaudited)(unaudited)
Revenues$46,173 $65,118 $125,629 $182,312 
Costs and expenses:
Cost of revenues21,117 27,621 58,652 77,951 
Research and development6,856 7,694 20,551 22,854 
Sales and marketing4,231 5,516 12,632 15,308 
General and administrative2,756 3,256 8,221 9,370 
Total costs and expenses34,960 44,087 100,056 125,483 
Income from operations11,213 21,031 25,573 56,829 
Other income (expense), net2,146 2,033 3,820 9,503 
Income before income taxes 13,359 23,064 29,393 66,332 
Provision for income taxes2,112 4,128 4,351 10,941 
Net income$11,247 $18,936 $25,042 $55,391 
Basic earnings per share of Class A and B common stock and Class C capital stock$16.55 $28.44 $36.69 $82.76 
Diluted earnings per share of Class A and B common stock and Class C capital stock$16.40 $27.99 $36.38 $81.53 
Number of shares used in basic earnings per share calculation679,449 665,758 682,561 669,312 
Number of shares used in diluted earnings per share calculation685,851 676,519 688,381 679,401 

5


Alphabet Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Quarter Ended September 30,Year To Date September 30,
2020202120202021
(unaudited)(unaudited)
Operating activities
Net income$11,247 $18,936 $25,042 $55,391 
Adjustments:
Depreciation and impairment of property and equipment3,289 3,085 9,366 8,340 
Amortization and impairment of intangible assets189 219 606 662 
Stock-based compensation expense3,195 3,874 9,768 11,422 
Deferred income taxes136 (1,287)(280)192 
Gain on debt and equity securities, net(2,015)(2,158)(3,055)(9,792)
Other206 64 875 (199)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable(3,601)(2,409)(1,079)(3,276)
Income taxes, net(69)3,041 469 2,744 
Other assets(233)(1,255)(592)(1,447)
Accounts payable420 238 (269)(874)
Accrued expenses and other liabilities2,990 2,562 891 2,763 
Accrued revenue share969 357 277 386 
Deferred revenue280 272 428 406 
Net cash provided by operating activities17,003 25,539 42,447 66,718 
Investing activities
Purchases of property and equipment(5,406)(6,819)(16,802)(18,257)
Purchases of marketable securities(40,821)(34,497)(104,932)(95,106)
Maturities and sales of marketable securities31,877 31,459 97,751 92,126 
Purchases of non-marketable investments(553)(656)(1,864)(2,068)
Maturities and sales of non-marketable investments125 334 598 590 
Acquisitions, net of cash acquired, and purchases of intangible assets(13)(259)(368)(2,233)
Other investing activities(406)388 125 441 
Net cash used in investing activities(15,197)(10,050)(25,492)(24,507)
Financing activities
Net payments related to stock-based award activities(1,357)(2,602)(4,073)(7,239)
Repurchases of common and capital stock(7,897)(12,610)(23,245)(36,801)
Proceeds from issuance of debt, net of costs9,863 6,350 11,761 13,949 
Repayments of debt(61)(6,392)(2,043)(15,070)
Proceeds from sale of interest in consolidated entities, net(2)2,462 310 
Net cash used in financing activities546 (15,254)(15,138)(44,851)
Effect of exchange rate changes on cash and cash equivalents35 (146)(186)(106)
Net increase (decrease) in cash and cash equivalents2,387 89 1,631 (2,746)
Cash and cash equivalents at beginning of period17,742 23,630 18,498 26,465 
Cash and cash equivalents at end of period$20,129 $23,719 $20,129 $23,719 

6


Reconciliation from net cash provided by operating activities to free cash flow (in millions; unaudited):
We provide 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 September 30, 2021
Net cash provided by operating activities$25,539 
Less: purchases of property and equipment(6,819)
Free cash flow$18,720 
Free cash flow: We define free cash flow as net cash provided by operating activities less capital expenditures.
7


Reconciliation from GAAP revenues to non-GAAP constant currency revenues (in millions, except percentages; unaudited):
We provide non-GAAP constant currency revenues and the non-GAAP 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 and hedging activities, which are not indicative of our core operating results.
Quarter Ended September 30, 2021
YoY
(using Q3'20's FX rates)
QoQ
(using Q2'21's FX rates)
EMEA revenues (GAAP)$19,839 $19,839 
Exclude foreign exchange effect on Q3'21 revenues using Q3'20 rates(490)N/A
Exclude foreign exchange effect on Q3'21 revenues using Q2'21 ratesN/A184 
EMEA constant currency revenues (non-GAAP)$19,349 $20,023 
Prior period EMEA revenues (GAAP)$13,924 $19,084 
EMEA revenue percentage change (GAAP)42 %%
EMEA constant currency revenue percentage change (non-GAAP)39 %%
APAC revenues (GAAP)$11,705 $11,705 
Exclude foreign exchange effect on Q3'21 revenues using Q3'20 rates(8)N/A
Exclude foreign exchange effect on Q3'21 revenues using Q2'21 ratesN/A134 
APAC constant currency revenues (non-GAAP)$11,697 $11,839 
Prior period APAC revenues (GAAP)$8,458 $11,231 
APAC revenue percentage change (GAAP)38 %%
APAC constant currency revenue percentage change (non-GAAP)38 %%
Other Americas revenues (GAAP)$3,688 $3,688 
Exclude foreign exchange effect on Q3'21 revenues using Q3'20 rates(117)N/A
Exclude foreign exchange effect on Q3'21 revenues using Q2'21 ratesN/A(54)
Other Americas constant currency revenues (non-GAAP)$3,571 $3,634 
Prior period Other Americas revenues (GAAP)$2,371 $3,364 
Other Americas revenue percentage change (GAAP)56 %10 %
Other Americas constant currency revenue percentage change (non-GAAP)51 %%
United States revenues (GAAP)$29,824 $29,824 
United States revenue percentage change (GAAP)39 %%
Hedging gains (losses)$62 $62 
Revenues (GAAP)$65,118 $65,118 
Constant currency revenues (non-GAAP)$64,441 $65,320 
Prior period revenues, excluding hedging effect (non-GAAP)(1)
$46,195 $61,887 
Revenue percentage change (GAAP)41 %%
Constant currency revenue percentage change (non-GAAP)39 %%
(1)    Total revenues and hedging gains (losses) for the quarter ended September 30, 2020 were $46,173 million and $(22) million, respectively. Total revenues and hedging gains (losses) for the quarter ended June 30, 2021 were $61,880 million and $(7) million, respectively.
Non-GAAP constant currency revenues and percentage change: We define non-GAAP constant currency revenues as total revenues excluding the effect of foreign exchange rate movements and hedging activities, and we use it to determine the constant currency revenue percentage change on year-on-year and quarter-on-quarter basis. Non-GAAP constant currency revenues are calculated by translating current quarter revenues using prior period exchange rates and excluding any hedging effect recognized in the current quarter. Constant currency revenue percentage change is calculated by determining the increase in current quarter non-GAAP constant currency revenues over prior period revenues, excluding any hedging effect recognized in the prior period.
8


Other income (expense), net
The following table presents our other income (expense), net (in millions; unaudited):
 Quarter Ended
September 30,
20202021
Interest income$460 $387 
Interest expense(48)(77)
Foreign currency exchange gain (loss), net(84)(139)
Gain (loss) on debt securities, net116 37 
Gain (loss) on equity securities, net(1)
1,899 2,121 
Performance fees(135)(492)
Income (loss) and impairment from equity method investments, net26 188 
Other(88)
Other income (expense), net$2,146 $2,033 
(1)Includes all gains and losses, unrealized and realized, on equity investments. For Q3 2021, the net effect of the gain on equity securities of $2,121 million and the performance fees of $492 million increased the provision for income tax, net income, and diluted EPS by $342 million, $1,287 million, and $1.90, 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.

9


Segment results
The following table presents our revenues and operating income (loss) (in millions; unaudited):
Quarter Ended September 30,
20202021
Revenues:
Google Services$42,573 $59,884 
Google Cloud3,444 4,990 
Other Bets178 182 
Hedging gains (losses)(22)62 
Total revenues$46,173 $65,118 
Quarter Ended September 30,
20202021
Operating income (loss):
Google Services$14,453 $23,973 
Google Cloud(1,208)(644)
Other Bets(1,103)(1,288)
Corporate costs, unallocated(929)(1,010)
Total income from operations$11,213 $21,031 
We report our segment results as Google Services, Google Cloud, and Other Bets:
Google Services includes products and services such as ads, Android, Chrome, hardware, Google Maps, Google Play, Search, and YouTube. Google Services generates revenues primarily from advertising; sales of apps, in-app purchases, digital content products, and hardware; and fees received for subscription-based products such as YouTube Premium and YouTube TV.
Google Cloud includes Google’s infrastructure and data analytics platforms, collaboration tools, and other services for enterprise customers. Google Cloud generates revenues primarily from fees received for Google Cloud Platform services and Google Workspace collaboration tools.
Other Bets is a combination of multiple operating segments that are not individually material. Revenues from the Other Bets are derived primarily through the sale of internet services as well as licensing and R&D services.
Unallocated corporate costs primarily include corporate initiatives, corporate shared costs, such as finance and legal, including certain fines and settlements, as well as costs associated with certain shared research and development activities. Additionally, hedging gains (losses) related to revenue are included in corporate costs.
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