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Alphabet Inc. (GOOGL) SEC Filing 8-K Material Event for the period ending Tuesday, February 1, 2022

Alphabet Inc.

CIK: 1652044 Ticker: GOOGL
Exhibit 99.1
Alphabet Announces Fourth Quarter and Fiscal Year 2021 Results
MOUNTAIN VIEW, Calif. – February 1, 2022 – Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter and fiscal year ended December 31, 2021.
Sundar Pichai, CEO of Alphabet and Google, said: “Our deep investment in AI technologies continues to drive extraordinary and helpful experiences for people and businesses, across our most important products. Q4 saw ongoing strong growth in our advertising business, which helped millions of businesses thrive and find new customers, a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business continuing to grow strongly.”
Ruth Porat, CFO of Alphabet and Google, said: “Our fourth quarter revenues of $75 billion, up 32% year over year, reflected broad-based strength in advertiser spend and strong consumer online activity, as well as substantial ongoing revenue growth from Google Cloud. Our investments have helped us drive this growth by delivering the services that people, our partners and businesses need, and we continue to invest in long-term opportunities.”
Q4 2021 financial highlights
The following table summarizes our consolidated financial results for the quarters and years ended December 31, 2020 and 2021 (in millions, except for per share information and percentages).
Quarter Ended December 31,Year Ended
December 31,
2020202120202021
(unaudited)(unaudited)
Revenues$56,898 $75,325 $182,527 $257,637 
Increase in revenues year over year23 %32 %13 %41 %
Operating income$15,651 $21,885 $41,224 $78,714 
Operating margin28 %29 %23 %31 %
Other income (expense), net
$3,038 $2,517 $6,858 $12,020 
Net income$15,227 $20,642 $40,269 $76,033 
Diluted EPS$22.30 $30.69 $58.61 $112.20 




Q4 2021 supplemental information (in millions, except for number of employees; unaudited)
Revenues, Traffic Acquisition Costs (TAC) and number of employees
Quarter Ended December 31,
20202021
Google Search & other$31,903 $43,301 
YouTube ads6,885 8,633 
Google Network7,411 9,305 
Google advertising46,199 61,239 
Google other6,674 8,161 
Google Services total52,873 69,400 
Google Cloud3,831 5,541 
Other Bets196 181 
Hedging gains (losses)(2)203 
Total revenues$56,898 $75,325 
Total TAC$10,466 $13,427 
Number of employees135,301 156,500 
Segment Operating Results
Quarter Ended December 31,
20202021
Operating income (loss):
Google Services$19,066 $25,993 
Google Cloud(1,243)(890)
Other Bets(1,136)(1,450)
Corporate costs, unallocated(1,036)(1,768)
Total income from operations$15,651 $21,885 
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 twelve months ended December 31, 2021, respectively, was a reduction in depreciation expense of $446 million and $2.6 billion and an increase in net income of $347 million and $2.0 billion, or $0.52 and $3.02 per basic share and $0.52 and $2.98 per diluted share.
Stock Split Effected in Form of Stock Dividend (“Stock Split”)
Alphabet today announced that the Board of Directors had approved and declared a 20-for-one stock split (the “Stock Split”) in the form of a one-time special stock dividend on each share of the Company’s Class A, Class B, and Class C stock. The Stock Split is subject to stockholder approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of Class A, Class B, and Class C stock to accommodate the Stock Split.
If approval is obtained, each of the Company’s stockholders of record at the close of business on July 1, 2022 (the “Record Date”), will receive, after the close of business on July 15, 2022, a dividend of 19 additional shares of the same class of stock for every share held by such stockholder as of the Record Date.
Webcast and conference call information
A live audio webcast of our fourth quarter 2021 earnings release call will be available on YouTube at https://youtu.be/ItLfgdDN5oE. The call begins today at 2:00 PM (PT) / 5:00 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.
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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, 2020 and our most recent Quarterly Report on Form 10-Q for the quarter ended September 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 Annual Report on Form 10-K for the year ended December 31, 2021. All information provided in this release and in the attachments is as of February 1, 2022. 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

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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 December 31,
20202021
(unaudited)
Assets
Current assets:
Cash and cash equivalents$26,465 $20,945 
Marketable securities110,229 118,704 
Total cash, cash equivalents, and marketable securities136,694 139,649 
Accounts receivable, net30,930 39,304 
Income taxes receivable, net454 966 
Inventory728 1,170 
Other current assets5,490 7,054 
Total current assets174,296 188,143 
Non-marketable securities20,703 29,549 
Deferred income taxes1,084 1,284 
Property and equipment, net84,749 97,599 
Operating lease assets12,211 12,959 
Intangible assets, net1,445 1,417 
Goodwill21,175 22,956 
Other non-current assets3,953 5,361 
Total assets$319,616 $359,268 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$5,589 $6,037 
Accrued compensation and benefits11,086 13,889 
Accrued expenses and other current liabilities28,631 31,236 
Accrued revenue share7,500 8,996 
Deferred revenue2,543 3,288 
Income taxes payable, net1,485 808 
Total current liabilities56,834 64,254 
Long-term debt13,932 14,817 
Deferred revenue, non-current481 535 
Income taxes payable, non-current8,849 9,176 
Deferred income taxes3,561 5,257 
Operating lease liabilities11,146 11,389 
Other long-term liabilities2,269 2,205 
Total liabilities97,072 107,633 
Contingencies
Stockholders’ equity:
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 662,121 (Class A 300,737, Class B 44,665, Class C 316,719) shares issued and outstanding
58,510 61,774 
Accumulated other comprehensive income (loss)633 (1,623)
Retained earnings163,401 191,484 
Total stockholders’ equity222,544 251,635 
Total liabilities and stockholders’ equity$319,616 $359,268 

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Alphabet Inc.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except share amounts which are reflected in thousands and per share amounts)
Quarter Ended December 31,Year Ended December 31,
2020202120202021
(unaudited)(unaudited)
Revenues$56,898 $75,325 $182,527 $257,637 
Costs and expenses:
Cost of revenues26,080 32,988 84,732 110,939 
Research and development7,022 8,708 27,573 31,562 
Sales and marketing5,314 7,604 17,946 22,912 
General and administrative2,831 4,140 11,052 13,510 
Total costs and expenses41,247 53,440 141,303 178,923 
Income from operations15,651 21,885 41,224 78,714 
Other income (expense), net3,038 2,517 6,858 12,020 
Income before income taxes 18,689 24,402 48,082 90,734 
Provision for income taxes3,462 3,760 7,813 14,701 
Net income$15,227 $20,642 $40,269 $76,033 
Basic earnings per share of Class A and B common stock and Class C capital stock$22.54 $31.15 $59.15 $113.88 
Diluted earnings per share of Class A and B common stock and Class C capital stock$22.30 $30.69 $58.61 $112.20 
Number of shares used in basic earnings per share calculation675,582 662,663 680,816 667,650 
Number of shares used in diluted earnings per share calculation682,969 672,493 687,028 677,674 

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Alphabet Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Quarter Ended December 31,Year Ended December 31,
2020202120202021
(unaudited)(unaudited)
Operating activities
Net income$15,227 $20,642 $40,269 $76,033 
Adjustments:
Depreciation and impairment of property and equipment3,539 3,215 12,905 11,555 
Amortization and impairment of intangible assets186 224 792 886 
Stock-based compensation expense3,223 3,954 12,991 15,376 
Deferred income taxes1,670 1,616 1,390 1,808 
Gain on debt and equity securities, net(3,262)(2,478)(6,317)(12,270)
Other392 (14)1,267 (213)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable(5,445)(5,819)(6,524)(9,095)
Income taxes, net740 (3,369)1,209 (625)
Other assets(738)(399)(1,330)(1,846)
Accounts payable963 1,157 694 283 
Accrued expenses and other liabilities4,613 4,541 5,504 7,304 
Accrued revenue share1,362 1,296 1,639 1,682 
Deferred revenue207 368 635 774 
Net cash provided by operating activities22,677 24,934 65,124 91,652 
Investing activities
Purchases of property and equipment(5,479)(6,383)(22,281)(24,640)
Purchases of marketable securities(31,644)(40,090)(136,576)(135,196)
Maturities and sales of marketable securities35,155 36,168 132,906 128,294 
Purchases of non-marketable securities(5,311)(770)(7,175)(2,838)
Maturities and sales of non-marketable securities425 344 1,023 934 
Acquisitions, net of cash acquired, and purchases of intangible assets(370)(385)(738)(2,618)
Other investing activities(57)100 68 541 
Net cash used in investing activities(7,281)(11,016)(32,773)(35,523)
Financing activities
Net payments related to stock-based award activities(1,647)(2,923)(5,720)(10,162)
Repurchases of common and capital stock(7,904)(13,473)(31,149)(50,274)
Proceeds from issuance of debt, net of costs6,250 11,761 20,199 
Repayments of debt(57)(6,365)(2,100)(21,435)
Proceeds from sale of interest in consolidated entities, net338 2,800 310 
Net cash used in financing activities(9,270)(16,511)(24,408)(61,362)
Effect of exchange rate changes on cash and cash equivalents210 (181)24 (287)
Net increase (decrease) in cash and cash equivalents6,336 (2,774)7,967 (5,520)
Cash and cash equivalents at beginning of period20,129 23,719 18,498 26,465 
Cash and cash equivalents at end of period$26,465 $20,945 $26,465 $20,945 

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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 December 31, 2021
Net cash provided by operating activities$24,934 
Less: purchases of property and equipment(6,383)
Free cash flow$18,551 
Free cash flow: We define free cash flow as net cash provided by operating activities less capital expenditures.
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.
Comparison to the Quarter Ended December 31, 2020
 Quarter Ended
December 31, 2020December 31, 2021% Change from Prior Year
EMEA revenues$17,238 $23,153 34 %
EMEA constant currency revenues23,211 35 %
APAC revenues9,909 12,732 28 %
APAC constant currency revenues12,996 31 %
Other Americas revenues3,050 4,447 46 %
Other Americas constant currency revenues4,398 44 %
United States revenues26,703 34,790 30 %
Hedging gains (losses)(2)203 
Total revenues$56,898 $75,325 32 %
Revenues, excluding hedging effect
$56,900 $75,122 
Exchange rate effect273 
Total constant currency revenues$75,395 33 %

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Comparison to the Quarter Ended September 30, 2021
 Quarter Ended
September 30, 2021December 31, 2021% Change from Prior Quarter
EMEA revenues$19,839 $23,153 17 %
EMEA constant currency revenues23,662 19 %
APAC revenues11,705 12,732 %
APAC constant currency revenues12,872 10 %
Other Americas revenues3,688 4,447 21 %
Other Americas constant currency revenues4,560 24 %
United States revenues29,824 34,790 17 %
Hedging gains (losses)62 203 
Total revenues$65,118 $75,325 16 %
Revenues, excluding hedging effect
$65,056 $75,122 
Exchange rate effect762 
Total constant currency revenues$75,884 17 %
Comparison to the Year Ended December 31, 2020
 Year Ended
December 31, 2020December 31, 2021% Change from Prior Year
EMEA revenues$55,370 $79,107 43 %
EMEA constant currency revenues76,321 38 %
APAC revenues32,550 46,123 42 %
APAC constant currency revenues45,666 40 %
Other Americas revenues9,417 14,404 53 %
Other Americas constant currency revenues14,317 52 %
United States revenues85,014 117,854 39 %
Hedging gains (losses)176 149 
Total revenues$182,527 $257,637 41 %
Revenues, excluding hedging effect$182,351 $257,488 
Exchange rate effect(3,330)
Total constant currency revenues$254,158 39 %
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.
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Other income (expense), net
The following table presents our other income (expense), net (in millions; unaudited):
Quarter Ended December 31,
20202021
Interest income$386 $378 
Interest expense(53)(117)
Foreign currency exchange gain (loss), net(87)(163)
Gain (loss) on debt securities, net210 (172)
Gain (loss) on equity securities, net(1)
3,052 2,650 
Performance fees(405)(228)
Income (loss) and impairment from equity method investments, net355 49 
Other(420)120 
Other income (expense), net$3,038 $2,517 
(1)Includes all gains and losses, unrealized and realized, on equity investments. For Q4 2021, the net effect of the gain on equity securities of $2,650 million and the performance fees of $228 million increased the provision for income tax, net income, and diluted EPS by $509 million, $1,913 million, and $2.84, 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.
Segment results
The following table presents our revenues and operating income (loss) (in millions; unaudited):
Quarter Ended December 31,
20202021
Revenues:
Google Services$52,873 $69,400 
Google Cloud3,831 5,541 
Other Bets196 181 
Hedging gains (losses)(2)203 
Total revenues$56,898 $75,325 
Quarter Ended December 31,
20202021
Operating income (loss):
Google Services$19,066 $25,993 
Google Cloud(1,243)(890)
Other Bets(1,136)(1,450)
Corporate costs, unallocated(1,036)(1,768)
Total income from operations$15,651 $21,885 
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 and 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 platform services, collaboration tools, and other services for enterprise customers. Google Cloud generates revenues from fees received for Google Cloud Platform services, Google Workspace 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 health technology and internet services.
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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 R&D activities. Additionally, hedging gains (losses) related to revenue are included in corporate costs.
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Ticker: GOOGL
CIK: 1652044
Form Type: 8-K Corporate News
Accession Number: 0001652044-22-000015
Submitted to the SEC: Tue Feb 01 2022 4:01:29 PM EST
Accepted by the SEC: Tue Feb 01 2022
Period: Tuesday, February 1, 2022
Industry: Computer Programming Data Processing
Events:
  1. Earnings Release
  2. Financial Exhibit
  3. Other Events

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