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Alphabet Inc. (GOOGL) SEC Filing 8-K Material Event for the period ending Tuesday, April 26, 2022

Alphabet Inc.

CIK: 1652044 Ticker: GOOGL
Exhibit 99.1
Alphabet Announces First Quarter 2022 Results
MOUNTAIN VIEW, Calif. – April 26, 2022 – Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter ended March 31, 2022.
Sundar Pichai, CEO of Alphabet and Google, said: “Q1 saw strong growth in Search and Cloud, in particular, which are both helping people and businesses as the digital transformation continues. We’ll keep investing in great products and services, and creating opportunities for partners and local communities around the world.”
Ruth Porat, CFO of Alphabet and Google, said: “We are pleased with Q1 revenue growth of 23% year over year. We continue to make considered investments in Capex, R&D and talent to support long-term value creation for all stakeholders.”
Q1 2022 financial highlights
The following table summarizes our consolidated financial results for the quarters ended March 31, 2021 and 2022 (in millions, except for per share information and percentages; unaudited).
Quarter Ended March 31,
20212022
Revenues$55,314 $68,011 
Change in revenues year over year34 %23 %
Change in constant currency revenues year over year(1)
32 %26 %
Operating income$16,437 $20,094 
Operating margin30 %30 %
Other income (expense), net
$4,846 $(1,160)
Net income$17,930 $16,436 
Diluted EPS$26.29 $24.62 
(1)    Non-GAAP measure. See the table captioned “Reconciliation from GAAP revenues to non-GAAP constant currency revenues” for more details.
Q1 2022 supplemental information (in millions, except for number of employees; unaudited)
Revenues, Traffic Acquisition Costs (TAC) and number of employees
Quarter Ended March 31,
20212022
Google Search & other$31,879 $39,618 
YouTube ads6,005 6,869 
Google Network6,800 8,174 
Google advertising44,684 54,661 
Google other6,494 6,811 
Google Services total51,178 61,472 
Google Cloud4,047 5,821 
Other Bets198 440 
Hedging gains (losses)(109)278 
Total revenues$55,314 $68,011 
Total TAC$9,712 $11,990 
Number of employees139,995 163,906 



Segment Operating Results
Quarter Ended March 31,
20212022
Operating income (loss):
Google Services$19,546 $22,920 
Google Cloud(974)(931)
Other Bets(1,145)(1,155)
Corporate costs, unallocated(990)(740)
Total income from operations$16,437 $20,094 
Stock Repurchase
On April 20, 2022, the Board of Directors of Alphabet authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares in a manner deemed in the best interest of the company and its stockholders, taking into account the economic cost and prevailing market conditions, including the relative trading prices and volumes of the Class A and Class C shares. The repurchases are expected to be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.
Webcast and conference call information
A live audio webcast of our first quarter 2022 earnings release call will be available on YouTube at https://youtu.be/6X1cAEVor1M. 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.
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, 2021, which is on file with the SEC and is 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 March 31, 2022. All information provided in this release and in the attachments is as of April 26, 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
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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 March 31,
20212022
(unaudited)
Assets
Current assets:
Cash and cash equivalents$20,945 $20,886 
Marketable securities118,704 113,084 
Total cash, cash equivalents, and marketable securities139,649 133,970 
Accounts receivable, net39,304 34,703 
Income taxes receivable, net966 919 
Inventory1,170 1,369 
Other current assets7,054 6,892 
Total current assets188,143 177,853 
Non-marketable securities29,549 30,544 
Deferred income taxes1,284 1,388 
Property and equipment, net97,599 104,218 
Operating lease assets12,959 12,992 
Intangible assets, net1,417 1,313 
Goodwill22,956 23,010 
Other non-current assets5,361 5,778 
Total assets$359,268 $357,096 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$6,037 $3,436 
Accrued compensation and benefits13,889 9,803 
Accrued expenses and other current liabilities31,236 33,051 
Accrued revenue share8,996 8,116 
Deferred revenue3,288 3,198 
Income taxes payable, net808 4,344 
Total current liabilities64,254 61,948 
Long-term debt14,817 14,791 
Deferred revenue, non-current535 499 
Income taxes payable, non-current9,176 9,406 
Deferred income taxes5,257 2,843 
Operating lease liabilities11,389 11,363 
Other long-term liabilities2,205 2,242 
Total liabilities107,633 103,092 
Contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding
Class A, Class B, and Class C 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); 662,121 (Class A 300,737, Class B 44,665, Class C 316,719) and 658,763 (Class A 300,763, Class B 44,404, Class C 313,596) shares issued and outstanding
61,774 62,832 
Accumulated other comprehensive income (loss)(1,623)(4,049)
Retained earnings191,484 195,221 
Total stockholders’ equity251,635 254,004 
Total liabilities and stockholders’ equity$359,268 $357,096 

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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 March 31,
20212022
(unaudited)
Revenues$55,314 $68,011 
Costs and expenses:
Cost of revenues24,103 29,599 
Research and development7,485 9,119 
Sales and marketing4,516 5,825 
General and administrative2,773 3,374 
Total costs and expenses38,877 47,917 
Income from operations16,437 20,094 
Other income (expense), net4,846 (1,160)
Income before income taxes21,283 18,934 
Provision for income taxes3,353 2,498 
Net income$17,930 $16,436 
Basic earnings per share of Class A, Class B, and Class C stock$26.63 $24.90 
Diluted earnings per share of Class A, Class B, and Class C stock$26.29 $24.62 
Number of shares used in basic earnings per share calculation673,220 660,171 
Number of shares used in diluted earnings per share calculation682,071 667,551 

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Alphabet Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Quarter Ended March 31,
20212022
(unaudited)
Operating activities
Net income$17,930 $16,436 
Adjustments:
Depreciation and impairment of property and equipment2,525 3,591 
Amortization and impairment of intangible assets228 191 
Stock-based compensation expense3,745 4,504 
Deferred income taxes1,100 (2,090)
(Gain) loss on debt and equity securities, net(4,751)1,437 
Other(255)140 
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable2,794 4,364 
Income taxes, net785 3,820 
Other assets(776)
Accounts payable(982)(2,373)
Accrued expenses and other liabilities(3,530)(3,216)
Accrued revenue share(444)(828)
Deferred revenue137 (94)
Net cash provided by operating activities19,289 25,106 
Investing activities
Purchases of property and equipment(5,942)(9,786)
Purchases of marketable securities(36,426)(28,462)
Maturities and sales of marketable securities39,248 29,779 
Purchases of non-marketable securities(646)(776)
Maturities and sales of non-marketable securities19 12 
Acquisitions, net of cash acquired, and purchases of intangible assets(1,666)(173)
Other investing activities30 355 
Net cash used in investing activities(5,383)(9,051)
Financing activities
Net payments related to stock-based award activities(2,184)(2,916)
Repurchases of stock(11,395)(13,300)
Proceeds from issuance of debt, net of costs900 16,422 
Repayments of debt(937)(16,420)
Proceeds from sale of interest in consolidated entities, net10 
Net cash used in financing activities(13,606)(16,214)
Effect of exchange rate changes on cash and cash equivalents(143)100 
Net increase (decrease) in cash and cash equivalents157 (59)
Cash and cash equivalents at beginning of period26,465 20,945 
Cash and cash equivalents at end of period$26,622 $20,886 

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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 March 31, 2022
Net cash provided by operating activities$25,106 
Less: purchases of property and equipment(9,786)
Free cash flow$15,320 
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 from the Quarter Ended March 31, 2020 to the Quarter Ended March 31, 2021
 Quarter Ended% Change from Prior Year
March 31, 2020March 31, 2021
EMEA revenues$12,845 $17,031 33 %
EMEA constant currency revenues16,102 25 %
APAC revenues7,238 10,455 44 %
APAC constant currency revenues10,092 39 %
Other Americas revenues2,157 2,905 35 %
Other Americas constant currency revenues3,096 44 %
United States revenues18,870 25,032 33 %
Hedging gains (losses)49 (109)
Total revenues$41,159 $55,314 34 %
Revenues, excluding hedging effect
$41,110 $55,423 
Exchange rate effect(1,101)
Total constant currency revenues$54,322 32 %

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Comparison from the Quarter Ended March 31, 2021 to the Quarter Ended March 31, 2022
 Quarter Ended
March 31, 2021March 31, 2022% Change from Prior Year
EMEA revenues$17,031 $20,317 19 %
EMEA constant currency revenues21,628 27 %
APAC revenues10,455 11,841 13 %
APAC constant currency revenues12,440 19 %
Other Americas revenues2,905 3,842 32 %
Other Americas constant currency revenues3,923 35 %
United States revenues25,032 31,733 27 %
Hedging gains (losses)(109)278 
Total revenues$55,314 $68,011 23 %
Revenues, excluding hedging effect
$55,423 $67,733 
Exchange rate effect1,991 
Total constant currency revenues$69,724 26 %
Comparison from the Quarter Ended December 31, 2021 to the Quarter Ended March 31, 2022
 Quarter Ended
December 31, 2021March 31, 2022% Change from Prior Quarter
EMEA revenues$23,153 $20,317 (12)%
EMEA constant currency revenues20,836 (10)%
APAC revenues12,732 11,841 (7)%
APAC constant currency revenues11,975 (6)%
Other Americas revenues4,447 3,842 (14)%
Other Americas constant currency revenues3,854 (13)%
United States revenues34,790 31,733 (9)%
Hedging gains (losses)203 278 
Total revenues$75,325 $68,011 (10)%
Revenues, excluding hedging effect
$75,122 $67,733 
Exchange rate effect665 
Total constant currency revenues$68,398 (9)%
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 March 31,
20212022
Interest income$345 $414 
Interest expense(76)(83)
Foreign currency exchange gain (loss), net113 (73)
Gain (loss) on debt securities, net(86)(367)
Gain (loss) on equity securities, net(1)
4,837 (1,070)
Performance fees(665)233 
Income (loss) and impairment from equity method investments, net(89)
Other373 (125)
Other income (expense), net$4,846 $(1,160)
(1)Includes all gains and losses, unrealized and realized, on equity investments. For Q1 2022, the net effect of the loss on equity securities of $1,070 million and the $233 million reversal of previously accrued performance fees related to certain investments decreased the provision for income tax, net income, and diluted EPS by $176 million, $661 million, and $0.99, 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 March 31,
20212022
Revenues:
Google Services$51,178 $61,472 
Google Cloud4,047 5,821 
Other Bets198 440 
Hedging gains (losses)(109)278 
Total revenues$55,314 $68,011 
Operating income (loss):
Google Services$19,546 $22,920 
Google Cloud(974)(931)
Other Bets(1,145)(1,155)
Corporate costs, unallocated(990)(740)
Total income from operations$16,437 $20,094 
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.
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: 0001652044-22-000025
Submitted to the SEC: Tue Apr 26 2022 4:01:32 PM EST
Accepted by the SEC: Tue Apr 26 2022
Period: Tuesday, April 26, 2022
Industry: Computer Programming Data Processing
Events:
  1. Earnings Release
  2. Financial Exhibit

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