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, | ||||
2020 | 2021 | |||
Revenues | $ | 46,173 | $ | 65,118 |
Increase in revenues year over year | 14 % | 41 % | ||
Increase in constant currency revenues year over year(1) | 15 % | 39 % | ||
Operating income | $ | 11,213 | $ | 21,031 |
Operating margin | 24 % | 32 % | ||
Other income (expense), net | $ | 2,146 | $ | 2,033 |
Net income | $ | 11,247 | $ | 18,936 |
Diluted EPS | $ | 16.40 | $ | 27.99 |
- Non-GAAPmeasure. 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, | |||||
2020 | 2021 | ||||
Google Search & other | $ | 26,338 | $ | 37,926 | |
YouTube ads | 5,037 | 7,205 | |||
Google Network | 5,720 | 7,999 | |||
Google advertising | 37,095 | 53,130 | |||
Google other | 5,478 | 6,754 | |||
Google Services total | 42,573 | 59,884 | |||
Google Cloud | 3,444 | 4,990 | |||
Other Bets | 178 | 182 | |||
Hedging gains (losses) | (22) | 62 | |||
Total revenues | $ | 46,173 | $ | 65,118 | |
Total TAC | $ | 8,166 | $ | 11,498 | |
Number of employees | 132,121 | 150,028 | |||
Segment Operating Results | |||||
Quarter Ended September 30, | |||||
2020 | 2021 | ||||
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.xyz press@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 | As of | ||||
September | |||||
December 31, | |||||
30, | |||||
2020 | 2021 | ||||
(unaudited) | |||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 26,465 | $ | 23,719 | |
Marketable securities | 110,229 | 118,284 | |||
Total cash, cash equivalents, and marketable securities | 136,694 | 142,003 | |||
Accounts receivable, net | 30,930 | 34,047 | |||
Income taxes receivable, net | 454 | 753 | |||
Inventory | 728 | 1,278 | |||
Other current assets | 5,490 | 6,029 | |||
Total current assets | 174,296 | 184,110 | |||
Non-marketable investments | 20,703 | 26,101 | |||
Deferred income taxes | 1,084 | 1,195 | |||
Property and equipment, net | 84,749 | 94,631 | |||
Operating lease assets | 12,211 | 12,918 | |||
Intangible assets, net | 1,445 | 1,549 | |||
Goodwill | 21,175 | 22,623 | |||
Other non-current assets | 3,953 | 4,276 | |||
Total assets | $ | 319,616 | $ | 347,403 | |
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 5,589 | $ | 4,616 | |
Accrued compensation and benefits | 11,086 | 12,170 | |||
Accrued expenses and other current liabilities | 28,631 | 30,113 | |||
Accrued revenue share | 7,500 | 7,745 | |||
Deferred revenue | 2,543 | 2,968 | |||
Income taxes payable, net | 1,485 | 4,170 | |||
Total current liabilities | 56,834 | 61,782 | |||
Long-term debt | 13,932 | 14,288 | |||
Deferred revenue, non-current | 481 | 510 | |||
Income taxes payable, non-current | 8,849 | 8,984 | |||
Deferred income taxes | 3,561 | 3,551 | |||
Operating lease liabilities | 11,146 | 11,471 | |||
Other long-term liabilities | 2,269 | 2,250 | |||
Total liabilities | 97,072 | 102,836 | |||
Contingencies | |||||
Stockholders' equity: | |||||
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no | 0 | 0 | |||
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 | 58,510 | 61,193 | |||
issued and outstanding | |||||
Accumulated other comprehensive income (loss) | 633 | (408) | |||
Retained earnings | 163,401 | 183,782 | |||
Total stockholders' equity | 222,544 | 244,567 | |||
Total liabilities and stockholders' equity | $ | 319,616 | $ | 347,403 | |
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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 September 30, | Year To Date September 30, | ||||||||||
2020 | 2021 | 2020 | 2021 | ||||||||
(unaudited) | (unaudited) | ||||||||||
Revenues | $ | 46,173 | $ | 65,118 | $ | 125,629 | $ | 182,312 | |||
Costs and expenses: | |||||||||||
Cost of revenues | 21,117 | 27,621 | 58,652 | 77,951 | |||||||
Research and development | 6,856 | 7,694 | 20,551 | 22,854 | |||||||
Sales and marketing | 4,231 | 5,516 | 12,632 | 15,308 | |||||||
General and administrative | 2,756 | 3,256 | 8,221 | 9,370 | |||||||
Total costs and expenses | 34,960 | 44,087 | 100,056 | 125,483 | |||||||
Income from operations | 11,213 | 21,031 | 25,573 | 56,829 | |||||||
Other income (expense), net | 2,146 | 2,033 | 3,820 | 9,503 | |||||||
Income before income taxes | 13,359 | 23,064 | 29,393 | 66,332 | |||||||
Provision for income taxes | 2,112 | 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 | $ | 16.55 | $ | 28.44 | $ | 36.69 | $ | 82.76 | |||
stock and Class C capital stock | |||||||||||
Diluted earnings per share of Class A and B common | $ | 16.40 | $ | 27.99 | $ | 36.38 | $ | 81.53 | |||
stock and Class C capital stock | |||||||||||
Number of shares used in basic earnings per share | 679,449 | 665,758 | 682,561 | 669,312 | |||||||
calculation | |||||||||||
Number of shares used in diluted earnings per share | 685,851 | 676,519 | 688,381 | 679,401 | |||||||
calculation |
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Alphabet Inc. published this content on 26 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2021 20:15:48 UTC.