AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Controlled advertising inventory, owned properties and default-search distribution provide an established route to monetization. Multiyear Services revenue growth supports its commercial significance. This does not demonstrate network effects, superior unit costs or an equivalent advantage throughout Alphabet.
durability · 2/4 · Growth from 2023 through first-half 2026 supports persistence, but readily terminable commercial relationships and an actual regulatory direction constrain durability. The disclosed period does not establish exceptional protection against technological change.
customer dependency · 2/4 · Cloud's substantial backlog excluding cancellable contracts establishes contractual commitment. Advertising relationships can often be terminated at any time, and technical switching costs are not demonstrated. Cloud hardware contracts also limit interpretation of backlog as recurring-service dependency.
erosion resilience · 2/4 · Services and Cloud continued to grow revenue and operating income despite competitive and regulatory exposure. However, the EC direction is a realized constraint and AI remains a demanding competitive arena. Current growth does not demonstrate resilience to the full eventual effects of remedies or changing search behavior.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · The available explicit realized-pricing evidence is adverse: device pricing pressure has hurt consolidated margins. Core advertising price changes are not quantified, so this weak grade reflects limited observed outcomes rather than a finding that advertising prices declined. Revenue growth and pricing discretion do not establish realized price increases.
retention · 2/4 · Multiyear Services growth provides indirect evidence of continuing demand, and non-cancellable Cloud backlog provides direct contractual demand visibility. Neither establishes customer-level renewal or repeat-purchase rates; readily terminable advertising relationships and backlog's hardware component temper the assessment.
margin resilience · 3/4 · Services and Cloud operating margins improved across the supplied annual results and first-half comparisons despite growing expenses. These are strong realized operating outcomes, although mix, cost management and acquired operations can contribute; the results do not isolate pricing power. Device pricing pressure is an actual counterweight.
contractual freedom · 2/4 · The company discloses discretion in establishing advertising prices, and advertiser competition for keywords influences monetization. That freedom is constrained by customers' termination rights and the EC cease-and-desist direction. The passages do not establish unrestricted unilateral pricing across products.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 2.69
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.56
Financial strength99
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 97.24
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 0.66
- Net debt / operating income (x)
- 0.14
- Interest coverage (x)
- 175.32
- Current ratio (x)
- 2.01
Capital allocation86
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 34.95
- 3-year average dilution (%)
- -2.47
- 3-year average SBC / revenue (%)
- 6.67
- cashConversionGrade
- 70.41
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · 2025 operating cash generation of $164.7 billion exceeded $91.4 billion of property purchases and supported capital returns. By June 2026, substantial liquidity coexisted with higher debt, common shares and preferred financing, no first-half common repurchases, $707.0 billion of contractual commitments and $85.2 billion of uncommenced lease payments. Completed acquisitions demonstrate deployment, while returns on the expanded commitments remain unproven.
incentive alignment · 3/4 · Actual 2025 GSU and PSU grants, disclosed completed vesting and future service conditions demonstrate implemented equity incentives. Performance awards, multiyear vesting, a relative TSR modifier, hedging restrictions and shareholding requirements support alignment. This assesses disclosed arrangements rather than assuming proposed amendments were adopted or all future awards earned.
execution · 3/4 · Multiyear Services and Cloud revenue and operating-income growth provide strong demonstrated operating evidence, while the Wiz and Intersect acquisitions were actually completed. Execution is assessed indirectly from business outcomes rather than attributed wholly to management skill. Other Bets losses increased, acquisition integration returns remain unproven, and antitrust findings are adverse evidence.
governance · 2/4 · An independent chair, independent key committees, annual elections and an established Risk and Compliance Committee provide concrete oversight structures. Unequal voting rights and controlling stockholders' influence materially limit outside accountability. Disclosed structures do not prove oversight effectiveness, particularly against the actual competition-law findings.
Evidence
Our control is evidenced by our sole ability to monetize the advertising inventory before it is transferred to our customers and is further supported by us being primarily responsible to our customers and having a level of discretion in establishing pricing.
Revenue recognition: advertising inventory control and pricing discretion · Filed 23/07/2026
Google Advertising Google advertising revenues are comprised of the following: •Google Search & other, which includes revenues generated on Google search properties (including revenues from traffic generated by search distribution partners who use Google.com as their default search in browsers, toolbars, etc.), and other Google owned and operated properties like Gmail, Google Maps, and Google Play; •YouTube ads, which includes revenues generated on YouTube properties; and •Google Network, which includes revenues generated on Google Network properties participating in AdMob, AdSense, and Google Ad Manager.
MD&A: owned advertising properties, default search distribution partners and Google Network · Filed 23/07/2026
The following table presents revenue, profitability, and expense information about our segments (in millions): Year Ended December 31, 2023 2024 2025 Revenues: Google Services $ 272,543 $ 304,930 $ 342,721 Google Cloud 33,088 43,229 58,705 Other Bets 1,527 1,648 1,537 Hedging gains (losses) 236 211 (127) Total revenues $ 307,394 $ 350,018 $ 402,836 Operating income (loss): Google Services $ 95,858 $ 121,263 $ 139,404 Google Cloud 1,716 6,112 13,910 Other Bets (4,095) (4,444) (7,515) Alphabet-level activities (9,186) (10,541) (16,760) Total income from operations $ 84,293 $ 112,390 $ 129,039 Supplemental information about segment expenses: Google Services: Employee compensation expenses $ 46,224 $ 44,560 $ 45,124 Other costs and expenses 130,461 139,107 158,193 Total Google Services costs and expenses $ 176,685 $ 183,667 $ 203,317 Google Cloud: Employee compensation expenses $ 19,054 $ 20,519 $ 22,078 Other costs and expenses 12,318 16,598 22,717 Total Google Cloud costs and expenses $ 31,372 $ 37,117 $ 44,795 87.
Note 15: 2023–2025 segment revenues, operating income and expenses · Filed 05/02/2026
The following table presents revenue, profitability, and expense information about our segments (in millions): Three Months Ended Six Months Ended June 30, June 30, 2025 2026 2025 2026 Revenues: Google Services $ 82,543 $ 94,540 $ 159,807 $ 184,177 Google Cloud 13,624 24,768 25,884 44,796 Other Bets 373 382 823 793 Hedging gains (losses) (112) 106 148 (74) Total revenues $ 96,428 $ 119,796 $ 186,662 $ 229,692 Operating income (loss): Google Services $ 33,063 $ 39,544 $ 65,745 $ 80,133 Google Cloud 2,826 8,814 5,003 15,412 Other Bets (1,246) (1,799) (2,472) (3,899) Alphabet-level activities (3,372) (5,789) (6,399) (11,180) Total income from operations $ 31,271 $ 40,770 $ 61,877 $ 80,466 Supplemental information about segment expenses: Google Services: Employee compensation expenses $ 11,306 $ 12,275 $ 22,643 $ 24,481 Other costs and expenses 38,174 42,721 71,419 79,563 Total Google Services costs and expenses $ 49,480 $ 54,996 $ 94,062 $ 104,044 Google Cloud: Employee compensation expenses $ 5,517 $ 6,933 $ 10,929 $ 13,376 Other costs and expenses 5,281 9,021 9,952 16,008 Total Google Cloud costs and expenses $ 10,798 $ 15,954 $ 20,881 $ 29,384 40 Google Services and Google Cloud employee compensation expenses include the costs associated with direct and allocated employees.
Segment information: second-quarter and first-half 2025–2026 operating results · Filed 23/07/2026
Many of our advertisers, companies that distribute our products and services, digital publishers, and content providers can terminate their contracts with us at any time.
Risk factors: advertiser and partner contract termination rights · Filed 05/02/2026
We face formidable competition in every aspect of our business, including but not limited to, from: •general purpose search engines and information services; •vertical search engines and e-commerce providers for queries on topics such as those related to travel, jobs, and health, which users may navigate directly to rather than go through Google; •online advertising platforms and networks, including online shopping and streaming services; •other forms of advertising, such as billboards, magazines, newspapers, radio, and television, as our advertisers typically advertise in multiple media, both online and offline; •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, including businesses that have developed proprietary platforms; •providers of digital video services; •social networks, which users may rely on for product or service referrals, rather than seeking information through traditional search engines; and •providers of workspace communication and connectivity products.
Business competition: alternative search, advertising, cloud and AI provider categories · Filed 05/02/2026
Further, in September 2025, the EC announced its decision that Google had infringed European competition laws through "self-preferencing" practices on the buy-side and the sell-side relating to Google's advertising technology business.
Legal matters: EC advertising-technology competition decision · Filed 23/07/2026
The EC decision imposed a €3.0 billion fine and directed Google to cease and desist the alleged "self-preferencing" practices.
Legal matters: EC fine and cease-and-desist direction · Filed 23/07/2026
We appealed the ruling in November 2025, which remains pending.
Legal matters: pending appeal of EC decision · Filed 23/07/2026
As of June 30, 2026, we had $519.5 billion of remaining performance obligations (“revenue backlog”), of which $513.9 billion related to Google Cloud.
Revenue recognition: June 2026 remaining performance obligations · Filed 23/07/2026
Revenue backlog includes related deferred revenue currently recorded as well as amounts that will be invoiced in future periods and excludes cancellable contracts and payments we make to our customers not expected to be in exchange for distinct goods and services.
Revenue recognition: backlog exclusions for cancellable contracts and certain customer payments · Filed 23/07/2026
In the first quarter of 2026, we elected to change our reporting of revenue backlog to also include contracts with an original expected term of one year or less.
Revenue recognition: 2026 change in backlog reporting scope · Filed 23/07/2026
For instance, margins on our devices have had, and may continue to have, an adverse effect on our consolidated margins due to pricing pressures and higher cost of sales.
Risk factors: realized device pricing pressure and adverse margin effects · Filed 05/02/2026
Fluctuations in our advertising revenues, as well as the change in paid clicks and cost-per-click on Google Search & other properties and the change in impressions and cost-per-impression on Google Network properties and the correlation between these items have been, and may continue to be, affected by factors in addition to the general factors described above, such as: •advertiser competition for keywords; •changes in advertising quality, formats, delivery, or policy; •changes in device mix; •seasonal fluctuations in internet usage, advertising expenditures, and underlying business trends, such as traditional retail seasonality; and •traffic growth in emerging markets compared to more mature markets and across various verticals and channels.
MD&A: factors affecting advertising prices, engagement and revenue · Filed 23/07/2026
Alphabet Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2023 2024 2025 Operating activities Net income $ 73,795 $ 100,118 $ 132,170 Adjustments: Depreciation of property and equipment 11,946 15,311 21,136 Stock-based compensation expense 22,460 22,785 24,953 Deferred income taxes (7,763) (5,257) 8,348 Loss (gain) on debt and equity securities, net 823 (2,671) (24,620) Other 4,330 3,419 2,108 Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable, net (7,833) (5,891) (8,779) Income taxes, net 523 (2,418) (3,226) Other assets (2,143) (1,397) (4,542) Accounts payable 664 359 907 Accrued expenses and other liabilities 3,937 (1,161) 12,939 Accrued revenue share 482 1,059 899 Deferred revenue 525 1,043 2,420 Net cash provided by operating activities 101,746 125,299 164,713 Investing activities Purchases of property and equipment (32,251) (52,535) (91,447) Purchases of marketable securities (77,858) (86,679) (103,773) Maturities and sales of marketable securities 86,672 103,428 83,240 Purchases of non-marketable securities (3,027) (5,034) (5,716) Maturities and sales of non-marketable securities 947 882 1,367 Acquisitions, net of cash acquired, and purchases of intangible assets (495) (2,931) (1,592) Other investing activities (1,051) (2,667) (2,370) Net cash used in investing activities (27,063) (45,536) (120,291) Financing activities Net payments related to stock-based award activities (9,837) (12,190) (14,167) Repurchases of stock (61,504) (62,222) (45,709) Dividend payments 0 (7,363) (10,049) Proceeds from issuance of debt, net of costs 10,790 13,589 64,564 Repayments of debt (11,550) (12,701) (32,427) Proceeds from sale of interest in consolidated entities, net 8 1,154 400 Net cash used in financing activities (72,093) (79,733) (37,388) Effect of exchange rate changes on cash and cash equivalents (421) (612) 208 Net increase (decrease) in cash and cash equivalents 2,169 (582) 7,242 Cash and cash equivalents at beginning of period 21,879 24,048 23,466 Cash and cash equivalents at end of period $ 24,048 $ 23,466 $ 30,708 Supplemental disclosures of non-cash investing activities: Purchases of property and equipment included in accrued liabilities and accounts payable $ 7,435 $ 10,326 $ 15,090 See accompanying notes.
Consolidated statements of cash flows: operating cash, capital expenditure and financing · Filed 05/02/2026
CONSOLIDATED BALANCE SHEETS (in millions, except per share amounts) As of December 31, 2025 As of June 30, 2026 (unaudited) Assets Current assets: Cash and cash equivalents $ 30,708 $ 55,911 Marketable securities 96,135 186,563 Total cash, cash equivalents, and marketable securities 126,843 242,474 Accounts receivable, net 62,886 69,175 Inventory 2,439 9,991 Other current assets 13,870 21,884 Total current assets 206,038 343,524 Non-marketable securities 68,687 131,461 Deferred income taxes 9,113 1,448 Property and equipment, net 246,597 321,212 Operating lease assets 15,221 17,694 Goodwill 33,380 57,828 Intangible assets, net 1,283 9,105 Other non-current assets 14,962 39,711 Total assets $ 595,281 $ 921,983 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 12,200 $ 20,258 Accrued compensation and benefits 17,546 15,086 Accrued expenses and other current liabilities 55,557 73,014 Accrued revenue share 10,864 10,599 Deferred revenue 6,578 7,154 Total current liabilities 102,745 126,111 Long-term debt 46,547 98,165 Income taxes payable, non-current 9,531 11,306 Deferred income taxes 919 22,819 Operating lease liabilities 12,744 14,591 Other long-term liabilities 7,530 8,511 Total liabilities 180,016 281,503 Commitments and Contingencies (Note 10) Stockholders’ equity: Series A and Series B preferred stock and additional paid-in capital, $0.001 par value per share, 100 shares authorized; 6.25% mandatory convertible preferred stock, 0 and 19 shares issued and outstanding allocated equally between each series with a liquidation preference of $1,000 per share 0 18,023 Class A, Class B, and Class C stock and additional paid-in capital, $0.001 par value per share: 300,000 shares authorized (Class A 180,000, Class B 60,000, Class C 60,000); 12,088 (Class A 5,822, Class B 837, Class C 5,429) and 12,230 (Class A 5,868, Class B 835, Class C 5,527) shares issued and outstanding 93,126 131,371 Accumulated other comprehensive income (loss) (1,916) (2,285) Retained earnings 324,055 493,371 Total stockholders’ equity 415,265 640,480 Total liabilities and stockholders’ equity $ 595,281 $ 921,983 See accompanying notes.
June 2026 balance sheet: liquidity, debt, preferred capital and common shares · Filed 23/07/2026
As of June 30, 2026, expected future fixed or guaranteed commitments under these agreements were $707.0 billion, the significant majority of which related to long-term supply agreements.
Commitments: future fixed or guaranteed supply, energy and content obligations · Filed 23/07/2026
Future lease payments as of June 30, 2026 were as follows (in millions): Operating Leases Finance Leases Remainder of 2026 $ 1,836 $ 206 2027 3,498 387 2028 2,979 377 2029 2,576 356 2030 2,046 285 Thereafter 8,398 1,309 Total undiscounted lease payments 21,333 2,920 Less: imputed interest (3,296) (330) Total lease liability balance $ 18,037 $ 2,590 As of June 30, 2026, we have entered into leases, primarily related to data centers, that have not yet commenced with future lease payments of $85.2 billion that are not yet recorded.
Leases: recorded obligations and future payments on leases not yet commenced · Filed 23/07/2026
Share Repurchases In the three and six months ended June 30, 2026, there were no repurchases of the company's Class A or Class C shares.
Share repurchases: no common share repurchases in first-half 2026 · Filed 23/07/2026
The GSUs and PSUs granted to our named executive officers in 2025 and the dividend equivalent units (DEUs) accrued on such grants were granted and accrued under Alphabet’s Amended and Restated 2021 Stock Plan in accordance with its terms and the applicable award agreements.
Executive compensation: actual 2025 GSU and PSU grants under existing plan · Filed 24/04/2026
Sound Program Design Pay for Performance Best Practices in Executive Compensation •Competitive total pay opportunity to attract, retain, and motivate leaders •Primarily equity-based compensation with payout aligned to long-term company performance •Multi-year vesting of stock awards •Continuous risk oversight and compensation design features that safeguard against excessive risk taking •Independent compensation consultants who provide guidance on compensation design and risk assessment •Performance stock awards with payout based on long-term company performance •Performance stock awards include total shareholder return modifier to reward significant positive outperformance of Alphabet relative to the companies comprising the S&P 100 for the applicable performance period •No change in control benefits if equity awards are assumed or substituted by the surviving company •Prohibition of pledging and hedging ownership of Alphabet shares by executive officers, directors, and employees •No executive-only benefit plans or retirement programs •No excessive perquisites For more detailed information on Alphabet’s executive compensation philosophy and practices, see “Compensation Discussion and Analysis” beginning on page 42.
Executive compensation: performance awards, multiyear vesting, TSR modifier and hedging prohibition · Filed 24/04/2026
We require our named executive officers and other senior executives to maintain certain levels of holdings of Alphabet shares.
Compensation discussion: executive shareholding requirements · Filed 24/04/2026
(13)This award vests as follows: 1/10 of GSUs vested on 3/25/2025, 6/25/2025, 9/25/2025, and 12/25/2025; 3/40 of GSUs shall vest on 3/25/2026, with the remaining GSUs vesting 3/40 quarterly on the 25th day of the month through 12/25/2026, and on the 1st day of the month from 4/1/2027 through 1/1/2028 until the units are fully vested, subject to continued employment on such vesting dates.
Outstanding equity awards: completed 2025 vesting and subsequent service conditions · Filed 24/04/2026
Our Class B stock has 10 votes per share, our Class A stock has one vote per share, and our Class C stock has no voting rights.
Ownership risk: unequal voting rights among common share classes · Filed 05/02/2026
Through their stock ownership, Larry and Sergey have significant influence over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets, for the foreseeable future.
Ownership risk: controlling stockholders' influence over elections and transactions · Filed 05/02/2026
Board Leadership and Composition Board and Committee Practices Shareholder Alignment •Independent Chair of the Board, separate from CEO role •100% independent key committees (AC, RCC, LDICC, NCGC) and committee chairs •Review of each committee chair at least every three years •Board membership criteria established by the Board with consideration of potential director nominee’s integrity, strength of character, judgment, business experience, specific areas of expertise and knowledge of the industries in which the company operates, ability to devote sufficient time to attendance at and preparation for Board meetings, and factors relating to Board composition •Consideration of a range of skills, professional experiences, backgrounds, and viewpoints in evaluating potential director nominees Annual Board and committee evaluations Executive sessions of independent directors for all quarterly Board and committee meetings led by the Chair of the Board and committee chairs, respectively Director commitment policy, which provides that the maximum number of public company boards directors can serve on is four (including Alphabet Board) Director orientation and continuing education programs Committee meetings open to all directors •Annual election for all directors •Majority voting standard for election of directors •Removal of directors with or without cause •Minimum share ownership requirements for both executive officers and directors •Channels for shareholder feedback, including via engagements •Board oversight and evaluation of shareholder proposals submitted for consideration at the annual meeting of shareholders •Board to represent the balanced, best interests of the shareholders as a whole For more detailed information on Alphabet’s corporate governance and risk oversight framework, see “Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board Matters” beginning on page 24.
Corporate governance: independent chair, independent committees and shareholder rights · Filed 24/04/2026
While the full Board is responsible for risk oversight, it has optimized its committee structure to provide focused and expert attention to AI-related risks: •Established in October 2025, the Risk and Compliance Committee assists our Board in its oversight of our principal legal, policy, reputational, and operational risks, including those related to AI, as needed.
Risk oversight: establishment and remit of Risk and Compliance Committee · Filed 24/04/2026
Acquisitions and Divestitures On March 11, 2026, we completed our acquisition of Wiz for $29.5 billion, after purchase price adjustments and excluding post combination compensation arrangements.
Acquisitions: completed Wiz purchase and adjusted consideration · Filed 23/07/2026
On March 10, 2026, we completed our acquisition of Intersect for $5.9 billion, after purchase price adjustments.
Acquisitions: completed Intersect purchase and adjusted consideration · Filed 23/07/2026
Following the close of the acquisition, the financial results are included in our consolidated financial statements within the Google Cloud segment.
Acquisitions: inclusion of Wiz financial results in Google Cloud · Filed 23/07/2026
•Google Cloud has entered into a limited number of agreements to supply multiple gigawatts of TPU hardware to customers who require or provide on-premises infrastructure for specialized, high-scale workloads.
MD&A: limited number of agreements to supply multiple gigawatts of TPU hardware · Filed 30/04/2026
Revenues for these transactions are included in our backlog as of March 31, 2026.
MD&A: inclusion of TPU hardware transactions in March 2026 backlog · Filed 30/04/2026
AI technology and services are highly competitive, rapidly evolving, and require significant investment, including technical infrastructure, development, and operational costs.
Risk factors: AI competition and investment requirements · Filed 05/02/2026
