Alphabet Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Nature of Operations

Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. ("Alphabet") became the successor issuer to Google.

We generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide enterprise customers of all sizes with infrastructure, platform services, and applications; and sales of products and services, such as fees received for subscription-based products, apps and in-app purchases, consumer devices, and Tensor Processing Unit (TPU) systems.

Basis of Consolidation

The consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated under the variable interest and voting models. Intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP), and in our opinion, include all adjustments of a normal recurring nature necessary for fair financial statement presentation. Interim results are not necessarily indicative of the results to be expected for the full year ending December 31, 2026. We have made estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates.

These consolidated financial statements and other information presented in this Form 10-Q should be read in conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC. There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the year ended December 31, 2025, except for as described below.

Use of Estimates

Preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates due to uncertainties. On an ongoing basis, we evaluate our estimates, including those related to the allowance for credit losses; contingent liabilities; fair values of financial instruments, intangible assets, and goodwill; income taxes; inventory; and useful lives of intangible assets and property and equipment, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, and the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, and the collectibility of an amount that we expect in exchange for those goods or services is probable. Sales and other similar taxes are excluded from revenues.

Google advertising revenues consist of revenues from:

•Google Search and other 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 properties; and

•Google Network properties, including revenues from Google Network properties participating in AdMob, AdSense, and Google Ad Manager.

Our customers generally purchase advertising inventory through Google Ads, Google Ad Manager, Google Display & Video 360, and Google Marketing Platform, among others.

We offer advertising by delivering both performance and brand advertising. We recognize revenues for performance advertising when a user engages with the advertisement. For brand advertising, we recognize revenues when the ad is displayed, or a user views the ad.

For ads placed on Google Network properties, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed on Google Network properties on a gross basis; that is, the amounts billed to our customers are recorded as revenues, and amounts paid to Google Network partners are recorded as cost of revenues. Where we are the principal, we control the advertising inventory before it is transferred to our customers. 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.

Google subscriptions, platforms, and devices revenues consist of revenues from:

•consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One, which offers access to our most capable Gemini models;

•platforms, which primarily include revenues from Google Play sales of apps and in-app purchases;

•consumer devices, which primarily include sales of the Pixel family of devices; and

•other products and services.

Subscription revenues are recognized ratably over the period of the subscription, primarily monthly. We report revenues from Google Play sales of apps and in-app purchases on a net basis because our performance obligation is to facilitate a transaction between app developers and end users for which we earn a service fee.

Google Cloud revenues consist of revenues from:

•Google Cloud Platform primarily generates consumption-based fees and subscriptions for infrastructure, platform, and other services. These services provide access to solutions such as artificial intelligence (AI) offerings including our enterprise AI infrastructure, Vertex AI platform, and Gemini Enterprise; cybersecurity offerings; and data and analytics solutions.

•Google Workspace includes subscriptions for cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Calendar, Drive, and Meet, with integrated features like Gemini for Google Workspace.

•Product sales, primarily the sale of TPU systems.

•Other enterprise services.

Our cloud services are generally provided on either a consumption or subscription basis and may have contract terms longer than a year. Revenues related to cloud services provided on a consumption basis are recognized when the customer utilizes the services, based on the quantity of services consumed using the relative standalone selling price allocation. Revenues related to cloud services provided on a subscription basis are recognized over the contract term as the customer receives and consumes the benefits of the cloud services.

Our Google Cloud product sales generally consist of the sale of TPU systems comprising hardware, software, installation, support, and extended warranty services. Customer arrangements may also include options requiring us to repurchase the hardware and embedded software at pre-set prices, over a multi-year term, which are generally accounted for as rights of return. Where the customer assigns the TPU systems to another party, but retains the ability to require us to repurchase the TPU systems, we account for this as a financial guarantee. Product sales revenue from hardware, net of estimated allowances for returns, and software is recognized generally when control of the hardware is transferred to the customer. Installation, support, and extended warranty services revenue are recognized ratably over the service period or as services are performed.

Arrangements with Multiple Performance Obligations

At contract inception, we assess whether concurrent agreements with a customer should be accounted for as a single agreement. Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenues to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on observable prices of our products and services sold or priced separately in comparable circumstances to similar customers.

Customer Incentives and Credits

Certain customers receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues. We believe that there will not be significant changes to our estimates of variable consideration related to customer incentives and credits.

Sales Commissions

We expense sales commissions when incurred when the period of the expected benefit is one year or less. We recognize an asset for certain sales commissions and amortize if the expected benefit period is greater than one year. These costs are recorded within sales and marketing expenses.

Cost of revenues consists of traffic acquisition costs (TAC) and other costs of revenues.

•TAC includes:

◦amounts paid to our distribution partners who make available our search access points and other ad-supported services. Our distribution partners include browser providers, mobile carriers, original equipment manufacturers, and software developers; and

◦amounts paid to Google Network partners primarily for ads displayed on their properties.

•Other cost of revenues includes:

◦content acquisition costs, which are payments to content providers from whom we license video and other content for distribution, primarily related to YouTube (we pay fees to these content providers based on revenues generated, subscriber counts, or a flat fee);

◦depreciation expense, primarily related to our technical infrastructure;

◦employee compensation expenses related to our technical infrastructure and other operations such as content review and customer and product support;

◦inventory and related costs associated with the consumer devices and TPU systems hardware we sell; and

◦other technical infrastructure operations costs, including energy, equipment, and network capacity costs.

Inventory

Inventory consists primarily of hardware related to TPU systems for sale to enterprise customers and consumer devices, which primarily include the Pixel family of products. We utilize third-party contract manufacturers to manufacture our inventory. Our inventory includes raw material components purchased directly from our suppliers; work-in-process inventory undergoing conversion into finished products; and fully assembled finished goods. Inventories are stated at the lower of cost or net realizable value.

Acquired Intangible Assets

Intangible assets with definite lives are amortized over their estimated useful lives on a straight-line basis generally over periods ranging fromone to 10 years, and are subsequently removed from the presentation of gross intangible assets and accumulated amortization once they are fully amortized.

Assets Held for Sale

We consider assets to be held for sale in the period when all of the criteria for a qualifying plan of sale are met. Upon designation as held for sale, we record the assets at the lower of their carrying value or their estimated fair value, reduced for the cost to sell the assets, and cease depreciation. Long-lived assets classified as held for sale are measured at fair value on a nonrecurring basis.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03 "Income Statement: Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)" to improve the disclosures about an entity’s expenses. Upon adoption, we will be required to disclose in the notes to the financial statements a disaggregation of certain expense categories included within the relevant expense captions on the consolidated statements of income. The standard is effective for our 2027 annual period, and our interim periods beginning in 2028, with early adoption permitted. The standard can be applied either prospectively or retrospectively. We are currently assessing adoption timing, the method of adoption, and the effect that the updated standard will have on our financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06 "Intangibles: Goodwill and Other‒Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" to modernize the accounting for software costs under Subtopic 350-40, Intangibles‒Goodwill and Other‒Internal-Use Software (referred to as “internal-use software”). Upon adoption, we will be required to account for internal-use software under the updated capitalization criteria. The standard is effective for our interim and annual 2028 periods, with early adoption permitted. The standard can be applied either prospectively, retrospectively, or under a modified transition approach. We are currently assessing adoption timing, the method of adoption, and the effect that the updated standard will have on our consolidated financial statements.

In May 2026, the FASB issued ASU 2026-02 "Environmental Credits and Environmental Credit Obligations (Topic 818)” to provide recognition, measurement, presentation, and disclosure guidance for environmental credits and environmental credit obligations. Upon adoption, we will be required to account for environmental credits and environmental credit obligations under the new guidance. The standard is effective for our interim and annual 2028 periods, with early adoption permitted. The standard should be adopted on a retrospective basis. We are currently assessing adoption timing and the effect that the updated standard will have on our consolidated financial statements.

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation.

Note 2. Revenues

Disaggregated Revenue

The following table presents revenues disaggregated by type (in millions):

The following table presents revenues disaggregated by geography, based on the addresses of our customers (in millions):

(1) Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America ("Other Americas").

Revenue Backlog

As of September 30, 2026, we had $567.7 billion of remaining performance obligations (“revenue backlog”), of which $560.8 billion related to Google Cloud. Revenue backlog represents commitments in customer contracts that have not yet been recognized as revenue. We expect to recognize just over 55% of the revenue backlog as revenues over the next 24 months with the remainder to be recognized thereafter. The estimated revenue backlog and timing of revenue recognition for these commitments is largely driven by contract duration along with our ability to deliver in accordance with relevant contract terms and when our customers utilize services, both of which may fluctuate from period to period. Revenue backlog includes related deferred revenue currently recorded as well as amounts that will be invoiced in future periods and excludes cancelable contracts and payments we make to our customers not expected to be in exchange for distinct goods and services. 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. Our revenue backlog as of September 30, 2026 included $16.8 billion associated with a multi-year commercial agreement with Crux AI, an unconsolidated equity method joint venture and a related party. See Note 3 for further details on our investment in Crux AI.

Deferred Revenues

We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. Deferred revenues primarily relate to Google Cloud and Google subscriptions, platforms, and devices. Total deferred revenue as of December 31, 2025 was $8.6 billion, of which $5.5 billion was recognized as revenues for the nine months ended September 30, 2026. Total deferred revenue as of September 30, 2026 was $12.6 billion.

Note 3. Financial Instruments

Fair Value Measurements

Investments Measured at Fair Value on a Recurring Basis

Cash equivalents and marketable equity securities are measured at fair value and classified within Level 1 and Level 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets.

Debt securities are measured at fair value and classified within Level 2 in the fair value hierarchy, because we use quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value. The following tables summarize our cash, cash equivalents, and marketable securities measured at fair value on a recurring basis (in millions):

(1) Includes $75.2 billion of Space Exploration Technologies Corp. ("SpaceX") shares subject to short-term restrictions on the ability to sell.

Investments Measured at Fair Value on a Nonrecurring Basis

Non-marketable equity securities accounted for under the measurement alternative are investments in privately held companies without readily determinable market values. The carrying value of these non-marketable equity securities is adjusted upward or downward to fair value upon observable transactions for identical or similar investments of the same issuer or impairment. Non-marketable equity securities that have been remeasured during the period based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy, and remeasurements due to impairment are classified within Level 3. Our valuation methods include option pricing models, market comparable approach, and common stock equivalent method, which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, expected time to exit, risk-free rate, and the rights and obligations of the securities we hold. These inputs vary significantly based on investment type.

As of September 30, 2026, the carrying value of our non-marketable equity securities accounted for under the measurement alternativewas $128.2 billion, of which $8.8 billion was remeasured at fair value during the three months ended September 30, 2026 and was primarily classified within Level 3 of the fair value hierarchy at the time of measurement.

Debt and Equity Securities

Debt Securities

The following table summarizes the estimated fair value of investments in available-for-sale marketable debt securities by effective contractual maturity dates (in millions):

The following tables present fair values and gross unrealized gains and losses recorded to accumulated other comprehensive income (AOCI), less any expected credit losses, aggregated by investment category (in millions):

The following tables present fair values and gross unrealized losses recorded to AOCI, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method. For certain debt securities, we have elected the fair value option for which changes in fair value are recorded in other income (expense), net (OI&E). The fair value option was elected for these securities to align with the unrealized gains and losses from related derivative contracts.

The following table summarizes gains and losses for debt securities, reflected as a component of OI&E (in millions):

Non-Marketable Securities

Our non-marketable securities primarily consist of non-marketable equity securities accounted for under the measurement alternative. The carrying value is measured at the total initial cost plus the cumulative net upward and downward adjustments (including impairments). We also have non-marketable equity securities through which we exercise significant influence, but do not have control over the investee, accounted for under the equity method. Certain of our non-marketable securities include our investments in variable interest entities (VIEs) where we are not the primary beneficiary. See Note 5 for further details on VIEs.

Realized net gain (loss) on equity securities sold during the period reflects the difference between the sale proceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if later. All gains and losses, including impairments, are included as components of OI&E.

In May 2026, we entered into an agreement with Blackstone Inc. ("Blackstone") to form a US-based joint venture entity to provide data center capacity, operations, networking, hardware, and software as a single compute-as-a-service offering. Under the agreement, Blackstone is committed to provide future capital contributions of up to $5.0 billion, and we are committed to provide future data center and energy infrastructure backstops in support of agreements the venture may enter into of up to $10.0 billion, subject to certain conditions. In the third quarter of 2026, the venture was formally announced as Crux AI, and we entered into a multi-year commercial agreement with the venture which constitutes a related party transaction. We hold a minority interest in the joint venture which is considered a variable interest entity for which we are not the primary beneficiary, and we account for our investment in the venture under the equity method. As of September 30, 2026, the carrying value of our investment in the joint venture was not material. See Note 2 for further details on our revenue backlog associated with the commercial agreement with Crux AI.

The carrying values for non-marketable securities are summarized below (in millions):

(1) As of September 30, 2026, our investments in non-marketable securities accounted for under the measurement alternative primarily consist of our investment inone private company.

Gains and Losses on Equity Securities

Gains and losses (including impairments), net, for equity securities included in OI&E are summarized below (in millions):

(1)Excludes income (loss) and impairment from equity method investments. See Note 7 for further details.

Cumulative net gains (losses), calculated as the difference between the sales price and purchase price, represent the total net gains (losses) recognized after the initial purchase date. This represents the total economic impact of the investment, regardless of when the gains or losses were previously recognized. Cumulative net gains on equity securities sold were $102 million and $980 million during the three months ended September 30, 2025 and 2026, respectively, and $306 million and $2.0 billion during the nine months ended September 30, 2025 and 2026, respectively.

Derivative Financial Instruments

We utilize derivative instruments to manage risks relating to our ongoing business operations, including foreign currencies, interest rates, commodity prices, credit risk, and market prices of certain marketable equity securities. These derivatives are primarily classified within Level 2 of the fair value hierarchy.

We also enter into derivatives as a result of agreements with certain third parties to backstop specified payment obligations related to data centers, including data center lease payments and the associated energy costs for certain agreements. We account for these as credit derivatives. Additionally, a certain strategic investment includes forward funding commitments that are accounted for as equity derivatives, as they include rights to participate in future capital funding, the exercise of which is contingent upon the achievement of specified operational and financial milestones. These credit and equity derivatives are classified within Level 3 of the fair value hierarchy. Our valuation methods include probability-weighted expected return models, which may include a combination of observable and unobservable inputs, including counterparty risk, credit default rates, risk-free rates, and our contractual rights and obligations under the agreements.

We recognize derivative instruments in the Consolidated Balance Sheets at fair value. We present our foreign currency collars (an option strategy comprised of a combination of purchased and written options) at net fair values and present all other derivatives at gross fair values. The accounting treatment for derivatives is based on the intended use and hedge designation.

Cash Flow Hedges

We designate foreign currency forwards and options (including collars) as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the US dollar. These contracts have maturities of 24 months or less.

Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI and reclassified to revenue when the hedged item is recognized in earnings. Hedge components excluded from our assessment of hedge effectiveness are amortized on a straight-line basis over the life of the hedging instrument in revenues. The difference between fair value changes of the excluded component and the amount amortized to revenues is recorded in AOCI.

Additionally, we designate interest rate derivatives as cash flow hedges to manage our exposure to certain interest rate risks. Changes in the fair value of these derivatives are deferred in AOCI and reclassified to OI&E when the hedged item is recognized in earnings.

As of September 30, 2026, the pre-tax net gainon our cash flow hedges that is expected to be reclassified from AOCI into earnings within the next 12 months was $369 million.

Fair Value Hedges

We enter into interest rate swaps to manage interest rate risk associated with certain fixed-rate debt, effectively converting a portion of our fixed-rate debt to floating-rate debt. We designate these swaps as fair value hedges to hedge against changes in the fair value of the fixed-rate debt attributable to changes in the benchmark interest rate. Fair value hedge amounts included in the assessment of hedge effectiveness are recognized in OI&E, along with the offsetting gains and losses of the related hedged items.

Net Investment Hedges

We designate foreign currency forwards, options (including collars), cross-currency swaps, and foreign currency-denominated debt as net investment hedges to hedge the foreign currency risks related to our investments in foreign subsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI.

Changes in the fair value of hedge components of forward and option contracts that are excluded from the assessment of hedge effectiveness are recognized in OI&E. Hedge components of cross-currency swaps that are excluded from the assessment of hedge effectiveness are amortized over the life of the hedging instrument and recognized in OI&E. The difference between fair value changes of the excluded component and the amount amortized to OI&E is recorded in AOCI.

Foreign currency-denominated debt designated as net investment hedges had a carrying value of $15.4 billion and $31.8 billion as of December 31, 2025 and September 30, 2026, respectively.

Derivatives Not Designated as Hedging Instruments

We enter into derivatives not designated as hedging instruments to manage risks related to our ongoing business operations. The primary risk managed is foreign exchange risk related to the remeasurement of monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. Gains and losses on these foreign exchange derivatives are recorded within the "foreign currency exchange gain (loss), net" component of OI&E. We also enter into derivatives to manage other risks, including interest rates, commodity prices, credit risk, and market prices of certain marketable equity securities, the gains and losses from which are recorded within the "other" component of OI&E.

We have entered into agreements with certain third parties to backstop specified payment obligations relating to data centers, including data center lease payments and the associated energy costs for certain agreements. We account for these as credit derivatives. The notional amounts for these credit derivatives represent the maximum potential exposure regarding future payments in the event of specified default scenarios by underlying parties. These agreements carry remaining terms of up to 15 years and the total potential exposure reduces over time as the underlying parties fulfill their payment obligations. Upon a default under these credit backstops, we retain the right to assume the underlying leases for internal use or to sublease to third parties. Under specific conditions or following a predetermined period, we may elect to extinguish the backstop obligation by making a termination payment. If we elect such payment, our obligations may be partially offset by equity or cash receipts from counterparties. These potential inflows are not reflected in the notional amounts for credit derivatives.

The notional amounts for equity derivatives primarily represent an agreement for future capital funding in the form of notes receivable or equity to be funded in multiple tranches contingent upon the achievement of specified operational and financial milestones through 2030.

Gains and losses arising from these credit and equity derivatives are recorded within the “other” component of OI&E. See Note 7 for further details.

The gross notional amounts of outstanding derivative instruments were as follows (in millions):

See Note 5 for further details on variable interest entity considerations relating to our equity and credit derivatives.

The fair values of outstanding derivative instruments were as follows (in millions):

(1) Derivative assets are recorded as other current and non-current assets.

(2) Derivative liabilities are recorded as accrued expenses and other liabilities, current and non-current.

The amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows (in millions):

The gains (losses) on derivatives and non-derivative financial instruments in cash flow hedging and net investment hedging relationships recognized inother comprehensive income are summarized below (in millions):

The table below presents the gains (losses) of derivatives included in the Consolidated Statements of Income: (in millions):

Offsetting of Derivatives

We enter into master netting arrangements and collateral security arrangements to reduce credit risk. Cash collateral received related to derivative instruments under our collateral security arrangements is included inother current assets with a corresponding liability. Cash and non-cash collateral pledged related to derivative instruments under our collateral security arrangements are primarily included in other current assets.

The gross amounts of derivative instruments subject to master netting arrangements with various counterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (in millions):

(1)The balances as of December 31, 2025 and September 30, 2026 were related to derivatives allowed to be net settled in accordance with our master netting agreements.

Note 4. Leases

We have entered into operating and finance lease agreements primarily for data centers, land, and offices throughout the world with varying lease terms.

Components of lease costs were as follows (in millions):

(1)Includes a short-term lease agreement entered into in June 2026, and amended in September 2026, with a remaining non-cancelable commitment of approximately $6.0 billion as of September 30, 2026. We do not recognize right of use assets or lease liabilities on leases with a term of 12 months or less. Short term lease costs are recognized on a straight-line basis over the lease term.

Supplemental information related to leases was as follows (in millions):

(1)Additionally, during the three and nine months ended September 30, 2026, we made $159 million and $994 million of lease prepayments for leases not yet commenced, respectively, which are expected to be accounted for as finance leases.

Future lease payments as of September 30, 2026 were as follows (in millions):

As of September 30, 2026, we have entered into leases, primarily related to data centers and energy infrastructure, that have not yet commenced with future lease payments of $130.5 billion that are not yet recorded. These leases will commence between 2026 and 2031 with non-cancelable lease terms betweenone and 26 years.

Note 5. Variable Interest Entities

Consolidated VIEs

We consolidate VIEs in which we hold a variable interest and are the primary beneficiary. The results of operations and financial position of these VIEs are included in our consolidated financial statements.

Unconsolidated VIEs

We hold various forms of interests in VIEs, including certain of our investments in private companies and renewable energy entities, certain leases and credit derivatives with data center entities, and financial guarantees with energy infrastructure entities. Because we have determined that we do not direct the activities that most significantly impact the economic performance of these entities, we are not the primary beneficiary. Therefore, these VIEs are not consolidated within our financial statements.

Our investments in private companies and renewable energy VIEs are primarily accounted for as non-marketable securities under the measurement alternative or the equity method. The carrying values of these investments are included within non-marketable securities on our Consolidated Balance Sheets. See Note 3 for further details on investments. The maximum exposure to these VIEs is generally limited to the current carrying value plus future funding and financial support commitments. As of December 31, 2025 and September 30, 2026, future funding and financial support commitments were $1.1 billion and $31.9 billion, respectively. As of September 30, 2026, this amount includes $20.0 billion of future capital funding commitments with a private company contingent upon the achievement of specified operational and financial milestones through 2030, which is accounted for as an equity derivative. Also, included in this amount is $10.0 billion of potential future data center and energy infrastructure backstops in support of our investment in the Crux AI joint venture. See Note 3 for further details on derivatives and equity method investments.

Leases with data center leasing VIEs are accounted for as finance leases and are included within total lease obligations disclosed in Note 4. The maximum exposure arising from leases with VIEs is limited to the net carrying value of commenced finance lease assets, plus the undiscounted future obligations for leases that have not yet commenced. See Note 4 for further details on leases.

Credit derivatives with data center VIEs carry a maximum exposure which is limited to the financial risk over the period of the arrangements, as reflected by the credit derivative notional value. See Note 3 for further details on credit derivatives.

Financial guarantees with energy infrastructure entities have maximum exposure limited to the potential amount of future payments under these arrangements. See Note 10 for further details on financial guarantees.

Note 6. Debt

Short-Term Debt

We have a commercial paper program of up to $25.0 billion, which is used for general corporate purposes. We hadno commercial paper outstanding as of December 31, 2025 and September 30, 2026.

Our short-term debt balance also includes the current portion of certain long-term debt.

Long-Term Debt

During 2026, we issued $45.0 billion of US dollar-denominated senior unsecured notes and $35.8 billion of foreign currency-denominated senior unsecured notes for general corporate purposes.

In the third quarter of 2026, we issued senior unsecured notes consisting of: $23.8 billion US dollar-denominated fixed-rate notes and $1.3 billion US dollar-denominated floating-rate notes with a weighted-average coupon rate of 5.55% and a weighted-average maturity of 15 years; and A$3.3 billion Australian dollar-denominated fixed-rate notes and A$2.3 billion Australian dollar-denominated floating-rate notes with a weighted-average coupon rate of 5.82% and a weighted-average maturity ofeight years.

Total outstanding long-term debt is summarized below (in millions, except percentages):

(1)Includes floating-rate notes consisting of $1.8 billion in US dollar notes with interest calculated using the compounded Secured Overnight Financing Rate (SOFR) plus 0.44% to 0.60%, and A$2.3 billion in Australian dollar notes calculated using the Bank Bill Swap Rate (BBSW) plus 0.65% to 0.90%. Interest on these notes is reset quarterly.

(2)Principal, unamortized discount, and debt issuance costs for the foreign currency-denominated notes include the effect of foreign exchange rates.

(3)Includes fair value adjustments for fixed-rate notes in fair value hedge relationships. See Note 3 for further details.

(4)Total current portion of long-term debt is included within accrued expenses and other current liabilities. See Note 7 for further details.

The notes in the table above are senior unsecured obligations and rank equally with each other. We may redeem the fixed-rate notes, other than the Japanese yen-denominated notes, at any time in whole or in part at specified redemption prices. The floating-rate notes are not redeemable prior to maturity. Interest is payable quarterly for the floating-rate notes, semi-annually for the US dollar, Canadian dollar, Japanese yen, and Australian dollar-denominated fixed-rate notes, and annually for the euro-, sterling-, and Swiss franc-denominated fixed-rate notes. The effective interest rates are based on proceeds received and contractual interest payments.

The total estimated fair value of the outstanding notes was approximately $45.6 billion and $114.9 billion as of December 31, 2025 and September 30, 2026, respectively. The fair value was determined based on observable market prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy.

In October 2026, Waymo entered into a Credit Agreement for a $5.0 billion senior secured term loan that matures in October 2032. The term loan bears interest at a rate equal to Term SOFR plus 5.25% and is secured by certain assets and subsidiaries of Waymo, subject to specified carve-outs. The obligations under the term loan are not guaranteed by Alphabet or any of its other subsidiaries.

Credit Facility

As of September 30, 2026, we had $10.0 billion of revolving credit facilities, of which $4.0 billion expires in April 2027 and $6.0 billion expires in April 2030. No amounts were outstanding under the credit facilities as of December 31, 2025 and September 30, 2026.

Note 7. Supplemental Financial Statement Information

Accounts Receivable

The allowance for credit losses on accounts receivable was$924 million and $1.2 billion as of December 31, 2025 and September 30, 2026, respectively.

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):

(1)As of December 31, 2025 and September 30, 2026, approximately 60% of technical infrastructure assets were comprised of servers and network equipment. The remaining balance was comprised of data center land and buildings and related assets.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):

(1)See Legal Matters in Note 10 for further details.

Noncontrolling Interests

Total noncontrolling interests (NCI) in our consolidated subsidiaries were $3.4 billion and $6.9 billion as of December 31, 2025 and September 30, 2026, respectively, of which $841 million and $825 million were redeemable noncontrolling interests (RNCI) as of December 31, 2025 and September 30, 2026, respectively. NCI and RNCI are included within common stock and additional paid-in capital (APIC). Net loss attributable to noncontrolling interests was not material for any period presented and is included within the "other" component of OI&E.

Accumulated Other Comprehensive Income (Loss)

Components of AOCI, net of income tax, were as follows (in millions):

The effects on net income of amounts reclassified from AOCI were as follows (in millions):

Components of OI&E were as follows (in millions):

(1)Interest expense is net of interest capitalized of $130 million and $405 million for the three months ended September 30, 2025 and 2026, respectively, and $301 million and $1.0 billion for the nine months ended September 30, 2025 and 2026, respectively.

Note 8. Acquisitions and Divestitures

Wiz Acquisition

On March 11, 2026, we completed our acquisition of Wiz for $29.5 billion, after purchase price adjustments and excluding post combination compensation arrangements. This acquisition represents an investment by Google Cloud to accelerate our capabilities in multicloud and AI-driven security. Following the close of the acquisition, the financial results are included in our consolidated financial statements within the Google Cloud segment.

The preliminary purchase price was allocated as follows (in millions):

(1)Goodwill has been recorded in the Google Cloud segment and primarily attributable to synergies expected to arise after the acquisition. Goodwill is not deductible for tax purposes.

(2)Includes $660 million of acquired cash.

Intangible assets acquired as of the acquisition date were as follows:

Intersect Acquisition

On March 10, 2026, we completed our acquisition of Intersect, a developer of renewable energy, for $5.9 billion, after purchase price adjustments. This acquisition enables acceleration of data center capacity and energy development. Intersect is a VIE and we have determined we are the primary beneficiary. Following the close of the acquisition, the financial results are included in our consolidated financial statements and are allocated to our segments.

The final purchase price was allocated as follows (in millions):

(1)Goodwill has been allocated to Google Services and Google Cloud segments and primarily attributable to synergies expected to arise after the acquisition. Goodwill is not deductible for tax purposes.

(2)Includes $410 million of acquired cash.

Pending Divestiture

In March 2026, we entered into a definitive agreement to contribute our ownership interest in GFiber, a wholly owned subsidiary, into a newly formed entity. Upon closing, we expect to receive $1.5 billion in cash, a $2.0 billion note receivable, and a 49.99% equity interest. The remaining interest is expected to be accounted for as an unconsolidated VIE under the equity method of accounting, as we will no longer be the primary beneficiary. The transaction is expected to close in late 2026.

GFiber meets the criteria for held for sale classification. No impairment loss was recognized upon initial classification as held for sale and we ceased depreciation of the related long-lived assets. Held for sale assets primarily consist of property and equipment of $7.1 billion, which is included in other current assets in our Consolidated Balance Sheet as of September 30, 2026. The operating results of GFiber remain included within the Other Bets segment through the close of the transaction.

Note 9. Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill for the nine months ended September 30, 2026 were as follows (in millions):

Intangible Assets

Information regarding intangible assets was as follows (in millions):

Amortization expense relating to intangible assets was $129 million and $375 million for the three months ended September 30, 2025 and 2026, respectively, and $375 million and $920 million for the nine months ended September 30, 2025 and 2026, respectively.

Expected amortization expense of definite-lived intangible assets held as of September 30, 2026 was as follows (in millions):

Note 10. Commitments and Contingencies

Commitments

We have significant contractual obligations from contracts with remaining terms greater than one year. As of September 30, 2026, total commitments under these obligations were $802.1 billion, which includes $4.5 billion of standby letters of credit issued and outstanding to secure performance obligations under our long-term supply agreements.

These contractual obligations consist mostly of long-term supply agreements to secure future production capacity for technical infrastructure and inventory components. Contract durations under these long-term supply agreements extend through 2032 and we expect to make the significant majority of the commitment payments through 2031. Certain of our long-term supply agreements contain fixed volume commitments with variable pricing between minimum and maximum rates and/or the ability to partially reduce committed volumes. The amounts disclosed above reflect pricing and volumes at the maximum contractual limits of the current contracts.

Other significant long-term contracts relate to certain energy service agreements to secure energy for data center usage, and certain content licensing agreements. The energy service agreements include terms ranging from three to 26 years, with obligations through 2054, and generally include take-or-pay provisions for minimum quantities of energy supply and substantive termination fees. Our content licensing agreements have remaining terms extending through 2031.

Financial Guarantees

To support counterparty procurement of long-lead time equipment for our future power purchase and energy agreements, we provide financial guarantees to certain counterparties with varying terms through January 2049. As of September 30, 2026, our maximum potential future payments under these guarantees were $16.2 billion, upon which we may receive certain assets. The fair value of these obligations was not material.

In addition, certain contracts require us to repurchase previously sold TPU hardware and embedded software under specified conditions and subject to the assets being returned in working order. As of September 30, 2026, our maximum potential future payments under these guarantees were $6.6 billion, and the fair value of these obligations was not material. Based on the extent of the discount on repurchase and other factors, we do not believe counterparties have an economic incentive to exercise their option to require us to repurchase.

Indemnifications

In the normal course of business, including to facilitate transactions in our services and products and corporate activities, we indemnify certain parties, including advertisers, Google Network partners, distribution partners, customers of Google Cloud offerings, lessors, and service providers with respect to certain matters. We have agreed to defend and/or indemnify certain parties against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.

It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows, or financial position. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period.

As of September 30, 2026, we did not have any material indemnification claims that were probable or reasonably possible.

Legal Matters

We record a liability when we believe that it is probable that a loss has been incurred, and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate.

Certain outstanding matters seek speculative, substantial, or indeterminate monetary amounts, substantial changes to our business practices and products, or structural remedies. Significant judgment is required to determine both the likelihood of there being a loss and the estimated amount of a loss related to such matters, and we may be unable to estimate the reasonably possible loss or range of losses. The outcomes of outstanding legal matters are inherently unpredictable and subject to significant uncertainties, and could, either individually or in aggregate, have a material adverse effect.

We expense legal fees in the period in which they are incurred.

Antitrust Matters

We are subject to formal and informal inquiries and investigations as well as litigation on various competition matters by regulatory authorities and private parties in the US, Europe, and other jurisdictions globally, including the following:

•Android: In July 2018, the European Commission (EC) announced its decision that certain provisions in Google's Android-related distribution agreements infringed European antitrust laws, imposed a €4.3 billion fine, and directed the termination of the conduct at issue. We appealed the EC decision and implemented changes to certain of our Android distribution practices. In September 2022, the General Court affirmed the EC decision but reduced the fine from €4.3 billion to €4.1 billion. We subsequently appealed the General Court's affirmation of the EC decision, which was denied by the European Court of Justice in July 2026. The

EC decision is now final. In July 2026, we made a cash payment of $5.2 billion for the fine plus accrued interest.

•AdSense for Search: In March 2019, the EC announced its decision that certain provisions in Google's agreements with AdSense for Search partners infringed European antitrust laws, imposed a €1.5 billion fine, and directed actions related to AdSense for Search partners' agreements, which we implemented prior to the decision. In 2019, we recognized a charge of $1.7 billion for the fine and appealed the EC decision. In September 2024, the General Court overturned the EC decision and annulled the €1.5 billion fine. The EC has appealed the General Court's decision with the European Court of Justice, which remains pending.

•Search: In October 2020, the US Department of Justice (DOJ) and a number of state Attorneys General filed a lawsuit in the US District Court for the District of Columbia concerning Google's Search and Search advertising practices and its compliance with US antitrust laws. In August 2024, the US District Court for the District of Columbia ruled against Google. A final judgment was entered in December 2025, which, among other things, imposes restrictions on how Google distributes its services and requires Google to share certain search data with and offer syndication services to certain competitors. In January 2026, we appealed the final judgment and moved to pause implementation of certain remedies. The court denied the motion to stay as premature, allowing Google to seek a stay until the scope of certain remedies is more defined. In February 2026, the DOJ and state Attorneys General also appealed. The appeals remain pending.

•Advertising Technology: In December 2020, a number of state Attorneys General filed a lawsuit in the US District Court for the Eastern District of Texas concerning Google's advertising technology and its compliance with US antitrust laws and state deceptive trade laws. In January 2023, the DOJ, along with a number of state Attorneys General, filed a lawsuit in the US District Court for the Eastern District of Virginia concerning Google's advertising technology and its compliance with US antitrust laws, and a number of additional state Attorneys General subsequently joined the lawsuit. In April 2025, the US District Court for the Eastern District of Virginia issued a mixed decision in the DOJ case against Google, ruling that neither Google's advertiser tools nor the DoubleClick and AdMeld acquisitions were anticompetitive, but that Google's publisher tools unfairly excluded rivals. A separate proceeding to determine remedies, the range of which varies widely, took place in September 2025, with the parties presenting differing remedy proposals. In September 2026, the Court issued its remedies decision, denying the DOJ's request for structural divestitures of Google's advertising technology assets, instead ordering certain behavioral remedies concerning interoperability, data access, and auction conduct. After the Court enters its final judgment, we plan to appeal the adverse portion of the April 2025 decision and, upon full review of the remedies decision, we may also appeal aspects of the September 2026 decision. A trial in the state Attorneys General case in the Eastern District of Texas will take place after the conclusion of the remedies proceedings in the DOJ case. Given the nature of these matters, we cannot estimate a possible loss.

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. The EC decision imposed a €3.0 billion fine and directed Google to cease and desist the alleged "self-preferencing" practices. We appealed the ruling in November 2025, which remains pending. We recognized a charge of $3.5 billion in the third quarter of 2025, and we placed bank guarantees in the fourth quarter of 2025 in lieu of cash payment.

In September 2024, the United Kingdom (UK) also issued a Statement of Objections concerning Google's advertising technology and its compliance with UK antitrust laws, to which we responded. The matter remains pending.

•Google Play: In July 2021, a number of state Attorneys General filed a lawsuit in the US District Court for the Northern District of California concerning Google's operation of Android and Google Play and its compliance with US antitrust laws and state antitrust and consumer protection laws. In September 2023, we reached a settlement in principle with 50 state Attorneys General and three territories and recognized a charge. In May 2024, we funded the settlement amount to an escrow agent. The Court approved the settlement in August 2026.

In December 2023, a California jury delivered a verdict against Google in Epic Games v. Google related to Google Play's business. Epic did not seek monetary damages. The presiding judge issued a remedies decision in October 2024, ordering a variety of alterations to our business models and operations and contractual agreements for Android and Google Play. We appealed the judgment, including the jury verdict and aspects of the remedies ordered. In July 2025, the Court of Appeals denied our appeal, and we subsequently petitioned the US Supreme Court for review. While that appeal was pending, we implemented the effective ordered remedies in October 2025. In March 2026, we reached a settlement with Epic to seek modification of the remedies, implement certain changes regarding the operation of Google Play, and resolve certain other lawsuits Epic has filed regarding Google Play's business. Following the settlement, we withdrew our petition to the US Supreme Court in March 2026, and Epic and Google filed a joint motion to modify the injunction in April 2026. In July 2026, Epic and Google jointly withdrew the motion to modify the injunction, and Google is complying with the October 2024 remedies decision.

•European Digital Markets Act: In March 2024, the EC openedtwo investigations regarding Google's compliance with certain provisions of the European Union's (EU) Digital Markets Act relating to Google Play and Search. In March 2025, the EC issued preliminary findings of non-compliance in both investigations, to which we responded. In July 2026, the EC issued non-compliance decisions imposing fines of €430 million relating to Google Play and €460 million relating to Search. We appealed both decisions in October 2026; both appeals remain pending. We recognized a charge totaling $1.0 billion in the third quarter of 2026 for the fines.

In addition to these antitrust proceedings, private individual and collective actions that overlap with claims pursued by regulatory authorities are pending in the US and in several other jurisdictions, including across Europe. This includes private claims stemming from regulatory proceedings in which Google's liability has been fully determined and the remaining dispute concerns potential damages.

For example, in July 2026, the Stockholm Patent and Market Court issued a decision against Google in a private action brought by PriceRunner (a subsidiary of Klarna) relating to Google's display and ranking of shopping search results. The Court awarded the plaintiff approximately $2.1 billion (awarded in multiple currencies) in principal damages plus accrued interest and costs, which we recognized in the second quarter of 2026. We appealed the decision, which remains pending.

For other such matters, given their nature, we cannot estimate a possible loss.

We believe we have strong arguments against open claims and will defend ourselves vigorously. We continue to cooperate with federal and state regulators in the US, the EC, and other regulators around the world.

Privacy Matters

We are subject to a number of privacy-related laws and regulations, and we currently are party to a number of privacy investigations and lawsuits ongoing in multiple jurisdictions. For example, there are ongoing investigations and litigation in the US and the EU, including those relating to our collection and use of location information, the processing controlswe offer users, and advertising practices, which could result in significant fines, judgments, and product changes.

Patent and Intellectual Property Claims

We have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe others' intellectual property rights. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering certain features, functionalities, products, or services. As a result, we may have to change our business practices and develop non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business. In addition, the US International Trade Commission (ITC) has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss in an ITC action can result in a prohibition on importing infringing products into the US. Because the US is an important market, a prohibition on importation could have an adverse effect on us, including preventing us from importing many important products into the US or necessitating workarounds that may limit certain features of our products.

Further, our customers and partners may discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and adversely affect our business.

Other

We are subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, and consent orders involving competition, intellectual property, data privacy and security, tax and related compliance, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, design of our products and services, personal injury and other tort and nuisance theories, consumer protection, including how we moderate content on our platforms, AI, and other matters. For example, we periodically have data incidents that we report to relevant regulators as required by law. Such claims, consent orders, lawsuits, regulatory and government investigations, and other proceedings could result in substantial fines and penalties, injunctive relief, ongoing monitoring and auditing obligations, changes to our products and services, alterations to our business models and operations, and collateral-related civil litigation or other adverse consequences, all of which could harm our business, reputation, financial condition, and operating results.

We have ongoing legal matters relating to Russia. For example, some matters concern civil judgments that include compounding penalties imposed upon us in connection with disputes regarding the termination of accounts, including those of sanctioned parties. We do not expect these ongoing legal matters will have a material adverse effect.

Non-Income Taxes

We are under audit by various domestic and foreign tax authorities with regard to non-income tax matters. The subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to the sale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We accrue non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from our expectations.

See Note 14 for further details regarding income tax contingencies.

Note 11. Stockholders' Equity

Common Stock Issuance

On June 4, 2026, the company completed an underwritten public offering of 29 million Class A shares at a price of $355.1982 per share and 29 million Class C shares at a price of $351.8018 per share. All shares have a par value of $0.001 per share.

Concurrently with the public offering, on June 4, 2026, the company completed a private placement of 14 million Class A and 14 million Class C shares to an affiliate of Berkshire Hathaway Inc. (the “private placement”). The shares were issued in a private placement pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

The net proceeds received by the company were $20.5 billion from the public offering and $10.0 billion from the private placement, after deducting underwriting discounts, commissions, and direct offering expenses which were recorded as a reduction to common stock and APIC. These proceeds will be used for general corporate purposes, including capital expenditures to scale AI infrastructure and global compute.

Mandatory Convertible Preferred Stock

On June 5, 2026, the company issued an aggregate amount of 385 million Series A and Series B depositary shares, representing 19 million shares of 6.25% Mandatory Convertible Preferred Stock, split evenly into Series A (indexed to Class A stock) and Series B (indexed to Class C stock). Each depositary share represents a 1/20th fractional interest in a share of preferred stock.

The mandatory convertible preferred stock has a par value of $0.001 per share and liquidation preference of $1,000 per share ($50 per depositary share). Aggregate net proceeds were $19.0 billion which will be used for general corporate purposes, including capital expenditures to scale AI infrastructure and global compute. Gross proceeds were reduced by underwriting discounts and offering expenses, which were recorded as a reduction to preferred stock and APIC.

Dividends are cumulative at an annual rate of 6.25% on the liquidation preference of $1,000 per share of mandatory convertible preferred stock and may be paid in cash, shares of common stock, or a combination of cash and shares of common stock, at the company’s election. Dividends that are declared will be payable quarterly on February 15, May 15, August 15, and November 15 of each year, commencing on August 15, 2026 and ending on, and including May 15, 2029 with the record date being the first of the respective month.

Unless earlier converted, each outstanding share will automatically convert on the mandatory conversion date, which is on or about May 15, 2029. The conversion rate for each share of our Series A mandatory convertible preferred stock will be between 2.2520 and 2.8160 shares of Class A stock, and Series B mandatory convertible preferred stock will convert into between 2.2740 and 2.8420 shares of Class C stock, depending on the applicable market value of our Class A and Class C stock upon conversion and subject to certain anti-dilution adjustments. The applicable market value will be determined based on the average volume-weighted average price per share over the 20 consecutive trading day final averaging period ending immediately prior to the mandatory conversion date.

If a fundamental change occurs on or prior to May 15, 2029, holders of mandatory convertible preferred stock will automatically convert into Class A or Class C shares, as applicable, at a special fundamental change conversion rate and, under certain circumstances, receive a fundamental change dividend make-whole amount. Other than during a fundamental change conversion period, at any time prior to May 15, 2029, holders may elect to convert at the minimum conversion rate, subject to certain anti-dilution and other adjustments.

The mandatory convertible preferred stock is not redeemable at the company’s election before the mandatory conversion date. Holders of the mandatory convertible preferred stock will not have any voting rights, with limited exceptions.

Capped Call Transactions

In connection with the issuance of the 385 million Series A and Series B depositary shares, representing 19 million shares of mandatory convertible preferred stock, the company entered into privately negotiated capped call transactions with certain financial institutions.

The company paid an aggregate premium of $1.0 billion for these capped call transactions, which was recorded as a reduction to preferred stock and APIC. The capped call transactions provide the company with the option to receive shares of Class A and Class C stock upon conversion of the mandatory convertible preferred stock. The transactions have an initial cap price of $532.6704 per share for the Class A and $527.7974 per share for Class C, each representing a premium of 50.0% over their respective public offering prices.

These transactions are intended to reduce the potential dilution to the company’s common stock upon conversion of the mandatory convertible preferred stock. As the transactions are indexed to the company’s own stock and meet certain accounting criteria, the capped call options are recorded as a reduction of stockholders’ equity and are not accounted for as derivatives.

At-the-Market Program

On June 1, 2026, the company entered into an equity distribution agreement with certain sales agents party thereto, pursuant to which we may sell both our Class A and Class C stock having aggregate sales proceeds of up to $40.0 billion from time to time through an at-the-market offering program (the "ATM Program"). The proceeds from offerings under the ATM Program are primarily intended to be used to meet tax obligations associated with employee equity grants.

During the three and nine months ended September 30, 2026, we issued 12 million shares of Class A stock for net proceeds of $4.3 billion and 24 million shares of Class C stock for net proceeds of $8.1 billion. As of September 30, 2026, $27.6 billion remained available for future issuance under the ATM Program.

Subject to the terms and conditions of the agreement, the company may sell shares of Class A and Class C stock through the sales agents listed in the agreement in amounts and at times to be determined by the company. In addition, we may elect to sell, through the sales agents or through others (whether acting as agent or principal), shares of our stock for forward settlement. We are not obligated to sell any of our shares under the ATM Program.

Preferred and Common Dividends

In the three and nine months ended September 30, 2026, total cash dividends on preferred stock were $234 million, representing $117 million each on the Series A and Series B mandatory convertible preferred stock.

In the three and nine months ended September 30, 2026, total cash dividends on common stock were $2.7 billion and $7.9 billion, representing $1.3 billion and $3.8 billion for Class A, $182 million and $541 million for Class B, and $1.2 billion and $3.6 billion for Class C shares, respectively.

In October 2026, the company's Board of Directors declared a quarterly cash dividend of $15.63 per share on each of our Series A and Series B mandatory convertible preferred stock (equivalent to approximately $0.78 per share on each of our Series A and Series B Depositary Shares). The mandatory convertible preferred stock dividend is payable on November 15, 2026 to stockholders of record for each of the company's Series A and Series B shares as of November 1, 2026.

In October 2026, the company's Board of Directors declared a quarterly cash dividend of $0.22 per share on our Class A, Class B, and Class C stock. The common stock dividend is payable on December 14, 2026 to stockholders of record for each of the company's Class A, Class B, and Class C shares as of December 7, 2026.

The company intends to pay quarterly cash dividends in the future, subject to review and approval by the company’s Board of Directors in its sole discretion.

Share Repurchases

In the three and nine months ended September 30, 2026, there wereno repurchases of the company's Class A or Class C shares.

In April 2025, the company's Board of Directors authorized a $70.0 billion share repurchase program for its Class A and Class C shares. As of September 30, 2026, $69.5 billion remained available for Class A and Class C share repurchases.

Repurchases may 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. The repurchase programs do not have an expiration date.

Note 12. Net Income Per Common Share

We compute net income per common share of Class A, Class B, and Class C stock using the two-class method. Basic net income per common share is computed using the weighted-average number of shares outstanding during the period. Diluted net income per common share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of restricted stock units (RSUs), other contingently issuable shares, and mandatory convertible preferred stock. The dilutive effect of outstanding RSUs and other contingently issuable shares is reflected in diluted earnings per common share pursuant to the treasury stock method. The dilutive effect of mandatory convertible preferred shares is reflected in diluted earnings per common share pursuant to the if-converted method. The computation of the diluted net income per common share of Class A stock assumes the conversion of Class B stock, while the diluted net income per common share of Class B stock does not assume the conversion of those shares.

Net income available to common stockholders is calculated by adjusting net income to deduct declared and accrued dividends on the mandatory convertible preferred stock.

In accordance with our certificate of incorporation, the rights, including the liquidation and dividend rights, of the holders of our Class A, Class B, and Class C stock are identical, except with respect to voting. Furthermore, there are a number of safeguards built into our certificate of incorporation, as well as Delaware law, which preclude our Board of Directors from declaring or paying unequal per share dividends on our Class A, Class B, and Class C stock. Specifically, Delaware law provides that amendments to our certificate of incorporation which would have the effect of adversely altering the rights, powers, or preferences of a given class of stock must be approved by the class of stock adversely affected by the proposed amendment. In addition, our certificate of incorporation provides that before any such amendment may be put to a stockholder vote, it must be approved by the unanimous consent of our Board of Directors.

Immaterial differences in net income per common share across our Class A, Class B, and Class C shares may arise due to the allocation of distributed earnings, which is based on the holders as of the record date, compared with the allocation of undistributed earnings and number of shares, which is based on the weighted-average shares outstanding over the periods.

The following tables set forth the computation of basic and diluted net income per common share of Class A, Class B, and Class C stock (in millions, except per share amounts):

(1)Not applicable for consolidated net income per common share.

(2)Pursuant to the if-converted method, preferred dividends are added back and preferred shares are assumed to have been converted to common shares only if they have a dilutive effect on net income per common share.

(1)Not applicable for consolidated net income per common share.

(2)Pursuant to the if-converted method, preferred dividends are added back and preferred shares are assumed to have been converted to common shares only if they have a dilutive effect on net income per common share.

Note 13. Compensation Plans

Stock-Based Compensation

For the three months ended September 30, 2025 and 2026, total stock-based compensation (SBC) expense was $6.4 billion and $8.7 billion, including amounts associated with awards we expect to settle in Alphabet stock of $6.1 billion and $8.3 billion, respectively. For the nine months ended September 30, 2025 and 2026, total SBC expense was $17.9 billion and $23.9 billion, including amounts associated with awards we expect to settle in Alphabet stock of $17.2 billion and $22.4 billion, resp ectively.

Stock-Based Award Activities

The following table summarizes the activities for unvested Alphabet RSUs and performance stock units (PSUs), both of which include dividend equivalents awarded to holders of unvested stock, for the nine months ended September 30, 2026 (in millions, except per share amounts):

As of September 30, 2026, there was $61.8 billion of unrecognized compensation cost related to unvested RSUs and PSUs. This amount is expected to be recognized over a weighted-average period of 2.8 years.

Note 14. Income Taxes

The following table presents provision for income taxes (in millions, except for effective tax rate):

We are subject to income taxes in the US and foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. The total amount of gross unrecognized tax benefits was $11.5 billion and $12.5 billion, of which $9.7 billion and $10.6 billion, if recognized, would affect our effective tax rate, as of December 31, 2025 and September 30, 2026, respectively.

Note 15. Information about Segments and Geographic Areas

We report our segment results as Google Services, Google Cloud, and Other Bets:

•Google Services includes products and services such as ads, Android, Chrome, consumer devices, Google Maps, Google Play, Search, and YouTube. Google Services generates revenues primarily from advertising; fees received for consumer subscription-based products such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One; the sale of apps and in-app purchases; and consumer devices.

•Google Cloud includes infrastructure and platform services, applications, and other products and services for enterprise customers. Google Cloud generates services revenues primarily from consumption-based fees and subscriptions received for Google Cloud Platform services, Google Workspace communication and collaboration tools, and other enterprise services. Google Cloud generates product revenues primarily from the sale of TPU systems.

•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 autonomous transportation services and internet services.

Revenues, certain costs, such as costs associated with content and traffic acquisition, certain engineering activities, and inventory, as well as certain operating expenses are directly attributable to our segments. Due to the integrated nature of Alphabet, other costs and expenses, such as technical infrastructure and office facilities, are managed centrally at a consolidated level. These costs, including the associated depreciation, are allocated to operating segments as a service cost generally based on usage, headcount, or revenue.

Certain costs are not allocated to our segments because they represent Alphabet-level activities. These costs primarily include:

•certain AI-focused shared research and development activities, including employee compensation expenses and technical infrastructure usage costs associated with the development of our general AI models;

•corporate initiatives such as our philanthropic activities; and

•corporate shared costs such as certain finance, human resource, and legal costs, including certain fines and settlements.

Charges associated with employee severance and office space reductions are also not allocated to our segments. Additionally, hedging gains (losses) related to revenue are not allocated to our segments.

Our Chief Operating Decision Maker (CODM) is our Chief Executive Officer, Sundar Pichai. Our CODM uses segment operating income (loss) to allocate resources to our segments in our annual planning process and to assess the performance of our segments, primarily by monitoring actual results versus the annual plan. Our operating segments are not evaluated using asset information.

The following table presents revenue, profitability, and expense information about our segments (in millions):

Google Services and Google Cloud employee compensation expenses include the costs associated with direct and allocated employees. Google Services and Google Cloud other costs and expenses primarily include direct costs, such as advertising and promotional activities, inventory and related costs, legal and other matters, and third-party services fees as well as allocated costs, such as technical infrastructure and office facilities usage costs. Additionally, Google Services other costs and expenses include content acquisition costs and TAC.

See Note 2 for further details relating to revenues by geography.

The following table presents long-lived assets by geographic area, which includes property and equipment, net and operating lease assets (in millions):