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Alphabet Inc. 8-K Report, Financial Results (Jan 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed January 30, 2024
Period End
January 30, 2024
In the record · 2016–202610-K1310-Q328-K112

GOOGL filed 13 annual reports (10-K), 32 quarterly reports (10-Q) and 112 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jul ’22Jul ’22
  2. Leadership change8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed January 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Alphabet reported strong fourth-quarter 2023 results, with consolidated revenues of $86.3 billiona, up 13% year over year (up 13% in constant currency), and full-year 2023 revenues of $307.4 billion, up 9% (10% in constant currency).

Q4 operating income rose to $23.7 billionb from $18.2 billion, with operating margin expanding to 27% from 24%. Diluted EPS was $1.64 versus $1.05 a year earlier, though Q4 results were helped by a $586 million gain on equity securities and a $0.24 full-year EPS benefit from extending the useful lives of servers and network equipment (from four to six years). Full-year net income was $73.8 billion, diluted EPS $5.80, and free cash flow for Q4 was $7.9 billion.

Growth was broad-based. Google Search & other grew 13% to $48.0 billion, YouTube ads rose to $9.2 billionc, and Google Cloud revenue reached $9.2 billion, up from $7.3 billion, with its operating income swinging to $864 million from a loss of $186 million. Management emphasized that AI investments are already supporting Search, YouTube, and Cloud.

Management also stated its commitment to durably re-engineering the cost base while investing for growth. Investors should note the cost actions. Severance and office-space exit charges totaled $1.2 billiond in Q4 and $3.9 billion for the full year, and the headcount fell to 182,502 from 190,234.

Cash flow from operations weakened in Q4 to $18.9 billion from $23.6 billion, largely due to a large income tax payment, and capital expenditures rose to $11.0 billion from $7.6 billion. Those capex levels are a key watch item for future margins and free cash flow. The filing itself is a furnished earnings release under Item 2.02, so its contents are not deemed filed under the Exchange Act.

02—Key points

Key Highlights

  1. Q4 2023 consolidated revenues of $86.3B, up 13% YoY (13% constant currency); full-year revenues of $307.4B, up 9%
  2. Q4 operating income of $23.7B vs. $18.2B a year earlier; operating margin expanded to 27% from 24%
  3. Q4 diluted EPS of $1.64 vs. $1.05; results include a $586M equity securities gain and a server/network useful-life change adding $0.06 to Q4 EPS and $0.24 for the full year
  4. Google Cloud swung to $864M operating income from a $186M loss, on revenue of $9.2B (up from $7.3B)
  5. Google Search & other grew to $48.0B (from $42.6B) and YouTube ads to $9.2B (from $8.0B)
  6. Restructuring costs of $1.2B in Q4 and $3.9B for the year; headcount reduced to 182,502 from 190,234
  7. Q4 operating cash flow fell to $18.9B from $23.6B and capex rose to $11.0B from $7.6B, leaving Q4 free cash flow at $7.9B

03—Questions

Frequently Asked Questions

  1. How did Alphabet's revenue and profitability trend in Q4 2023?

    Q4 revenue rose 13% to $86.3B and operating income rose about 30% to $23.7B, expanding operating margin to 27% from 24%. Net income reached $20.7B, and diluted EPS was $1.64 versus $1.05. Part of the EPS gain reflects non-operating items, including a $586M equity securities gain and a depreciation benefit from extending server useful lives.

  2. Is Google Cloud now profitable, and how is it growing?

    Yes, on an operating basis for Q4 2023. Google Cloud posted $864M of operating income versus a $186M loss a year earlier, on revenue of $9.2B, up from $7.3B (about 26%). The filing does not break out Cloud's full-year profitability.

  3. What restructuring costs did Alphabet incur, and what do they mean for the outlook?

    Alphabet recorded $1.2B of severance and office-space exit charges in Q4 and $3.9B for 2023, plus $269M of accelerated rent and depreciation for the year. Headcount fell about 4% to 182,502. Management says it is committed to durably re-engineering its cost base, so investors should expect continued focus on efficiency alongside higher AI-related investment.

  4. Why did free cash flow decline in Q4 2023?

    Operating cash flow fell to $18.9B from $23.6B, primarily due to a $9.9B swing in income tax payments, partly offset by higher net income. Capital expenditures rose to $11.0B from $7.6B, leaving Q4 free cash flow at $7.9B. Full-year operating cash flow still increased to $101.7B from $91.5B.

04—Continue

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