Alphabet(Google) (GOOG) Operating Income

: $84,293 Mil (TTM As of Dec. 2023)

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Alphabet(Google)'s Operating Income for the three months ended in Dec. 2023 was $23,697 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $84,293 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Alphabet(Google)'s Operating Income for the three months ended in Dec. 2023 was $23,697 Mil. Alphabet(Google)'s Revenue for the three months ended in Dec. 2023 was $86,310 Mil. Therefore, Alphabet(Google)'s Operating Margin % for the quarter that ended in Dec. 2023 was 27.46%.

Good Sign:

Alphabet Inc operating margin is expanding. Margin expansion is usually a good sign.

Alphabet(Google)'s 5-Year average Growth Rate for Operating Margin % was 4.50% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Alphabet(Google)'s annualized ROC % for the quarter that ended in Dec. 2023 was 31.40%. Alphabet(Google)'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 67.92%.

Alphabet(Google) Operating Income Historical Data

The historical data trend for Alphabet(Google)'s Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Alphabet(Google) Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

35,928.00

41,224.00

78,714.00

74,842.00

84,293.00

Alphabet(Google) Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Operating Income																18,160.00	17,415.00	21,838.00	21,343.00	23,697.00

Alphabet(Google) Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $84,293 Mil.

Alphabet(Google) (NAS:GOOG) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Alphabet(Google)'s annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	94788 * ( 1 - 15.26% )	/	( (249124	+	262455)	/ 2 )
=	80323.3512	/	255789.5
=	31.40 %

where

	Invested Capital		(Q: Sep. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	396711	-	57572	-	( 119935	-	max(0, 86295	-	176310	+	119935	))
=	249124

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	402392	-	50221	-	( 110916	-	max(0, 81814	-	171530	+	110916	))
=	262455

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

Alphabet(Google)'s annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2023		Q: Dec. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	97924	/	( ( (139904 + max(-27205, 0))	+	(148436 + max(-18409, 0)) )	/	2 )
=	97924	/	( ( 139904	+	148436 )	/	2 )
=	97924	/	144170
=	67.92 %

where Working Capital is:

	Working Capital		(Q: Sep. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(41020	+	2957	+	12398)	-	(57572	+	4303	+	21705)
=	-27205

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(47964	+	0	+	12650)	-	(50221	+	4137	+	24665)
=	-18409

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Alphabet(Google)'s Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	23697	/	86310
	=	27.46 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Alphabet(Google) Operating Income Related Terms

Thank you for viewing the detailed overview of Alphabet(Google)'s Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

Alphabet(Google) (GOOG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » Alphabet Inc(Google) (NAS:GOOG) » Definitions » Operating Income

Comparable Companies

Address

1600 Amphitheatre Parkway, Mountain View, CA, USA, 94043

Website

https://www.abc.xyz

Alphabet is a holding company. Internet media giant Google is a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google's other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart home products, which include Nest and Google Home, also contribute to other revenue. Alphabet's moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), provide faster internet access (Google Fiber), enable self-driving cars (Waymo), and more.

Executives

Sundar Pichai	director, officer: Chief Executive Officer	GOOGLE INC., 1600 AMPHITHEATRE PARKWAY, MOUNTAIN VIEW CA 94043
John L Hennessy	director
Frances Arnold	director	5200 ILLUMINA WAY, SAN DIEGO CA 92122
Kavitark Ram Shriram	director	1600 AMPHITHEATRE PARKWAY, MOUNTAIN VIEW CA 94043
Ann Mather	director
Lawrence Page	director, 10 percent owner, officer: Chief Executive Officer	1600 AMPHITHEATRE PARKWAY, BUILDING 41, MOUNTAIN VIEW CA 94043
Sergey Brin	director, 10 percent owner	555 BRYANT STREET, #367, PALO ALTO CA 94031
Ruth Porat	officer: SVP, CFO	C/O GOOGLE INC., 1600 AMPHITHEATRE PRKW, MOUNTAIN VIEW CA 94043
L John Doerr	director	C/O KLEINER PERKINS CAUFIELD & BYERS, 2750 SAND HILL ROAD, MENLO PARK CA 94025
Ferguson Roger W. Jr.	director	CORNING INCORPORATED, ONE RIVERFRONT PLAZA, CORNING NY 14831
Alan R Mulally	director	P.O. BOX 995, MERCER ISLAND WA 98040
Robin L Washington	director	333 LAKESIDE DRIVE, FOSTER CITY CA 94404
David C Drummond	officer: SVP, Corporate Development	1600 AMIPHITHEATRE PARKWAY, BUILDING 41, MOUNTAIN VIEW CA 94043
Eric E Schmidt	director	1010 ALMA STREET, MENLO PARK CA 94025
Diane B Greene	director	C/O ALPHABET INC.,, 1600 AMPHITHEATRE PKWY, MOUNTAIN VIEW CA 94043