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Alphabet(Google) (NAS:GOOG) Gross Margin %

: 54.90% (As of Sep. 2022)
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Gross Margin % is calculated as gross profit divided by its revenue. Alphabet(Google)'s Gross Profit for the three months ended in Sep. 2022 was $37,934 Mil. Alphabet(Google)'s Revenue for the three months ended in Sep. 2022 was $69,092 Mil. Therefore, Alphabet(Google)'s Gross Margin % for the quarter that ended in Sep. 2022 was 54.90%.

Warning Sign:

Alphabet Inc gross margin has been in long-term decline. The average rate of decline per year is -1.8%.


The historical rank and industry rank for Alphabet(Google)'s Gross Margin % or its related term are showing as below:

GOOG' s Gross Margin % Range Over the Past 10 Years
Min: 53.58   Med: 59.64   Max: 62.69
Current: 56.1


During the past 13 years, the highest Gross Margin % of Alphabet(Google) was 62.69%. The lowest was 53.58%. And the median was 59.64%.

GOOG's Gross Margin % is ranked worse than
54.68% of 523 companies
in the Interactive Media industry
Industry Median: 60.99 vs GOOG: 56.10

Alphabet(Google) had a gross margin of 54.90% for the quarter that ended in Sep. 2022 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Alphabet(Google) was -1.80% per year.


Alphabet(Google) (NAS:GOOG) Gross Margin % Historical Data

The historical data trend for Alphabet(Google)'s Gross Margin % 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 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 58.88 56.48 55.58 53.58 56.94

Alphabet(Google) Quarterly Data
Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 57.58 56.21 56.48 56.80 54.90

Alphabet(Google) (NAS:GOOG) Gross Margin % Competitive Comparison

For the Internet Content & Information subindustry, Alphabet(Google)'s Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Alphabet(Google) (NAS:GOOG) Gross Margin % Distribution

For the Interactive Media industry and Communication Services sector, Alphabet(Google)'s Gross Margin % distribution charts can be found below:

* The bar in red indicates where Alphabet(Google)'s Gross Margin % falls into.



Alphabet(Google) Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Alphabet(Google)'s Gross Margin for the fiscal year that ended in Dec. 2021 is calculated as

Gross Margin % (A: Dec. 2021 )=Gross Profit (A: Dec. 2021 ) / Revenue (A: Dec. 2021 )
=146698 / 257637
=(Revenue - Cost of Goods Sold) / Revenue
=(257637 - 110939) / 257637
=56.94 %

Alphabet(Google)'s Gross Margin for the quarter that ended in Sep. 2022 is calculated as


Gross Margin % (Q: Sep. 2022 )=Gross Profit (Q: Sep. 2022 ) / Revenue (Q: Sep. 2022 )
=37934 / 69092
=(Revenue - Cost of Goods Sold) / Revenue
=(69092 - 31158) / 69092
=54.90 %

* 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.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Alphabet(Google)  (NAS:GOOG) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Alphabet(Google) had a gross margin of 54.90% for the quarter that ended in Sep. 2022 => Durable competitive advantage


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


Alphabet(Google) Gross Margin % Related Terms

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


Alphabet(Google) (NAS:GOOG) Business Description

Alphabet(Google) logo
Address
1600 Amphitheatre Parkway, Mountain View, CA, USA, 94043
Alphabet Inc is a holding company, with Google, the Internet media giant, as 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 homes 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), faster Internet access to homes (Google Fiber), self-driving cars (Waymo), and more. Alphabet's operating margin has been 25%-30%, with Google at 30% and other bets operating at a loss.
Executives
Hennessy John L director
Mather Ann director
Porat Ruth officer: SVP, CFO C/O GOOGLE INC. 1600 AMPHITHEATRE PRKW MOUNTAIN VIEW CA 94043
Pichai Sundar director, officer: Chief Executive Officer GOOGLE INC. 1600 AMPHITHEATRE PARKWAY MOUNTAIN VIEW CA 94043
Doerr L John director C/O KLEINER PERKINS CAUFIELD & BYERS 2750 SAND HILL ROAD MENLO PARK CA 94025
Arnold Frances director 5200 ILLUMINA WAY SAN DIEGO CA 92122
Ferguson Roger W. Jr. director CORNING INCORPORATED ONE RIVERFRONT PLAZA CORNING NY 14831
Shriram Kavitark Ram director 1600 AMPHITHEATRE PARKWAY MOUNTAIN VIEW CA 94043
Mulally Alan R director P.O. BOX 995 MERCER ISLAND WA 98040
Washington Robin L director 333 LAKESIDE DRIVE FOSTER CITY CA 94404
Brin Sergey director, 10 percent owner 555 BRYANT STREET, #367 PALO ALTO CA 94031
Drummond David C officer: SVP, Corporate Development 1600 AMIPHITHEATRE PARKWAY BUILDING 41 MOUNTAIN VIEW CA 94043
Schmidt Eric E director 1010 ALMA STREET MENLO PARK CA 94025
Greene Diane B director C/O ALPHABET INC., 1600 AMPHITHEATRE PKWY MOUNTAIN VIEW CA 94043
Campbell James Grier officer: VP, Alphabet Corp. Controller 1600 AMPHITHEATRE PKWY MOUNTAIN VIEW CA 94043

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