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Alphabet Inc. (NASDAQ:GOOG)

Common-Size Income Statement
Quarterly Data

Alphabet Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of revenues -38.35 -37.55 -40.21 -40.42 -40.49 -40.30 -42.10 -41.32 -41.90 -41.86 -43.53 -43.33 -42.78 -43.86 -46.47 -45.10 -43.20 -43.52 -43.79 -42.42 -42.38 -43.57
Gross profit 61.65% 62.45% 59.79% 59.58% 59.51% 59.70% 57.90% 58.68% 58.10% 58.14% 56.47% 56.67% 57.22% 56.14% 53.53% 54.90% 56.80% 56.48% 56.21% 57.58% 57.62% 56.43%
Research and development -15.21 -15.50 -16.32 -14.80 -14.32 -15.02 -13.60 -14.10 -14.00 -14.78 -14.03 -14.68 -14.19 -16.43 -13.50 -14.87 -14.12 -13.41 -11.56 -11.82 -12.40 -13.53
Sales and marketing -7.01 -6.92 -7.22 -7.04 -7.36 -6.84 -7.63 -8.19 -8.01 -7.98 -8.94 -8.98 -9.09 -9.36 -9.45 -10.03 -9.51 -8.56 -10.09 -8.47 -8.53 -8.16
General and administrative -5.39 -3.90 -4.69 -7.22 -5.40 -3.92 -4.57 -4.08 -3.73 -3.76 -6.03 -5.19 -4.67 -5.39 -6.70 -5.21 -5.25 -4.96 -5.50 -5.00 -5.40 -5.01
Income from operations 34.03% 36.12% 31.57% 30.51% 32.43% 33.92% 32.11% 32.31% 32.36% 31.63% 27.46% 27.83% 29.27% 24.95% 23.88% 24.80% 27.92% 29.55% 29.05% 32.30% 31.29% 29.72%
Other income (expense), net 81.79 34.32 2.80 12.47 2.76 12.39 1.32 3.61 0.15 3.53 0.83 -0.19 0.09 1.13 -1.33 -1.31 -0.63 -1.71 3.34 3.12 4.24 8.76
Income before income taxes 115.82% 70.44% 34.37% 42.98% 35.19% 46.31% 33.42% 35.92% 32.51% 35.16% 28.28% 27.64% 29.36% 26.09% 22.55% 23.49% 27.29% 27.84% 32.40% 35.42% 35.53% 38.48%
Provision for income taxes -22.17 -13.50 -4.10 -8.80 -5.95 -8.03 -5.92 -6.12 -4.64 -5.78 -4.32 -1.97 -4.74 -4.52 -4.63 -3.36 -4.32 -3.67 -4.99 -6.34 -5.59 -6.06
Net income 93.65% 56.94% 30.27% 34.18% 29.24% 38.28% 27.51% 29.80% 27.87% 29.38% 23.97% 25.67% 24.62% 21.57% 17.92% 20.13% 22.96% 24.17% 27.40% 29.08% 29.94% 32.41%

Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).

The financial performance exhibits a trajectory of expanding margins, characterized by a significant reduction in the cost of revenues and a substantial increase in net profitability over the analyzed period. While operating margins remained relatively stable or grew modestly through 2024, the most recent periods show a dramatic escalation in net income driven by non-operating factors.

Gross Profitability and Cost Management
A consistent improvement in gross margin is observed. The cost of revenues, which fluctuated between 42% and 46% from 2021 through 2023, entered a downward trend starting in 2024, reaching a low of 37.55% by March 31, 2026. Consequently, the gross profit margin expanded from a baseline of approximately 56% in 2021 to a peak of 62.45% in early 2026, indicating enhanced production efficiency or a shift toward higher-margin revenue streams.
Operating Expense Trends
Research and development costs remain a primary investment area, generally oscillating between 11% and 16% of revenues, with a recent uptick to 16.32% in late 2025. Sales and marketing expenses demonstrate a gradual downward trend, decreasing from peaks of over 10% in late 2021 to approximately 7% by mid-2026, suggesting improved organic growth or optimized customer acquisition costs. General and administrative expenses have remained largely stable between 3% and 6%, despite a temporary spike to 7.22% in September 2025.
Operational Efficiency
Income from operations experienced a period of compression in 2022, bottoming at 23.88% in December of that year. However, a recovery phase followed, with operating margins returning to the 30-32% range throughout 2023 and 2024. The trend culminated in a significant increase to 36.12% by March 31, 2026, reflecting the combined impact of lower cost of revenues and disciplined operating expenditure.
Non-Operating Impact and Net Income
The most striking variance occurs in other income (expense), net. After several years of minimal or negative impact, this line item grew exponentially in 2025 and 2026, peaking at 81.79% of revenues in June 30, 2026. This non-operational surge heavily distorted the final results, pushing the net income margin from a historical average of 20-30% to an extraordinary 93.65% in the final reported quarter. This indicates that recent bottom-line growth is driven primarily by non-core financial gains rather than purely operational performance.

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