Analysis of Geographic Areas
Alphabet Inc. operates in 2 regions: United States and International.
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- Analysis of Profitability Ratios
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Area Asset Turnover
Alphabet Inc., asset turnover by geographic area
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| United States | |||||
| International |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An examination of area asset turnover reveals divergent trends between the United States and International segments over the five-year period. The United States demonstrates a consistent decline in asset turnover, while the International segment, though also decreasing, maintains a substantially higher ratio throughout the observed timeframe.
- United States
- Asset turnover in the United States experienced a steady decrease from 1.47 in 2021 to 0.99 in 2025. This represents a cumulative reduction of approximately 32.3%. The rate of decline accelerated between 2022 and 2023, and again between 2023 and 2024. This suggests a growing inefficiency in utilizing assets to generate revenue within the United States segment.
- International
- The International segment’s asset turnover ratio decreased from 4.60 in 2021 to 3.14 in 2025, a total decrease of roughly 31.8%. While a downward trend is present, the International segment consistently exhibits a significantly higher asset turnover compared to the United States. The rate of decline appears relatively consistent year-over-year, although a slight deceleration is observable between 2024 and 2025.
- Comparative Analysis
- The gap between the International and United States asset turnover ratios widened over the period. In 2021, the International ratio was approximately 3.13 times that of the United States. By 2025, this multiple increased to approximately 3.17. This indicates that assets in the International segment are considerably more effective at generating sales than those in the United States. The diverging trends suggest differing operational efficiencies or market conditions between the two geographic areas.
The observed trends warrant further investigation into the underlying factors driving the decline in asset turnover for both segments, particularly within the United States. Potential areas of inquiry include changes in sales strategies, asset composition, and operational efficiency.
Area Asset Turnover: United States
Alphabet Inc.; United States; area asset turnover calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | |||||
| Long-lived assets | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= ÷ =
Analysis of the provided financial information reveals a declining trend in area asset turnover within the United States between 2021 and 2025. Simultaneously, both revenues and long-lived assets have increased over the same period, though at differing rates.
- Revenues
- Revenues demonstrate consistent growth throughout the observed period, increasing from US$117,854 million in 2021 to US$194,229 million in 2025. The rate of growth appears to be accelerating, with larger absolute increases in later years.
- Long-lived Assets
- Long-lived assets also exhibit a consistent upward trend, rising from US$80,207 million in 2021 to US$195,337 million in 2025. The growth in long-lived assets is substantial, indicating significant investment in property, plant, and equipment or other long-term assets.
- Area Asset Turnover
- The area asset turnover ratio, which measures the efficiency with which assets are used to generate revenue, decreased from 1.47 in 2021 to 0.99 in 2025. This indicates a diminishing ability to generate sales from the existing asset base. While revenues are increasing, they are not increasing at a rate sufficient to offset the growth in long-lived assets, resulting in the declining turnover ratio. The most significant decrease occurred between 2023 and 2025.
The combination of increasing long-lived assets and a decreasing area asset turnover suggests potential inefficiencies in asset utilization or a shift in business strategy requiring greater asset investment. Further investigation would be needed to determine the underlying causes of this trend and assess its implications for future performance.
Area Asset Turnover: International
Alphabet Inc.; International; area asset turnover calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | |||||
| Long-lived assets | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= ÷ =
Analysis of the provided financial information reveals a consistent decline in area asset turnover for the observed period. While revenues have generally increased, the growth in long-lived assets has outpaced revenue growth, resulting in decreasing efficiency in asset utilization within the international segment.
- Revenues
- Revenues demonstrate a positive trend, increasing from US$139,634 million in 2021 to US$208,734 million in 2025. This represents a substantial overall increase, indicating growth in the international market.
- Long-lived Assets
- Long-lived assets have also increased over the period, rising from US$30,351 million in 2021 to US$66,481 million in 2025. The rate of increase in long-lived assets appears to be accelerating, particularly between 2023 and 2025.
- Area Asset Turnover
- The area asset turnover ratio, which measures the efficiency with which assets are used to generate revenue, has decreased steadily. Starting at 4.60 in 2021, the ratio declined to 4.36 in 2022, 4.19 in 2023, 3.93 in 2024, and further to 3.14 in 2025. This indicates that a greater investment in long-lived assets is required to generate each dollar of revenue in the international segment.
- The decreasing trend in asset turnover, coupled with increasing long-lived assets, suggests potential inefficiencies in asset management or a shift towards more capital-intensive operations within the international segment. Further investigation is warranted to understand the drivers behind this trend and assess its implications for future profitability.
The divergence between revenue growth and asset turnover suggests that while the international segment is expanding in terms of sales, it is becoming less efficient in its use of assets. This could be due to factors such as increased competition, investments in new technologies, or expansion into markets requiring significant infrastructure development.
Revenues
Alphabet Inc., revenues by geographic area
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| United States | |||||
| International | |||||
| Hedging gains (losses) | |||||
| Total |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Revenue performance demonstrates consistent growth across all reported geographic areas between 2021 and 2025. The United States and International segments both contribute significantly to overall revenue, with the United States exhibiting a slightly higher growth rate in later periods. Hedging gains (losses) fluctuate considerably, but represent a relatively small portion of total revenue.
- United States Revenue
- Revenue from the United States increased steadily from US$117,854 million in 2021 to US$194,229 million in 2025. The growth rate accelerated from approximately 14.4% between 2021 and 2022 to roughly 8.5% between 2024 and 2025, indicating continued, though moderating, expansion within this market.
- International Revenue
- International revenue also experienced consistent growth, rising from US$139,634 million in 2021 to US$208,734 million in 2025. The growth rate was initially higher than that of the United States, at approximately 4.6% between 2022 and 2023, but slowed to around 16.4% between 2024 and 2025. This suggests increasing importance of international markets, but with varying growth dynamics.
- Hedging Gains (Losses)
- Hedging activities resulted in gains in 2021, 2022, and 2023, followed by gains in 2024 and a loss in 2025. The magnitude of these gains and losses varied significantly, peaking at US$1,960 million in 2022. The 2025 loss of US$127 million represents a reversal of prior trends, though its impact on overall revenue remains limited due to its small relative size.
- Total Revenue
- Total revenue increased from US$257,637 million in 2021 to US$402,836 million in 2025, demonstrating a compound annual growth rate of approximately 9.3%. The largest year-over-year increase occurred between 2023 and 2024, with a growth of approximately 14.0%. This overall growth is driven by contributions from both the United States and International segments.
The combined growth of the United States and International segments indicates a robust and expanding revenue base. While hedging activities introduce some volatility, their overall impact on total revenue is minimal. The observed trends suggest a continued positive outlook for revenue generation.
Long-lived assets
Alphabet Inc., long-lived assets by geographic area
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| United States | |||||
| International | |||||
| Total |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Long-lived assets exhibited consistent growth across both the United States and International segments between December 31, 2021, and December 31, 2025. The rate of increase, however, varied between the two geographic areas. Total long-lived assets also demonstrated a steady upward trajectory throughout the period.
- United States
- Long-lived assets in the United States increased from US$80,207 million in 2021 to US$195,337 million in 2025. This represents a substantial increase, with accelerating growth observed in later years. The increase from 2021 to 2022 was US$13,358 million, while the increase from 2024 to 2025 was US$56,344 million, indicating a significant acceleration in investment within the United States.
- International
- International long-lived assets grew from US$30,351 million in 2021 to US$66,481 million in 2025. While consistently increasing, the growth rate was less pronounced than that of the United States. The increase from 2021 to 2022 was US$3,133 million, and the increase from 2024 to 2025 was US$20,850 million. Although the absolute increase in 2024-2025 is higher than earlier periods, the proportional growth remains lower than in the United States.
- Total
- Total long-lived assets increased from US$110,558 million in 2021 to US$261,818 million in 2025. The growth pattern mirrors the combined trends of the United States and International segments. The largest single-year increase occurred between 2024 and 2025, with an increase of US$77,194 million, driven primarily by the substantial growth in the United States.
- Relative Contribution
- The United States consistently represented the larger portion of total long-lived assets throughout the period. In 2021, the United States accounted for approximately 72.5% of total assets, increasing to approximately 74.8% in 2025. This suggests a growing concentration of long-lived asset investment within the United States.
The observed trends suggest a strategic focus on expanding long-lived asset investment, particularly within the United States. The accelerating growth in the United States, coupled with the relatively slower growth internationally, warrants further investigation to understand the underlying drivers of these differing investment patterns.