Analysis of Reportable Segments
Alphabet Inc. operates in 3 segments: Google Services; Google Cloud; and Other Bets.
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Segment Profit Margin
Alphabet Inc., profit margin by reportable segment
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Google Services | |||||
| Google Cloud | |||||
| Other Bets |
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).
Segment profit margins exhibited varied performance across the observed period. Google Services demonstrated consistent profitability and a generally positive trend, while Google Cloud transitioned from losses to substantial gains. Conversely, Other Bets consistently reported significant losses, with fluctuations in magnitude throughout the period.
- Google Services
- The Google Services segment maintained positive profit margins throughout the period, ranging from 34.15% to 40.68%. A slight decrease was observed from 2021 to 2022, followed by a recovery and subsequent increase through 2025. This indicates a resilient core business with improving profitability in recent years.
- Google Cloud
- Google Cloud experienced a notable shift in profitability. Beginning with substantial losses in 2021 (-16.14%) and 2022 (-11.29%), the segment achieved profitability in 2023 (5.19%). This positive trend continued, with margins expanding to 14.14% in 2024 and further to 23.69% in 2025. This demonstrates successful execution of strategies to improve the financial performance of the cloud business.
- Other Bets
- The Other Bets segment consistently reported negative profit margins, indicating ongoing investment and development phases. Margins ranged from -701.33% in 2021 to -268.17% in 2023, suggesting some improvement in loss reduction. However, margins deteriorated in 2024 (-269.66%) and 2025 (-488.94%), indicating increased investment or challenges within these ventures. The magnitude of losses remains substantial.
Overall, the trend suggests a strategic shift within the company, with a focus on improving the profitability of newer ventures like Google Cloud, while the core Google Services business remains consistently profitable. The continued losses in Other Bets represent a significant area of financial outlay and require ongoing monitoring.
Segment Profit Margin: Google Services
Alphabet Inc.; Google Services; segment profit margin calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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
Segment profit margin = 100 × Operating income (loss) ÷ Revenues
= 100 × ÷ =
The Google Services segment demonstrated a generally positive trajectory in financial performance between 2021 and 2025. Both operating income and revenues exhibited growth over the five-year period, contributing to an evolving segment profit margin.
- Operating Income
- Operating income experienced a decrease from US$91.855 billion in 2021 to US$86.572 billion in 2022. However, a recovery was observed in subsequent years, with income rising to US$95.858 billion in 2023, US$121.263 billion in 2024, and further increasing to US$139.404 billion in 2025. This indicates a strengthening of the segment’s profitability following the initial dip.
- Revenues
- Revenues consistently increased throughout the period. From US$237.529 billion in 2021, revenues grew to US$253.528 billion in 2022, US$272.543 billion in 2023, US$304.930 billion in 2024, and reached US$342.721 billion in 2025. This consistent revenue growth suggests sustained demand for the segment’s offerings.
- Segment Profit Margin
- The segment profit margin initially declined from 38.67% in 2021 to 34.15% in 2022, coinciding with the decrease in operating income. A modest recovery to 35.17% occurred in 2023. More substantial improvement was then noted, with the margin increasing to 39.77% in 2024 and reaching 40.68% in 2025. This upward trend in profit margin suggests improved operational efficiency or a favorable shift in revenue mix, as revenues grew at a faster rate than operating income in the latter years.
Overall, the Google Services segment demonstrated resilience and growth. While a temporary setback was experienced in 2022, the segment rebounded strongly, achieving both revenue expansion and margin improvement through 2025.
Segment Profit Margin: Google Cloud
Alphabet Inc.; Google Cloud; segment profit margin calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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
Segment profit margin = 100 × Operating income (loss) ÷ Revenues
= 100 × ÷ =
The financial performance of the segment under review demonstrates a significant improvement over the observed period. Initially, the segment experienced operating losses, but transitioned to profitability and subsequently exhibited substantial growth in both operating income and revenue. This positive trajectory is reflected in a markedly increasing segment profit margin.
- Operating Income (Loss)
- From 2021 to 2022, the segment reported operating losses of approximately $3.1 billion and $2.97 billion, respectively. A substantial shift occurred in 2023, with the segment achieving an operating income of $1.72 billion. This positive trend continued, with operating income increasing to $6.11 billion in 2024 and further escalating to $13.91 billion in 2025. This represents a considerable turnaround and accelerating profitability.
- Revenues
- Revenues exhibited consistent growth throughout the period. Starting at $19.21 billion in 2021, revenues increased to $26.28 billion in 2022, $33.09 billion in 2023, $43.23 billion in 2024, and reached $58.71 billion in 2025. The rate of revenue growth appears to be accelerating, particularly between 2023 and 2025.
- Segment Profit Margin
- The segment profit margin initially reflected the operating losses, registering at -16.14% in 2021 and -11.29% in 2022. A positive margin of 5.19% was achieved in 2023, indicating the transition to profitability. Subsequent years saw significant margin expansion, reaching 14.14% in 2024 and 23.69% in 2025. This demonstrates increasing efficiency and a strengthening competitive position. The increasing profit margin suggests that revenue growth is outpacing the growth of operating expenses.
Overall, the segment demonstrates a strong positive trend in financial performance. The transition from operating losses to substantial profitability, coupled with accelerating revenue growth and expanding profit margins, suggests a successful strategic direction and improving operational efficiency.
Segment Profit Margin: Other Bets
Alphabet Inc.; Other Bets; segment profit margin calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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
Segment profit margin = 100 × Operating income (loss) ÷ Revenues
= 100 × ÷ =
The financial performance of the 'Other Bets' segment demonstrates a consistent pattern of operating losses over the five-year period. While revenues have generally increased, operating income remains significantly negative, resulting in substantial negative segment profit margins.
- Operating Income (Loss)
- Operating losses decreased from US$5,281 million in 2021 to US$4,095 million in 2023, indicating some improvement. However, losses increased again in 2024 and 2025, reaching US$7,515 million. This suggests that while initial efforts may have reduced losses, more recent performance has deteriorated.
- Revenues
- Revenues exhibited an upward trend, increasing from US$753 million in 2021 to US$1,527 million in 2023. Revenue growth slowed in 2024, reaching US$1,648 million, and decreased slightly in 2025 to US$1,537 million. Despite the overall increase in revenue, it has not been sufficient to offset the substantial operating losses.
- Segment Profit Margin
- The segment profit margin remained deeply negative throughout the period. It improved from -701.33% in 2021 to -268.17% in 2023, mirroring the reduction in operating losses. However, the margin worsened in 2024 (-269.66%) and significantly declined in 2025 (-488.94%). This indicates that the rate of loss relative to revenue has increased in the most recent years, despite revenue remaining relatively stable.
The increasing operating losses and declining segment profit margin in 2024 and 2025 are particularly noteworthy. While revenue growth has occurred, the segment continues to require substantial investment and has not yet demonstrated a path to profitability. The substantial negative margins suggest that the segment is a significant drag on overall company profitability.
Revenues
Alphabet Inc., revenues by reportable segment
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Google Services | |||||
| Google Cloud | |||||
| Other Bets | |||||
| 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).
Overall revenue demonstrates a consistent upward trajectory from 2021 through 2025. However, the composition of revenue shifts significantly, with varying growth rates observed across reportable segments. Google Services remains the dominant revenue contributor, while Google Cloud exhibits the most substantial percentage growth. Other Bets show modest growth, with a slight decline in the most recent year. Hedging gains (losses) are volatile and contribute a relatively small portion of total revenue.
- Google Services
- Google Services revenue increased steadily from US$237,529 million in 2021 to US$342,721 million in 2025. The growth rate appears to be accelerating, with larger absolute increases in revenue observed in later years. This segment consistently represents the largest portion of total revenue.
- Google Cloud
- Google Cloud experienced the most rapid growth among the reported segments. Revenue rose from US$19,206 million in 2021 to US$58,705 million in 2025. This represents a substantial increase in its contribution to overall revenue, although it remains smaller than Google Services. The growth rate, while consistently positive, shows a slight deceleration from 2023 to 2024, and then accelerates again in 2025.
- Other Bets
- Revenue from Other Bets increased from US$753 million in 2021 to US$1,648 million in 2024, indicating initial growth. However, revenue decreased to US$1,537 million in 2025, suggesting potential challenges or a shift in focus within this segment. This segment consistently represents a small portion of total revenue.
- Hedging gains (losses)
- Hedging gains (losses) are highly variable. A significant gain was recorded in 2022 (US$1,960 million), followed by more modest gains in 2023 and 2024. A loss was recorded in 2025 (US$127 million). The impact of this item on total revenue is relatively small compared to the core segments.
- Total Revenue
- Total revenue increased from US$257,637 million in 2021 to US$402,836 million in 2025. The rate of increase appears to be accelerating, driven primarily by growth in Google Services and Google Cloud. The increasing contribution from Google Cloud is diversifying the revenue base.
Operating income (loss)
Alphabet Inc., operating income (loss) by reportable segment
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Google Services | |||||
| Google Cloud | |||||
| Other Bets | |||||
| Alphabet-level activities | |||||
| 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).
The operating income performance across reportable segments demonstrates varied trajectories over the five-year period. Google Services consistently generates the largest operating income, exhibiting growth throughout the period. Google Cloud transitioned from operating losses to substantial profitability, while Other Bets consistently reported operating losses that widened over time. Alphabet-level activities also experienced increasing operating losses.
- Google Services
- Operating income for Google Services decreased from US$91.855 billion in 2021 to US$86.572 billion in 2022. A recovery was then observed, with income rising to US$95.858 billion in 2023, and accelerating to US$121.263 billion in 2024, before reaching US$139.404 billion in 2025. This indicates a strong and accelerating growth trend in this segment.
- Google Cloud
- Google Cloud experienced operating losses of approximately US$3.1 billion in both 2021 and 2022. A significant turning point occurred in 2023, with the segment reporting an operating income of US$1.716 billion. This profitability continued to expand, reaching US$6.112 billion in 2024 and US$13.910 billion in 2025, demonstrating a rapid improvement in financial performance.
- Other Bets
- The Other Bets segment consistently reported operating losses throughout the period. Losses were US$5.281 billion in 2021, increasing to US$6.083 billion in 2022, then decreasing to US$4.095 billion in 2023. Losses increased again in 2024 to US$4.444 billion, and further to US$7.515 billion in 2025. This suggests ongoing investment in these ventures is not yet translating into profitability, and losses are expanding.
- Alphabet-level Activities
- Alphabet-level activities incurred operating losses each year. Losses decreased from US$4.761 billion in 2021 to US$2.679 billion in 2022. However, losses then increased substantially, reaching US$9.186 billion in 2023, US$10.541 billion in 2024, and US$16.760 billion in 2025. This represents a concerning trend of increasing losses at the corporate level.
- Total Operating Income
- Total operating income followed a fluctuating pattern. It decreased from US$78.714 billion in 2021 to US$74.842 billion in 2022, then increased to US$84.293 billion in 2023. Significant growth was observed in 2024, reaching US$112.390 billion, and continued into 2025 with US$129.039 billion. The overall trend is positive, driven primarily by the performance of Google Services and the turnaround in Google Cloud, despite the losses in Other Bets and Alphabet-level activities.