Alphabet Inc. stock research
FY2024 Q4
Alphabet (GOOGL) Gross Margin — Quarter Ended Dec 31, 2024
The quarter’s revenue increased compared to both the prior quarter and the same quarter a year ago, while gross profit rose considerably. Cost of revenue also grew from both comparison periods, but gross margin exhibited mixed behavior—it was slightly lower than the preceding quarter yet higher than the year-ago quarter.
Gross margin takeaway
Quarter ended Dec 31, 2024 · FY2024 Q4
The quarter’s revenue increased compared to both the prior quarter and the same quarter a year ago, while gross profit rose considerably. Cost of revenue also grew from both comparison periods, but gross margin exhibited mixed behavior—it was slightly lower than the preceding quarter yet higher than the year-ago quarter.
- The strongest observable driver is the relationship between revenue growth and cost of revenue growth relative to the prior quarter; revenue rose more in absolute terms than cost of revenue, leading to higher gross profit, yet the margin rate weakened because cost of revenue increased at a faster proportional rate. The year-ago comparison shows the opposite pattern, with gross margin improving as revenue grew while cost of revenue declined.
- Gross margin weakened slightly from the immediately preceding quarter but improved from the same quarter one year earlier. Revenue was higher both sequentially and year over year, while cost of revenue was higher sequentially but lower than the year-ago quarter.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
57.9%
Gross profit
$55.9B
Revenue
$96.5B
Cost of revenue
$40.6B
Quarter-over-quarter change
-0.8 pts
Year-over-year change
+1.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2024 | $80.5B | $46.8B | $33.7B | 58.1% |
| Jun 30, 2024 | $84.7B | $49.2B | $35.5B | 58.1% |
| Sep 30, 2024 | $88.3B | $51.8B | $36.5B | 58.7% |
| Dec 31, 2024 | $96.5B | $55.9B | $40.6B | 57.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2024
-0.8 pts
Year-over-year change
Dec 31, 2023
+1.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the relationship between revenue growth and cost of revenue growth relative to the prior quarter; revenue rose more in absolute terms than cost of revenue, leading to higher gross profit, yet the margin rate weakened because cost of revenue increased at a faster proportional rate. The year-ago comparison shows the opposite pattern, with gross margin improving as revenue grew while cost of revenue declined.
Gross margin weakened slightly from the immediately preceding quarter but improved from the same quarter one year earlier. Revenue was higher both sequentially and year over year, while cost of revenue was higher sequentially but lower than the year-ago quarter.
Monitor whether cost of revenue continues to increase at a faster proportional rate than revenue, as this dynamic could further pressure gross margin.