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This was due to a one time tax hit. >Alphabet was forced to swallow a $586 million tax charge on the non-GAAP line related to its stock-based compensation, cos

This was due to a one time tax hit. >Alphabet was forced to swallow a $586 million tax charge on the non-GAAP line related to its stock-based compensation, costing the company about 83 cents a share — the difference between a substantial earnings miss and a huge beat. >The tax charge is the result of a rule change in the U.S. targeting companies’ use of stock-based compensation to sweeten their adjusted earnings numbers. The Financial Accounting Standards Board last year implemented changes that force companies to better account for the tax benefits of paying employees in stock instead of cash, and the charge reflected the benefit Alphabet had realized for the full year. http://www.marketwatch.com/story/the-tax-hit-that-made-google-miss-on-earnings-and-the-big-change-that-will-keep-it-from-happening-again-2017-01-26 http://www.marketwatch.com/story/the-tax-hit-that-made-googl...

JumpCrisscross 10y ago
> This was due to a one time tax hit Was it a one-time hit or is this the new normal for stock-based compensation (SBC)?
- bitmapbrother 10y ago
  It's both as they're going to adopt the same stock based compensation as other companies going forward.
- curiouscats 10y ago
  I believe the "one time tax hit" is adjusting for their past fake non-GAPP earnings which pretended giving away billions in stock wasn't material (I am guessing, so I might be wrong). The practice of excluding billions in stock giveaways for non-GAPP earning (as not a real cost) was long seen as misleading by me and many others http://investing.curiouscatblog.net/2016/04/21/buybacks-giveaways-to-executives-and-non-gaap-earnings/ http://investing.curiouscatblog.net/2016/04/21/buybacks-give... They also decided to stop using that deceptive practice, so going forward the non-GAPP earnings will be less fake. It is sad Google used such deceptive practices. I believe it was forced into being less deceptive by accounting standards not by some decision to be less deceptive going forward.
  - maverick_iceman 10y ago
    Is there any reason someone would look at non-GAAP earnings instead of GAAP given that companies muck around non-GAAP deciding whatever costs to exclude depending on a whim?

JumpCrisscross 10y ago

> This was due to a one time tax hit Was it a one-time hit or is this the new normal for stock-based compensation (SBC)?

bitmapbrother 10y ago
It's both as they're going to adopt the same stock based compensation as other companies going forward.
curiouscats 10y ago
I believe the "one time tax hit" is adjusting for their past fake non-GAPP earnings which pretended giving away billions in stock wasn't material (I am guessing, so I might be wrong). The practice of excluding billions in stock giveaways for non-GAPP earning (as not a real cost) was long seen as misleading by me and many others http://investing.curiouscatblog.net/2016/04/21/buybacks-giveaways-to-executives-and-non-gaap-earnings/ http://investing.curiouscatblog.net/2016/04/21/buybacks-give... They also decided to stop using that deceptive practice, so going forward the non-GAPP earnings will be less fake. It is sad Google used such deceptive practices. I believe it was forced into being less deceptive by accounting standards not by some decision to be less deceptive going forward.
- maverick_iceman 10y ago
  Is there any reason someone would look at non-GAAP earnings instead of GAAP given that companies muck around non-GAAP deciding whatever costs to exclude depending on a whim?