GOOG · 10-Q · 2026Q1 · Full report

Distribution Channels and TAC

Alphabet Inc. · 2026-04-30 · Importance 55 · Surprise 32

Traffic acquisition costs (TAC) increased year over year and were largely driven by higher payments to distribution partners as revenues subject to TAC grew; TAC totaled $15.228 billion for the three months ended March 31, 2026. The TAC rate declined from 20.6% to 19.7% due to a revenue mix shift from Google Network properties (higher TAC intensity) to Google Search & other properties (lower TAC intensity). Distribution partners include browser providers, mobile carriers, original equipment manufacturers, software developers, and Google Network partners (AdMob, AdSense, Google Ad Manager), and most of the advertiser revenues from Network properties are paid as TAC to those partners. The net effect is larger absolute TAC dollars supporting broader distribution even as TAC as a percent of revenue moderated because of product mix.