Alphabet (GOOG) 30 Jan 242023 Q4 Earnings call transcript

Welcome, everyone. Thank you for standing by for the Alphabet Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Jim Friedland, Director of Investor Relations. Please go ahead.

Thank you. welcome Fourth and Conference XXXX everyone, Call. afternoon, to Quarter Alphabet's Earnings Good are Schindler Pichai, us Sundar With today Philipp and Porat. Ruth

quickly I'll cover safe harbor. Now the

Form Some and XX-K subject materially. statements are our on to today uncertainties. current Please performance of for Actual assumptions undertake we in number refer XX-Q, XX-K based including differ be operations that Forms of and discussed are and may We Such and the financial could ended results a the our update year regarding our forward-looking. upcoming filing the considered expectations XXXX. statement. that to statements business, December make factors risk to any XX, forward-looking obligation no risks

financial included reconciliation measures Relations abc.xyz/investor. and our this to GAAP website today's non-GAAP in available measures. through at A which During will to and we call, is is of Investor located press present earnings release, both public distributed the non-GAAP GAAP

otherwise. And unless Our comments will state Sundar. over be turn comparisons on we call to the now year-over-year I'll

everyone. Hello,

our in the powered YouTube this growth by and product revenues and billion cloud, quarter Music, meet subscriptions, in Our and Xx growing driven including Premium crossed YouTube going and which TV topics: accelerated leadership; reached strongly XXXX. product I'm into Today, X XXXX. and opportunities about Search; talk billion $X up Subscription by our focus GenAI to our momentum reflect helping two, it's investments $XX investments three, in one, strong and how Google and One; saw annual innovation AI, to revenue, four, continuing ahead. results is which since main growth

First, AI and Search.

the we helping our GenAI, to the have a long next way and realization team year us around our DeepMind, next fuel state-of-the-art many deep to using our launches. We research enterprise is number gives understand billions had and industry-leading Google bringing proud run our natively multimodal of Gemini centers. Gemini Search. data consumer to in bringing a it most will Ultra and It's the vision it's text, already video in advances. to Gemini can era, Ads mobile and a from we of you together of people with products, models and only I'm Last first coming engineered to soon. It's is on capabilities, the new The with teams. X going Search and a when excitement foundation formed Gemini closed combine the world-class images, brought working starts of improve from the and foundation. already. in As new audio, year way, of it of everything already how we on code demonstrating to get products generation by AI we great products. That of led know, series of better. to advances that is responded the launching and great models responsibly versions devices

Surge faster Experience, users. already where with are Gemini making Search, We Generative in or it's SGE, for our experimenting

in from deeper in able looking are queries. applying such languages. By multiple where finding in information days latency I'm AI longer or for questions useful like it types people the perspectives. new for in wider English we complex We People including also helpful are more particularly happy answer Search those education and generative or understanding, reduction seen of gift are as needs in questions, even have in we to with Labs of benefit serve that ideas. It's areas comparisons X the It's XX% SGE. what seeing Search through a are range a U.S. available of earliest to

are intricate queries. and more conversational improving including satisfaction, We answers for

the on publishers. to users linking surfacing traffic earlier, for approaches we to of mentioned we'll send value Results and to page, continue more a our and links with and I SGE wider valuable are that sources As prioritize range add

are you a gaps. see gesture to generative let's X this offers Android Samsung X more AI Pro search continuing SXX It's on phones Beyond Circle what SGE, switching overviews. to simple make and Lens we use available without on Pixel and the searching accessible AI with search intuitive. starting Galaxy week you Pixel and now to new Series. and

to get You to search the AI-powered you and can add anything visual see a moment. insights about ask in questions text

AI campaigns. Then interest our search also the our our accelerate seeing of It's that understanding, capable Pro complements planning. includes solutions XX are AI-powered at over is creation addition advertisers. countries conversational Gemini to summarizing, In a new experience reasoning, more around Bard, over in world. much of conversational now and is and That to for Search. coding and in like Gemini Search, tool now the It's by there uses languages XXX we powered things lot that

Gemini ahead, even segue Ultra. That's a for good subscribers by we'll out to Looking version rolling be subscriptions. powered more an advanced

it's $XX now business said annually. earlier, As a I billion

momentum. for key YouTube in subscription and creators. Premium countries passionate of industry Music the over and driver music have is the engaging and users XXX They're real YouTube driving and revenues. regions, our Available great returns

more. unlimited is doing on has found home People DVR. perfect on NFL Philipp will navigation, love also consumer had and the TV viewing that multiview about well. YouTube feedback We've its Sunday talk the great experience. YouTube, and Ticket

It's Google million AI strong Let more more here, incredibly users. to are going Google in service, look engaged us are Google about to is strong growing in products bring to and forward very XXX and come. with to to From features our provides relationship features unlocks doing well, our storage, growth. me we exclusive One. growth build a and most we One just about also subscription allows strong It talk with subscribers. cross expanded well user

Cloud XXXX, Cloud. Face, enabled AI win brands, including Mobility us McDonald's, platform capabilities broad our advances, our and our Google infrastructure, including and QX, GenAI multi-host product performance and AI, models serving expand and leadership many for Hugging software GenAI Essential technology AI and combines supercomputing Vertex with models. and Hypercomputer, cost serving that agents. provide Motorola Next, advantages our Verizon. Google Throughout new and Mistral our to offers TPUs leading product introduced GPUs, like and across AI Character of a and training building are Customers thousands it. we on AI AI Antropic, to powerful multi-slice architecture AI groundbreaking Duet our and In AI relationships and

the AI benefit will million and comprehensive paying look and productivity software Telekom to text deploy ], from unique [ For added their models, our Galaxy SXX Workspace, advanced helping prompts only AI, we the Singapore Moody's world, customer's own turn and and ImagineX Woolworths. creativity support cybersecurity helping faster teams Duet complete over GE customers Cloud Google Deutsche Platform, Shutterstock AI chat their write And is the developers life companies enterprise image Vertex like Pfizer. AI, support. and the Duet building is Co. software, AI better completion, Workspace will AI to GenAI trusted to request Post, with GenAI assists has customers its analysts. Duet It well with cycle Platform, with improved and year. Using helps with model. offer around and and & Series helping for agents partner Conversations. Customers GenAI experience AI. customize, text-to-image to With Since AI, code and at Duet Secret of It's and increasingly SetPalM MedPaLM, applications, have and into augment Gemini It announced boost policies. launch, discover, users personalize nearly developers Gemini XXX Fiserv, used a simple Vertex choosing fine-tuned employees customer incorporate our visuals. with and Cloud its than core and Duet open-source Gemini, improve offering testers PaLM, operations. including generator, as Vertex seen developers the and are to including AI for from and thousands HX security Commerzbank at Victoria's thousands productivity and last and Wayfair, increasing Uber AI, Duet operations development Xx Samsung soon. In Google of cybersecurity packaged Google ImagineX and X operations, corpus and AI smartphone AI API improve Appliances In enabling AI as more are Search recently to we cogeneration models. has Vertex HX popular AI the strong Gemini platform. Spotify adoption

there robust strong from has with joint driven AI growth direct Accenture nearly ISVs, co-sell XX,XXX XXXX. Our consultants. our center And has Cloud nearly of excellence. have we up Google are to In by been generative create a and number of Cloud channels. teamed Google tripled ecosystem, XXXX to With indirect GenAI-enabled deals the

our by supported a we as ahead. is to us. to This Cloud also focus AI opportunities for turn are infrastructure. our differentiator and our discipline me Search, ambitions. let big state-of-the-art It's Next, key realizing pursue infrastructure YouTube the compute and major

responsibly centers how invest are wave to we continue the in this, data new disciplined and to support customers. we of in in run being for us services AI-powered We our for growth company. this and our Through compute

key our efforts working You've and focus reengineer durably their Teams structures. efficiency. priorities our me improve base removing to and are to continues. on our layers execute simplifying and heard talk about to organizational work That cost and fast, velocity

across This projects, us resources teams new in has Nest, As pull across operate nonpriority some help we invest Pixel portfolio. which our us areas. just well help a progress down Fitbit and into devices team and one will example, brought from Across have different teams together teams, structure. growth different our drive our other functional and will wound

experience improvements of improving our like operations. efforts a infrastructure also of and major snapshot the our We efficiency efficiencies processes, achieving quarter. in have in we certain And in are utilization, cost building computing of automation our areas on made supplier procurement, driving years machine our savings. That's through significant and

close, our by partnerships and reached trips. like million outlets. of and highlights. apply AI potential. XXXX into Novartis Gemini treat Phone fully Other AI-first deeply relationships awarded are when a which for autonomous many grateful to momentum. uses small CES partners a was businesses advertising succeed on is work many I Waymo, from the Isomorphic our We to Nano safety, Eli focused do, Thank Philipp? features I'm Android innovation year. diseases, new the year XXXX other portfolio excited generation with has also all X, product Compose over our Lilly developers of more. want and in couple XXXX. for Before which of AI And work of hard more X what's now of employees for for start-ups Messages next to to ecosystem Year to partners. the Google entered phone, of our Bets display I throughout Labs our are It together, deep to their across thank start great Pixel Magic and the the retailers, and ride-hailing to we on and we partners profound with strategic partners, our and was our with the do of at you companies, come. In who and numerous ahead

year-on-year. Google trend that of revenues other Thanks, and Search particular everyone. in began the Sundar, the in of through second and in grew XX% quarter and solid vertical. again were Services strength $XX XXXX retail of In by end the hi, in We growth Google advertising, billion retail year. led had the a up revenues continued XX% year-on-year, APAC,

by revenues was And by declined driven In Devices, YouTube in Google XX% year-on-year subscriptions. driven response revenue year-on-year. increased in ads growth and growth brand. and previously up Other, strong X% direct which named both Platforms year-on-year XX% Subscriptions, revenues network were

continued advertising for for growth. quarter the Now color see where upside and we some on long-term

is achieve thousands they of bet over the a to Discover. work via per decide also spot. QX, a customers perspective, Gmail and do-more-with-less connect our a excited goals seeing profitability discovery buy. versus Max few product calls, average their billion in conversions bright to including convert I stream, more immersive, environment. From and are to big deliver image-only as In and We're consistently momentum. get relevant on advertisers testing demand access have single to Shorts, gen creatives and social This X% in highlighted advertisers consumers Google Over users YouTube ads Tens putting help find AI we're them remained for X about last and help Performance you to scroll, campaigns. what a across how YouTube, dollar visual our of and campaign,

strong context. and feedback in As we AI more look them in generative relevant headlines performing with more the up help ads. put advertisers help to campaigns we're tailored and to and show search better ads of hands was ahead, more ads created assets QX. based each businesses starting Adoption by better descriptions also creating on build even Automatically

in are was U.K. In advertisers Ads. then coming week's GenAI-powered news addition advanced beta in conversational experience This that to field to building higher-quality see excellent SMBs now ad X strength. tests especially for power publish languages, how who last are ACA. And with can't campaign with Early XX% new continues Gemini a level campaigns more open We advertisers performance sizes. advertisers. big this will being are effort, search more playing to less drive to and to all wait the available to is or good capabilities U.S. of show Google and likely

shared provide to below found is overview we and connect the experiment SGE. to to they we'll new are play or commercial the that for improve options native new to and for showing for ads continue experience, action ads important people quarter, in last above alongside with formats As continue Ads by AI-powered also journeys will results. search We've with as either SGE to opportunities finding useful role people businesses. us an creating helpful take people relevant Search new

strong our fourth performance at was highlight. a Looking Search for quarter. Retail the

new start QX, and very in indicated incremental we price-conscious, We up had U.S. Google that in see as Five. like and moments features we shop all-time recommendations the access the to an of continue demand using to last a a high, growth a to SGE. promotional season consumers seekers early gifting Cyber destination, seeing this Launches shopping deals Five. we and the deal trends drove out saw Cyber With being to including better experience. QX. deals included These shopping during Xx play In season versus well key were at quarry new GetItFast one-stop filters like as AI-generated in stronger

were drove a offering Five; omni who markets store U.S. ad traffic higher regular in who well-known solutions to on a omnichannel large pickup a increase shopping using ROAS examples and a ads. later Performance by increase Our brand, and retailer top and its a demand. global across looking fashion versus Quick win conversion capture showcasing XX%-plus Cyber proven growth for pickup a rate in Max traffic during shopping store accelerate drove through AI-powered holiday also retailers include big-box XX%-plus XX%-plus omni

advertising and creator more creators Moving create YouTube millions and I'll revenue on QX more businesses subscription responsibility. across build to YouTube. other their obviously any X our keep connect We focused leads own We're our what more make said ways ads give than money also before: engagement YouTube's and and advertisers success creation, via in pleased the fund viewers And which more content, to starts fans revenue. have on growth platform. going, means subscriptions, in we're our growth drive viewers. More pillars: reiterate with this content with to eyeballs momentum viewers, want. To success. and these and significant to and with of and I ways creators monetization value delivering creators

AI-powered Dream Anyone products with a area Screen from languages, of people suite live XX-minute dozens in XX-second their new studio phone more First, from first hands. GenAI extras, a backgrounds in can studio app full to in Shorts, a a backdrop, come. Number YouTube for supercharging about background help capabilities. for including takes make devices. AI-generated excited without video place dubbing. palm to Shorts increasingly everything of We're mobile swap XX-hour on creation, remove is two, allowed tools, a videos our is budget. all with new this to to these into invested to Create We've production big in translate which streams of their the viewers. for There our

Connected growth We in and remains a Shorts top with Shorts continue YouTube strong time TV. grow watch to priority. across

to pillar must-have app generates TV. Monetization revenue, bulk we content sports refer and experience even to month, and tailored we billion Advertising Put Connected NFL TVs our this realized our this of together, of ad-supported subscription every what Ticket the lets XX views. people daily as and is and interactive nonskippable the the range Connected and users experiences and well room every on rolled make and XX-second to a averaging TVs, to that and like here. love: invest send-to-phone are through offerings. combination second live continue people formats as We're ads use pause logged-in heavily CTV-first billion-plus content is the we ads. the YouTube screen and the studio features TV Primetime X with an We've living growing fastest. as to experience is creators, Channels. in all better YouTube have with is out industry-first a #X engage Sunday via plus of or viewership investing We where

are early. continues that by this opportunities It's Shorts, to the unlock. we've for but Shorts learning developed can new formats excited interruptive viewers. nicely. progress less For to We're ads monetization

introducing Our drive AI go gen from video and funnel. part for dollars make reach results advertiser view We're and the action campaigns demand continue to to video and also video video further via across across our with upfront new Ticket advertisers existing advertisers, partnering YouTube Sunday are sports YouTube and Unilever, year opportunities. and including NFL scatter advertising in-game first content. in to XX-plus

offerings subscription a also are healthy clip. growing Our at

everything sports we excited features, Premium across for of and to MultiView, creators And Premium is great. innovate average, We're and fourth it to Feedback our content season additional Premium are professional users boost YouTube. music our here. Responsibility underlines engagement content. more including and user ad-supported feed traditional bundles Sunday user do well. the sign-up enhancements. We're been has and NFL Music opportunities each attractive create also users creators, YouTube continue first on gave Premium with Ticket. pillar, to content It new our YouTube we've and and across even user experience, YouTube delivering value than do. and performed more itself. partners and made media to even earnings partners other with On new pleased

this. focus to continue relentlessly We on

in partners talked best just with is key continue others mentioned a NFL. the our key Sundar we this for relationships us, to earlier. priority always, about bring As them to industries of deepening do and the across Google among Samsung, QX. We

highlight key including note about our and I'm in for for a Google of Maps was to to with expanded impact the with customers integration our a putting customers. and it's Another deeper customers' our and in-vehicle opportunities continued work with enhance experiences services, partnership AI to excited huge ecosystems, digital Google partners Google built-in XXXX. I'll with more Play. Whether of partners. gratitude wrap Porsche continued collaboration we're

Our of outstanding our focus their work and and success success for their only year. Ruth, this is then to to Googlers because possible over you.

Thank you, Philipp.

of we was of $X.X very depreciation content results year our the are due The inventory-related reflects billion, last the driven $XX.X We $XXX lapping We up the fourth pleased up the added full with X% growth billion, ended quarter versus XXXX. revenues as revenues offsetting XXXX, of fourth year increase billion reduction offerings. estimated X%, was quarter called charges made revenues $XX.X My also lives expense $XX.X in revenue first in we billion to $XX changes for otherwise. Total by that fourth a XXXX as with associated a currency. X%. cost strong primarily with revenues comments in out quarter consolidated acquisition in year. rate to with the reported the with starting to of remained in largest useful in billion, well unless XX% Alphabet subscription on contributor YouTube with year state revenues which cost will costs both Other last up benefit of versus be comparisons up of Search billion, for growth. year-over-year and the I quarter, constant

billion with exit office connection the an took expenses, of global to comparisons In the we in our in quarter of optimize total actions that in reflect charges fourth space. terms $X.X additional year-on-year XXXX

charges, of XX%. billion, were other certain billion, up out OpEx was was expenses, income across our Operating cash As you by flow we made payments deferral head charges operating EPS driven income based XX our were primarily these an of R&D compensation. tax release, in the $XX.X and and billion Net affected were up lines We of revenues earnings allocated in cost $X.X related expenses the followed of on by which payment free to the margin associated and was billion, $XX.X October the $X.XX. count. Operating $XX.X the by tax can was on reflecting expense see delivered XX%, to real was increase estate that XX%, quarter. in timing fourth the called which we billion, previously $XX

For free shares repurchased XXXX, A We was billion XXXX flow our of the in marketable securities. ended cash cash year C the full and billion. a $XXX of year $XX $XX billion Class total Class with and and in

$XX.X up XX%. results. to again Services, revenues were led growth in and retail. up Turning quarter XX%, of other advertising Within Google in were revenues by Google billion, $XX segment billion Search the

billion, advertising. Platforms advertising up direct of revenues other growth referred reflecting advertising operating Services up Network YouTube up revenues, X%. Subscriptions, income $X.X revenues, XX%, were in $X.X down $XX.X as margin of was was $XX billion both we primarily and driven XX%. XX% operating which and Devices was were were billion YouTube Google previously and X%. TAC to revenues the up XX%, by billion, revenues. response $XX.X subscription billion, brand

the also We're $X.X Google average Cloud primarily million AI. income pleased strong Google seat. increases X%. Google the Revenues contribution for revenue momentum increasing margin an of up by Workspace of GCP growth with delivered in and billion revenue very operating delivered XX%. segment. to of with Cloud quarter, an driven Turning the were operating $XXX from per

loss As milestone billion. $X.X one of Other from quarter in billion, for the the operating to fourth a the payment Bets $X.X Other were was our the XXXX, and year revenues Bets. Results full benefited in

advertising throughout within to outlook advertisers. for and across for business. to first, teams With attractive Search drive improved extraordinary advertising. and the which Services, Google the Turning XXXX, reflects experiences sequential our respect We pleased were to ROI our growth work for with revenue YouTube of users the

larger remain advertising $XXX higher As XXXX, we than base. growth than sustaining on more on of this we XXXX with revenues enter billion focused healthy

our base to fourth year devices, subscribers reached including subscription growth the subscription of total the in and ability by primarily quarter Platforms with our in substantial offerings. the within full driven and to Second, Subscriptions, products for past high YouTube the XXXX substantial from and for revenues increase deliver the value-add strong revenues years offerings in subscription teams billion a few provides over our The primarily demonstrates $XX Devices, our in build, across like services on increased growth driven One. Play further while of Pixel had number continue on family, again by In newer to we with make which buyers. increase solid our sizable Google AI-powered particularly YouTube the portfolio. through an investments efficiencies innovation driving emphasis

Cloud. Turning to Google

the are and and creating enterprises product to with of vertically engagement. The our Cloud gratified level ending were new opportunities performance. for pleased strong billion across performance area. operating the seeing $XX benefits the We year, of up with are in year are versus on intensely technology, revenues XX% Google The AI integrated is Gemini, year. of for QX strong team AI our we demand prior industry-leading is with focused governments portfolio Full bringing Cloud globally, we every

profitability, with of reflects intent continue in XXXX maintain invest support across growth. while long-term to to healthy the team terms to In focus the the we improvement sustained profitability

and expenses. Turning to margins

you second, the repeatedly the product our efforts remain slower to count our reengineer pace on as we contributors XXXX organization right of have we we structure. a quarter a design our much and drive we with opportunities first, the can simplify and and reductions of to resources to year-on-year, prioritization to to and behind committed in important As result priorities. prioritization Key execution see product layers we our efficiency pace We're of process reflecting cost in most down and to head and support our expense growth we hiring. invest our can; ensure announced first growth include: have focused durably base the slower to removing hiring, organizational velocity. Both resources stressed, where reallocate moderating framework as

continue technical talent. will to in and top We engineering invest

in Finally, through growth, with improving execute the in use to with suppliers the our efficiency we across organization, was slow our our driven and investment spend including procurement for XXXX, followed will investment be our CapEx notably investment Other and servers efficiency streams been QX growth The extraordinary of applications CapEx in across work quarter component while regard by the users, of long-term of in sharpen the technical billion In data globally increasing largest respect overwhelmingly AI, other for real step-up to in customers centers. our than opportunities we for infrastructure, technology Alphabet enterprise CapEx and estate our through the advertisers, that governments in infrastructure central technical operations the working reported AI developers, our deliver reflects offers. outlook and to CapEx, to to the our larger given by portfolio. With Bets, optimizing breakthroughs fourth XXXX. With continue vendors expect capturing portfolio. streamlining to compelling expense we've in upside $XX cloud focus the

projects to world's capital, bring that as the some you. the will announced now For moving to questions. external giving address is take through independent your opportunity it most to challenges. Thank to the focus more breakthrough out more I of and companies week, X spin on it working be Alphabet's example, last Philipp would Sundar, pressing technologies X

from comes Stanley. question first Morgan with our Brian And Instructions] [Operator Nowak

for AI Philipp, generative about advertising one of have Philipp. tools. is of sort the I X the first a new lot

obviously have the You lot in fire a of irons here.

out of been how kind You've AI-based then as factors really can of you so force you sales some question rolled of you secondly, pace should advertisers just can and could do can overall PMax these the think have on when the the the understanding get whole talking about early tens with dictate that tools intensity thinking of we business? through tools they an for of And advertisers. The a ad impacting the about allocation? advertising the at more long-term be some business thousands us and the hurdles which bigger of like we roll walk impact that of be broadly sort through momentum is, gating

so Yes. Thank much. you

drive So I've bidding, long covered advertiser range core very us creative advances as well time. a previous advertisers quarters. the the really publisher advertising this areas: different a been to And a at our more recent experiences. across as core for of of large value for little our are products targeting bit very, on AI has allowing and

bidding in we the very match areas. bidding the we're the progress ads, value-based the side, are assets. seeing those on And seeing core search in created a ads the are on as responsive for We broad creative, search very happy automatically ads with example, targeting significant side, one

I think one in I that previous the one. of calls mentioned

about talked take in AI everybody well on essentials factors. the really get we're and progress that PMax neutral about full play to hurdles trying with asked to You happy gating very advantage tools. ready QX. in We those The this as of

So track expecting on we're we here. think I with overall, what are

the sales or it me force call few have intensity done side, On let adjustments. a we reallocations portfolio

our we One is LCS, customers. really -- for solutions, that's our we strong really customers QX. have largest large GCS, to channel on the Global fastest-growing growth also and starts channel, is most our know, from teams. And And some treatment for scaling of really it's note, millions SMBs. The customer. growth by you call the sophisticated really large and also focused them now As GCS our dynamically right which to it team customer growth then our the transformational in Solutions, customer delivered smaller particularly Customer important different ones is we of largest team and delivering X have every where every

incredible But AI-powered and taking because restructuring opportunity those of also and we there's away So doing focus resources not that's our scale, grow more to we that's we're ROI the solution here when and AI service we our side. But adjustments. some more an see We're be roles GCS customers. to significant actually here. we always important to deliver to why here be with want done how smarter on I opportunities clear, at is have in restructure, adjustments efficient

intensity going So channels a as force sales here. I on I look at the focus stronger mentioned forward

question Anmuth next JPMorgan. Our comes from Doug with

on we there One are Can Ticket for returns X subscribers thinking for going How on us assess then one and you Sunday your can your Ruth Ruth, NFL be about reengineering more about Sunday to investment durably just then, guideposts from thinking also the And you're learnings cost forward? And year year of and the far? Philipp, talk an X? YouTube your any you so were now help you progress and that key Philipp. TV? both should just and perspective into structure. Ticket in advertising are both what about

Thanks for the question.

about about the combination make can. Then sure make, we're most in I Alphabet, got very layers being efficiency and So but durably lot you're the to comments, start does to the we the across the tried process right we're are with them product resulted simplify Google, our quarter for base removing call very of creates and it behind in the with we've committed opportunities, a execution out and prioritization we're work, framework drive focused cost slower looking opening organizational resources on continuing of done progress of to hiring. really support as to velocity. structure, we priorities. talked are X, we reallocating pleased pace The to at those reengineer work to growth product has the design to prioritization this important where we as resources that number and and then the opportunity organizational and investing and across a really,

see can our in that head count You year-on-year. down numbers

quarter. it You in the results delivered can the in we that some of the see fourth in --

will also in But it in this quarter, You around the can pace continued roughly continue and severance-related hiring. announcements I to do invest that quarter as these lower quarter said we $XXX estimate of we've in be -- much goes expense million top will opening first the the as first engineering. in to point At we comments, efforts.

and work sort doing. the that optimizing a also about which the a streams, ongoing big that's the everything use as estate way do real the But work our why we're then the with we're if organizational one, portfolio. efficiency with with So vendors; of I which we continuing and streamlining effort; large Alphabet about, we're which doing to which the host is severance-related is operations across expense, in technical prioritization note through talked AI; helps other our work have the infrastructure, all design, we're pave product doing suppliers our start work very of you improving of

it's So work build is that described when we've about and that continuing started, to ongoing. durably on reengineering,

app I must-have earlier, strategy our look, and the Ticket Ticket position on supports said NFL Sunday as Sunday NFL TV as long-term solidify on set. a So YouTube's help really side, everyone's

You great viewing of on feedback asked about really the We've some far. feedback with a experience. so MultiView, like start of positive lack the really, the learnings. received navigation, a People Maybe chat, the I one. latency, this

You bundle can Remember, as with the the Primetime both more one. as asked of YouTube part the them the YouTube and sign-ups Nothing side today stand-alone season ads offering pleased on with to subs. on about a on via Ticket and all Channels. Sunday and sub access the both. TV a subscribers. We're Maybe share I start NFL you for the this

NFL portfolio. around actually appreciate. YouTube doing or side, the this Sunday part we offering demand On or This Sunday game Highlights, you mentioned from YouTube's partnered pretty advertisers Channels with allows YouTube ahead whether breadth Select our season. advertisers across football buy independently live unique or XX commentary watching you're ahead. solid know, of of first I partnership which of partnerships the to post here. NFL about YouTube NFL first game year opportunities, in ad across our Primetime scatter an our We're the over we YouTube advertisers And Ticket reach channels. And lineup can ] fans [ is market on the And as NFL really Ticket our across in-game saw TV excited as content on YouTube ad

with comes Sachs. question Our Sheridan next from Eric Goldman

next Search Bard back mean that how how call product to years, then, things and of in Two, a elements could. and Experience over the Generative Search evolution noncommercial the of on do Assistant bigger-picture world ahead? And might the comments and question, in envision you coming search in the of Google like and Sundar, continuing Generative couple if change might When search for evolve commercial of think what the to more a Experience. about cases years your I you traditional earlier were from to of I public Alphabet-level statement called release also captured not itself. one-timers the P&L of elements elements seems the just messaging one-timers want were in any that are whether some Other the activities. to legal this segments and those the understood the make of quarter to as but if just confirm they more want out and sure whether were would Bets the be quarter It well. we there as Ruth, comments I in allocated around use one-timers

exciting works is Thanks, an and on iterating And very as certain we've it Eric. Great feedback we are early is it as it, said, Look, of well. queries time. the SGE type in been question. incorporating for clearly positive. the product, Clearly, I

a where We are expanding answering first queries a in the set well. queries It certain of works of very the time it better way. category definitely is for

Search, direction the us seen to underestimate of one people gives the well. Overall, haven't that as which I things is on see day, amount constantly about we queries of before. of So breadth think we Search proceed a the new

so And through were follow an that the to of is models experience think go and more. search. And allows we will deliver agent like users if be even AI across about what here and in the us for over advanced we see trick future generative again maybe to most we and and to act Bard will more answers time, beyond And our complementary. I high-quality use with the think time, over particularly breadth Assistant there, very

have to all So have sense is. of lot of do. taken far, ahead. the area feedback Obviously, that an super is the But the been positive. where I deep -- the And so a execution it's set opportunity directionally, has what a what we work think we

there. technicals see of that comments go terms activities. of walk and it a other real to the have you line other when gets arrayed billion just we comment I in across in the then estate, real estate on question, lines on understand various the that But to items, various was $X.X the in making through your it table P&L. exit through so Alphabet-level charge the charges the how in in And anybody is related R&D, can And IR spread is et you cetera, then opening

Our next with MoffettNathanson. question comes Nathanson from Michael

X have for I I Philipp, think.

or importance Connected or adoption the that's beginning? interest bit Shorts you And YouTube, of Connected YouTube talk given the Given you is doing of the Shorts the U.S. still advertising year. or what strength Connected outside whether system? talk been challenges? with engagement the could you that past to TV saw see you've talk outside about auction TV? more Anything to about large of the on about the Google a headwind opportunity U.S.? And can the you for the about then the headwinds Anything the Can you at Do over not operating the TVs share you consistent modernization a drive help about growth? density at of still to company the us

Yes. Thank question. you so your much for

leader audience It's it continues TV U.S. streaming time I the all I watch is really perform said well. On really Connected before, one side, mentioned actually deep. to and the YouTube group diving in just audiences.

at specific one. On on the we side, moment at. I to -- nothing have There's time this something closely it's international in are this looking

from mentioned in billion-plus XX growth both monetization huge pleased with views. we've very creators I X we to the to demand we're built respond billion seen. On users short-form the Shorts every daily the Shorts and side, month, And look, viewers video. for

to Specifically continues nicely. monetization to the question, Shorts progress monetization

have revenue committed right, we're Shorts creator Shorts, from In total actually, earnings increased for and partnership. continue. here say obviously, you this succeed, expect And creators sharing we the since really long-term this to heard we to month, fact, to succeed. similar, we videos, generated before, introduced our when a every And me long-form

Our Stephen with comes from question UBS. next Ju

time and across smaller multiple ROI need the like lineage to bidding at product development believe So of Philipp, you're there's search it it's designed my But well X I a generate help which advertisers manage history, maximize this advertising. And like in today, not to spend creative seems Services. been since this was long years run been easily helping new as launched. of rollout is also more was smart things and but question, about Google your PMax as

TAM could you what enabling longer otherwise your with does are expansion over kind And revenue growth feeling before? who how SMBs the So not term? about you tailwind of for that create advertise

only investing change solutions not GCS us. of field, level of focus in the channel, the ton has over that here few They're been really several years. And before. help this. part playing our there's under you been mentioned of a mentioned always those. a times But Look, as more on for you are and last in our this huge know, focus several they've SMBs We

So advertisers. actually, sophisticated brands more SMBs and bigger can compete with

whole mentioned they always of feedback the could so and the we're that bidded making value is getting you and so quickly, targeting so that for that and you're creative on-ramp on easier and are the SMBs. several need part the solutions is drive actually easy mentioning workflow And solutions much AI

very with what here. satisfied we're So seeing we're

to We a And field is really time, more and productive for will more path not much also invest. AI interesting future to only better easier arise very over but life helpful, make feel continue I playing SMBs. level

Our next question Post comes from BAML. with Justin

for Ruth. Sundar Maybe one and for one

I Just AI as growth, on there to some competitive tools of Search are Search. use an on think concerns alternative

'XX. Ruth, stand AI think Google $XX tools? And rate experiences. run Just CapEx in new onetime the the billion. how what changes should was we Or you other then year there? wondering step-up, A versus or since see obviously. you've seen innovative about items if in And that is and Any query into any can volumes, positive more Search really negative, evolve make out

Thanks, Justin.

effects have of more all, look, about lot on we Search, broadly. a People obviously, of information think choices. First

-- So constantly and are evolving. user expectations

of we lot on we users everything are is test experience I I can making Search breadth, better. we against And way. And content all tool across a year mattering And we so is time. generative together putting a that's But into a the the a a stability see track X, in we've ends Search: much rich, new the the of arsenal. Generative the test, Experience, been innovation. Obviously, follow And in compelling through the to up the continuous there's goes strong liking think long particularly the to diverse access actually depth through and more how are diversity doing getting record web there. this progress when what for sources AI think, that out and verticals, it

the and road think our both progress, AI the including I about very strong on is feel good the map 'XX I Search so And the model. progress. for And underlying

excited pretty I'm about So what's ahead us 'XX. in of

customers, infrastructure. indicated, to onetime there. investment It really our and Philipp CapEx overwhelmingly applications $XX been extraordinary Google the across developers, was AI for enterprise really have talking reflects it's I of offer. Sundar DeepMind, CapEx it's item our within everything in quarter, -- there respect for of Google about, with billion Services, governments. the board the users, the opportunity the in Cloud, To no as cloud your in Google outlook And I And was and technical question, advertisers, for long-term fourth is that

We to notably quarter, last be do XXXX. would that than CapEx XXXX. full in note continue So year larger expect grow we XXXX did CapEx to

think I a you payments As of know this, quarterly cash CapEx invest. to note, the can number. timing affect all continuing the point but we're But main is

Sandler question with next Barclays. Ross from comes Our

your why the growth said in doubled of has, XXXX, team to happened was RPM to Philipp. I Digging don't that on quality back is trial back something I or a being guess to a since disclosed that from think, a But Sundar Search ad then. document deliver fall, Google we if DOJ that there more the the know I go So if was than in for, question lines fragile along business XX% strategy.

large tonight about as today monetization? context about what Google's do feel forward? of we said So revenue in you how guess, you the just drive I going base, the sit about do Search And feel here I RPM ability early to how XXXX, Ruth guess in the

we so and our the I it improvements quality, driven technical all the improve users quality right? So change. ROI rigor actual ads the and don't the on and deliver underpinned fundamental advertisers to by focus and excellence attributes experience that excellence, go-to-market for search, -- both I in tremendous are have confidence work, ads all X ads pillars think our RPM, extraordinary on our foundational quality Look, on search be improvements quality,

AI it. And think gives side in as the on think well days the I side. as we us the are of early on monetization I organic opportunity both

way. information think taking I view, long-term deeper a in be serve to, we'll a able needs

ahead. context, I what's about excited pretty with so it I'm in -- think long-term that about And and that

And our last question will be from Mark Mahaney with Evercore.

material this be the on cycle, starting commentary that Any quarter. by first, this cloud. to in generative back may nice then, of reacceleration AI up? that YouTube and curve deceleration workloads on are cloud seen? And just explained wanted sort the Is we've the and volatility, the ask on we to bend one One and and this that growth the Philipp, to the it and now optimization trickle reacceleration and in just deceleration been cause creative, created to on there's volatility, to on quarter this AI On question them where last I creative YouTube particularly AI performance-based now on Google have offer the ad with who and using forever offer and creative by area? this of ads that into kind but are SMBs a the do the really side, a new improve there campaigns video that and Is opens terms wasn't out AI. along of of you in And offering area you before? market? that new up far think growth How spend the

Thanks, Mark. On cloud, let that. me take

First factors. of all, of a combination

AI XX% GenAI And I But is and solutions think of saw, as which Google definitely data definitely using pillar than of greater security, and foundational you AI Cloud. are on cetera. unions is that adoption. early excitement with something driving around top infrastructure, analytics, et our the interest

us have mostly variations, play ahead that in on we And through. front. as I so a think are area cost something especially optimizations contributing as out where well. through regional parts to 'XX, go think we continue was worked the look it's are our there will I from I strengths innovation when I but factor second, AI think And the an at And many

maybe on start with So me general question, a view. YouTube your let

has to thriving been of voice a millions audiences build critical here. their and you connect with And very YouTube around already. share creators of piece businesses has enabled obviously know, AI this world submission, the and

are on YouTube interesting Dream and really of new a including features we YouTube, announcement lot where complementary You for example, of thoughts. introduced lot whole made other of obviously a Screen, aware tools the creativity and

already. to we You world take can that imagine advertising can obviously the this actively more

models actually a Multi-format As know, -- actually, soundtrack of to world creators there I part And said AI, the heading, design heading, is where new of this generation ad a absolutely AI if just and a see where where will look already. And the you multimodal will continues are our capabilities rich video you are that for capabilities. it unlock campaigns. already power -- will this you It's easier heading, music lot models are models can of earlier, creator are those to of solutions it at how on impact the you ads simplify similar some already video Search for -- side. ACA generative impact you in what flow and makes as see like positively creativity. measurement can perfect products and the our core see emerging how creators, to of

our I'd today. any Friedland turn like to remarks. And to further session the for back concludes for that conference Jim question-and-answer over

joining Thanks, and first for with you look forward today. call. everyone, a have We good XXXX our Thank us on you again speaking quarter to evening.

call. Thank you for you, concludes Thank everyone. today's This conference participating.

You may now disconnect