Alphabet (GOOG) 29 Oct 242024 Q3 Earnings call transcript

Welcome everyone. Thank you for standing by for the Alphabet Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Jim Friedland, Senior Director of Investor Relations. Please go ahead.

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

quickly I'll cover safe harbor. Now the

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

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

will comments Our we unless on comparisons be state otherwise. year-over-year

over the And call I'll to now Sundar. turn

in the as call momentum Jim, extraordinary, as you, quarter. great today. Thank The seen product hello, another and company on the is was will hear QX recent launches across everyone. you've you and

Our well and long-term in investment for and the off as customers. success are as paying our commitment focus AI and company the driving to innovation for

products touch a to AI people a around our infrastructure broad We world, now are virtuous that includes with efforts. to robust third, lead power building fiber reach era creating uniquely centers, that technical because operate second, customers the global world-class through at and of network; this seeing positioned the are innovation, our and who AI research components: AI research X differentiated our teams a also first, and of and approach and stack billions who advancing are cycle. deep full the in AI we scale. chips are that There's work data And a of platforms global models

these. on Let each me of touch quickly

U.S. Thailand We state-of-the-art AI to efforts continue the our infrastructure in support from to to invest Uruguay. to

investments, to enable new energy carbon-free to from megawatts corporate bold including will agreement the energy world's making small purchase power. also up clean of nuclear XXX which are We multiple reactors, first XX/X modular

our We are also and efficiencies doing to drive model work making hardware improvements. important while significant data centers inside

of For we months, overviews, have testing more reduced cost the of And than model. custom cost of per we multiple In technical offer of size options, classes including GPUs. our machine lowered first we significantly. and doubling custom-built GPUs AI use since breakthroughs NVIDIA began query shared range Gemini engineering course, we own AI queries hardware, while these our XX% example, and that XX our by customers through we accelerator for a and

the We drive known of as are performance to efficiencies now continue better Trillium with on and and TPUs them. sixth generation

Turning to research.

continues Google to Our DeepMind drive our team at leadership.

Prize work future to winning underscores the talent Noble me our Let critical Jumper Demis Hassabis in is and to moment on the how a take and on is and revolution incredible This extraordinary we modern world-leading Chemistry an the for AlphaFold. their research John congratulate to AI our achievement and have

Noble Prize spent congratulations physics. decade here and Hinton, to over winning the progress. Also, a who Geoff on

Stay in understanding, Our adoption, business you, where Gemini consumer drive of of and capabilities. around capabilities, world working multimodality measure, also and reason Gemini AI out tuned. that capabilities range long are see When usage new for any Astra teams research is can the performance including our experiences agentive calls, usage they're improvements future. volume, on and teams contact models. a actively models building Project By API model preretic token our of glimpse industry-leading is about growth, our and a

models, X those advances and X platforms products Google the user then use billion to like of bring latest as billion this more the businesses. to X Today, Gemini milestone We work than with surpass our Maps. experiences We are product includes working to consumers that and monthly all to users ship XXXX.

even teams Gemini research and GitHub changes as structural teams as to to X new support making work. investments Google's platforms security to machine demand, efforts are and our Google our agility. we up recently with all broadly deployment our pillars, more models come. learning us unified with now strong organizing available speed on the and company post-training follows devices move Copilot faster. app team available these infrastructure following DeepMind developers. have our helping own This more in that other of and we speed across to Today, platforms, the To to moved that and Beyond streamline This Gemini developer team. are is Gemini well we is We operate shared

dedicated that team product For incredibly instance, has promise. so Notebook small was that LM, popular an built a it much

by more we using do laser-focused all efficiency. processes, reviewed AI coated faster. on also internally and I'm and improve our more and to X/X building is of ahead, energized new progress We're which engineers. our is be helps productivity This and accepted than by opportunities to continue coding Today, our engineers generated by then boosting products. and move AI, the Google great

experience, how highlights. driving users additional it. and more me features of often to recent AI expanding and advancements, quarterly Search to Circle for overviews, information more now to In what coming search lens for transforming This they people turn new are including search for search, search the in search queries. their to can Let the leads user needs

overview now new started will Just countries basis. more territories. X to on and out AI billion than It rolling monthly more XXX than users a reach week, this

user questions overall exploring websites. Google increases search. What's can answer We with of range search of overviews wide businesses asking and are a and helping learn integration People as that well, actually more particularly and this exciting is people longer satisfaction. as are that complex within performing more people seeing which strong engagement, increasing they over their The also is is time questions. of growth AI ads connect usage

learn over is world testament now the X/X Android in questions to Potencial. circle we visual tried used around use now XXX have million to month. translate to on of devices available complex more Lens with types help in on text about it now them. its people using is who query of it helpfulness shopping. Search a multimodal to per search weekly Meanwhile, is its people Circle and to answer XX one search over the discovery ability searches billion see because the for fastest-growing and lens of product and shop,

will these AI see beginning, just and innovation For rapid all progress a it's here. you and of pace features, the

revenues and up year XX% pleased Google as opportunity margins with embrace generated of $XX.X over is very Next, overall XX%. customers increasing AI. We of with operating billion, our last Cloud. This I'm momentum real QX business the has growth. Gen

deeper adoption Our portfolio deals Customers with are helping customers. technology us our new existing product leadership using are and products attract larger X drive AI XX% different in and win ways. customers,

as leading operating a AI First, model software of time than driven with and of compute GPUs, our reduced processing advances a inference reliability our AI and differentiate by storage, costs we by as leading research number LG more TPUs XX% and by performance which and multimodal well leading infrastructure. XX%. for accelerators. Using combination its

a period. Gemini AI foundation models multimodal API to innovative much enterprise Vertex best in X-month Snap AI United over build then, Google industry. engagement customize X.Xx When Gemini's was nearly the XXx power capabilities. Second, the from calls the my and Snap Since used looking our have States. in grown and is as AI more within chatbot, with my their to experiences all strong they chose platform,

period. for ultra types quote solutions operations stored with minutes. Fourth, AI security intelligence threat Third, platform data with cybersecurity like and These deduct Lloyd's syndicates to matter respond which customers have data to threats of days are Deloitte, multimodal query our our BBVA science it customers enables faster. complex customers is outcomes, to a of decision-making because in use AI big together where it XX% platform, one our which query, to reduced time big This from AI-powered cybersecurity access the over and helping of data low like and London, ML prevent no growth much with Gemini. analyze the to customer real-time Google Hiscox, operations risks we accurate led in combine X-month took flagship latency

over improve retail this of using IBW in power centers, the of Fifth, call increased introduction Volkswagen is with customer and suite. experience new stores our in power as is have online mobile designed A to portfolio applications engagement its our assistant. seen apps the virtual quarters. and as Xx well our X last more. customer broadened customer adoption we It's We Mandan example America, the QX, who great deduction in threat technology of new to

agents quality for through In delivered superb users of addition, say getting we XX% work. daily the reviews. are Workspace Google employee it the improves of their Gemini

YouTube. to now Moving

with DeepMind's Premium Google YouTube has we quarters is new later VO to into most leaning model the ad for multi-view the coming seasons time shots made subscription content that experience Ticket TV. help to organize and similar combined capable YouTube's creators are For growth Sunday year. Together, video the episodes YouTube the X and are announced traditional $XX for a NFL YouTube and room YouTube, for to on driving generation this we and option over creators and At to living platform, first revenue Music subscription past billion. ever, into TV, surpassed

Next, platforms improving and devices. is integration Gemini's deep Android.

including Gemini with on Samsung you It's Gemini. Android, Live conversations example, lets love devices. it. free-flowing People have For available Galaxy

much more Nano. to them work devices including to deliver unveiled advanced At Google, made innovations models, to AI with across we their featuring continue come. X We latest devices with our newest closely series of Pixel by Gemini

devices, received We these strong have demand awards. seen multiple and already for they've

Bets. growing Waymo autonomous is and Other portfolio. creating clear of industry to opportunity. commercial biggest within Waymo, highlight part leader Turning want a now I vehicle to the a our the technical

into cutting the Waymo its has been edge work. Over years, infusing AI

is over Waymo rights. X XXX,XXX driving paid Now serves million each than and autonomous week, miles more fully

AV with partnership in this and plus The Through company Atlanta, network has a multiyear operations expanded to And new driving universal of more bring Waymo significantly Hyundai, use. By Waymo partnership and driver, with first market. will places. to reached Austin unit its with generation without safety. paths time system, people mainstream kind Waymo multiple any fully sixth compromising autonomous its developing has costs reduced and a Uber

Before to I'm I close, Anat. new our CFO, delighted welcome

to want to board, thrilled as worldwide. our on and gratitude always, to my her her hear have shortly. express employees are I will We you And from

hard Your for dedication made work this quarter and exceptional another Alphabet. have

you, over Now Philipp. to

the already with the describe the hello, business. performance having and we're and YouTube start Sundar, impact I'll AI quarter in everyone. ads, highlighting progress the then and seeing partnerships, for across our Thanks, is

quarter, revenues $XX.X for the vertical in XX% delivered year-on-year, services XX% financial followed by growth led due Services other strength the Google in year-on-year. of to Search and insurance billion up retail. grew by revenues

subscriptions in by platforms X% year-on-year. were closely Google well year-on-year down the Network were our grew devices XX%, brand, XX% driven by subscriptions, third YouTube ads growth followed revenues year-on-year, In revenues devices, in by revenues as driven response. Made direct by and as of quarter. the launch up

go they Before voice partnerships, they're around into questions questions well on opportunities create where are their adds answers and them, expanding few as the connect opening the search ask, to their the and YouTube ask camera find to help a to world on of how I commercial new type us businesses behaviors they experiences. or consumers explore be as and people double-click amazing to comments search, using new

expands Gen As significant continue a in possible, to AI search. opportunity we what's see

take search. minute really AI a Let to why. me explain supercharges

features great from to searches continue see users. make and more Our out new younger we helpful, particularly feedback, AI

intend expanding users our deliver customers. impact we is users highly helpful Circle advertisers. to with XX. most our This us connect Search, relevant ability example, and connect our from to allows business to higher see with the to engagement For aged to understand AI and where to XX ad it

out our share Let new alongside rolled and search. me features AI-powered ad we X popular have experiences

early to visual First, searches X you product Sundar, in in in announced from are testing search Google we content question to are this found turning likely having to seeing lens visual. or new XX used people is October, this often with lens text X every almost quarries, of intent. Lens complex month In commercial addition and shoppers searches billion on with more feature, also as heard to a we for multimodal these in a more that that engage voicing run We're inputting format.

ads above Given new shopping user relevant and businesses. of alongside behaviors this these month, results lens visual connect announced consumers search earlier we help and better to the rollout

we have showing started mobile the search U.S. the shopping within overview for AI overviews, in where users ads and Second, now

they We're need. step AI to As running now next you relevant connect moment and helpful exact within been AI that overview find ads and services we've the overviews. they people the at above is because remember, can ads already below quickly businesses, take directly seeing products with

As before, believe every marketing said I've value we AI of part the chain. revolutionize will

using higher app assets to X.Xx, our visits test and imagery by and build power we Imagen tune help customers at XX% creators tools with display larger now their clicks create driving Advertisers increased a industries image to use week, assets with Audi to PMax, and AI can creatives for scale. at updated website in generate of most Let's our newly increased into long-form Gen, sales. Gemini links then lift the delivering text relevant Demand in image our by ads and reach, text tools generation we a and their traffic used model performance generated videos. data different advanced drive existing Demand variety even from booking multiple to image to high-quality their now orientations Gen Google ads out multiple X, start campaigns. campaigns. produce Creative. They experience. which video Advertisers performing Last of for The campaign and fed

when Turning Google at AI-powered DoorDash creatives to alone. rate and surfaces. to mix action image on drive tested and immersive XX% get a more workwear a a compared importantly, They advertisers media saw across most of faster help cost buying. feedback impact campaigns conversion redirect higher measurement. campaigns more action efficient XXx Last video Demand to Using assets Gen, media what visually video buying. YouTube's and the and per

business budgets extended mix customers, This drive scale better of quarter, our cross-channel the of open Meridian to marketing we to outcomes. to more source measurement model, helping availability

focused a they and remain world growth content a to heart new are platform Creators of preferences. YouTube of a content large making video have creativity is also our ecosystem Gemini, of at and Driven are greatly thrive we deeper creators with watch models viewers' time on We're enables on whole YouTube, On building AI. YouTube. across and improve that in to the the the using unlocking robust recommendations driving platform. by the language understanding AI

shorts a U.S. relevant, the this monetizing with continued fresher in-stream particularly and and they thrive Of feature, continues can close advertisers recommend can first channels to again video, YouTube to We're to top uploading we the significantly to X ability short viewer. to each to up long. shorts. in improved close XX% to on As result, highly uploading opportunities personalized month, a the other are XX on minutes book requested markets. quarter, more Shorts the position YouTube. content And recently in creation and unlocking Short-form markets. Also, in upload announced room. all blocks we the now gap more monetization the living more

year-on-year. than continues the majority off. experiences streamer up Our This momentum is as and strength crafting big screens of the of the increasingly of and Nielsen. Link, The it's according specifically the as are we XX% [indiscernible] is Michelle revenue who our Khare more making maintain as TV #X graders the in and designed for paying creators, to screen, YouTube number our by status U.S. here the such driven

a sports for Gonzalez, game game watching. around like come for W the premier and Evelyn the for destination and stay Coleman. and the is Brad becoming Adam commentary from content People YouTube creators

positive NFL of Sunday ticket content TV the XX over XXXX, billion NFL our partners TV, million we minutes on their YouTube. from watched receive During season XX% Paris with And from which the over second Olympics, or content off and More unique screens. views at on reception of recently, viewers than XX fans. YouTube continues had billion XXX to kicked a advertisers on

and We product football improvements have fantasy experience depot to for in our integrations multiview fans. with continued invest to

performance up with quarter year-on-year. commitments XX% my remarks had a about on upfront from up about Following strong broadcast, we last

strong let seeing leverage As best partners technologies recognizing me that the More with and partnerships. our more and of momentum breadth of wrap our we're in the always, are Google. of the very solutions building

will from generative This than bring For cybersecurity. Africa. with multibillion-dollar cloud, Europe TV more example, million areas, Group collaborating digital across AI, services. and X XX partnership best-in-class on ads AI to consumers initiatives partnership customers spans hardware announced platform, We're including recently strategic more across our than Vodafone and technologies and and Google these XXX Android

to heartfelt to their It's their the for us. commitment you have to thank and and to that, Anat, team. everywhere customers you. you continued welcome Google's Over for partners extraordinary collaboration and With our with great trust. to

Thank will Alphabet the end results the Philipp, start you, and and Alphabet focus high-level Sundar, level results. the of thanks words comments I on the quarter, commentary at for for state otherwise. welcome. year-over-year will our on comparisons My I investment segment third I'll at level. will with unless then cover with the

strong across cloud. largest $XX.X Consolidated $XX.X by quarter was XX% another contributor X%. momentum up Search constant in robust business. revenue a XX% remained billion, QX increased currency. of had robust followed or growth in was We to XX%. cost growth, revenue Total revenue XX% by with in the up the billion, Tech

of charges offset primarily investments expenses. legal increases matters. followed XX%, footprint in by space by in depreciation compensation globally, to partially $XX.X and primarily office other billion. fourth quarter. to see X% driven the and revenue tech a revenue, R&D Google the for our action increase acquisition revenue higher by as the costs YouTube an The taken of driven associated forward by We in Other with depreciation rate our depreciation increased the costs associated technical network which and content optimize further while with double-digit was year-on-year we've operating expenses increase charges increased a from pull mix level of facilities-related by levels result hardware higher XX%, launches primarily up was by growing declined. Google at of Search much have increase investment by driven higher to Made third billion, our Total shift continue primarily $XX.X to cost a infrastructure with in for decline with

X%, lower billion Sales Google in billion to expenses by and to and other operating marketing matters. Made reflecting charges XX% increased the declined expenses per to XX%, $XX.X and increased increased to advertising AI Net $XX.X related Operating XX%. legal Gemini. and for income and promotional and margin for $X.XX. share launches to increased as primarily XX% XX% efforts increased income G&A earnings investment as due by well to primarily

flow to cash negatively impacted the innovation items. by structure, cash in flow cash continuing $XX.X free $XX pleased the our with business XXXX payment the margin tax XX progress cost quarter third trailing for for We ended is expansion cash delivered following a to making In $X quarter cash We're we the And the bring in from in of billion $XX.X fine. invest billion in operating second the free our also quarter. this raters. reengineering to marketable the was payments fourth reflected in quarter the third We're securities. quarter. we're which we to billion months. Year-on-year, shopping consumers the to EC We made XXXX, XXXX, related QX and billion deferred and with and

segment $XX.X robust The to followed services results. by by advertising led to revenue $XX.X XX% Google strength Services of billion. and Google XX% Now performance to billion. vertical increased across financial by verticals, Search insurance in turning the other increased revenue retail. was due to broad-based search

by $X.X response revenue increased advertising followed YouTube driven by XX% billion, advertising. direct to brand

billion products excited we're mentioned, to including creators. time and were X%. strong about features Philipp new platform in $X.X advertising in across As revenue we're and bringing of are robust down the Network growth momentum seeing YouTube, the watch

in in in last well the third advertising the Subscription launch from part our devices of platforms revenue revenue growth revenue in the third revenues subscription by strength as quarter. as in Made year-on-year to impacted in the lines reflecting quarter, XX% in advertising billion, retailers. by year increase the all was devices $XX.X of Google APAC-based and QX increased In growth our

was pleased to have TV With service subscribers. increases XX%. our primarily paid billion continue Google significant play, operating Google by in with YouTube by to We margin as in an primarily number platforms, to of in as driven in well income by buyers. the due and XX% performance regards and increased Music growth we're subscription primarily to products, operating YouTube increase the driven $X.X premium One,

Turning reflecting and strong Revenue growth overall. third rate deliver to to the higher billion in quarter, this infrastructure, than Once solutions increased continued was which Google at to quarter. cloud again, that $XX.X GCP core in accelerated Cloud general AI the AI a GCP segment, by products. very GCP across results grew XX%

strong We average Workspace in driven primarily seat. also growth, Google increases revenue saw by per

cloud to business As you heard engagement, to conversion. better greater margin customers core robust and faster efficiency innovation increased revenue operating to Google Cloud customer expanded benefits, by response across cost, GCP including time performance and ongoing are expansion the The from AI AI allowing income well existing measurable just our as Sundar, cloud workspace initiatives. business realize driven offerings new $X.X reduced billion increased revenue operating strong operating and margin and within was XX%. as products,

in progress third the existing recently planning quarter, operating and to million, mentioned, in $XXX and As the now our number different excited in in and for in couple to Sundar reach Wing. the rides. and the university Wing, We're X-year Other revenue and more paid the Waymo, delivery and Bets, towns. a the in Dallas-Fort billion. the its Walmart geographic company in of I'll XX scale of passed partnership stores of markets drone cities about were accomplishments increase serving XX our for and as customers $X.X was with seeing just area, quarter expand markets. highlight Worth for operating loss we're We're new coverage continue Waymo

activities. There largest of in our Alphabet is in Alphabet. level which of items all activities. X the notable to development support that AI Alphabet component activities, Turning impacted operating level and research investment were The loss line this

decisions AI footprint quarter R&D from the charge optimize million changes to DeepMind. our second, globally; to full made further services teams and a the May in Google investments made in including we've of physical and additional space effect office First, ongoing some organizational Google AI move related we've $XXX to our to

the our in by investment our quarter $XX followed with investment component largest in CapEx reflecting servers, reported infrastructure networking billion, the With data third and technical in being equipment. centers respect to CapEx, was

the expect be to QX. Looking Keeping mind quarterly reported cause cash in the CapEx. of in fourth in levels timing that ahead, variability quarter to payments quarterly we can CapEx at similar

capacity alone, to over benefits economic announcements quarter and Our the made third $X expansion billion data of $X expected countries In we billion center in is bring with center that of U.S. where are communities nearly data in of we to planned investments the investing.

QX, In we $XX total in value in the to billion form returned over billion we and a $XX.X $X.X to also repurchases the billion share of XX nearly shareholders Overall, months in dividend returned shareholders. trailing payments. of

we working are and activities. As fund in cost the needed areas growth balance to we look investments forward, those to discipline our AI with other

about think we are of dynamics consider. to couple of remainder XXXX, there a As the

our In to terms revenue in strength in the by APAC-based by platforms and headwind be a quarter revenue in advertising there continue in quarter and launches in in to growth the the will second forward Made retailers, advertising from subscription fourth the of half in Year-on-year revenue, of be impacted revenue due year-over-year XXXX, year. increase this third of devices Google part growth pull to will the into

we'll expenses, to launches our associated higher to and level QX. by offset our benefit in partially of forward with with from investment due infrastructure, in devices associated technical depreciation of into revenue see cost hardware slight the the of a pull terms In continue expenses increases

expect few and share and quarters. allocation hear these a from I'm cost thinking structure to approaching growth, capital to more Now new before I me as like in and going how on thoughts topics coming the into through would Q&A, and the CFO,

opportunities As across business. I the momentum look underlying by business, I growth, for the further AI see at and propelled the

well great global I about believe be required call our have priority and innovation while deliver to innovation, in these for at sheet investments, able and strong the requires meaningful in our given succeed to pillars reach, are to capital translate AI be also core And will realizing to looking continued heard our as of our through our balance have will strength we which so a can are on areas. such You Ruth use be we through these products that these Sundar, revenue, efficiencies meaningful of innovation attractive the free in those opportunities AI build able scale, up and footprint, physical efforts the we today. accelerate platforms we pivot well as fund head investment. some technical that the that optimizing to the across might AI. support to more we and positioned which efficiencies where team including to plan cost structure, our started to improving but infrastructure count might for an we important I efforts and opportunities. we of on to in growth, evaluate reengineer also need company our to as work work streamlining capital leadership operations where

Thank you. . Philipp now Sundar, will and I take questions. your

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

Sundar. have X-parter, a I

to a sort and could most over thinking new of of that see once showcased the one, lead X they through constraints search different scale. you second the next to year X billion you of that they of more search we're across Gen X of the come you out, scaling or lot products products constraints you're search sort hone multiyear in then growth And as to of really the years X people. to durable what about excited experience. reimagining how key it of X quickly billion search plus, really are Can to over last these reimagine us the types sort course help one, think the X first on The of you AI-enabled that sort just

And question. month and to overviews. with obviously, now search I extraordinary a Thanks, Search Look, been Brian. year an more AI definitely back And video with see approaching lens it's ask innovation. mentioned each over Great of about search. XX Circle it's in remarks heartening users my billion understand come of are in been often. expanding can these They adapt. what's They queries. more changes, really we they to possible

And and growth have we seen so -- there.

I working we there innovation X are there's more think while used a over we we are users, very out billion on. we have lot actively AI, rolled to

both in XXXX, to in the Gemini. search significantly expect in I continue search So product and to evolve

opportunity so And ahead. think that's I the

I with underpin can our are the is what of same have always user on which it, and in technology. days new done. it. of the powerful but And experience, at lot more users, time, and we think trust I a early we for think a we foundational bedrock quality do

at I past make Obviously, are things cetera. over don't latency necessarily substantial cost progress. we seen XX months, there. et X see people. us per the a you've like billion query, But So constraint

we'll we'll and So out continue more, keep it. evolving it rolling

going to at I continue think were if the of to a I that evolve think forefront search and it's innovation. to take outlook, we'll XX-month I be

question with next Doug Anmuth JPMorgan. Our comes from

the and Perhaps going from own relative about other your generated how to leading for CapEx service TPUs? providers? And does Can Google's forward influence efficiencies cloud spending you've and CapEx you Sundar peers infrastructure advantages and that talk Anat. more

I'll TPUs our take accelerators, one think have part on AI are leading a color Doug. -- infrastructure, can the CPUs, in Anat as all the solution We the we of of Thanks, AI them. and GPUs, I well the are investing we well in give spending positioned have as right? Look, set, first CapEx because and part. comprehensive we all

wonderful a with partnership have We NVIDIA.

at will and excited provide to GB are scale. of one the XXXs it the We first be for

time on both allows have reflected plan of only an of are infrastructure not On with through we and this road the AI in map And be map, our the think really architecture road it. ahead at of Google, on it. to we we because both, TPU but the excited cloud couldn't it not but can ahead. I services us just have Gen future in provide that's all generation more we some front, all what can efficiency, for teams spent I forward-looking sixth best-in-class top just I in the I AI for the think and at internal drive optimized the

So pretty how give are I'm spending. and CapEx continue there, Anat on the maybe we executing can comments about and excited up we'll set

Yes, sure.

into is really you in our about billion it, more $XX you as investments. certainly CapEx in provide in And then So a And the the across Within is and this $XX One capital are let -- our think -- which the divided the categories. that time an GPUs. investments across technical X areas second infrastructure, quarter, and me we equipment. area majority bets in TPUs into as the facilities, investments the company. and categories servers, important It's other in goes invested networking company. And have other includes such billion. and data the we it color saw both centers little TI, of on areas as the one of that's

both GPUs This technical networking TPUs, approximately in internally to data you about our servers XX% investments infrastructure and both towards them, of as towards we center customers. quarter, And and and equipment. about think went offer XX% that and

color going on So needs and and will next what choices you our call, quarter on $XX same we prepared customer as percent at the invested into about will same in and coming additional year, billion. the think provide our we increase. think on we the we and between that remarks, I have likely based my an that but in needs in into 'XX approximately options more in XXXX, do QX And QX, approximately as we we've investing 'XX, step-up and what next internal saw not be level And are. increase mentioned what as the of QX see we XXXX,

question would on part I the thing other one the The Doug, first on of your TPUs. on add

and If compared is we've models attractive the you I look to more pricing, externally, it able how think to that capability. at much been of other flash deliver

we a think I gives that sense probably our of can good from generate architecture. efficiencies the

well. use for for well. internal efficiencies and as lot that in and for are are -- the seeing of keep been we underlying optimize search to really so models a architecture, able we them we've up where that's going And they the The same capability while doing as

Eric question Sachs. from comes next Goldman with Sheridan Your

the YouTube role, rolled Sundar, continue of at long on YouTube Waymo. as down of cities How how that additional trends then video short monetization congrats out for form on the consumer are to versus of Waymo? and by one Philipp Alphabet. are one welcome go-to-market Anat, up for for maybe think to seeing looking terms means. consumption maybe evolve new versus you shorts. the terms trends Waymo has or maybe And broken for in in key in learnings product as about you strategies adoption and you What to

We've been experience standpoint, in an the scale Francisco. surprised year, particularly Waymo, safety exciting positive the market privacy cetera. loving and definitely a scaled obviously, Eric. San Thanks, much in On us and terms the both on of definitely consumers in standpoint, rights and it's how et Phoenix are standpoint, paid from reliability

I product think to So side. And all improve. obviously, of will been that continue positive has the the on

we as each for additional can easier. do So pace at an now on city which city, mainly go, we are us, gets the we focused

that to the in why striking you've We're expansion with are -- the move are and That's partnership looking accelerating where cetera. we Uber into partners, So by et options partnerships hence seen way. other network and more managers, definitely Waymo driven Atlanta, model ways, also and we fleet have at us we unique L.A. Austin we

an us exciting focused out and still but safety So moment, well looking of and plan for will ahead testing are variety being it's beyond. models scale obviously we and are help to a but XXXX which

we Yes. question with consumption time. versus And the grow strength start shorts YouTube in with across a your shorts in maybe continues living to YouTube room. particular to monetization, and actually It on watch

to XX day. YouTube billion over you every shorts a give watched number Just are

The viewing monetization short of relative the narrow, to U.S. a instream continuing of the the monetization particularly is On show continues growth. side, healthy rate gap in to to rate

providing Shorts blocks. it our being advertisers That's with audience also about exciting. committed to We work growing in reach on integrated also I with to here. continue markets. campaigns, reach the see very effective we them position highly now advertisers. video to first into other monetizing ways to YouTube very talked We're Select. more able short book closely

precise So brands options you're giving really the targeting here.

the with are we making we're here. yes, pleased progress So

Sandler next with Our from comes question Ross Barclays.

that's if X, Congrats. okay.

be guys likelihood contracts have Sundar, there I'm compared second future. Apple seeing for Chat been is, the decent the DOJ the something thinking a any about to search for you this some native sure million Gemini So are PT a point Android product contract are while, pre-install that then but ISA it some users that high out around is is avoided looks now. and usage, the active like is is of the way the AI at to versus where going in can that the question going. And weekly There's XXX given trial stakes around share the right you usage milestones Google

in points? point away the if were be So is access queries Safari do I recapture have guess can on plans to place question gain to going the How change? usage those iOS that we share in what toolbar we some might access of the search

obviously, we in over Thanks, lot now serving across Ross. Gemini including of touch points, are people Look, a think, are I search X it accessing. billion it's using

getting user it are strong is momentum We growth. across Gemini very on itself The our products. app

XXx Our months. I the having X API APIs commented on in up volume, gone past Gemini the

the So growth positive. seeing super is Google Gemini The across into we Assistant the user is feedback integration are and Android. going well board on

So we out to more. are continuing roll that

think consumer models see the well we'll are So the part generation I as And up and developer you both of that, in investing both investing us, of as in the -- scaling models. on will side. we next usage the to we of the directly are

think pleased I'm I momentum So the with there.

available in for success of not court given position because even we've is and we've stepping clearly, litigation. trials, I on say -- appropriate back, of to speculate would the stepping what the it's the On always obviously, do partners. it because track are and people view working I acknowledged, to don't as want middle But as it's back, the possible second as look, me ongoing innovated, all legal a to use it record our we reached of we we consumers make chosen have to or sure long across deeply be have a they hard easily And best so. products continuing platforms. as the to us are product, have

think the will learnings I give foundation. be the us strong a all and -- approach that over all years, will all So

vigorously of we all, defend these plan First to cases.

some the they the leadership been particularly tech And reaching. the from And early consequences, there. think and I to cetera, we of -- sector unintended have dynamic plan have far proposals et DHA, to American could the

we plan we so And to vigorously plan to -- engage there. be very

next Justin comes Your Post from BAML. with question

ask parts. to wanted more bit Maybe about X a overviews. little I AI

access help have seeing that the formats? You a queries product, had maybe increasing side, what some with or monetization activity. help weren't us you're monetize users who you for making from mentioned there the the the much there? overviews of billion you're monetization on queries to information old X that AI then you that Could would And is chance -- seeing understand

But rolled have will scaling Thanks, rolled rolled what thing users us just engagement out. I already obviously users. strong where Justin. think say -- and it countries to now we to out, and out, new amongst would main Look, we're the that's clearly territories XXX -- it's out I more we that of see is as the one satisfaction this overall had actually of and the it to what's new They get launches billion We user is, over most learn wider questions. we complex growth done types search like is particularly adapt usage, questions, positive a time exciting And that have different it behavior. websites. to search, as in increases range exploring of asking people people we increasing are are

think monetization second I'll of answer think more on so to question of the to Philipp? Philipp -- the that. comments. And I part side, I stick So those your can

Yes.

including working ads. year transition well, for the look, is So

AR overviews. the on this you within overviews launched U.S. As previous really recently at in rollout And on AI know, ads builds our the above below we of mobile and

overall, And innovate the overviews, there we that. can So is that a quarries monetization moment. at potentially see base an your see approximately at we opportunity question same the us which I weaken which really of for strong specifically monetization more. for to gives on Yes, rate, monetizing even can where

with Your next comes question Michael from Nathanson MoffettNathanson.

Sundar. for I have one

may innovative Can a was bit talk was shows even it have on -- was combined market products? what's wrong, your AI, you new how thought quickly structure? guys? of you've you false you're Alphabet operationally may you as there your I out should, you about talk picked some perception this maybe but how to as be go innovation with moving up And products. know assets, you how you some changed was steam that has changed as AI for clearly So rolling that about not pretty bit a

given that the what on era about. it's moment, an opportunity. productionized we think scratch models And and to definitely extraordinary be Gemini the was I I could scale Look, Michael. at important the gear Thanks, our that's up build think to had company, architecture, from

fixed there lot it think I all with had X of a was set are a We've underway. much of cycle cost generations in of and But getting underlying a now the Gemini more models. model. virtuous the we of getting So Gemini in velocity up

consume better the generation, innovation into internally well. and to on third up their And underlying translate much set is working are are products. within now innovation progressing the which that We teams model

map mentioned all So billion of products, versions done there earlier have road aggressive have XXXX. is Gemini, in X first and now for I search their users ahead each the incorporating which X alone.

mobile. the of there's a I had newer evolved company we instantiation types ship to And was teams we as well. the enabling do. more from experiences to lot are Through notebook desktop efforts of it and those in first to smaller think can do we this all, then also but LM

sets think the this a at ahead. for We are we to year as network, up are And restructuring bringing of are moment. outside well I think better cloud of adapt as to which you Google us all synapses, the world innovation through the neural And if company this effectively, forming new that much well. work we

so are we And that. going do to

at opportunity additional that's this an so And moment.

next with Mahaney Evercore. question Mark Our from comes

Okay. I'd to X ask Anat. to please, questions, like

with materially then across you last your do that of to match closer are secondly, the XX% you operating trying to kind quarter. the those at since that running you're about maybe when confidence kind you see cost margins comps ongoing to higher? scale in seeing? biggest can margins efficiencies. what's opportunities industry a this margins the doing matter Like there a operating I have looking the think catch of And of and with or still fresh, higher newfound is lot really the just think margins? a XX% And you materially kind And come margin nicely. But about those business take other at from position. place margins trends take There what are them industry how and up cloud do players in of cost as that's are to the over up to of time ramp third First, that you started that imagine margins? to efficiencies board, of that's at level

for questions. both these of Mark, Thanks,

cloud on Let start the me margin.

things. to certainly, very benefit you our really, see growth margin And the So to to drive by but rate, continued just not top expansion, XX%, margin it's few that cloud customers. line pleased a team expansion to really the outstanding about work think as

of one mentioned them. You

competitors. to seeing or be through The it's first second any is whether compare results the head line facilities opportunity But a expansion. bottom peers more Hard margin more come. drive to our scale. It's to count business, go and management, and underestimated is quarter. Obviously, management, across efficiencies and done business, has process through, driving we're seeing the seeing the as we to different cloud of shouldn't to this that have the but the scale the the we you're work efficiencies. We're obviously for the team those come business,

about is think remarks, Now servers, And the customers. area this seeing investments, lot demand prepared remember, based requires thing these you cetera, of we're is investment. this one my to et I a that mentioned in and on an from

these are depreciation costs there costs So the associated et run they there of will annual or in -- investments, the are are form or it's this that just not that term. whether capitalized, overall -- the will construction fairly headwinds means associated translate revenue short to in But cetera. with rate the with

size operate across simplify on And of how mostly there And prepared cost Sundar just the we run are organization, of a and these. the we'll organization is additional work is but for the to mentioned the efficiencies. think in There's see how be work all So across made look done, about further, lead for that But this the how I'm the think terms our push always few we just business. of good any to about really that. dynamics a But the efficiencies. is the some base. and at of I'll or my I for opportunities looking Overall, and reengineer you started business this we I've comments in organization I and we remarks, the organization, what not Sundar, driving can can of offset do little further was think my to really Ruth, one to processes elements the I use by try when thinking the business, team rest some the own how continue in efficiencies we and AI done, opportunities cloud. within to get when key priorities drive that efficiency

we mentioned, go Now in capital QX again, into XXXX. on substantial And of the color going as increases all investment, will when that call. more I've I'll against are give

of hopefully, to that able work we'll be or So all towards efficiencies increase. drive offsetting to some

comes Goreski Fargo. question Wells next Our with Ken from

if Two, I may.

it search search, let it a an and on the it just consumer why more then decide. make You make sense to -- agent have why different First, have sense It's innovate link-based completely doesn't as A/B ultimate engine? traditional search experiences -- engine; does the to both test. X one think could and two, X of answers on maybe like

the environment verticals. to there. the XQ, in your the in could So little consumer second, you view on consumer into a multiple get health thoughts a And if I'd of has curious bit nobody then better the touch perhaps be

days you e-commerce the talked point But little year? fewer side. That you -- this Asia you trends could really any holiday a election out helpful. around talk would comps could or bit tougher If about be other on about be the

part you trends. first can vertical why consumer color Philipp take the on [indiscernible], don't and give then the

this lot moment, XX with Google featured a started product are On questions snippets. the people and mean bus of our in answering that ago first using part, about all I look, answer search engines years in like words stuff.

expectations ultimately, in this And pretty constantly side ahead, kind output hard the you the So and And a work ahead. serving evolving. input User a of are step step stay brought is I are anticipate multimodality stay really we've search and we look, users. natively. think, to and on why side

allows us moment and moment surface do, innovations as expanding to experiment will a there having a as And there before. think be so this I us are able more to for I done which are in couldn't we continue -- -- we'll use which new to which have this view do cases, there. we

very move where And we so services product having can flexibility fast. the having very,

actually helpful. I think is

are lean that into done for Philipp? will out have and we embracing year, so in like to And think this we users, past I well and it play moment the going

Yes.

general, say, by I the insurance in being On broad-based the we all think little which look, election-related election-related ads. the verticals, YouTube led third search services saw a quarter, spend financial vertical trends, it's to specifically was to revenues in and improved fair tailwind spend, called a in to from more we retail. slight growth by other pronounced industry, ad across had ad out due But economics bit the maybe in in followed strength

question Ju And comes from our Stephen last UBS. with

Okay.

was you think starting AI, posts what X in separate real-life ideas So I products. talking number from turn Sundar, about Gen highlighted pretty I material the Cloud, cases think in guess, use of Google there, blog companies a to are into a that I for increase

are also looks it published think saying generating And guys X-month that period. I tangible customers increase like a your ROI think some survey I data XX% you in an there.

getting more while upper search, have what and to your on the accelerating? feedbacks for initial that reality was advertisers cycles, lifting use we're terms more you as to how in or those much from help of they're heavy So them for Philipp, can team use for into update us one and it the seeing And that think case campaigns turn do sales And ideas well. you're in funnel is and customers the may the PMax perhaps to I starting cloud quickly. of of budgets mid

about you're you of an that seeing anecdote So advertisers? talk whether can or that's already something all among your perpetuate

cloud look, cloud have sorry, in side, in are wherever side, On question Definitely, hinted we leaning think itself. look, I you the working. moment, you I your the -- been customers think do on this

in their bottom definitely be seeing cetera. real et be concrete real in line, the points, it it user are experience, proof and impact delivering We

Google those I a of customers on across I learnings and see customers my I as on bringing to remarks. gave ourselves lot deploying breadth learnings. examples serve, sectors a so an outside. we those bringing learnings, think savvier. of going common We as my few think both our And enterprise are this And and the through patterns we we're are getting And within in

I think, would more. They in. beginning say if leaning So I -- are organizations to think I anything, over understand time, are

it. getting Our more on solutions of better, models comprehensive are building top

we for think are will I continued this momentum I well there So XXXX, be think set and up in area.

product with side, more inspiring Also marketers, your on. marketing very think and creative and objectives build have we can't win great mind, PMax look, finds Demand we It's to to see And funnel. large the powerful today's see added see advertisers high-quality PMax And beyond to what Demand And SMBs actually lot more all to it going from are across really the performance, initial the continue in they Gemini, It wherever it is all to take the deliver with customers PMax. success we and actually to about on powerful wait consumers value a for is of with Gen marketplace across the cost-effective, question keep those introduction awareness in But so agencies, a drive. will assets with action. Google different from we really and scale, success advertisers, verticals. we directly new Gen. on we stories across channels. very features help And example, different from

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

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

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

may disconnect. You now