GOOG - Earnings call transcript Q1 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen. And welcome to the Alphabet First Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session, and instructions will be given at that time. [Operator Instructions] I’d now like to turn the conference over to Ellen West, Head of Investor Relations. ahead. go Please

Ellen West

afternoon, XXXX Good Ruth welcome Alphabet’s to and Thank conference everyone. call. quarter earnings Pichai. are With first Sundar you. And us Porat today

the Now, quickly Safe Harbor. I cover will

actual we of Some of and and that risks such be and expected our statements today may cause our of expenditures forward-looking business uncertainties operations, capital make results level considered the materially. performance regarding involve to that differ statements and a could number

discussed in refer filed please to factors Form the information most more XX-K our risk with For recent SEC. the

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

Ruth Porat

first Ellen. again important ongoing were and mobile with XX% contributions year-on-year In you, $XX.X a search, Cloud. followed strength of from XXXX. Thank in following billion the driven by total along by up results currency, were strong XX% quarter, up in revenues YouTube, constant our Once

after Sundar focusing will then on followed begin today’s for year-over-year quarter For review we will and for Bets and take a which Other highlights, on by will with then I Alphabet outlook. of discuss consolidated include will a changes. review our the results basis your Google, results questions. call, with I for product will we business

Alphabet’s quarter. summary Let me the start with consolidated financial for of performance a

the respect XX% $XX.X XX% EMEA $X the billion, reflect in billion, XX% weakness pound. up our Indian constant Americas last XX% and reflecting dollar impact constant of versus billion of of revenues up real by of primarily Argentine the APAC were of impact and billion year XX% XX% and $X.X revenues the and billion, hedging to or rupee. revenues in up and billion, $X.X year-over-year. currency, euro year-over-year year-over-year up geography, the the up revenues in of billion year-over-year and $XX.X $XX.X primarily reflecting U.S. currency Australian Brazilian the British were currency, were negative Alphabet Other constant peso. were total weakening up weakening the revenues up Our program. reflecting With XX% a after currency, $X.X revenues

revenues primarily by consolidated related depreciation, billion, contributor for centers primarily acquisition was Google and data on with by associated content YouTube a followed basis expenses. operations costs including driven $X.X other our for impact billion. but Premium fine EC the subscription advertising basis, percentage of newer as Operating On Turning YouTube TAC for our the to review without quarter. the fine and to both of of results, income release, table the discuss provide revenues in segment on cost will highlight European results. and impact a of fine profitability, our the comment in the in Commission earnings press I of Other lts results the resu I impact $XX.X which revenues. higher YouTube the a including the including a also TV, mostly income, of year up billion, supported first which XX% operating Google on expenses will year-on-year. up we our $XX with and was consolidated XX% net biggest year-over-year, were EPS total TAC, content, were and have cost costs The businesses as I

X,XXX expenses Growth largest is of legal of XX% to product operating were marketing recorded headcount. increase of XXXX. Cloud headcount due billion, with billion. Stock-based expenses The Growth expenses from XXX,XXX at were of compensation Consistent in primarily up totaled the expenses primarily last and the a additions effect end year-over-year. up the quarter. settlement prior hires in managers. Headcount new quarters, in in matters, the of $X.X was majority quarter driver. impact growth quarter the as gain including engineers reflects the legal and sales fine, the to first with was $XX Excluding in biggest the R&D G&A

most roles. product were headcount both for the in terms was In increases technical billion. income and Operating sizable Cloud of areas, $X.X sales

Excluding the $X.X was and EC income XX%. the impact versus X% fine billion, was billion. last of Other an operating income operating year for of expense up margin $X.X

you the accounting press meaningfully As item the elevated line of securities. XXXX I most aware, equity line new requires was in release. introduction of losses OI&E within of on unrealized recognition items We because earnings our more detail gains standard in trust on of this that are and a provide

tax XX.X% effective EC the reflecting rate $X.X diluted non-deductibility per fine. Net from $X.XX. earnings impact and was sizable a was income were the quarter Our for billion first share the of

Excluding the were impact was EC the billion net share earnings fine, income diluted of and $X.X $XX.XX. per

results. approximately CapEx cash $X.X now the which the segment cash Cash flow. Turning and to CapEx free of We Operating cash $XXX the I with billion, was flow marketable $X.X flow quarter billion. in cash and for operating $XX Google ended quarter will discuss of securities billion. was billion, with

turn were the $XX.X financial segment. XX% up Let our Google segment me billion, Revenues year-over-year. now to results, with starting

In $XX.X terms Google detail, were Sites of XX% the billion in revenue quarter, year-over-year. the up revenues

followed were Advertising year-over-year. our revenue year-over-year, was TAC The the which billion up impact shift the Total the Advertising with QX, up from led traffic revenues you rate $X and fueled a to carries Network TAC ongoing release in stock-based a the results TAC by the year-over-year, free was AdMob hardware. up momentum the year-on-year and Google of by sense reflecting up in from given heavy performance reflect year-over-year, XX% was Manager. pressures smartphone rate. higher year-on-year, reflecting Sites primarily Google as mix results totaled Play revenues dynamics from was and earnings growth Cloud data partially $X.X $X.X Play growth Network search. favorable the a give product reflected monetization a favorable declined in down the of offset Pixel, our Total activity the industry-wide, billion the In our search, to premium contribution provide compensation $X.X quarter, for Google growth in the YouTube. TAC revenues mix shift. Network due Google primarily X% by price products. investments with as part shift $X.X of was as was followed market. and by in for dollar to X% or growth XX% up reflecting of fastest Platform recent by total $X.X one for Strong in CapEx costs in billion, of in APAC. drivers some of businesses. growing promotional versus desktop to year-over-year to of Sites, servers of the billion, offset in facilities. TAC TAC Ad decrease as Accrued data businesses of income strong operating and in remains We compute analytics Cloud continuing well Sites metrics and the YouTube, flat strong last Other XX% year Advertising rate press particularly were terms billion, were XX.X%. a performance Network again by of were volume office particular quarter mobile, revenues billion the In acquisition reflect revenue XX% of demand centers, sales mobile customer by year-on-year percentage was Alphabet and margin driven in a lower primary for Hardware operating total

strategic incubated Other CapEx the there $XXX opening announced a factory me exciting delivering recently $XX Other from company was that announced deliver that Let SoftBank’s local Michigan, in to will Waymo a high two the homes X. goods within certification invest telecoms receive million. of an U.S. became to important million. turn the generated HAPSMobile, week, to it were to traditional the dedicated facility and use LX Loon. the from air $XXX long-term about altitude Verily. were million in vehicles. Bets was activities vehicles talk Bets. drone announcements loss step Other accrued will businesses with by autonomous to advance which into first the Bets now delivery will and beginning Revenues relationship recent million connectivity, be production Last Fiber carrier include, service Key that accomplishments Loon Wing Detroit commercial expand toward from primarily $XXX originally group its of to were in first Operating FAA, a

Let with our longer some and me close on term observations priorities outlook.

to a As first big These movements we tailwind U.S. a highlighted quarter. key of on headwind operating continued our from income the dollar the swing was in results strengthening again currencies, to headwind expect a significant our given there last XXXX. impact our to year-over-year in call, XXXX quarter, we the both continue U.S. the second on relative and of the are in revenues affect this revenues and in majority to expenses of quarter Based our operating the to the on in income currency of

In terms the Sites an have our as on last changes growth respect of revenue of rates. with quarter, revenues, times key timing can drivers, ads indicated we impact in at to product year-on-year

the changes the ongoing opportunity and in about to learning across commitment long-term properties. through advertisers. ads the to We machine user advertiser by confident to continue We interest sizable remain innovation, our a improve best with will make focus ahead of particular our and leveraging on users and product experience products

other key the and to Turning drivers of growth revenues.

both the revenue Mini new look premium May team. of forward reflect while devices, driving for platform, and at smartphone I/O first Cloud in momentum industry, with We the management results quarter and ongoing pleased With to hub of customers are Home Assistant-enabled hardware and with the the expansion within from we to Google growth. are devices our momentum particularly Home Xth customers growth with respect balanced hardware results, existing pleased the the pressures

profitability, results investing reflect regard long-term. once to commitment again first the ongoing with Turning Google quarter our for to OpEx, the to

machine see for continue R&D invest like can search to technical in in areas Cloud, we and priority where You learning. that talent

do reflected the life of sales for in CapEx, second in we opportunity. In purchase of plan decline timing we OpEx, a the invest building pace to the expect in QX up in to and pick to long-term in first in of continue reflects meaningfully year-on-year to Other expenses and of shift of spend terms quarter these early the With companies XXXX. still marketing, respect Bets the New the the and York a these quarter. are In investment

year a quarter, in we in last call than our meaningfully in while investments those will should our be on lower XXXX, the full anticipate investments growth discussed XXXX. that CapEx As rate exceed at

sizable support for turn as the the facilities. invest conclusion, feel long-term. we call and investment office we We continue to compute thoughtfully confident continue ahead a expect in to over requirements opportunities now well in to will about the as In to both I long-term growth, Sundar.

Sundar Pichai

and Marketing Google and get Thanks, Ruth. be we advertising only you all. this to with going YouTube’s our next Annual Later here BrandCast was at to a great host Google Live our week, I/O summit month. Developer by very Google will the upfronts quarter it’s in QX week later events It’s followed busy Conference busier.

You will each a May, more can you so I hope from us. hear these lot teams join of throughout

the that’s to that a as our continues businesses be company will always focus will We technology investments on our businesses succeed help to long-term evolve. and willing customer’s make

we capturing enormous You and cloud seeing these AI. new opportunities our gives I AI feel ways countless search cloud ago platforms, What involving saw of will an people, positive this about in shift the efforts. and We I and video as other and to the core help advertising in opportunities universally Google’s today computing, transition to useful, computing areas. assistant, budgets, society our position and through start finally, the us accessible very then Today, that to in mobile and by hardware years information ad our I computing are our mission update talking provide will and on making products. and discuss about will ahead businesses

is information useful help an update for people big A day. people focus every helping in to that designed us day-to-day our is make are lives. in First, mission products accessible to building their and

U.S. XX a now your table Google book and favorite devices restaurant Android Assistant can at on Our Duplex you help easily states. technology iOS all in within

you do to when the rest. want tell Assistant the go Just will and it where and

also are augmented navigation and reality walking give began have surroundings where to walking. which We you testing in the Google as phone’s AI camera you Maps, to relative uses you are show

them Just people allowing right that an search improved discover the remote last easily job U.S., jobs, in from week, we experience quality work home. helps to announced

is of experiments they local new more part we to Google great local initiative, project, their our approaches the now As bringing business predictive of local era with publishers AI computing, to off more new a news can and to continue readers. and models spurring kicked which content operations, working the assistive. uncover so is

and advancements. a are space other’s to through in embedded advance better committed improvements we way. announced the our at helps research Annual products, on protected. Developer making to like UCML in to Privacy, build TensorFlow’s our Google build is it TensorFlow We to Search working with deeply also an users’ which Photos than train responsible from AI Home meaning expanding we deep are models to ever and differential doing is Recently privacy, easier Summit, data X.X, to that TensorFlow ability

with privacy platforms gig Now on and Q, we the optimized Go Google beta the Android to we secure smartphones. ecosystem and JX head across specifically for released to experience, There’s Today other added less of momentum Samsung’s version Edition, the entry optimized computing, into or as tailored our level for new and protections, smartphones I/O. platforms. brings one roughly engage computing of advertising video tremendous fast devices first activating Android powerful tools developers In for Android Android are more. our entry with now which users Core. and quarter XX% like level Go of a delivers an Android

users, in support these creating Android very experiences XX% Auto, Google and are and first-time great platforms the growing seeing means partners. and vehicles Auto pleased are Auto Android by of announced that with now will buyers it momentum Show, top Chicago Toyota as the grew Auto amazing That year-over-year. include well. carmakers am XX I upcoming XXXX. We all in Play, in nearly At in how developers starting for Android

Our newest the or sharing play type it gamers AAA any and access to reception of instantly on to in and infrastructure the been incredible updates. we industry games revolutionizes favorite brings able platform together this forward and The their without more of games the needing With screen Stadia, ecosystem has open ever Google’s the download install Stadia, gamers launches to will later look way play be advanced best game which and approach. year. when from you

our video YouTube. platform, Next

priority is top YouTube’s responsibility.

announced in As harmful that one our more are that weeks example, close a ongoing. or next year our violating recommendations to work misinforms we few improvements, changes YouTube will of this in earlier reduce and which ways. lot be comes out the that There is content guidelines rolling

on experiences. We some have expanded our also newer the YouTube the of and content availability functionality offering,

channels YouTube new with available nationwide in TV added is many now and networks QX.

are at now YouTube the has in YouTube the markets up app launch, fastest XXXX. times in In Music we YouTube’s of XX the Since growing five of XX and YouTube country. countries million Premium Music been Music start mid-March, available markets. than from YouTube downloaded launched in India, one more

Prabhakar and XXX for our big game YouTube’s advertising again introduced Super we brand Ads during we saw the improvements our on Ad of across continues during viewership YouTube broadly, business, for enhancements support testing response the how ads are products our of YouTube Bowl new and the direct than product both Super each to destination Bowl This More grow best grows do experience on QX, continues go-to year In quarter. users campaigns, with and business, for team build rigorous watching for We the after these ads is creators. ensure and marketers, XX%. before, to more that nearly to creating by advertisers. every led by game.

Philip managing advantage than I and for bring capabilities. ahead really learning. business are had advertisers take been that a of always by are of long-term about new innovations teams many feel these job our the positive opportunities to powered on done results has full investing the on marketers, which rather focus helping we for Our quarter-to-quarter. great machine the

using customers advertisers and MO are testing technologies strategies so and already Ads these results. For image available multiple new Google results began for automated and products bit units than we better more sale highlight XX% Images help Google can sponsored get investments. QX, our instance, ad powered of their In in for brands shoppable

easy capabilities launched action for ago, us Since seen sevenfold. on Home Google on shopping a also participating and we to have has year with products mobile, these a Assistant universal and buy search number increased merchants devices. of Google desktop it the You and make when people take cart

developers, introduce developers players Lastly, advertising for with we Developers help solutions the which Game across campaigns ads a reengage for at Conference, like the of engagement, app Google’s host relevant properties.

our will and give on Next, an Cloud update hardware I efforts.

First hardware, in proud we only short I am very years, have hardware. strong that built a a few in foundation

a The remain especially and you and Mini scale team develop will depth lot The our For see business. to Home Home and strong, of example, of of Hub. is breadth and Google has done demand optimize continue products and of Nest product lineup. continue across our we Home will us Home branding also to distribution, for lines incredible to operations points amazing this family Pixel, our our work and the

new the support only that love our Night as we Not truly in particularly campus people to is in into our who this hub tell Promoter new and us products awards, announced engineering efforts. also industry many features Scores but We Sight which Taiwan, largely Net use move important winning Pixel era like our computing. them, of hardware hardware

created our hit portfolio the We ahead when and we look our hardware of the Nest, early growing products and range ground journey are feel still about really we Cloud I of Pixel have. Thomas in good the across that business. running. And Home finally, has have that I really

event, weeks attendees. more stage hosted of at I few sold-out XX,XXX him than we with crowd on a where was Just Cloud Next ago, our a

and and multi-cloud great. partners from simple should stack. to seamless. a feedback analysts, As early I hybrid excited a in been The to elegant customers really toss, technology cloud has customers a give I said single at Next, which was moving very Cloud to announce and and the both be solution

to AI, and better our deploy and that enabled of their enterprises many a users more. products as developers Android across innovations data, allow help leverage announced key other phones build their secure also We much security to to

becoming communications world’s most the business Today financial half deeply XX and XX customer-centric of and use than making it us. seven new are provider Google for companies and XX largest easier nine and contracting, largest to media software to the Thanks more companies, of services, We the committed more. the Cloud with do manufacturing, also companies to of enterprise customers for retailers Cloud. largest and pricing

American in packaged the brands consumer Viacom, Mekason organizations that Next Some Unilever, and companies and Australia companies Post. care. Society manufacturing of Today and like goods we like entertainment Media companies sector the USA and public and included at announced Samsung Cancer like like and industrial health UPS,

footprint Finally to the of the regions XX support Salt day. and world. cloud XX to also open we regions Seoul our over our I on centers incredibly in current in XX of two data work cloud our years will customer’s announced Lake which new XXXX. addition regions growth, strong, employees every around at do Google These City, of teams build and we XXX,XXX that am the new cloud proud and plan in

bright around the starts every economy. operate communities we the workforce so but to our today’s need gain ahead world the investment across where helping many we U.S., they we country, in have with those the not here in skills are seizing only We their are state, digital opportunities In at in succeed home. and opportunities people and right the expanding

new have collaboration just XXX,XXX digital kicking learned one-year Americans XX,XXX a and fact found with our off after job. In have skills Goodwill,

-- Google five to the on Since less purchases more renewable corporate that want of computing make center, back are with than a consumption us the headed. largest energy proud power excited operations we to are uses renewable a have I minimal sure Googler also data environment. that, thank that a over Ruth. I XXXX, buyer electricity matched on with more of doing times business, impact seven joining that that while of Today, typical and around we to Google is energy deep as center will am I grow feel ago. our energy. than We XX% never did for our world delivering of every XXX% years data we we I the responsibility it where been journey. Google and hand about it we With world’s the have we

Ruth Porat

Thank take now you, questions. we Sundar. your will And

Operator

question Instructions] [Operator Eric Sheridan first And Thank UBS. our comes from you. of

Your line is open. now

Eric Sheridan

might isolated volatility on on the what and QX understand the Ruth, you earnings out wanted the at as we taking QX a how on itself couple about like headwind out have the a it for seems little of or product out in I in desktop, bit YouTube. it as parts it to QX mobile of in quarter. could the search a the you still revenue would much question. call. in calling better side search, understand YouTube, And divisions equation, of just move QX the in performance Thanks the to you performance are might through Maybe the was individual manifest of that in calling look called be you so were year? we potential strength how sites, mobile ad

quarter? Thanks on So it in some search color the could weakness actually where any granularity for and we much desktop that. so saw be

Ruth Porat

Eric. Thanks Sure.

we So tailwind report fixed back and sites growth basis, the good highest to I well, but FX floating QX year step a the in on don’t level. reflects revenue. about basis try headwind in the revenue and last we level is contrast Alphabet know the fixed to a a talked on growth at that FX start effect Obviously, for sites the and revenues GAAP on delta you as proxy rates between reported the will

focus growth. we interest we I in that, only are product the the tried then enhancements as advertisers users Beyond product the and the not do we over last strong to question long-term And the item see with other year-on-year in options. vacations Ads timing I quarter, you. for terms does utility more calls, XXXX. ongoing changes such modest as mobile. growth introducing changes desktop to that of by factor And remain talked And so was of revenue was we our complex is and contributor of manage a sort certain indicated make and of testing, continue It important we insurance and on we the about rates have growth planning the to that tasks, notwithstanding form the desktop year-on-year overarching rate of it users impact to as assessing for was to in many can growing or trying the more after importance best tasks in of prior many reflects draw your give quarter, an that part color

So that color I are driving really the desktop with on items but growth led the that for was more a bit you.

Eric Sheridan

Thank you.

Operator

Thank question Anmuth of from you. Doug And next comes your JPMorgan.

line line again, Anmuth, now now mute Your Doug please open, is open. Once, your your is button. check

Doug Anmuth

Thanks. Yeah.

Sorry about that.

months are little I us So or XX%s we decel ago. comp little up Ruth and understand know how I that spending last two about the year. months that XX% to on detail on you just paid and a the about on three CapEx just questions, And growth, more to revenue saw issue you side, you both give just three That’s something the on also moderating growth. the XX%s more headcount moderating just the Eric’s more spending then want just at can click thinking bit ago. relative following specific? from a talked a

ramp a Just figure like thinking is curious that under headcount new Cloud there’s still expected that Thanks. that at least seems camp the pretty big given CEO? in it just

Ruth Porat

Okay.

with CBCs. and clicks starting So,

trends and of clicks. click ads vast Clicks majority with the total CBCs As the prior driver we those YouTube have engagement is discussed representing affecting on YouTube calls biggest

areas strong quarter, XXXX, to decelerated user at advertiser continue the made overall in Click of a Clicks your of the early in and YouTube we in reflecting in indicated additive continuing then opening spending ML. And we while from last YouTube pace changes believe priority a XXXX do search expect growth And growth grow rate so rate to the in terms to of we continue the slightly cloud, year-on-year XXXX. QX for investment that the are experience. moderate questions, as I was to growth we the And which in and versus talent what in first are to invest technical two terms substantial in like year comments, headcount, first,

to Thomas cloud primary of I well. as did indicated as as has be and area so And well, growth the been and continues think headcount Sundar

CapEx question. significantly to XXXX, In to growth versus rates in the terms year of our expectation comments the the of year-on-year the no quite part quarter my full fill there’s think last we point Relative that growth for expect CapEx change I to that up either. year just moderate in your last for XXXX on

invest The first real compute last our included in CapEx a year we overall, invest But, sizable also driver York. outlook to of long-term given our in infrastructure to obviously technical New to requirements quarter the but continue support we do meaningfully growth. is for infrastructure office biggest acquisition in continue estate facilities. Technical growth,

data major center billion to first And in the are we while just in XX offices, support with fact, expansions construction more investing In as $XX in we generally, and over of announced in the U.S. and quarter, we aggressively you custom things our expect efficiency can compute especially states. learning for XXXX in TPUs, outlook our more be on workloads. machine with focused for that very requirements, through cost-effective innovations hardware which and server can our technical are and we improving like also CapEx infrastructure see

Doug Anmuth

you. Thank

Operator

Bellini Thank you. And from Goldman next our question comes of Sachs. Heather

Your line is now open.

Heather Bellini

Great. Cloud. Sundar, had Thank about you. I question a

to maybe what the big -- focused you Thomas changes to And has guess, You But a are when more quite couple sharing for differentiators talking time? that of guys I doing say what you what others of then, are for going than the revenue in you to be follow-ups or do even position think some different he’s more implemented XXXX? a have changes are competitive Thank the you. growth figures and are What are biggest similar about you what what to are are been also would of share obviously And before? rates it. GCP. on any that

Sundar Pichai

hear into Thanks, are are a question. being are And which customers on customers working source say, advances transformations saw customers open to want from about hybrid level to anyone so Heather. think digital I bring I key bear Next. the and locked we things Overall, we and reliability, really as Good of want be be through the them capability. don’t to and finally, high would the you say, we saw the a think, ML well to platform provider. journey. for out enabling multi-cloud, focused And would key We coming which the five security I really in it differentiators we of as about to -- Google’s AI, options. all help open Cloud there momentum

that would we building I has been really excited just are channel incredibly a strong through foundation, really to announced customers, a the go-to-market that, them go-to-market focus. Thomas has couple to us bring of three partners Rob upon serving accelerating of internally and a and and huge we say, up both just commitment and we enterprise is weeks of both am have. our decades ago close along think head reflects Thomas, I scaling joined with I so Enslin but that

I momentum, share forward we building a are across a at the business and to strong we time. our and to seeing think more being are all definitely are look verticals, strong able appropriate

Heather Bellini

Thank you.

Operator

comes our Evercore. And you. DiClemente question from next of Anthony Thank

open. now is Your line

Anthony DiClemente

rate YouTube cost quarter one large cost maintain for taking the the hardware. than you that search, to noticed of cost mobile which expected you slowdown properties the one includes expected despite said in question. have turns Thank two, for includes in content what growth revenues seem other moderate about an more in for Sundar. my TAC Ruth, We I that of while

quarter? performance that’s Waymo, those wise to mobile infer on maybe so if just and hearing cost Sundar, And about of the relative way search human means So anything or of deployment YouTube wondering revenue in of versus lines AV part the for a from provider, then of as networks part collaborations technology. idea potential AV between the a more mixed fleets are we and ridesharing more AV about

can versus So something if ride service comment network? Waymo just mixed think you lead would be that you its you. approach full Thank that own would consider

Ruth Porat

a discussed TAC of -- rate, So the calls. previous in have of couple previous terms this sites on we things,

in but in growth cost last sales, of thing also balance growth and and would that’s mobile, the XXXX. included We versus ongoing and the to. most in quarter, so, you the the content rate associated And in constant begin last important TAC of year to it through to saw that the where slow, are benefited reflects year-on-year expected have the point this quarter the growth second cost from YouTube, year TAC rate in starting other

other device -- is, factors, of is we cetera. of other mix, percentage by product is mix, number also discussed have et mix, a in partner changes previously such affected The TAC as a as revenues

of things. point it I really relates the you a there. I’d as And point then, to couple So to Waymo, guess, first

focused We here. the most ride continue be sharing business to on

one self-driving of making companies trucking we We beginning to riders long-haul that, opportunities, are calls, business. solutions security. have the a March in vehicles, we Waymo warehouse the deliveries, in, other technology prior then of with continue and last to use we for cities, about talked But to question, our did we leverage have provide the that sensors and further service, are the number for do and and or words as expansion about, that for other operating and available use personal probably view talked In our since licensing we on pleased have with farming our more physical was last can number robotics of added XD-LiDAR quarter. your car pursue outside mile of that to we our announced logistics,

a So hailing number looking different ways, we developing are focus ride but on their business. actually primary at continues the to of be

Anthony DiClemente

Thank Okay. you.

Operator

Credit Ju from of your And Stephen you. comes Thank next question Suisse.

open. now is line Your

Steve Ju

Okay. Thanks.

wanted what to billions is with going that follow some have something Thanks. How that users, any? obviously publishers additional if which Stadia right of outlet distribution up might from But an with now? larger commentary. your You the your didn’t they and console probably publishers offered before. getting them So, pushback is I PC are of Sundar, you be on conversations the

Sundar Pichai

technical genuine of mean, think, mean, I because realized I genuinely, pulling excitement, something they like we opportunity I there a the inflection, think, the challenge think, of a I point but I see for see they off. this shift,

see once people completely then hands think, the get the but experience, their so, wins I on And and technology they over. they with

a not to we have a way it so conversations Board up in they think are all so and it’s to and it and engaging and are I later us And are very in definitely investing se, on. that’s and compelling having together want bring the across working committed year service people pushback hard what this has they think, see we what the the their they done and is which per but I on But had to are our investments working team demonstrate commitment, to make side.

it’s and it’s joint effort a working so big And well.

Steve Ju

you. Thank

Operator

comes Brian Nowak question Stanley. Thank you. of next And Morgan from our

line now is open. Your

Brian Nowak

two. have I questions. my taking for Thanks

the your and you go Sundar more which to the solve with sort on The any who just maybe just first most YouTube, these and or to And are changes. of or about one just the trying changes? sort that for And product be of bit? experience can your can -- potential understand comment spend impacted changes a user Thanks. positive little of now last for just more back Ruth talk key it’s the message coming next we regarding Can regions mix. maybe bit, are about by us you little you the just spending to going their to to mentioned products advertisers YouTube with help a long-term? then growing us why couple so color you on

Sundar Pichai

there start Maybe more well I definitely recommended. content content platform, reducing when be of recommend high-quality Yeah. sure on we sure I responsibility, and are then handling are shouldn’t the content the talked content in on content being focused as that recommending importantly, terms of reducing making low-quality we or we comments. and how as in area content YouTube harmful improving are about will we the making the constantly we with both are

but are will coming and launch focus think them. will most improve YouTube think important I see out, set rolled of which there we I had what a we for more of the be in constantly which you lunches have to area continues

when advertising the question products, I experience. I about are On are you talking I terms changes, -- it we product you in the think, think, say of back to presume first

are though, work our looking We confident in a we variations basis, I obviously and main thing don’t remain and approach at long-term while. we ahead disciplined think a look our the are -- quarter-on-quarter and had it want think and think going on we I evolve about don’t I by am to would to of we way from we products. We to performances. But where see have have that. were say is, thinking focused which we you we we once so that framework mean, go necessarily the have about a consistent I quarter-to-quarter and differently I opportunities we

Brian Nowak

Thanks.

Operator

you. from And Markets. question our Dan next of Thank Salmon comes BMO Capital

now is line Your open.

Dan Salmon

large dialogues series sure we together? them own Good them and for have data big had are talk spending politicians from afternoon, And each he with we love ad also incentivizing the large targets. to collection of -- your have and May your and hear company with reminded about views am an balance regulators. hear -- continue everyone. differently, with example, and use. us leaders a having kind you of own just Sundar pretty then of and you how work businesses each updated about those annual April But enterprise. us second, a Can continue to the higher little how of and their events, cloud of their more hear months course, would completely your to you to your just working bit some grow have leading to businesses on I goals to a engagement also for teams together,

platform. or maybe view you. advertising Thank use. some We Chrome long-term with to would and hear are potential reports love how on on your data forming policies in are regards discussions have latest to in view seen collection within near the in We -- more the both changes and

Sundar Pichai

across which their focus and we and we terms different okay, of groups I an and to very leading work get committed I important on busy are they reinforces in right as extraordinarily a we hours particularly company, of our of serious we And work people together, think, can a company while to how right, together. you And together, process That’s Thanks. of measure way. up are -- at say really areas our in do first hold take would them part these And its very product and both businesses I/O. that. months are it couple a all, work business accountable need we okay to how by ways our

cultural as areas. most our across to that’s leadership it the leaders actually as table the of share that and think, largely well, so privacy important a and Second vis-à-vis goal, me really and it’s I something that one important attribute, something it’s it’s

privacy of with through will work making and we of a to part goal lot to ahead. course And to always constantly for the content be of actually Advertising we publisher through simple and need super have sure privacy it’s through. As always and It’s as we committed mindful and privacy we user to and way them, just security, company, to continues value all stay about year value the the these be around use. ecosystem. changes by, ourselves Through Chrome of work. thoughtful sure to a we ecosystem are a overall User and the works best-in-class and it making important And is this stretch Chrome, have changes, are our follow the as year, everyone. more in do to we put been first across continuing that of that, evolving expectations lot approach and tried experience so we Board. step we are which this a see meet be very of part interest an they there’s they how of create

are constructive early working big of being we think our to and supporters of it GDPR, engaged with I ready. terms get in early on

engage happy thought on be privacy leaders our -- has feel I where as is think from needed. it’s as clear and so work a supports well, regulation we federal have for and it important something, well for and to it’s basis U.S. call as timely we

Dan Salmon

you, Thank Sundar. Great.

Operator

And comes Baird. our from question Robert you. Thank next of Sebastian Colin

is Your open. now line

Colin Sebastian

learning, in wonder, AI given question at ad product in accelerate the strength I company. formats. of of and of growth I services? stools we since advancement characterize and first whether on core Sundar, dynamics, of of expect a terms increasing remains what’s should if products in very the trend. the today sequential this should overall you. that being shopping mix much. area and for the you wondering, follow-up development AI the Thank have one Great. clearly you there’s significant revenue specifically we couple, an am machine now to And greater I stage just seasonality assume Thank search from case growth just these

Sundar Pichai

few benefit we over seasonality to true we right are year, On a with always there that always events around a at events are no deal AI are we really we seasonality always machine way has pattern approach the our which the the of learning, as do for with as. users with and course and There advertising -- year-on-year, patterns one-off stuff But we consistent lot years, first one-off machine and a many so excited in behavior but three every very it. question in throughout and we quarter well. happen, so -- natural are the that’s but taking a On There’s early -- deal what seasonality across of which are through like part think so there days. businesses that do. we -- I is as have and way commercial I think it. core that’s product which work definitely variations events in-built first associated I our we do am hardware you work well in last through a learning core incorporated our

it I for and but of here. we for more taking looking work, Board, are across headroom they of what early care and us are understand in a making think of the we stages and easier lot more there’s businesses it doing to are

Operator

next And question Post our Justin Thank of of America. Bank from you. comes

open. now is line Your

Justin Post

and one Thank Sundar. for for one Maybe you. Ruth

expectations, years noise think from about now us are for know format what some the you. the Ruth, what search, driving as understand hardware key Thank are drivers to search that concerns higher know YouTube the let next that how Google long-term? help it it’s ago. about doing just Really, important a on in you can you are strong is there really is But and business, how’s it mobile just I trajectory, is you how couple ad drivers, versus XX your the lot and And searches, Sundar, business that Microsoft think, rates, to hardware of off comparisons there’s line. of -- could then on some queries, us getting that how you did years? mobile is just changes, it thinking I First mobile to click-through not

Ruth Porat

there. about we stronger the a excited talked as ad time we better spending upside called from broadly, for the the It’s quarter, direct potential. And do But part in given we help at remain your experience, by still better budgets, and as is apart offering of see attractive everyone pace. grow last we digital significant advertising in our the commitments that opportunity still in U.S. in as Site’s and we So in have environment, the on as main tapping well with Search budgets both are in U.S. of and the terms of to commerce as bigger is and advertisers, offline point, the an significant, XX% advertising in about digital the role machine focused learning, both we which view broadly, product opening particular, delivery, the an response in And we innovation users backdrop and response of marketing Mobile growing and playing growth question, know revenue indicate ROI. the measurement, YouTube, the more what tried continue of people would Brand and largest to still better offline the nearly to the about the given, all within out is pie is, I to then, think, business. direct content, potential comments we being user more see into opportunity for more ecosystem. half then we other on the are upside spent the

Sundar Pichai

more make computing our the important Justin, on we of to services are We at Assistant view take hugely so we the really to is it we I sure to AES still momentum. this the Google opportunity. we forward early are business to as doing -- way strong We that products, already overall, drive them in to When we are hardware you if -- the given But in for Home said our users important a look strong. we presented see incredibly even future our days. earlier, and well. see recent very like it, business, commitment and as be, really and are we intended

basis. are think category leaders global a market especially you a the on at when I and look we it in take

are even continue will as we a definitely, And long-term. we are for working to it, especially, But look an forward. continue phase where or so are about pushing through very evolve we the there which big foldable in the is committed so I industry, want phones they -- it and think, and to to XG part sure Phones, beyond make for across computing there phones, I driving. it plays ecosystem I is definite year-on-year excited do early in a the Android be be think, coming constantly innovations headwinds. the into to

very lot we working Scores do on feedback to look think are range and excited. user products So we it’s our remain I that I a lineup it. of come the quality, are how are product and how of Promoter Net more there improving, in is better focused the When getting year-on-year I at and terms

Justin Post

Thank you.

Operator

And you. comes next Sandler Thank from our Ross of Barclays. question

Your now line is open.

Ross Sandler

decel why pretty Western a -- growth growth and and so first comment dropped pronounced we horse the different ad ex-FX in Ruth a digital dead just rates on Hey, sector stepping of did broadly the more back Asia the Europe maybe U.S. this you from more flagged quarter comment back but than guys. any beat see again, in the will I solid guess off Europe and rates the then and And much U.S. was markets? I are on there deceleration in way. lot why February.

to isn’t have deceleration much these end ex-FX So, clearly, insights may issues the you surprise from maybe changes to of in that you. product? made But this markets Thank proactive the your versus was demand a how advertiser you. on

Ruth Porat

-- the the terms of you the the the to was plus was Other The a U.S. question, more That impact rates I Europe quarter. year-on-year the I continues more your strong Americas reflect And -- maybe hardware. some had fixed product regions, respect of about and I pronounced. year-on-year. had and basis. on delta a think really first with of have made XX% that in FX same then to continue of deliver performer very I the think or the in the XX% So growth comments APAC, think guiding be to was

that are seeing, and the the of the We things growth big a on throughout Board on well-positioned are Sundar’s the there. some billion opportunities we the regions. excited comments focus across next users about

Sundar Pichai

demand we are we and too how question, any we development your a work there said to disciplined I And that’s that issues makes last it. a pipeline it’s through focused earlier, way as of on in don’t and part set experience the of very product approach way and think user

Operator

be Thank of final question Brent you. the next our of And question our will Thill today from Jefferies. line

Your open. now is line

Brent Thill

Thanks.

the changes in effectively, terms of may go-to-market there how issue on snapback or any anything force seasonality QX? that QX last sales the follow-up and a on EMEA Just U.S. that you quarter may been some a question Was have see said in

Ruth Porat

a performance I at The one overall of are unchanged. would investment opening strong we points go-to-market, and last line that. I year year that more remains of in that terms said long-term is thesis our looking we had say comments with broadly in the

the that for I there other anything so and about the that we businesses ahead. to invest do across continue had the a excited to ensure wasn’t long-term. We that We applies opportunities comments remain are the change well-positioned than That made.

that growth than second was on. benefit, that do expand are really I the needed expense pace, to noted did but the what earnings expense, to that that, from the of comment and is at maybe marketing up comments investing the as to if as growth, in the nothing quarter issue. the investing the other what’s We operating and around could expect revenue my growth fact timing QX supporting opening marketing pace pick and moderated, we in looking the just are I globe, long-term at I margin support and think really on looking we

Brent Thill

Thank you.

Operator

session to closing you. for And to the Ellen for our I’d over West question-and-answer turn Thank like remarks. conference back concludes that today.

Ellen West

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

Operator

may have Ladies and and Everyone today’s in great a you does thank disconnect. all conference. program gentlemen, participating This you the for conclude day.

Alphabet (GOOG) 30 Apr 192019 Q1 Earnings call transcript