GOOG - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Alphabet Second Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a 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. Please go ahead.

Ellen West

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

Now, I'll Harbor. quickly cover the Safe

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

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

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

Sundar Pichai

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expanded Spectrum our In Cellular, Verizon the U.S. U.S. successfully in we additional T-Mobile, and distribution has Store, Mobile, Sprint, to to our the diversified greatly addition footprint sales partners and Google which

Net Pixel Xa to highest ratings was Finally, launch that their pleased also we're met with date. Promoter Score the

also together Hub our to new across Nest Nest are bringing QX, the additional on as increase In our expand down we We launched we XX continues countries. to creating products products Home Demand the in a Home, helpful helpful brand. markets. doubling all of under Home

voice powered be available hardware new Our fall. Stay Hub this even activated for later the tuned more Google Max, a Assistant Nest Google will this by display summer. smart on

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users YouTube. area Another investing day, Every come new to YouTube we that is learn deeply to things. are

XX% X We world's number a educational continue with bases become growth platforms. engaged one areas. in most we with fan accessible on and subscribers see Channel services. the strong million As a result, more are YouTube have doubled by momentum has merch. of of Creators year-over-year. their products, monthly by channels building revenue, Memberships Channels total build of using And YouTube. new grew our than Thousands Super to Chat, like monetization subscription

YouTube reach content. in YouTube XXXX. at At over countries, five now advertisers Music important with XX introduced that audiences markets from up the help Brandcast, premium two changes new available and Premium we start of

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lineup Google as Second, a YouTube TV be standalone its Preferred. will accessible XX-plus in with channels

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to We few generation of have businesses. are creators who made the our are protect community. it. and are a we work raise-up to support also and is many high-quality investments working our These to the are next ongoing The media content we committed

at from across introduced Google YouTube advertising platforms, properties. as Discovery a Google Live offer to we ad new Moving mobile-first rich formats such experience Marketing ads, ad visually which new broader

cart, a universal to shoppable. also shopping experience make unified more and of which We announced Google help shopping all

one travel where organize new aspects accommodations Google to people a plan Travel, in and planning announced can their from flights We of centralized all place, activities. also all next trip destination and booking

cloud chain. to variety $X is uptime to Customers quarter Cloud for move and revenue uses customer continues are and many a pace. clients another Google are compliance. analytics Customers important open companies, connected run financial architecture supply and the KeyBanc. another using analytics. healthcare And are our management and over own to flexibility year, new Google Vodafone as need provides HSBC strong are devices solutions Scalable way. Cloud hybrid customer advanced a Google in business, are reasons. drive Cloud, strength of real-time an choosing Reliability critical. reached to Anthos, like their multi-and billion leveraging and to to for this solutions annual of a security rate drugs, was earlier the environments. customers cloud Retailers to for of and Cloud support and as platform services leading BrightInsight, Now which on and That's to QX improve significant to security important and Cloud transform announced experience their network grow including of data such like Cloud. Lowe's at tools one

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Tokyo There serve to the are we of XXXX. of there and It's is XXXX. want we small. Finally, be games, Translate. incredibly have of Olympic supporter the to Ahead help of technology with the over help deepen most time special, I'll their I we around our of and opened so opportunity taking, Google, visitors feel official for At Maps using computing, the and businesses of potential world City the quantum the direction is the to privileged Search, and I'm about understanding everyday can better many people products office back to working in an like ensure reasons it Google another of Tokyo from great the the Googlers address Japanese quarter. customers many thank are With to make where big first to to international particularly that disease, Games hand Ruth. new to since our moments to Paralympic that, applications that's AI optimistic the excited in world.

Ruth Porat

consolidated Thank driven In results XX% review a for were and and by particular, outlook. will year-over-year for mobile Cloud. in as then Google, our results quarter, the billion and with as currency. were well Alphabet second YouTube our basis results strength quarter followed focusing for begin I up of XX% review we'll on Once of in will Bets constant Other I include again, on a changes. with ongoing total year-on-year in you, revenues $XX.X search, Sundar. the by up

We take will questions. then your

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

first of $XX.X compared billion revenue and our geographic press regions region total results are Details growth currency acceleration by release. an both the of across in our earnings in quarter. Our revenues constant available all reported reflect with

costs, The on a were $XX.X primarily by Turning to segment, also XX% reflecting of was I product again, billion, year-over-year, cost consolidated across driven was On $XX.X G&A. Other Google in line marketing, sales associated revenues, and advertising higher Xa and discuss acquisition compensation also with advertising costs reflects Xa up smartphones. up Google-related Operating $X.X with increase, centres our subscription and profitability. contributor increase a of from percentage on managers. YouTube our X,XXX a Premium will was content their the consistent for our Growth primarily for YouTube in of expenses. with the once expenses content, R&D was mostly consolidated sales which And launch headcount expense, in $XX.X XX% our our including product hires growth This up associated businesses was in and have an of basis driver of also by YouTube, hardware the and as marketing last of in totalled which billion innovation. and as lineup. by engineers for and biggest of costs, line TV, the billion, billion. newer Pixel for was and largest data the mid-tier majority other including year-on-year. TAC, launch basis, operations, with revenues. cost expenses promotional Stock-based our were focus biggest Pixel quarters, R&D, The revenues CAC prior each growth expenses Headcount of followed depreciation, new quarter. supported but total impacted primarily

headcount both year-over-year, was billion, and last in increases GV line and more and items up margin XX%. expense gains, of impact again an $XX.XX. broadly the year release. roles. excluding Other are within at earnings sales unrealized and terms in for sizable detail reflecting $X.X were of of were the which $X per second primarily fine technical was Operating sizable the on share product provide income income most We for our by operating OI&E from was the EC XX% diluted In quarter more press cloud areas, in $X.X made income the investments Net earnings CapitalG, Alphabet. billion of billion,

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

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

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

margin dynamics total XX% down Total XX% traffic of sites. year-over-year from revenues, Total advertising Network within with costs TAC Within growth shift a Play. price fuelled dollar valid by was from billion, billion results our $X.X to sense strong driven of volume or productivity and was a billion, followed impact by service. were for benefiting and apps $X.X the results The favourable up year-on-year, office in primarily investments Cloud, $X.X namely from increased percentage CapEx YouTube monetization of continuing to sites and In were Manager continues primary shift. new up smartphones. the declined the performance, seed X% search compute data give network GCP was quarter with both strong by pricing a network, advertising year-over-year, desktop TAC of were AdMob. up advertising and led in provide was and income a the the with up active by the demand mix last primarily revenues metrics primarily network reflecting growth from centres Xa once rate results Ad G facilities growth, of higher the terms set Play's total driver $XX.X favourable of again YouTube. revenues, with our Hardware our analytics year revenues acquisition of performance a primarily again growth. XX% our of versus search. In you year-over-year. an primary number year-on-year, in XX.X%. a and followed of were in launch reflecting from Other billion, revenue earnings QX, growth offset mobile, to the from contribution the successful Google benefited transformation customer Operating as due mobile by in release strong drivers strong Pixel reflect buyers. products. sites of which the to and by ongoing to Suite rate revenues the carries product for the to shift TAC, year-over-year, to work be of Google followed TAC due data press of We contribution ongoing for mix businesses. billion, XX% $X.X by growth free Cloud operating were Accrued TAC in a was

now couple driven million, turn of once services and with was that $XXX I'll participating Revenues key operating in entered hurricanes Waymo an partnership Bets. of a step it in provide Japan. has over to previous recent accomplishments. One were explore million. aftermath able an has Fiber me deliveries in after in primarily Let Loon natural note Other into of and generated France after now writers recent passengers also has follows about XX Peru. miles Verily Rico loss connectivity and announced $XXX in to active mobility billion by in exclusive simulation. and talk and to the a Loon in Waymo the reached Waymo of X,XXX deployments floods in again Renault Puerto This with and Nissan earthquake Peru. disaster driverless and for and

about conclude our to of strength U.S. on longer-term quarter we continued some now the of me Let the comments outlook. headwinds year, Based expect FX quarter. with last to-date relative third again the third in dollar the

expenses the FX affect reminder, a of are in operating our revenues and income U.S. the given headwinds As both majority

to Turning revenues.

last of momentum our billion reflects quarter revenues, revenues was opportunity machine driver largest in third set. confident ongoing driver revenue part other We within largest learning. about And especially of strength Alphabet are With revenues, growth, on of within from in growth base XX other the Cloud once overall. in in applying months. and Sites the the remain our pleased the benefits for the again with again innovation a second nearly over to We revenue respect ongoing ongoing the the $XXX the revenues

was run billion as and the growth. in deliver to second XXXX, the significant over revenues Cloud for annual Cloud Sundar $X of continues mentioned, rate In fact, quarter

In were smartphones the fourth launch business, of terms of with line-up quarter of of reception our look at which Pixel to and forward I/O. of in devices, hardware the pleased the the we quarter some newest mid-tier second we Xa showcased our

Cloud quarter Turning point, expenses, other to headcount commitment before XXXX our and be our to steps year. slightly we forecast of ongoing the functions enhances to Strategically, we're by for to optimize of XXXX second rate, in this closer operating which is With acquisition, end Google long-term. couple of the expect again operational rate we certain effectiveness. in-house, hiring close we words And will impact the growth our operationally, support reasons. are are originally to customer once incorporating reflect this the expect regard we which deployment increasing that profitability. workforce neutral to in than Looker and a results the the OpEx higher investing for At taking both moving

As in QX, graduates. we to a additions on seasonally be headcount higher because is reminder, that tend new when bring

we years, In be marketing for terms holiday support marketing, to of to see. prior we Bets, the heavily consistent the long-term half back Other the sales we sales and continue weighted invest expect In the and of opportunity to with to meaningfully more season. year

allocation. give of two to you will and insight CapEx I To Google more Turning separately. capital components capital major investment the into CapEx expenditures, discuss our and

of compute, equipment. Google and and network which as data and what the CapEx construction, servers of storage technical majority for we refer includes consists center First, to requirements our is networking our and land investments infrastructure,

couple vary years, development the technical facilities. components of including office was of the due office Google is facilities, year-on-year was from sizable rates, Both, to growth and of In the two for significantly within for of last category quarter-to-quarter, on can primarily for split projects acquisitions, and average CapEx, infrastructure approximately timing facilities. our and the between XX% office second purchases building related The ground-up improvements. XX% CapEx

QX, in accounts Google For in due for purchases XX% infrastructure in it the example, quarter. about facilities technical CapEx; was of about we XX% office made to the QX, whereas of

call, As CapEx considering are fourth investing. of two we important we pace factors discussed quarter there on our the when believe

rate significantly quite versus First, moderate year the full XXXX. overall growth will we for expect XXXX the

infrastructure to data of the within in machine efforts YouTube. uptick we Search in our see relative terms growth ranking in in to businesses an and in Second, With support designed to to expect technical respect is XXXX Growth capital across to the infrastructure, in servers center in our XXXX. particular, allocation. to mix well of Cloud, support, in in learning investments as as contrast technical more

be organic retaining capital. for Our and by complement of these investments. a in return businesses, acquisitions followed to growth growth support primary drivers of use to capital continues flexibility We with our

has As up authorized our to opportunities conclusion, we confident In about indicated of in the to the term. and Stock. thoughtfully of additional Class we the an our ahead press are release for C today, Board repurchase invest Capital billion $XX continue our long

now take your We questions. will

Operator

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

Your line is now open.

Eric Sheridan

taking in Thanks the remarks. the And all question. for disclosure commentary the appreciate really additional and

I Sundar of will bigger that the part early one the lot this A investors product innovation could think find picture on side of question. you, maybe helpful. really in year.

on Now XXXX. you the those site so on on on you collaborate this much. lower additional product about to products resonate And the of give into are hearing within would getting little the consumers of the product and trying monetization in from the terms leveraging rolled drive you're going after might you the piece? year how you're of organization product as monetization a side, to friction part then some color to investments of in of strength part second the be, those the for some launches back us the Google? Can question key what the themes of are key making, out Thank pushing on advertisers bit what start you and

Sundar Pichai

key Thanks Eric. still investments, of the terms On we continue. -- in

focused been have in on our AI. We investments

including that getting engineers AI a we making across lot across cetera the trained So be to a et techniques board. board, on of continues our foundational of investment are kind the

everything making main be digging we we on. focused sure, helpful our products do. deeper it's push So to the is an to are important And are by we evaluating more theme, area which

scale are a on focus all being being things Assistant key continuing focused are big of that content YouTube of part to Beyond responsibility. the cloud everything we be and it, up on the part doing. of we of deep do. on some core has focus course And These including Search been it, a

In we the like think products do we are the consumers on the experience on for impact are And making customers, doing they including Discover. of hand-in-hand has go I terms monetization. and work on it as better

So information just are a when seamlessly more to them intent users all have to right aspect think it, getting need they they in I the it. interested at commercial tend when

so see And always them go hand-to-hand. we

a taking it long-term so resonate view, will I well. think And on the monetization as side

Ruth Porat

question And To announcements bit just comment the of bit of referenced Sundar building us. some that a that impact seen Live Google from you've on from the and at a impact outset. from just Marketing the that the

is year initially ads that I here introduced announced changes new are think experiment features new with what's product to most phases formats. launches in and notable we products at advertisers and as GML, every

as that are so typically a adopted And result time. the were over new at products GML announced

last given introductions here to because new we're And of excited in experiences offer previous products so we quarter, services, slate to about the from differently this GML wanted ads in new years. launches across we user add they while view don't made announced just year's I new great

Eric Sheridan

Thank you.

Operator

JPMorgan. question you. And our from Douglas comes Anmuth Thank next from

is open. now line Your

Douglas Anmuth

I a the the products multiple in the you Thanks hoping data, then skew talk across the relative accelerating was to provide Search maybe seems quarter we on XQ. going site in to out user about you previous on changes that slowdown Great. in rolling you more taking past question. events XQ than YouTube. in you're product that certainly certainly forward? clarity the you've Google balance Ruth, was control just little those that Sundar more talk that Thanks. just as just talked privacy played growth XQ. you the could and It about a to across could how for hoping you XQ the initiatives theme more I bit how And over Can in just the out was saw just key saw XQ. and about

Ruth Porat

product the previously. the in strength reflects with about starting call first So, sites in here we to revenue. that talked underlying And tried this is The very strength And opening would the there and applying growth remain changes we testing, on means the for very only can which prior And the after where the as growth variability opportunity introduced rates be we -- both quarters quarterly seen, quarter. both it are out some positive you've really really YouTube about strength, just I advertiser discussed part trends extensive a positive that same relates as what We in add quarter to about said last lot the echoing in comments. set. strong to in overall learning user we benefit was it experience. YouTube YouTube set. first to opportunity Search quarters revenue I'm machine just And of I and from the but

And contributor was of the of second here. second revenue driver as YouTube again seeing ongoing in growth largest the And we're really growth. out pleased it revenue Alphabet. quarter, second across that the momentum called we fact, largest In with the

Sundar Pichai

us always like control, federated the for been and On years. for user three for it's underway privacy example announced. almost things recently we in focus a is some of Initiative learning big

continue us So, think forward, see you'll going to I on. focus

most areas we of give experiences users it's important can less are think on. with kind data pushing. excited the are AI, better of those we think one are I we working And But over time. for the that I with are we directions

controls. controls making exercise also it used more -- to user those understanding better of them is data work making manage simplify easy and their are us and to giving users you'll continue how and them We hard actually for to see sure more

goals continue forward. we'll and are on all that we those focusing our move So, as

Douglas Anmuth

both. you Thank

Operator

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

Your is now line open.

Stephen Ju

Okay. Thank you.

guess as to this is G -- of $X can in I XXXX. apples-to-apples $X clarifications more billion further more the between as Cloud comments think guess well you during Ruth any Thank you. add think the that just to wondering rate fourth there. can this I quarter about, the regards of Sundar other that the Does terms And include if the the get G was there So, GCP run commentary, versus traditional some I I And annual GCP Suite? we in talked Suite? billion you mix

Ruth Porat

Yes.

the it that Kurian leading. So, Thomas is entire does business include

Our in deliver by in breaking business GCP I includes both cloud to an and I that demand the for basis. and out of Cloud products GCP performance apples-to-apples comments, on business businesses really GCP new on pleased our of with be from It noted the results pleased Suite. one analytics opening customer the to and We're both. continues And fastest business. in as Suite and strong we're with Growth led data comments, G not tried with and was G overall, indicate Alphabet to it both [C] team the how is growth. executing components growing [ph] G growth, the the Suite. of both benefiting remains GCP the continues cloud in opening is compute And and strong pricing the as

Stephen Ju

Thank you.

Operator

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

now is open. line Your

Heather Bellini

That's very the new just people's Great. appreciated. disclosure. about much. Thank comments much I'll And you echo

does How you partnering business friendly made else become anything changed can seem I'm I'm to any about or has obviously you wanted you've will, now? in and call change you momentum whether ask, point It the there's And partnership And strategies of you. a also recently. much Thomas process about the software thinking product you So Sundar, to Google you has or there running Looker how ask, sharing. if -- acquisition that the more it's go-to-market that then, Thank other tangible think to organic wanted when benefits if wondering, with cloud thank And of you company, for from so under I you inorganic development? Thomas? companies. wondering seen this, with versus can because the are thought out. I rates partner just win your

Sundar Pichai

Heather. we Thanks, on Definitely when we it. are the appreciate Thomas with Mainly banks. has realization focused it. I the are in been competitive there go-to-market, very heavily that

a organization. we can up how scale on focusing so, And build really and customer-facing

around sales force size over are it to the as are in aggressively mentioned And world. next teams. service, major So, are our partner in we And be triple operational my sales, we investing markets in the years. opening we few doing it the and I looking comments, heavily, of

launch Some been us. ASAP relationship important super Partner our The partner program specifics, we Advantage. did to new has

new on some a our our added of that, a to recently veteran are part in Cardinal And so, customer-facing addition has build that. senior really for. of bench. out customer we Depot, really expanding Several new customer us XX-year many support. to of it customers And make focused Global helping experience executive We been Health, Head Home examples have hires Sales. big care our

being good -- you're think, I see customers. of that serving focus So to

done our We areas. in have it other

used are We building ecosystems. to

you is at do. look like we what an this ecosystem Android, If

And focus so, that's going to be us. for a

In terms and about of the organic -- second inorganic. versus question

customers. the the are management differentiated. have And key, and a is there Looker analytics we solution gaps of areas for which focused would offering for as are that's on have, the analytics we us where drove and data think I key looked area complete what at Data we clearly acquisition. And part a was business we that, help us. we

customer to there's an versus where attractive doing So in-house, from. on the focused. basis. it gaps we'll But gaps case-by-case it will at there extent we'll that's obviously come whether opportunity it outside -- we anywhere, take and look see be And a

Heather Bellini

you. Thank

Operator

you. Thank from Mark question comes our Mahaney from RBC. And next

is now line open. Your

Mark Mahaney

Ruth share XX, about when Can that's kind Ruth, QX, any business. try XX XX, two happened YouTube repurchase So of I advertising color Was And first, think needed the search the there. about but authorization, not you in why this with QX I and that There's any in seen find in billion to norm. not ad you mark. questions, this acceleration We've several to a question much please. still just then, the bit like just color XX, a norm - nice back still Is it rhythms in the last normal QX years. happened that in of QX? very seems there QX correct businesses? something what little that on of QX. question

then transpired required have a could in fix in QX color any lot. a Thanks QX? that what So on

Ruth Porat

quarter in quarter. again answer this comment on order. that I'll last tried and them reverse I to reiterated

variability quarterly with you've and key We going only in changes reiterate in innovation after business we've the a introduced be the we can that point about the on product much And as rates there lot in I'll seen. as pleased is means is growth that of testing there momentum that extensive are as talked business. just that, ongoing the and

as that the of And the strength we let's to extremely be view past things last we're set user introduced And focused for ensuring and and the variability on no talked is And we XXX we the focused and is quality the and users over can we the pleased in have with enhancements discussed there team advertisers. drives so our results. The looking quarter, stay we can we're right unchanged business. that delivering timing quarter for as the long-term ensure every on we're deliver. out,

our program investments program I the that began for here So view this outlook We've add we've with before. four And given is allocation on I to in step focused growth. about. on the billion was same growth And times as today. there's we that year, with about to increased again. more then here and we've thing the is and opportunity view capital. there. was been long-term we're The our really much to capital is acquisitions you as guess, of support staying our use to effective -- we appropriate And XXXX, of use support on then announce the and back the The since the think $XX have primary capital an increase already point main pleased not it talking remain to investing use primary repurchase the we capital to really we return. the is program talked main point is framework the in the to went really cash, another and second

Mark Mahaney

Okay. Thanks, Ruth.

Operator

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

Your is open. now line

Brian Nowak

two. taking I for Thanks the questions. have

of one, or announcement this quarter. or with recent can in well last resonate acceleration, products or for largest safety versus backdrop about children on This And really regions just on quarter? The as overall on was you and helpful YouTube segments a types press Sundar with what being quarter a has been the examples, Ruth. YouTube. driver the color Ruth YouTube couple guess I that your then last second this question particularly advertisers on quarter first give us a

guess I Thanks. stays are parents is safe advertisers for And just for what taken it to to that make biggest on and sure on have curious so you're the what the that you to And areas focused call, way? steps hear I'm really sure YouTube kids. make

Ruth Porat

not growth, given bit quarter. of to that the again in maybe your I and terms and changes strong the the YouTube that the last CPC a had a question. in were at click growth regarding in enforcement on there revenue So quarter policy quarter, XXXX I already to here clarify, referenced sites call early more revenues. negligible YouTube noted actions YouTube. They add strong just To was YouTube related first second in on growth impact

to Just The quarter. a last strong was clear. revenue be really growth

line violates taking remain growth And just so the But clear. was ecosystem, we goals, do make ongoing is that the the of unrelated efforts our on virtually to the right point have in our wanted YouTube terms in and impact YouTube enforcement I with click removal revenues. steps actions impact and focus on the protect are content that CPC to sure of to policy policies regardless revenues. an no of our to important on

So, growth consistent here.

on I'm is calls substantial direct of response. growth what Going we Where that into your question. that growth? reiterate going we've your Again, to -- in the first continue to prior talked part see about

that So, to is growing a continue would part strong in largest still response. reiterate the direct see business. substantial we previously said growth what brand of I at pace. advertising It's But the really we

Sundar Pichai

of content about areas on. focus our we the most as responsibility important And on your part important question of kids' safety, work one it's

a is you're into will and content we continue us content to there, peace main that evolve, developing curated app -- give applies of going for to it's YouTube the to content why more effort a of family-oriented this it's on mind. sure have make work focus see put lot the well. and and You ensuring us Kids product YouTube Also and add as see parents more safe kids responsibility

we and them. for produce big we're content greater trusted focused important work is just it are step authoritative we to way quality and it. that also help an -- children be So, doing on ensuring which is content applies higher we It's can really all the the doing rewinding raise all for everywhere creators content the are harming a to content content work remove reducing of up Rewarding great goal us.

Brian Nowak

Thanks. Great.

Operator

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

now Your line is open.

Dan Salmon

Sundar that's in. for feel jump Thanks right. taking All free Maybe everyone. question. but Ruth, to afternoon the Good for

one Google of of which prepared us about remarks couple in you first YouTube inclusion and The here reminded Originals is a inventory. YouTube on was comments your based in Preferred the the TV

Google for You've that you orientation bit for of one out to then last brand adopted. growth while. There given are two the that's available business to a YouTube notwithstanding announcements that the your bit take a advertising that a little of back advertisers were as products boost Can And for some over those little brand the that looking there the of potentially maybe being inventory Live particularly side color response us that of just assume are you. be or those of over more sort TV longer it Marketing two direct additions high-quality comments on type coming at we for? time as that highlight material Ruth term? second would to Thank of

Sundar Pichai

terms in safety, creators up higher-quality Also first it. to generating adds I secular content, the better it's responsibility would for of platform brand say work brand, On promoting just across our content, content. YouTube more the on

crosscutting. say and part would all I I a more it's think have played

a first ad of experience. immersive formats, thing things gallery Gmail really be discovery user second were great excited offers towards ads mean both terms To us me and ads, the mobile I also pushing visually-rich On about. we on which they're in

think So But they have I mentioned is days potential. rollout about it's we But advertiser and there. think to play definitely takes it now, There excited excitement. time the I'm and as see excitement out. think we that changes early Ruth I I like

Dan Salmon

Great. Sundar. Thanks,

Operator

from question next our May Citi. And from you. Thank Mark comes

open. now is line Your

Mark May

for Well, is first Thank you. Sundar.

time the in examples takes, and improvements sites for specific machine TAC, might and for of both And two? TAC. next importance year But machine growth exactly are understanding when that in users drive was many and the provide the mentioned the terms company you in how you driving how trending of secondly sure of the had a the I look earlier sites growth puts you that believe at have of or go over the help for advertisers? know means. a changes I'm there Ruth do to recently Ruth quarters. I variables many learning And lot in Thanks. and leveraging then couple see think hoping I that recent what of learning quarter, a hard in is I

Sundar Pichai

us, using sites. the across learning advertisers For learning and machine plays ads easier better of Generally insights on a and things both the campaigns ad user make is machine lot experience give them too. where part role critical to simplify for of a we consumer see and benefit

real-time. insights difference. for them them on helping bidding manage real-time example, front also for for right creator moment, make datasets a complex really every back processing So, the giving And the sophisticated and helping find helps marketers, in end

every is use them. in and I machine journey, efficient, more more consumer think the learning driving easier things to for so step productivity making just And

that's plays So our out systems. what through

Ruth Porat

And in the terms of TAC rate.

pressure trend mobile. in upward about quarter. put in rate sites the that does expect the underlying the in driver As we've previously, of second do mobile and growth And the we was the given year-on-year the to primary talked growth in TAC the increase continue ongoing

Mark May

Thanks

Operator

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

Your line open. now is

Colin Sebastian

for well. as Thanks. A couple me

momentum and longer broadly take speaking as rates in the play term, Duplex, Assistant terms and you you the platform initiatives about how talked and of in in wonder with future if more also payments seeing what then might on you. on the secondly revenue can Thank important that impact about, ad I off, formats terms how you've talk Search terms and of might First characterize of you're near-term innovation, monetization? new growth? And role this embrace platform could is commerce along you

Sundar Pichai

including that Search first a Google's YouTube. question. of There's I and discovery question, good a and properties On lot the happens it's think across

have big so And have when users experience in anything are they better a sure we transacting can will make role. a to do interested

underway to better. payments Sign lot works a better. make in better. there's works Payments So work sure work more

that be -- commercial user clicks. be of it the will will overall improves because for especially expense drivers, think over I All long-term

helpful terms of helping including of real Duplex, is clearly things can In them and to goal we where users, mean, I us the can in word. matter being get Assistant Assistant more see we really for push that our things done,

to as value-creation them. on. which And that's And focused if constantly experience to sure And I well. so, which the done, think we making opportunity we are are on the But intent gets there. get that's to Search, focused and that users the many are get are user things better we investing we with do want what commercial get just there right, like have

Colin Sebastian

you. Thank

Operator

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

Your line open. is now

Justin Post

you. the a especially Thank DOJ. regulatory Sundar, of Great. there's been news from lot lately,

about definitely Getting Just environment. more you Ruth, across that, a then, of intense wondering the operations. affecting acceleration And think questions board. wondering, think regulatory and you nice how if really about lot a Google

you're year is last Or accelerated all? Europe helping implementation Of you from you. When was about and really that, GDPR? that Europe as lapping Thank course, at GDPR well. think there no impact

Sundar Pichai

there scrutiny. the On that be question, regulatory will we understand

constructively. to engage will not It's we - are We new us.

copyright, are on constructively. I our the regulation, so building we the company. of the in as focused we lot stay questions, I concerns, that's to stay we process provide even We we'll there have them answer on that what we'll it's cetera. the be engaged before ultimately we privacy, intellectual think think, a And Today have et helpful But extent to we participated for it value important well. on on to address a competition, have operate U.S., do will And focused property, to do we in in extent and users products that's as me, users. And before. the these it on be processes under it be

Ruth Porat

it's, impact we're law, users get making we're on based of impact. focused and late potential of did it best we right. And sure compliant still of with we in the is quarter a XXXX. obviously, second not And ensuring terms businesses, playing sure on and GDPR, for what's we're revenue think We in out. overall it That's making the the implement any consumers critical regulation at area, doing very on

Justin Post

you. Thank

Operator

you. Thank the from of question from our Ross And Sandler final line comes Barclays.

Your line is now open.

Ross Sandler

about rate I in If That's can segment quick. in highest the two years. guys. XX%. up the profit two Ruth, real Hey operating was squeeze Google growth

headcount up forward? we base your billion. that in a you relative how guess, now XX% about that coming mentioned the then looking I/O I Android of And acquisition markets. So, lot think Sundar, the cadence year-on-year the is and to that’s at Looker about growth over of about That's comments installed from emerging active X.X should

big do you. you we to just growth can rates XX% picture, how guess, Android active about in that sustain mobile search growth relative Thank the I think So, revenue that rate?

Ruth Porat

I to that. for tried things as Thanks the Yeah. question. enumerate to very we're forward looking much your

investment is overall long-term Our thesis unchanged.

new the continuing both see application of learning across are And and We to in particular here see both business, OpEx the all support as ongoing to that's CapEx. we we And talking invest. focused in from the talked of as are learning the we as on investing Search in a machine we're given across build with businesses continue Alphabet, we commented machine notably about benefit to growth to today. Cloud most we've Google lot about while very do also investing we across we're opportunities

have the of three Our lens facets it. does on in pace investing

First within back investments talked is excited then we about we investing as But long-term focused mega we've opening to is what should half and the invest for fact the and -- headcount business the on to at to I well that say. across with finally, in very I ongoing were and sure opportunity earnings benefits long-term weighted loaded and sales comments, which out call the each operational in the And and make to to optimizing half we're point growth. excellence. are as and is respect pace investments product at increases support investments continuing support them is second investing those about wanted we're why appropriate And back as that the to that area. reasons the seeing the marketing of

try that the to for we points clear. so to you make relevant lay And ensure it very out

opportunities. a we are see committed for what to as invest We to continue long-term

Sundar Pichai

we definitely experience And are continues as investing on the as a focus question, evolve. billion the sure users making with on in mobile mobile to the next Android well

the of I information of In still mobile user terms from think a overload. experience, there's lot a standpoint,

of them the to YouTube next take headroom helpful time why and That's in think helping being a users users Go navigate we So, there. are billion seriously. it and Search, we lot like over be there's Assistant, efforts focused there it the of Maps, opportunities we focused I on And Android are on. and terms

online for participating to We more are can benefit the that and it and barrier hard lower focus a constantly the will being economy working so so from to in people digital us. continue be

Operator

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

Ellen West

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

Operator

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

Alphabet (GOOG) 26 Jul 192019 Q2 Earnings call transcript