GOOGL - Earnings call transcript Q4 2024

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Operator

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

James Friedland

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

quickly I'll cover safe harbor. Now the

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

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

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

Sundar Pichai

strong our unique Thanks, approach. delivered hello, QX, another We our and in AI by Jim, everyone. full in quarter driven and stack leadership

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are We well continued growth. set up for

our on and today, how our touch platforms provide progress AI and cloud, I'll core update So improving YouTube, products. consumer an Then devices I'll it's Waymo. on and

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products Our our these leading to including AI scale. infrastructure, that research, at and and bring our and models tooling, people platforms world-class innovations

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data foundation Our and our centers customers, sophisticated us of powerful for global network cloud directly and regions a revenue. provides driving

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performance Cloud's is infrastructure ago. power with and we just data why leading choose most offer also nearly unit among to per efficient. platform. These Our of compared X the the scalability, more increasingly computing centers Google years coupled organizations electricity Xx efficiencies, are deliver Google cost world's

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look universal those models us on tool assistant. One is Gemini launched and to example with working in capabilities thinking to use new forward research. on are all the It Android closer topics that uses is to early agentic advances over vision in sharing give users better along a and sources. build with agents enable to the your key December soon. even out It us explore behalf to and multimodality world. rolling deep bring We of native in and complex our Gemini developer X.X's findings community Advanced

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AI platforms and around put people products billions of world. our the hands Third, into of the

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Cloud. Google First,

win commitments compared more Mercedes-Benz, of ]. to the first-time than cloud as XXXX, to number AI-powered offerings [ XXXX. Mercado Servier double us enabled customers such Our Libre In and

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are our accelerating marketplace. partners cloud customers Our with purchasing growth billions further our through dollars of solutions of

see which and growth of compared enabled performance saw inference both performance cloud It improving Xx strong training AI-powered portfolio Wayfair XX%. QX, sixth-generation to modeling broad modernize throughput and our AI nearly to solutions. its uptake by and cost Citadel help greater strong markets previous GPUs Xx These TPU, better leading begins our delivers advantages and training our delivers continue hyper In and to of across the computer, generation. Trillium, platform, we which TPUs. across with and We with performance scalability

just HXXX announce based ] with the week, delivered their the our platforms continue And we relationship [ We first Blackwell running customer highly strong recently NVIDIA. last customers. on also anticipated a to We were to platform.

new growth XXx WPP brands usage AI building foundation with year-over-year, Mondelez, databases and cybersecurity increased particularly multiple customers developer Radisson Gemini of data most multimodal platform, from Vertex Hotels platforms. X.X, with Flash, Imagen [ Xx using are XXXX saw analyze to like VIO in International AI-powered our Customers, during search a Our recently, including analytics from X clouds. benefiting data strong AI also applications across Vertex adoption and ] Gemini seeing now and our developer XXX-plus increase in and Gemini and models. ]. We're strong [

security AstraZeneca, against and truck customers, and help identify, Vodafone AI-powered operations including Our intelligence [ and protect products defend threats. ]

QX, and growing Agent is data adoption. we transactions of Quality which Gemini-powered employees. enterprises AI helps automate applications introduced strong also with seeing Our Google create Space, In portfolio agents Search for customer Google synthesize

customers, gave boost powerful their Gemini Workspace help capabilities enterprise recently all we to to productivity. of all AI Google our addition, business and In access

to continues watched #X Needs YouTube now be of share high. our a in with data on U.S. million the and U.S., On XX to YouTube. Moving streaming alone, record shows across in over streaming YouTube. election-related content the day watch at time election viewers

the paying We off. is into video. Podcast with YouTube integrated in experience, early particularly core Our investment Podcast

We now end X alone. emerging have service YouTube This at trends in room. share fans We according to XXX,XXX success later YouTube call. program of in shopping in Korea the in allowing their Edison businesses. creators approach used creators of living We more additional about the countries expand now consuming Philip the their to from a investing our even long-term reflects the mobile for frequently affiliate and the with and in will with shopping report. recent favorite U.S. are to last products podcast the more talk grow over YouTube to performance U.S. year the most

Galaxy one beta of coming subscribers including plus One's Last Android Google month, integration deeper updates, revenue SXX performance of and outstanding and announced XX, Gemini the been and in platforms the Android of series. fastest-growing Next, Samsung new first subscription is has we devices. terms products to growth. new our a

also Samsung announced designed Qualcomm. the next-generation Android reality era. recently platform is and ecosystem an and We headsets like Android with of Android first built Gemini for power devices XR, classes. XR Created the to extended

last XXX,XXX than growing. million which made Finally, each It's a week and tremendous passenger trips. year, Waymo, progress over more averaging now few on safely words serving trips X

up And vehicles ahead, Waymo arrive operations first to their trip. this next [ Austin X the international year, road Waymo its will network in including in Tokyo new partnerships be ] and markets, Miami for and year. expanding open Atlanta and coming will Looking weeks,

hardware developing it I'll going XXXX are be to hand you. also want around we costs. I driver, Waymo the lower quarter. thank the great another it. significantly which exciting, for employees to our are over for ready sixth-generation and is world to all We will Philip,

Philipp Schindler

primarily ads, and the having the the everyone. then for driven were impact decline YouTube of and my advertising AI network advertising highlighting business across XX%, revenues. quarter, partially by revenues billion rest cover partnerships, Strong is search, the in hello, quarter, by XX% in I'll services customers. Google our Thanks, up Search offset Sundar, around and YouTube our growth frame quickly in performance and was revenues. we're on growth year-on-year progress delivering for the remarks year-on-year $XX

what increase by strong from we on spend saw In the U.S. YouTube financial and from Search services of revenues advertising spend combined growth performance, XXXX by driven advertising XX% XX% the election retail. followed other by parties in elections. in in vertical The was was terms led almost revenues both doubling with

information holiday in product and using Circle it can in By already great over for into our voice, benefits more lots are product search, questions half opportunities new available using December, take products Search, consumer in we $X of Monday, to October, over new for revenues these Travel period from AI sales for holiday saw and Friday AI. a people December Google. generated to people ways we discovered. the broadly XXXX. Closing daily Lens billion visual up users rapidly is to queries we active growth to more began across brand Lens which advertisers. product, later and month continued another QX, We AI in were ground where ways the from each Tuesday. with in roughly spend quarter, sharing is Now they majority and was new our the started especially a about our making the same Interestingly, updates where and XX now and revenue. retail experiences. overviews plan was we Tuesday. out on Travel anticipated. People reviews advertisers can earlier offering Travel it more across than roll out This ad where saw Shoppers or rebuilt since expand in possible day saw Google commercial XX% get of increasingly trend we're for before, shopping to being billion over searches or particularly a in U.S., every innovation Last Google in search We've seeing a despite expanding find not Search. experience, the strong We're Cyber similar Search. billion in longer in Journeys are causing shopping shop incremental. Retail with entirely revenue season, Search already to year. In strong reinvented the price. of Google extend exciting integrating ask This used Monday much this these than Black had consumers. XX% that to a the season compared we're a shortest present quickly the Gemini growth testing introduced Travel the X.X and season their to of year-on-year U.S. for Cyber and X photo retailer camera are in contributed interesting shopping more XXXX, times on in like

Moving to ads.

continue investing capabilities measurement. and We buying, across in media AI creative

will the As the customers quarter, I've marketing And use every revolutionize we've said on AI. of seen increasingly AI value how over our of before, the we believe part that focusing optimizing are chain. past

XXX% benchmarks. On creative media and audiences targeting, XX% through generally authentic Select higher we spend a As markets be bidding to generation demand takeovers parent in YouTube with relevant return help know this their creator [ connect on Creators across the a and social Petco made new campaigns available and YouTube. click-through businesses buying, than to and across used takeovers the find achieved will best audience more content. Creator pet an higher ad rate their They and example, ], consumers expanding year. U.S. gen

by Creative, also PMax, achieved new we AI-powered we know marketing strategies in on work. model, reporting generally more better buying Nielsen to of effort. and advertising Event generation week, helping Meridian, models, on delivered compared assets. reinvest conversions understand at they on Last their return period measurement. for available customers increased meta production reinvest Ticket in campaigns. assets that and time spend higher and in YouTube mix Xx on into They easier controls when manual Based the PMax, XXX% finally, Looking marketing made helping Google campaigns creative made into assets. And and our a of used Using previous best-performing mix introduced analysis increase customers, the asset average, manual business media than saving they XX% video Center creative

We YouTube. growth saw in premium to watch continued ad-supported revenue across Turning and time experiences. growth robust backed by

full on our on Our incredibly the that generation thrive and focus people the available it It's experimenting been creators unlock here high-quality and a potential platform to with inspiring a video We'll YouTube in announced wide on to in which subjects coming AI. video see how creates it. range of enables styles. building make are model, months. remains state-of-the-art to of VoX, streaming we Expanding creators

and creators with the in-stream campaign Sephora In shorts YouTube searches long-form. ad We in brand creators more promote uplift tag is only This ascent and which objectives XX in now and increased boost continue all Google particularly with searches to U.S. Using All than make in XX% from short for the work gift. to their for cannot by gift [ Louis brand of content demand relative on the Gen traffic making from benchmark the guide invest ads, its brands. view Millennials. to leverage globally gens viewing we the in and to and viewing can ] videos monetization Z videos. gap success rate and progress relative luxury campaigns both long-form their helping goods holiday. Shorts with the excited percentage for duration ] AI-powered [ strong over by collaborations holiday of makes shorts U.S., while Their for lengths, and creator all channel of closing its greater YouTube the across types continues partners to Connected average XX%, advertisers combination expect and and TV, benefit equivalent an campaign for find benchmark reached XXXX. XX% best Sephora in drove We're used additional formats, content. XX% shorts engagement short-form on it in exceeded ad by the long-form points by easier Vuitton overall up to screens. video shorts on advertisers exceeded a We're XXXX,

Room. Living the into Looking

years Viewers a #X at on time is content streaming We be Nielsen. continue over for TVs our YouTube billion of high. the streaming hours their record daily U.S. And watch X share to XXXX. according nearly of in streamed in globally to in X

into YouTube Room Creators in. partnerships. directly reflects are years consumer even viewership investments truly and TV shifting and tune The products viewing on shine to work tap current Living multiyear to to behavior. right more makes build high-quality search viewers now inspiring prioritizing of that experiences the screens,

from a of fact, is In making the revenue up XX% creators over majority of year-on-year. number TV

[ We have podcast, increasingly format. shows are also a Friedman invested ] like in and popular [indiscernible] where visual Lex

over this. In alone. $XXX month are each devices million people room YouTube XXXX, embracing living podcast viewers watched creators on and of

YouTube to Edison. the most now the for listening popular podcast in is service U.S. according

always, Google wrap recognized. the Samsung. our As with momentum breadth is being me with increasingly of let what with in mentioned partnerships to the offer has seeing strong we're partnership Sundar deepening

partnership expanding its improve Cloud, Another customer high-performance who This AI a daily millions Googlers products, that, is summarization everywhere is also transform enable partnership you. fuels computations. to Using customer for technology digital customers and to infrastructure and with experiences. with for to to our partners will document Citi's workflows manual Google over its use and to computing employee employee streamline to generate processing. With search their me of it service, reduce trust. modernizing thank and Google allow advanced their Cloud commitment extraordinary continued Citi, and moment across initiatives Anat,

Anat Ashkenazi

$XXX constant the expectations level and with quarter in and in full start XXXX. We across first Consolidated on Alphabet I'll the momentum end X%. our continued the comments had basis Thank of I versus business. reported growth revenue billion for followed across by by Search as will will otherwise. I $XX.X results increased you, commentary XX% comparisons billion, TAC fourth year at for year-over-year Cloud. cost on up Total remained focus we're to with XXXX strong reported the billion, My momentum quarter results. cover was up X%. was another Alphabet will the then the currency. the for and XXXX. revenue with and and $XX.X state unless of both segment Philip. reached revenue quarter, XX% currency XX% largest in contributor billion, the constant QX some a with We're seeing robust business pleased $XX.X revenue up

due at revenues, was mix revenue content billion, of We for network a double-digit continue growing depreciation Made X%, while tax by XXXX, by have in to acquisition of with our to to the see costs were to launches primarily increasing Search $XX.X Other the depreciation technical fourth by Google rate investments year-over-year higher infrastructure. Growth hardware a quarter primarily by third the shift YouTube, cost declined. the levels revenue a to compared with and in our up driven content decline much increase timing in Google offset followed acquisition partially which costs, of in XXXX. due shift quarter

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

X%, full and were X%, increase compensation reflecting previously to shift allocated Sales charges in last operating the QX the charges X% and ads of the income $XX timing as representing G&A from marketing in charges to XX%, QX. the by as declined X.X associated of launch cash expenses expenses, year, in billion of of chartable R&D XX% quarter margin margin impact declines and cash and of headcount. Total fourth share decreased depreciation As fourth in timing expansion. reflecting across quarter of with in $X.XX. primarily XX% XX%, charges a increased on to marketable promotion quarter expenses Pixel expenses last the OpEx by optimization operating driven and ended year. Operating of billion, the optimization $XX.X expenses and due flow investments those to billion compensation We increased space increased as as year primarily in the quarter earnings by other partially XXXX. revenue $XX.X well per delivered for points disclosed, income the the well increased office expense to the Net contributions to optimization this our XX%, and shift securities. offset $XX.X ] billion free billion, by billion. [ based and in and lines $XX We to in for $XX.X XXXX. increased cost decreased

$XX reflecting due segment vertical billion, increased Google Google service to performance $XX.X other robust strong Search once financial to revenues across YouTube momentum results. followed strength and Search of led broad-based insurance revenues again the by Search ads. advertising to verticals, The across by billion. increased retail. to XX% was Google in Turning service by and the XX%

by launch from subscription comparison our in $XX.X of the to revenues advertising year-over-year driven YouTube increase of primarily the direct revenue third Made by brand revenue billion, compared down all offset in XXXX, part advertising. in the and in in Network XXXX. the with lines growth by advertising QX followed APAC-based quarter increased response device retailers. revenue the reflecting advertising billion, fourth in Subscription billion XX% by impacted the X%. In in $XX.X devices increased quarter the were revenue shift timing our was in strength fourth to to by Google $X revenues, quarter, X% of advertising of platforms partially

our buyers. in YouTube to rate increased increase Google TV, representing increase a in of and margin operating to products, $XX.X increased Service in XX%, number the operating YouTube to of We in strong increase subscription One. billion, With the Google continue growth margin expansion. regards slight Music a growth the in play, significant we due number saw to to primarily and primarily subscribers have XX% platform, due XX%, across Premium a to meaningful income from paid

that to revenue Workspace Cloud and deliver continued across which by margin customer increase operating and cloud well growth AI pleased segment, AI XX% in doing again, Healthy cloud solutions this to Once fourth in very results the seat. Google than a billion efficiencies quarter. valuable deliver focus on infrastructure generate XX.X%. to growth average grew to generative as is work income overall. GCP We're with increased growth revenue increased and much by X.X% increased core driven in from the solutions. cloud billion per its operating was products, business. to Google the GCP as $XX Turning to GCP, higher continued rate the reflecting Revenue strong Cloud at the across Google $X.X driving team primarily was quarter, to

As operating for $XXX Bets, revenue billion. of year-over-year Bets. increase million, Other $X.X for decline quarter, primarily the milestone the payment revenue fourth was the reflect loss in loss were Other operating a in quarter XXXX The for of and in the fourth one

level our line Turning in to Alphabet activities, The of support research Alphabet. AI largest of activities. this component is development investments all which and

to in our with the of returned business Cloud Services, support of nearly in total data largest value by dividend QX, payments. in $X.X and DeepMind. In followed in of in to the in in repurchases, billion, returned quarter Alphabet $X.X billion primarily $XX office billion investments in biggest As we was charges of our billion we nearly factor in fourth growth reminder, our comparison the shareholders all charges. reflecting centers and fourth $XX quarter In $XX workforce XXXX, technical XXXX. connection reported severance the almost Google component a quarter investment XXXX, the across in Google form to year-over-year billion and activities charges being respect CapEx the entirely reductions share Google the included fourth servers, to shareholders level Overall, in the with infrastructure, a in is from of space office space optimization. With CapEx, have

first Turning on to impact like XXXX, several provide will full and our year the business commentary factors that I quarter both would performance in XXXX. to some the

revenue on highlight impact will revenue, meaningful First, that items in of terms two the across company. have QX I'll

impact spot rates, relative revenues to current the strengthening QX our currencies expect key of of in The first the from QX At rates. exchange to is headwind dollar U.S. versus XXXX. the we larger a foreign the

the impact is year. of Second leap

of less quarter in a QX expect from in the year headwind leap We having of revenue day with XXXX, compared XXXX. X first

XXXX are revenue the in that service by the cloud XXXX. during when in capacity correlated could segments, for lapping advertising capacity, financial in comes we given variability will rates Google Cloud, strength online impacted new deployment of on revenue be experienced XXXX. with Services, depending And we As in growth vertical of timing our revenues new see the throughout

investments, CapEx starting for for full XXXX. to expectation our the Moving with year

As call, for AI technical by as for expand to servers our infrastructure, followed the QX networking. in we data expect we mentioned centers increase on primarily capital expenditure investments and we our efforts,

$XX level in and to in to to quarter-to-quarter, invest total of quarter. approximately approximately expect fluctuate primarily billion investment XXXX, schedules. We deliveries that of first due in timing CapEx the expected $XX from with $XX may billion billion The construction

the In we investment infrastructure growth few service. P&L, over terms years on technical into pressure higher will In more of expenses, depreciation. the as first, of the XXXX, our increase in in CapEx saw the XX% in increase past primarily depreciation form assets year-over-year put in we

the growth to years, the over in we rate investments in in few depreciation the Given accelerate expect past increase XXXX. CapEx

in AI some Second, head in growth count areas expect such investment and cloud. as XXXX we key

rapid also how in products mentioned As on on pace, we as we're efficiencies and to launching doing QX Sundar, a we're testing you than before. I and call, focusing while further that products faster solutions from delivering heard just operate customer And at the the ever business. driving building,

take we I'd questions, Before to like financial the results the year. recap for

and the $XX billion, coupled Google Cloud Google grew to each continue growth, with expansion. revenue revenue year billion. double-digit by XX%, For or margin full Services XXXX, $XXX reaching by see

that our billions and of billion, users AI generative a the in And well your using an And sharing take revenue XXXX, of AI increase over XXXX. We're ads cloud innovation annual infrastructure the provide monetization. been forward will Philip the from and decade, to I potential new for also monetization. income through I and on AI total billion generated generating the pleased revenues experiences We've solutions. AI of performance to $XXX We're will $XXX and to year with opportunities in excited at seeing about throughout look additional rate. annual the cloud run is we questions. from combined and YouTube now in XX% year. Sundar, improve progress more our business ended for momentum we're

Operator

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

Brian Nowak

Anat, one a back Search. few just I us of a your two, of the how top you for like and seems Sundar, lot XX to drive your agenetic kind Can more users you funnel of engagement sort some walk for of through see in over days you of step you us with excluding further have your evolve one there's talked we one, about possibilities on second and examples ago, the years advances OpEx I for you in have the product continue come the of sort XXXX? about D&A where the to at for next the search base. on big-picture Sundar, OpEx space, search, with maybe come and walk that AI advertisers? Then think Gen areas efficiencies further there's and Anat. Can to of just think of monetization through vision the efficiencies simplification stay of potential to step-ups to about sort the

Sundar Pichai

and better on and lot works better more models, trading we continuity next the have playing step. -- indicated. we obviously, it come. On great experience, as mean, we I -- their has to long look been view this journey. AI It's of and obviously a overviews on. But where has number Brian. queries Search, expanding metrics to are Thanks, a bringing out the so The positively been there's

in future more AI Search, with to the imagine we with multimodal I Circle Astra. Things ways. think done in like ways, we'll powerful you can Lens, have continue what bringing Project

get instantaneously, you we see types for are front in experiences of like but Those areas which don't and done will unlock really work. areas putting feel which cases of the imagine time users can There's answer. expirations, Gemini dramatically of the XXXX. newer the always to all AI. a course Things you also Deep -- us have possibilities Research, some are can of in can lot ahead. with And of I take answered use space through Search You where expanding so opportunity do

Anat Ashkenazi

make see certainly include question that on areas leverage further as areas of do for and see I before, call? areas. see, one focused previous forward And Cloud for we for our do and or comments is with growth. I'll to I've continue made to opportunities infrastructure. which some efficiency, do of we the And the I where where the this moving potential to and that where I've productivity the and see sure technical going continued priority AI on we in invest so we mentioned that we're remain can such regards

CapEx to infrastructure, servers the mentioned which this technical for I is our $XX centers. in majority the includes go and billion of So going towards data that year,

do we most in efficient is critical. that the ensuring way So

that. is going to is of count on focus such and the footprint Optimizing mentioned, growth, to Second continuing but the investing of in we're across will managing growth, areas and real AI be estate organization important. be and one that areas Cloud, as looking we're head the growth moderating I've

or it's operate you but within the As organization, Whether the AI looking run some the tools. code mentioned also how own using writing how so bringing organization. We well running simplify key together operate we we of AI some with to teams of with Sundar as AI at together. how call, we bringing our even previously the the like on speed, research Sundar talked increased our that business. areas processes previous code using the mentioned about can tools that

So It's and to we're we're X-quarter continue to other areas. -- so to of year, support focus the that going continue throughout this not the going It's at going to we type can that. is on in that growth a looking all effort.

Operator

with Anmuth from JPMorgan. Our Doug next question comes

Douglas Anmuth

Search? And is I constrained of fourth to been how it revenue can growth just decel wanted for XQ say on then on Philip, that on that learned rollout may bit and to expanded overviews you perhaps and like fair accurate? about things Philip AI you you of have just push additional more Anat. for higher little you but were ads in XQ? capacity? what more One one the a nearly the And And it And queries? more on capacity you're in Anat, to also is bit say to particular, existing that much -- cloud still out with could rolled you percentage that just quarter. commercial just higher growth. to I fair have monetizing that on of XQ, if suggested it A guess, curious sounded with a is talk the little par in

Philipp Schindler

satisfaction I AI which really on on monetization same all, which launched so previous the us rate, the recently see, as we So our AI for talked mobile first search more. on to good. which think base within I builds overviews, about overviews and innovate higher really U.S., usage, you a the And at Overviews, is overall, first nice rollout approximately AI that's gives see even before, of question, your and to of on actually drive strong know, really which as ads And above continue we we ads can in below. the

Anat Ashkenazi

On the Cloud question.

a the growth. growth, to and impressive So remark, than the think at grew GCP about a I'm as mentioned year-over-year at from much items And prepared a deceleration perspective. billion we quarter Cloud. Two excited ended in overall higher very that I $XX first, XX% rate

of deployment The first very a XXXX. in strong lapping we is core are [indiscernible] QX of

for is second The and products in do very quarter the strong than have see exited seeing had demand XXXX. we to, with we demand year one fourth capacity. been our in the And available alluded AI the we more you've

in situation, more supply-demand So very capacity tight working we bring to online. a hard are

in XXXX, increased XXXX, in throughout As bring year. continue in we'll to we've the I and investment capacity CapEx mentioned, more increase

Operator

Your with next Sheridan question Eric from Goldman Sachs. comes

Eric Sheridan

of from for lot moves asking a your news weeks I'll and to dominant across cost term? the a mean infrastructure just couple think that with as been team. that questions investors to custom get layer about layer, the or more silicon X ask on Sundar I and on one. long-term longer would to out I your take news the becomes have maybe for ago love might application it weeks what over of Alphabet curve little the AI, came a ago, training China of perspective even AI inference the from

Sundar Pichai

Eric. there's of think lot on a I Thanks, DeepSeek. observations been Look,

a think I tremendous team. all, of First

And if cost they've period in the but areas you frontier is at development, of shine There's performance obvious serve really for model been X Frontier us, I models over time. done X.X to model are some these of of ] of I the efficiency lot look of one which most this I if all the frontier. And say think Flash really, models, our models lead both -- models, period it's of efficient latency. lot very, always and work. Look, out we our attributes, stack think we good And think very I you are in well. end at would look including you the [ Gemini can X.X a thinking of per they the I to a it to there, think end our strength is optimization, with cost query. full DeepSeek's development obsession And comparing [ RX VX our of ]. drive Flash

past look proportion at spend X over which training increasing, ROIC. with as both All on say well because, of had I trajectory the good our towards of think, billions side. A would to for of serve things are across inference the products compared years, sets workloads I to you that, and the couple if good businesses cloud to inferences users the been support has the is the obviously, of

so think is I And good. that trend

models, inference if dimension scaling anything, accelerates as well. I because think obviously the it's that trend reasoning upon

space. use big about you're as can we of to opportunity think it and to we more of it so And why so comes, will feasible. excited coming actually cases know going reason use And is, cases look, the meet using the I that's seeing are which that because moment. we extraordinary part AI as I drive keep the is make invest down, think It's -- us the cost opportunity that's

Operator

question comes with from Michael next Your Nathanson MoffettNathanson.

Michael Nathanson

terms two. starting one more for Anat. tools research on is have and for for is about question something whether business? AI I you One going e-commerce to the modeling Philipp the is, recommendations capital Philipp, sites AI see things you or think guess product And a with spend? to getting the AI had that we're right to forward? do Can what how shopping long-term you But think like intensity this billion impacting is looking and not intensity $XX are of level like the ] you're are do [ you there's or think shopping. of Google on things capital you Anat of for behavior, of do [indiscernible] built. then I how question in bit monetization? And how that impact tools about that other talk about and this constraint It how sounds in forward

Philipp Schindler

transformed Google And we in even our advances in Google we to introduced December, across shop question. to rebuilt than fully AI compared We've daily mentioned easier, Google in in experience. In we quarter, a introduced a shopping which times been people up with from AI. billion on U.S. Google year. last I same ground products experience, obviously. saw a QX, make excellent users actually more period Look, using And the Google. Shopping more we reinvented search for day Last -- the this the XX% roughly active shopping as quite

a that's speed the most simplify helping Google intelligently really users to the up relevant So to good show products, research. new question, experiences development your And your here. specifically to Shopping and

to consider for with an get search your meet brief needs. things AI-generated top You products your plus maybe that

want very low prices. often So shoppers

tools really built browse and it's you comparison, page page, personalized for new deals this throughout. only not tracking insights, price all like is AI. can of and the But which deals like deal a price also finding new backbone So the includes price on dedicated

So this opportunity. think a we interesting very is

Anat Ashkenazi

And may capital. on then capital you we intensity there. questions the just and is One about on question would two and have the in of how think expenditure, I invested think capital that return

So business. on in at what And capacity. -- across the on allocate and cloud, do governance to externally, support the we're demand Alphabet Google the have capacity the made as the we we but even also how need demand very certainly, do seen looking just a the our available customer comment that I've you've looking but exceeds rigorous, one, internal we're first would ahead, was very responsibly. managing It process, we

more in that or can broad capacity, through working a manner. of efficient benefit address whether we be hard Services do have said, do can capacity we to we'll GDM, and it's or online. We very we customers, sure the that repurpose a whether support, business, to make having and So as Cloud Cloud Google or Google Google I more it's bring search

We data make we're that that at our doing to cost-efficient also the ensure center. investment most to in look way we it every optimize

you self our strategy rely to own build data centers. mostly and As know, is our design

efficiency cost industry-leading So of scale. and at power they're in terms both

customized CapEx our performance superior our and deliver own efficiency. outstanding customized We TPUs, for have their they so workload, the own do

to going we're we're as coming throughout how that to going capital progress when at years. be So make the investments decisions we all looking to

Operator

Your question from comes next with Bernstein. Shmulik Mark

Mark Shmulik

follow that recent to With consumer AI Brian's to to Sundar, Vision. from a seems Mariner and up I up launch, momentum catching competitor's earlier. project of Duplex strong Google and there's old kind agents wanted question own efforts really on just your suddenly

you each going? think lens? do mean to to in few agents I will consumer does eventually Google of other? conflict both see you flourish? And look really, with ahead, what it there outside they when where Or years a Is for be room Search

Sundar Pichai

agentic built with Look, I the capabilities these of lot a we X.X think, seeing definitely use underlying of view models. enabling are cases. first was definitely more of all, in progress the Gemini of

expands -- definitely the users. Look, and to of all opportunity actually think so actually progress inside. our we'll for And seeing are able experiences space. be agentic I I we do more think I this

have -- information talked you cases, had -- on have use in we et your cetera. a deeper when about it historically, can information you Assistant, can we've much our needs think Google It's been act way. but I now always vision

I opportunity space the think expands. So

of of for types a plenty the for AIO Google to plenty that can I our shows to feels I a positively Search. that. room, additional view We zero-sum will users it, all sense we tackle think clear I work use game. start of There's And users in for early cases. with react new to flourish. think, from very of there's us, think have cases many far use And

pretty excited what's I'm about So ahead.

Operator

Barclays. Sandler with Your next comes from Ross question

Ross Sandler

on One then on revenue. on infrastructure guidance Great. the one and

a tokens pricing X the million stack. something guys like running inference peers? you terms to think inference TPU of X API called in generating if the an cloud on lapping are category as problem out advantage just compared quantify the inference? And you little bit we XXXX then of advertiser talk Anat, Gemini you on costs Is Sundar, the inference So X, raw but not as around your for this Search. services strength generating everything shifts guys your versus same more cost do financial in Do channel? tokens you efficient a see Could How GPT numbers you bit look tokens as they're much of for a at when you lapping as Asia put costs we you the headwind? that about to of that? could see per and that kind million outbound the Any

Sundar Pichai

Ross, look, the project DPU whole started.

inferencing was VX chip. an effectively Our

our we've to about see on asked outside, already able We've growth. X cost, XXx attractive developer months. which is play our just is -- captured a latency advantage. at reason pass we to [ cost a approach doubled a effectively props, it's a ] think but we I have only about we not part million plan models you basis, that. I partly always the the very differentiation end-to-end price differentiation. but developers usage flat X.X been that all we've taken driving when meaningful of we on and on strong So the we performance definitely efforts know why we value bring drive can our Be basis. full stack end-to-end And stack mentioned, the in TPU approach so Vertex frontier up [indiscernible] year. in forward what last optimizing and and it is It's a on the you give is

of all a of that direct that. is so continue that doing and approach, result so And we'll

Anat Ashkenazi

any impact we going and we lapping not on regards is within segment what the that specifically see, This we're across position If to a pleased all was and throughout anything, as in saw the X the strength was specific see we QX. comment structural the exiting a day that in Financial as about to revenue fact fact saw with services. step-up the the including changes well year, about a to it we the continuing and to And the year and it you expect primarily strength really more then related of as less have comments but retail of It's insurance. made question in highlight that would to the financial in on my kind I've regarding I'm the verticals, XXXX. give year. I'm continue, as insurance the I Services, onetime with think But to numbers FX seeing, strength. of of

Operator

Post question America. Your Bank with comes next from Justin of

Justin Post

couple A for Philipp.

overviews. search with You mentioned higher usage

but more Just of usage? you competitors impact integrate user-generated AI, of move that? Is more it wondering AI? growth is professional in YouTube. how just think Search real doing at then you're from Thinking how know And a wondering as gathering? And usage. a I there's you're maybe increase second overall volumes traffic margin a if for about lot content for that with on total kind feeling What seeing of information your about about the content. you do to accelerating

Sundar Pichai

Maybe on healthy. -- on our metrics are just Search usage, overall,

usage. We continuing are of Search in growth see to on year-on-year basis terms a in overall

come that, overviews as well. so overall, users, I Of growth, And But all this well we course, segments stronger to earlier, users, innovations it's continuing within moment, being across received. have said to year. this I seen I through of perform younger AI particularly lot has is AI a more Search think including think

questions, to follow-up -- et cetera, make an opportunity easy you have give we people I drive growth. think evolve think even more and ask it more. will the I you think Search as product -- And as you make as further for interact to I

Philipp Schindler

YouTube and on U.S. color nearly healthy ads QX The followed YouTube some response. overall we XXXX. in a led advertising Look, that. your the direct driven growth by mentioned election brand from had And saw double revenue I very by brand, question. growth, spending

the from We a retail contribution tech strong also verticals. finance, and had

we remains strong said opportunity your position always time. On operating. one we Look, creators just overall, So UGC And strong the and with X in gives very lot million which shorts partner in YouTube really time are are is areas side. And channels the here. of the robust, as specifically, a monetization care confidence here stage program, we've key the to YouTube's here. have [indiscernible] an And such this set important more at that actually center success Today, incredible have Watch than #X growth program. really of a the particularly question most more creators. about. we strong us they're position thing

goes. and we're where very we have the this position So confident with

Operator

comes Wells with And our Fargo. last Gawrelski from question Ken

Kenneth Gawrelski

Two, Sundar, growing an have please. was questions Gemini focus please. on goal that by press the agent ambitious 'XX. end and I there Two usage the on reports side. of consumer want you the that, suggested on to some

free the Gemini can premium First, Over offering as it what's a et about marketing Today, how about the be -- to really whether maps, should on it's the cetera? And please? a tighter offering. ad see monetization do second should think future how Gemini? component? opportunity is, that, anything we one an time, a you then subscription share of you're or you existing And stand-alone search, into mail, this to the we experiences, more integration goal? it is product? think approach that Or it going aggressive employ achieve Is for

Sundar Pichai

had we've all, Gemini of particularly on momentum First XXXX. of through the for the strong a second app side, half

received there. it a easily with brought and of app positively iOS, of it on some for traction definitely it super made is, example, which And more lot dedicated accessible. We've we've been to, has getting a

growth last organic driving models. the our series definitely of out, just So out putting by rolled X.X product we week with

can capable I X.X free Flash. tier. So at the access one that's mean you most think of models I the

So that's as contributing well. definitely

are with I Gemini users Research. a definitely couple as we been Deep hit has think, of a key as well Gemini Live, advanced there. rapidly We've so And users had trading. innovations for

it So and as this a it Samsung. I we'll product go driving a making think we're obviously And come partnership a more to combination of have usage. -- is of we a innovation continually trading year, have lot on with and better, the lot

things other to which it as will are well. contribute there So

time, making think do reach for been ideas obviously, strategy. see billions ad And over users tier to I lead subscriptions. obviously, we And of we're have But side, good has user to always of monetization as the the us do And seen are experience. On lead a Google at committed for we you'll that great scale. free concepts, now, native we and you've but work focused want advertising products on with always aspect experience. and with in a the user -- very but

focused us like on just year, time. options give with this seen over you've we'll direction. I subscription so And But be the think YouTube, see people for you'll

Operator

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

James Friedland

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

Operator

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

may disconnect. You now

Alphabet (GOOG) 4 Feb 252024 Q4 Earnings call transcript