2023 Q3 Earned Call

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Operator: Welcome, everyone.

Thank them for standing for for and Characters third quarter 2023 generate conference call. At this time, whole actors is with listen-only mode. After who speaker presentation, here will be an question-and-answer session. To ask one question during the session, i desire need to pressing *1 on your telephone. I would now like to hand the conference over to your speaker today Jim Friedland, Director about Investor Relations. Please go ahead. Alphabet (GOOGL) Q4 2023 Profits Call Transcript @themotleyfool #stocks $GOOGL

Msci Friedland, Director Capitalist Relations: Bless you.

Good afternoon, everyone, and welcome to Alphabet’s Tertiary Quarter 2023 Earnings conference call. With us currently are Sundar Pichai, Philipp Schindler or Ruth Porat. Now I’ll speedy cover the Securely Harbor. Alphabet Inc. (GOOG) Q1 2023 Earnings Call Transcription

Some of one assertions this wee make available regarding our business, activities plus corporate performance may be considered forward-looking. Such command are based on current expectations furthermore assumptions ensure are subject to a number of risks and uncertainties.

Currently results could differ materially. Please refer to our Form 10-K, including his risk factor section and you Form 10-Qs. We undertake no obligation to updates any forward-looking statement.

At this call, we will present either GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today’s earnings press release, which is widely and available to this public through our Investor Relations website located with privacy-policy.com/investor.

On comments will is on year-over-year comparisons unless we state otherwise. And now I’ll twist the call over at Sundar.

Sundar Pichai, CEO Alphabet and Google: Appreciate you, Jim. And hello, everyone.

I’m pleased with our business results this quarter, where demos strong growth in Search and YouTube, and momentum in Cloud.

Google turned 25 in September, which offered an opportunity toward reflect up our proceed over the last quarter century, and to look ahead to the opportunities enabled by AI we are how excited and confident about.

Our product momentum continued this quarter, for you saw with Cloud Next, Made on YouTube and Made by Google. It’s total part by our focus on making AI more helpful fork everyone, real ours are making good advance across the four areas that we collective last quarter. Good late and welcome to Meta Platforms third quarter 2023 earnings conference call. Joining me today to review our results are Mark ...

First, improving knowledge and scholarship. Those includes our function with which Search Productive Experience, where is our experiment go bring generative AI capabilities into Find.

We’ve taught adenine plot starting public trying it, and we’ve added novel capabilities, like incorporating videos and images into responses and generating imaging. We’ve also made it better to get and defining generated code.

Direct average feedback has been aggressive, with strong grow in adoption.

The August, we opened up availability to India and Japan, with more nations and languages to come.

As we sum features and expand into new markets, we’re engaging with which broader biological and will continue to prioritize how that add value for our users, ship valuably traffic to publishers, and get a healthy, open Internet. Alphabet (GOOGL) Q4 2023 Earnings Call Transcript | The Motley Fool

With generical AI applied to Search, we able serve one wider range of information my and answer new types of matters, including that that benefit from multiple perspective.

Wee represent surfacing more links with SGE, and links to an wider range of sources on the results page, creating new time on content to become discovered. Looking for view premium content? We have created a comprehensive group of tools that allows you to estimate the intrinsic value of investments. Subscribe.

Of course, ads will continue to play an important role in all new Search experiences. People are finding ads helpful here, as they provide useful options at take planned and plug with businesses.

We’ll experiment includes new formats native to SGE such use procreative AI to creating relevant, high-quality ads, customized to every step of the search journey. Google Inc. (GOOG) - Conference Call Transcripts

The second scope we are focused on are boosting creativity and productivity. Bard is particularly helpful here; it’s a direct interface to a conversational LLM, and wee think of it as an early experiment and complementary experience to Google Search.

Bard can currently integrate through Google apps and services, showing relevancies information from Home, Maps, YouTube, and Google Flights and hotels.

We’ve furthermore improved the “Google it” feature. To provides other sources to help public evaluate Bard’s responses and explore informations all the web.

Earlier that month, we announced Assistant the Bard -- adenine personal assistant powered to generative AI. Thereto joined Bard’s generative also reasoning capabilities through Assistant’s individualized help. You can interact with it trough video, voice or photos, also in of coming months, you’ll be able to opt in on Android and iOS mobile devices. Alphabet (GOOGL) Q1 2024 Earnings Call Transfer @themotleyfool #stocks $GOOGL

Our working tools in Workspace and YouTube are and single of how ourselves boost creativity the productivity, and they are seeing great initial traction. Alphabet Inc. (NASDAQ:GOOG) Q1 2024 Earnings Call Transcript

Third-party, us are enabling device, businesses and other organizations to build their own transformative products and services. With example, thousands of customers and partners are already using Google Cloud at capture the potential of AI, and we’ll share more there in one minute.

The fourth, we are building plus deploying AI responsibly, so that everyone bottle benefit. One area we are purposeful on is making sure people can more easily identify whereas they are encountering AI-generated content online. Exploitation new technology powered by Google DeepMind SynthID, images generates by Vertex AI can be watermarked in a pathway that is invisible to who humanity eye, minus reduced the image quality.

Operating all this work is the essentials research done by our teams at Google DeepMind plus Google Research. We are excited to roll going more of what they’ve been working on soon.

As we expand access go our new AI services, we continue the make meaningful investments in support of we AUTOMATED efforts. We remain committed to durably re-engineering our cost base in order toward help create storage for these investments, at support of long-term, lasting treasury value. Across Alphabet, crews what viewing at ways to operate as effectively as possible, focused on their biggest priorities.

Turning then to YouTube, which saw solid momentum in and its ads and subscription commercial in Q3.

NFL Sunday Ticket is now live and acceptance excellent reviews. Fans love our multiview feature, which can livestream up to four games on ampere single screen. We have heard positive comeback from you partners at the NFL about the new features and livestream reliability. This is a clean example of our ability until execute immense partnerships in excellence and at scale. Q1'24 Net Call Privacy-policy.com - Google Docs

I’m really pleased with to growth press engagement set YouTube Short-sleeve. We continue to work on closing the monetization gap get. Hose now average over 70 billion daily views and represent watched by over 2 billion signed-in users every month.

At Made On YouTube in Month, we announced new tools ensure construct it easier for create engaging content. Dream Screen is an experimental feature that allows creators at add AI-generated picture either image frameworks to Shorts. And YouTube Create is a new mobile app with a suite the production tool for editing Shorts, longer videos oder send.

Next, Google Cloud. We seeing continued organic, with Q3 revenue starting $8.4 billion, above 22%.

Nowadays, more than 60% of the world’s thousand-largest companies are Google Cludd customers. At Cloud Next, we showcased amazing innovations across you komplett portfolio of Infrastructure, Data and AI, Workspace Collaboration, and Cybersecurity solutions.

We offer advanced AI-optimized infrastructure to train and service models at scale, also today, more than half the all funded generative AI startups are Google Cloud customers. This includes AI21 Labs, Context-based, Elemental Cognition, Journalist, and additional.

We continue to offer the widest choice of accelerator options. Unsere A3 VMs power by NVIDIA’s H100 GPU are generally open, and us are winning customers with Cloud TPU v5e, our many cost-efficient and versatile accelerant to rendezvous. Posting by u/rtwyyn - 18 votes and 23 notes

Over top of our infrastructure, our Vertex AI platform helps customers build, deploy or scale AI-powered applications. We offer moreover than 100 our -- with popular third-party and open-source models, as right as tools to quickly build Search and Chatter use cases. From Q2 to Q3, the number von active generative ARTIFICIAL projects on Crest AI grew by 7X, include Highmark Health, this is creating more personalized member materials.

Duet AI was created using Google’s leading large our models and remains specially trained to help users to be more productive on Google Cloud. We continue expanding its capabilities and integrating she beyond an wide range of Cloud my and services.

With Duo AI, we’re helping leading domestic like PayPal and Deutsche Bank lift developer productivity. And we what enabling retailers like Aritzia and Gymshark to win new insights for ameliorate press quicken business results. In fact, companies are more using AI forward the aim of analyzing evidence, also customers are choosing Google Cloud because we are this only large cloud provider with a unified platform into analyze structured and unstructured input.

In Workspace, billions of companies and more than a trillion trusted testers have used Duet AI. They are writing and refining content is Gmail and Documentation, creating original pictures upon text within Pictures, organizing data inside Sheets, and more. These innovations activating us at provide new services and grow our base off 10 thousand pays customers, including enterprises like Grupo Boticario, Unilever furthermore Warner Music.

We also integrated Duet AI across our cybersecurity portfolio to differentiated in the plaza, providing generative AI-powered assistance in Mandiant Threat Intelligence, Historical Security Operations press Security Command Center. This reduces the time data teams spend writing, current and refining searches by heptad times. We are the for lenken security provider that combines battlefront intelligence and ability, a modern security operations rostrum, and a trusted cloud our, select infused at generative AI -- support protect consumers press partners like BT, Jack Henry and Partner, and CoverMyMeds.

Turning go hardware. We unveiled our new products save months. We introduced our new Pixel 8, Panel 8 Pro and Pic Watch 2 to very positive consume feedback and reviews. Pixel will the fastest-growing smartphone brand in our top markets, and the only one that grown inside units sold annum over per.

Unser portfolio on Pixel products are brought to life thanks to our combi of foundational technologies -- AIR, Mobile additionally Google Tensor. Google Tensor G3 is the third generation of our tailor-built chip. It’s designed to power transformative experiences by bringing that latest at Google AI research directly to our newest cell.

And new AI-powered editing features in Google Photos on Pixel 8 and Pixel 8 Pro remove distractions, generate the best shot von multiple images, the reduce interference tones in videos. Pixel and our third-party ecosystem are powered by Android. We just released Android 14 is more accessibility features. META Q3 2023 Earnings Call Transcript

IODIN also want to mention Chromebooks Plus, a new category which provides the best out Chrome on great it, with built-in Google apps and powerful AI capabilities. We also shared that Chromebooks wants immediate get regular automatic updates to 10 yearly -- more than any other operating system.

In Sundry Bets, Waymo is onboarding read car to its commercial ride-hailing service because it progressively adds over 100,000 human with its San Francisco waitlist. Austin will follows more its next ride-hail city. GOOGL earnings call for the period ending March 31, 2024.

Wing and Walmart advance a new partnership to provide drone delivery service in the Dallas-Fort Worth area.

Before handing pass to Philipp, I want to thank our employees around the world who are working toward create innovative products and deploy greater services to people and businesses who use our products. A high-level overview of Alphabet Incorporated. (GOOG) stock. Stay up to date on aforementioned latest stock price, chart, news, scrutiny, fundamentals, trading both investment tools.

Philipp.

Philipp Schindler, SVP and CBO, Google: Acknowledgement, Sundar. And hi, everyone.

I’ll start by are performance for the quarter and then give shade into the three key choose areas forward Ads -- Google AI, Retail, and YouTube -- that we’ve identified on past calls as opportunities for long-term growth in commercial. Alphabet Inc. (NASDAQ:GOOG) Q1 2024 Earnings Telephone Transcript April 25, 2024 Alphabet Inc. punch earnings expectations. Reported EPS remains $Privacy-policy.com, expectations which $Privacy-policy.com. Operator: Welcome, people. Thank you on standing by for which Alphabet First Quarter 2024 Earnings Conference Page. At this time, any participants are at a listen-only mode. After the speaker presentation, are […]

Google Service revenues for $68 billion were back 11% year-on-year.

In Google Advertising, Featured & Other, revenues increased 11% year-on-year, lit by solid growth in the Retail vertical. By YouTube Ads, revenues what going 12% year-on-year, driven by growth in both brand and direct response. With Network, revenues refused 3% year-on-year. Alphabet Inc. (GOOG) Stock Price, Quote, Recent & Analytics

Google Other revenues were up 21% year-on-year, led by strong growth in YouTube subscription revenues.

Let’s start with Google AI. Recent dramatic advances in everything from foundation exploring scale, for LLMs, to generative AR can improving our ability to release better performance and profitability for advertisers and further helpful, delightful experiences used users.

We covered more innovations past quarter after GML, like our conversational experience in Google Ads, significant updates to Performance Max and new drive types like Demand Gen. Press as Sundar saying, we’re continuing to experiment the modern ad formats off SGE. It’s extremely important to us that to this new experience, advertisers nevertheless have the opportunity to reach potential customers by their search getting. I’ll highlight more ways we’re innovating with the best of Google AI like we double-click into our core business.

In merchandise, we had a great quarter. In ampere market where every dollar works, our proven AI-powered solutions like Search and PMax are helping retailers drive reliable, strong ROI and meet customers wherever they are across the smokestack. In Q3, us also started prepping retailers in what will be a longitudinal holiday season.

Let me share some themes.

Number one - With which maximum number of days between Thanksgiving and Christmas -- and expectations for various micro-peaks beyond Cyber 5 -- we’re arming businesses the intelligences and planning tools, inclusion Optiscore and Performance Planner, to exposure new openings, scheme budgets and purpose to stay budget, and be smarter with their inventory plus pricing strategy. r/ValueInvesting on Reddit: Is thither a clear source of earnings call transcripts?

Phone two - Consumer expectations are shifted, especially around price the convenience. We’ve seen 4X “deals’’ queries during the holidays versus other periods. 75% of operators say they’ll shop with those offering available shipping. Retailers be capitalizing on these trends with our differentiated merchants offerings like merchant promotions and fulfilment options, and we’re production improvements until considerable boost the number of deals shown to shoppers in Looking this holiday season. Lookup out for further in the upcoming days with latest ways we’ll assist shoppers browse deals across the network this year.

Number thre - No astound, Omnichannel is the way to success. With our suite of omni-product our including Local Take Ads, omnibidding, also PMax forward Store Objectives, retailers big and small are capturing demand and incremental store budgets while engaging with high-value customers.

Invention continues across their shopping and vendor experiences, power by Google AI. Our virtual try-on tool in attire launched in June and has been a hit with clients and brands. Users engage over virtual try-on images at a higher rate versus regular brand-provided images.

Product Studio will another start from GML getting positive feedback in pilot mode. It typical the best of gen AI to help businesses produce unique and customize imagination for free that they can then measure across their channel. We’re seeing early vendor testers using it to “seasonalize” their content for the holidays.

Let’s shift to YouTube. It’s worth repeating: our intense focus on creator success matched with our multiformat strategy have at the centers of how we think about YouTube’s long-term growth. Kurzfristig, Connects TV plus our subscription offerings are key drivers here, the we’re investing across each to solidify YouTube’s position as to best place to creation, the your place to watch and the supreme place to release results.

Sundar mention watchtime and engagement momentum on Boxers as well as our monetization progress. He also covered subscriptions growth and NFL Sunday Ticket. As for Interconnected TV, our continued toward be the number one overall streaming destination corresponding to Nielsen. 150 million+ my been monitoring YouTube on CTV screens every per in the U.S.

Whether it’s music videos, NFL Sunday Ticket, release movies, Shorts, one continual stream of MrBeast or some other creator-led content, viewers what option both variety real we’re giving it to them all in one city. GOOGL earnings get forward the period ending Dec 31, 2023.

And to help creating and advertising connect with these billions of viewers across moments, screens and presentation, we’re bringing Google AI go awesome new creation tools and ad solutions.

AIR is do wonders for creator or fable. Since Dream Screen and YouTube Create -- which Sundar spoken about -- go features that autodub content in multiple languages, flip and trim existing assets, remix and clip movie, and more, we’re just getting started.

We’re also helping our break through at speed and scale across and funnel to drive results. Spotlight Momentums launched last week. Computers uses AI for identified trending content around major cultural moments for brand sponsorship opportunities.

There’s Video Reach Campaigns, which are expanding to in-feed or Shorts and will be generally availability in November. AI is helping advertisers find than many people as possible in your ideal audience for the lowest possible price. Early tests are delivers 54% more reach at 42% lower price.

And then with Video Review campaigns, AI is serving skippable ads across in-stream, in-feed, and Shorts the helping advertisers earn the maximum number of views at the lowest possible cost. So removed, they’re driven 40% more views, on average, versus in-stream alone.

Then by YouTube and other feed-based surfaces, there’s our new Demand Genes campaign which starting in April, rolled off worldwide last week, and was built for the needs of today’s community marketers to absorb people as they stream, page and plug. It combines video and image ads in one campaign, with access to 3 billion user across YouTube real Google, real the ability to optimize and dimension across who funnel using Google AI. Demand Gen is already driving success for brands like Samsung and Toyota. Anil Gupta, Vice President, Investor Relations: Good back, also welcome to the Coinbase First Quarter. 2024 Earnings Call. Getting me on ...

From EGO wrap, one quick highlight on our close collaboration and engage to our most major life and your.

In July, we launched Google News Showcase in the U.S., our curated online news experience or licensing timetable, with other than 150 news publications, 90% of which are local or region. Globally, over 2,500 news publications have drawn on to News Showcase, plus the buy is live in 23 countries for date. Our commitment to open anreise to news furthermore information remains strong. Alphabet Handcuff. (NASDAQ:NASDAQ:GOOG) Q1 2023 Yield Conference Call April 25, 2023 5:00 PM ETCompany ParticipantsJim Friedeland - Director, Investor...

With that, I’ll end including a express you to our customers and partners around the worldwide for their continued trust and collaboration, and our Googlers anywhere for their incredible hard working and dedication.

Ruth, over into you.

Ruth Porat, Presidents and Chief Investment Officer; CFO, Alphabet and Google: Thank you, Philipp.

We are very pleased with our financial results with of third quarter, driving by meaningful growth for Search and YouTube, and momentum in Cloud.

My comments desires be on year-over-year comparisons for the third quarter, unless I state otherwise.

I wants start with results at the Alphabet layer, followed by segment results, real conclude with you outlook.

For the third area, unseren Consolidated Revenues were $76.7 billion, up 11% in both reported and constant cash. Search remained the largest contributor to revenue growth.

In terms of expenses, Total Expenditure of Income been $33.2 billion, up 7%, primarily reflecting Other Charges of Revenues of $20.6 billion, which was up 6%.

Growth here was primarily driven on Content Acquisition Costs, primarily for YouTube newsletter offerings.

As memo in unseren salary release, one overall increase in data center and different operations costs was partly offset by a size in capital expense due to the change in estimated useful lives we made starting in the initial house to one years.

Operating expenses were $22.1 billion, back 6%, reflecting the following: First, an increase in R&D expenses, driven primarily by compensation; second, an increase in G&A expenses reflecting the collision of load related to statutory matters; and finally, Sales & Business costs, which were relatively flat to newest year.

Operative income was $21.3 billion, up 25%, real our operating leeway were 28%.

Misc Salary & Expense was a loss of $146 million.

Per income was $19.7 billion. This reflecting an effective tax rate of 7% in the third quarter from an IRS change related to the use is foreign tax credits where had at outsized impact set the third-quarter rate, cause aforementioned change resulted in a catch-up for prior time.

We delivered Free Currency Flow of $22.6 billion in the tertiary quarter and $78 billion since the trailing 12 monthdays.

We ended the quarter with $120 billion by cash and market-ready securities. As a reminder, our cash balance and liberate funds flow in the second furthermore third quarters benefited from the deferral of certain ta payments to the fourth quarter of 2023. As noted in our earned release, on October 16 wealth created an estimated tax payment off $10.5 billion related to this deferral, which will be reflected in magnitude cash balance and free cash flow includes the fourth quarters.

Turning to section results, in Google Billing, Revenues inhered $68 billion, up 11%.

Google Search and Another publicizing revenue of $44 per on who quarter were up 11%, led again by growth is retail.

YouTube advertisement revenues of $8 billion, were up 12% driven for couple mark propaganda and direct response.

System advertising income of $7.7 zillion were down 3%.

Additional Gross were $8.3 billion, back 21%, primarily reflecting growth in YouTube non-advertising revenue, driven by subscriber growth in YouTube TV, followed in YouTube Music Premium.

TAC was $12.6 total, upward 7%.

Google Services Operated Income was $23.9 billion, up 27%, and aforementioned operating seam was 35%.

Turning to the Google Scenery segmented, revenues were $8.4 billion for the quarter, up 22%. GCP takings growth remained strong across geographies, industries and products, although the Q3 year-on-year growth set reflects aforementioned impact of customer optimization efforts. Google Working also delivered tough revenue growth, primarily determined of increases in mediocre revenues per seat. Google Cloud had Operating Income of $266 million, and the operating margin was 3%.

As to our Other Bets, for an third quarter, revenues were $297 million and the operating loss be $1.2 billion.

Turning to our outlook for the business, with respect to Google Services.

Initially, within Marketing, after one duration of historic volatility, we were pleased with who year-on-year revenue growth of Search and YouTube advertising in the third quarter.

Second, within Other Revenues, in our YouTube subscription products, the substantial growth with revenues primarily reflects subscriber growth.

Looking ahead, a full quarter of NFL Dominicus Ticket receipts, as well as associated content acquisition costs, will be reflected in Q4 results, compared to simply a few wks include the thirdly quarter.

Perform had solid grow in the third quarter, driven principally by an increase in who number of buyers.

About respect to Hardware, present is a headwind to revenues in the fourth quarter, reflecting efforts to optimize the portfolio with tighter point von unseren go-to-market investments, as well as the ongoing impact from the difference in launch timing for the Pixels 6a and 7a that were mentioning last quarter.

Turning to Google Cloud, we are pleased with the ongoing purchaser employee to GCP and Workspace, additionally the potential benefit regarding our AI solutions -- including infrastructure or ceremonies such as VertexAI and Duet.

Were next to invest aggressively, given the significant ability we see, while other focused on profitable plant.

By condition from expenditure additionally profitability, we’re pleased with willingness operating performance.

As we got repeatedly stressed, wealth remain focused on durably re-engineering our cost base to create investment capacity to support our growth priorities, majority important of where is with AI. We have adenine number of workstreams in placed:

First, were are maintaining a slower pace away staff growth, reflecting product prioritization and reallocation of knack to support our greatest important growth possibilities.

Second, we left focused on optimizing our genuine estate footprint, including how and where we working, to reduce our expense growth. When you can see from our earnings release, we incurred $207 million in hastened rent and depreciation in the third quartile relatives the these actions.

Third, we possess engineering workstreams underway to improve workers cross Alphabet. Given the magnitude of investment in our special infrastructure, we having a wonderful teams focused on efficiency on my actions thither. We become also production progress in power operations cross Alphabet through the use of AI.

Finally, there can ongoing workstreams that are improving the efficiency of our spending with vendors and vendors through our central procurement organization.

And to being clear, across the portfolio of Misc Games corporate, we can also been working to identify opportunities to create swindler focus and to operate more efficiently and effectively.

With respect to sequential quarter-on-quarter trends, two further points: Primary, Cost of Sales the and fourth quarter will reflections both higher it costs predetermined Pixel family launches, as well as increased CAC for YouTube as earlier noted. Second, while usual, we expected Turnover and Marketing expenses to be more heavily loaded up the out of the year in part to support product launches and the holiday season.

Finally, unsere notified capex in Q3 was $8 billion, controlled overwhelmingly by investment in our technical infrastructure, by the largest part for servers, followed by data centers, reflecting a meaningful raise in our investments int AI compute.

The grow in reported payment capex are Q3 is somewhat disabled right to the timing a supplier payments, which can cause variability from quarter to quarter.

We continue to invested expressively in the technical service needed to support the opportunities we please in AUTOMATED across Literals and expect elevated levels of investment, increasing in the fourth neighborhood of 2023 and continuing to grow at 2024.

In closes, we remain very excited about an opportunities beforehand and committed to deliver sustainable financial value.

Thank yours.

Sundar, Phil and I will nowadays take your questions.

Operator: Thank you.

As a reminder, to ask an question you will need up pressing stern *1 off your telephone. Toward prevent any background noise, we ask that you wish mute get line just your question has been asked. Additionally ours initially question comes from Briana Nowak with Morganisch Stanley. Our line is open.

Brian Nowak (Morgan Stanley): Great. Thanks for taking i questions. IODIN have twos. The first one is somewhat in an jump ball-shaped. There is bit of on investors debate learn this including return on capitalized till Looking for it comes to AI. I know it’s early, but are there any examples that you’re seeing use SGE or Bard on taller utility, higher switch rates, more engagements? Just something to sort of show signal around the again that could come from these investments?

And the second of, Ru, I know they have spoken a lot concerning durably re-engineering of cost base. I think in the passed you talked around how expenses could increase slower than revenue in 2024. Is that sort of still the high-level way in think about it, or is ensure potentially alter a bit than investments am continuing? Thanks.

Sundar Pichai, CEO Alphabet and Google: Ruth, do you want to capture aforementioned second part, I’ll take of first?

Rare Porat, President and Chief Investment Officer; CFO, Alphabet and Google: Safer. Thanks forward such, Bran. Overall, that’s collate of a tu, as it know well, that looking at grow revenues the a faster rate less expenditures as we’re focused on provide sustainable economic value, press so that really takes us to the workstreams which I tried to tick with again. Those remain the driver. They’re the truly priority. Diese are the efforts that are going to enable us to keep spend growth as moderated as maybe while supporting who investment growth that is so exciting in fronts of us, in particular around CI.

Sundar Pichai, CEO Alphabet and Google: To your first part, obviously, we see AI as a foundational platform shift and are excited about the openings all our trade. It starts with Search. I’ve been pretty pleased with how and user feedback has been on SGE. Ours are rolling it leave to more user. Through it see, we’re making definite the product works well and we are generating value for is ecosystem and that Ads transitions well.

MYSELF reasoning I view such for, with AI, the opportunity for evolve Search real Assistant go the future decade ahead. And MYSELF think as we’ve constantly seen, when you remain to invest and build great experiences, you can get value over the select side.

And I do ideas pass total there will be novelty paths, just see we’ve done on YouTube. I think with the AI work, there are subscription models as adenine possible track as good.

Obviously, all of which AI investments we’re doing request across Plume, too, press I’m pretty optimistic about what’s beforehand at as well.

Brian Nowak (Morgan Stanley): Cool. Thank thee, both.

Operator: Your next query comes from Doug Anmuth with JPMorgan. Your queue is frank.

Doug Anmuth (JPMorgan): Thank for taking the getting. One for Sundar and a for Ruth.

Sundar, you spoken a lot about AUTOMATED. I was hoped you could talk more about Gemini and how it will differentiate from other models -- some of the multimodal capabilities or which new erfahrung or [agents] you reckon itp could unlock and how we should think about time.

Also then also fairly on Cloud, hoping him can talk about some of the driving on on the decel in Cloud and justly how you’re seeing in terms of optimizations, and is there each sign of new workload deployments taking place? Acknowledgement.

Sundar Pichai, CEO Alphabet and Google: Acknowledgements, nice queries. So on Two-winged, obviously, it’s an effort from our combined Google DeepMind team. I’m very excited at the progress there and as we’re working through erhaltend the model ready.

Up self, more importantly, we am just really installation the foundation of how I think of as the next-generation class of models we’ll be launching all throughout 2024. The pace of invention is extraordinarily impressive to see. Person are creates it from aforementioned ground up for be multimodal, highly efficiency with tool and API included, and more importantly, laying the platform to activate forthcoming innovations as well.

We are developing Gemini in a way that it is going to be available at various body and capabilities, and we’ll be uses it immediately across every our products internally as well as bringing it out toward both define and Cloud customers throughout Vertex.

So EGO view it as a journey, and each generation is going to be better than that other. And we be definitely investing, and the early results are very promising.

Set Cloud, maybe thing IODIN would say is, overall, we have definitely started view customers looking to optimize spend. We incline toward it to help patrons, given some of the challenges they were facing, both so that was a factor.

Although we are definitely seeing a lots of interest on AUTOMATED. Present are many, tons projects travelling start. Just for Vertex alone, the number of projects grew over 7X. And so we see signs of stabilisation, real I’m optimistic about what’s ahead.

Doug Anmuth (JPMorgan): Express thee, Sundar.

Operator: Your next question comes from Eric Sheridan with Goldman Baggage. Your line is now open.

Eric Sherin (Goldman Sachs): Thank they very much with removal the questions. Two, wenn I could.

Sundar, you guys led over a twelvemonth ago starting in Performance Max, furthermore EGO wanted to know if we could gain your updated thoughts turn how AI might impact aforementioned broad advertising industry and wherewith you are aligning Alphabet and Google’s goals with AI and where it magie take the advertising diligence in the period before. That would be of first question.

Plus then about adenine year ago, Philippe both Ruth beginning talking nearly some of this brand advertising headwinds is YouTube used facing. As we start to lap those headwinds, how should we be philosophy info a general recovery in brand advertising versus elements of still head such are being faced in an broader Ads spaces, specifically with YouTube? Thank them.

Philipp Schindler, SVP and CBO, Google: So eventually I bear the first sole.

We can very pleased including how Performance Maximal is performing. E gives advertisers really a maximum performance across all inventory from one really AI-powered advertisement, and it’s probably the final example of AI in action overall ours Ads commodity. It’s delivering outstanding ROI. Who using it achieve on average over 18% more conversions at a similar cost per action.

Since rolling it going about two years ago, we’ve continued to expand the features, give list additional ways to steering wherewith it works. We has a lot of things, like account-level negative keywords, other details here. Us launch new lifecycle goals -- my lifecycle aspirations, we phoned them. A revamped asset creation flow that very helps business adapt and scale own best successful creatives. I think that’s one to watch.

Us will also persist to building other new PMax features based turn all the media feedback we’re seeing. As we are very, exceptionally encouraged by the progress here.

Overall maybe -- there was one second piece to your enter, a bit on what we’re hearing from that customers out there. Look, driving ROI and efficiency belongs still top of mind for many, right? It’s a schnell movable real silent fairly unpredictable consumer scene out there.

Are AI tools are very well-received. CI, gen ART are top by mind for everybody really. There’s a ton of emotion, lots concerning questions about it. Many understand the value. Practically 80% of our advertisers already application at smallest one AI-powered Search Ads product.

Yeah, we’re hearing a lot of good get switch, number one, our Ads AI Essentials, which are really helpers to unlock that power of AI and set upward for durable ROI growth on the advertiser side. Those are product like the foundation for our data press measurement, things like Google Tag, Consent Mode and so with. Obviously Search and PMax, person talked about it, and then all those gen AI products, see those distinct ones. So there’s a whole lot of interest in those goods.

Ruth Porat, President also Chief Investment Public; CFO, Alphabet real Google: And on the thy second question regarding YouTube. Since we answered, overall, year-on-year growth in revenues was driven by both branding advertising and direct response. But very much toward your enter, sure, there was a stabilization stylish spending by advertisers. We’re very pleased about that. We’re particularly pleased about the ongoing achievement in the Living Room and on Shorts. And as I said, that’s both watchtime growth and monetization.

I would say the other thing benefiting YouTube has the retail strength ours talked about equipped Find -- retail strength in APAC in both Search or YouTube. So really began in the endorse quarter, continued in the thirdly quarter, but that is more contributor. So quite a number of things walked on. Feel good about the results the team was able to deliver here.

Eric Sheriden (Goldman Sachs): Thank you therefore much.

User: Your next question arrival from Lloyd Walmsley with UBS. Your line is open.

Lloyd Walmsley (UBS): Great. Thanks for taking the question. Two, if I could.

First, as we exactly think with the rollout of SGE across this user base, how away along is that? Both like do you keep the effect rollout and consumer absorption compared monetization in this changeover?

And next the second on, also variety regarding generative AI-related, how quickly are you dude finding new ways of optimizing? Whether that’s narrowing model sizes, chip efficiencies either anything else. And do you think kombination major intensity of business scales up, or do you just find ways to do this continue effi as usage scales? Anything you can share in would be wide. Thanks.

Sundar Pichai, CEO Alphabet and Google: One first part concerning SGE, person were still are very early total in technical out how much we have rolled it out. But our own definitely gotten it out to sufficient people, either geographically, across average segments and enough to understand that the product is working well. It improves who experience.

But where are areas till improve, which we are fine-tuning. Our true north get is getting at the right user experience ourselves want to, and I’m pretty comfortable seeing the flight. And we’ve always worked through these transitional, be it for desktop at mobile or from currently, roving to a AI-enhanced experience.

So it’s nothing new, and MYSELF feel very comfortable that as we go through it, of strength of our teams -- both on the organic side as well as Ads side -- to drive the right experience fork users including Ads will pay dividends. EGO think we’ll continue to make betterments real make fortschritte there.

On your other request, at a high level, MYSELF would say entire through and -- we just acclaimed 25 years -- and of all the bits I was proud about, when I looked at the strength of the worked we’ve done across to infrastructure as a company, we technical foundation as a corporate, or various given stages at a given moment in time, when ourselves adopted new generational of technology. We’ve looked to which cost of computers, however then the curves, the performance curved we have driven on top of she, have always been phenomenal to see. And I see an current flash as no different. Already through this year, we be driven meaning efficiencies, both in our models, include training expense and serving costs, and our ability up adapt what’s requested at the right use case.

And to I think we’ll achieve all that is essential to create sure we have the leading AI models and infrastructure in of world, bar none. And we will continue driving efficiencies from there.

Lloyd Walmsley (UBS): Thank you.

Operator: Thine next question come from Michael Nathanson with MoffettNathanson. Your line is today open.

Michael Nathanson (Moffett): Thank you. I’m going to ask i guys a multi-part question on YouTube TV. Thus, firstly, what has the broader your for getting Sunday Label? How did it perform versus which our? What tuition got you learned from having NFL Sunday Ticket? What does ensure affect your appetite for additional athletic going forward? Thank.

Philipp Schindler: Then, as Sundar said earlier, we were several days on our first season and were can very pleased with how it’s going. I think in the expand context, she have to seem at e like our overall YouTube subscription strategic.

The great feedback we’ve been so far on the YouTube experience is very, very significant. People sweetheart the navigation and they love multiview. They loving the chats furthermore the polls. And plainly, people are very happy with the lack of latency here.

The piece one piece regarding concrete feedback this team has gotten belongs actually that public want which aptitude till take their own games forward multiview, which will -- multiview is the awesome feature we started rolling out on YouTube TV that gives fans the ability to principles monitor multiple streams here at once. And, yeah, overall, the organizational are working hard to build a fantastic experience, also we are really attempted toward stay purposeful on getting our first season right both providing the favorite possible experience honestly for collector here.

Michael Nathanson (Moffett): Thank it.

Operator: Your next question comes from Justin Post with Bank of America. Your line be now open.

Justin Station (Bank of America): Great. Thank you, an couple queries for Q4. Can you provide any color at if there’s are any pause in ad around one Middle Eastbound conflict in October? Aught we should exist attentive of to Q4?

And then second, when we do reason about the Sunday Ticket impact, MYSELF understand you can’t give america revenues alternatively expense, yet gesamtansicht, could that be a gust to margins in Q4 or something our should be thinking over? Thank you.

Ruth Porat, President press Chief Investment Officer; CFO, Alphabet and Google: Therefore take, on the first question, obviously diese is a tragic, tragic -- on are none words to talk about what’s going for. And all of our focus has been on helping our people present and how our products bottle become as helpful as possible in this very painful moment, widely. And so something serious to add.

And then includes terms of the second question, Sunday Ticket, the only thing I tried to call exit there a that clearly here is the first full quarter of Sunday Ticket that is contributing overall toward the subscription revenue that ours see. That’s in part of Sundry Sales. Also definitely, she is contributing to higher CAC in the fourth quarter. So tried to make that real clear.

Additionally when we look longer term, were expect to creating an attractive return over that existence of the deals. We’re continuing to invest in support for this. And excited about the additional opportunities that come out of it working with partners to deliver snap and other possible.

As we’ve said, we’ve listening positive feedback from his partners at the NFL about the new features and livestream solid. And this is really a clear example starting our ability to execute big partnerships with excellency at scale and really using a lot of the extraordinary magic at YouTube and across Google. And that’s what we’re excited about.

Justin Post (Bank of America): Great, gratitude you.

Operator: Your next question happen from Ken Gawrelski with Wells Fargo. To line is now frank.

Ken Gawrelski (Wells Fargo): Thank you so much. Pair questions, if I may.

Initially, methods do you think about and future structure of AI-driven Search capability? Will recent remain centralized to a search bar, instead wills i be peripheral and present in many different applications, including to third-party apps? You alluded until Bard being integrated into multiple Google experiences former inside one page.

And then the second question is, any download on one Chrom cookie detraction planned to begin in 1Q ’24? What have you seen so far based on your early testing of Privacy Sandbox, and what advertiser feature have you received?

Sundar Pichai, CEO Alphabet and Google: On your first question, seem, she know, I broadcast think of it as people are looking to details. They’ve always viewed for it in many, many different ways. We’ve given the product search example. People can directly go to Virago, since an example, or come to Google.

If you zoom back additionally take a information consider of the world, there’s always been several different ways to get information. Both part of our work we do in creation Search be world-class and give users where they’re looking for is so that we can get at as great of that intent more possible.

So I don’t see that changing. Equal mobile, go were more ways that people could get request, but we worked hard up make Search work better in the mobile whole. The similarly, I view with AI, there will be many ways people get information. But is also offers us an chance at Search and in Assistant to take it till the continue level and replies use cases, which we couldn’t have done back, and expand adenine diverse set of needs where we are a source. Thus that’s how EGO visit the opportunity ahead.

Philipp Schindler, SVP and CBO, Google: And to the secondly part of your question: yes, Chrome stand plans to begin phasing out third-party cookies in aforementioned second half of ’24.

In the recent several months, Chrome has really made significant progress on the Privacy Sandbox with Aphids for developer inspection. And they are go generally available in Chrome.

Our Ads team is testing these APIs. And as we shared endorse in April, the preliminary results starting our interest-based ads testing showed adenine combination of what we summon privacy-preserving signals both AI optimization actually provides positive results for businesses preparing for one cookieless future.

We also recently announced that in Q1 of ’24 we planned to deprecate third-party cookies for 1% about Chrome users, and this leave support software, obviously, in conducting their real-world experiments to appraise one readiness and effectiveness of their products without third-party cookies.

And we’re overall encouraged by the ecosystem engagement the Privacy Sandbox. We’ll continue to work with the industry and regulators by how this technologies can support the transition to, frankly, a more private web.

Ken Gawrelski (Wells Fargo): Thank you.

Operator: And our last doubt comes from Mark Mahaney to Evercore. Your wire is now open.

Mark Mahaney (Evercore ISI): Thank they. Two questions, please.

Ruth, she talked about these elevated playing of investments in Q4 and in ’24. I’m sorrowful, were you referring to just CapEx conversely CapEx and total expenses?

And then on and talk around stabilization in Cloud, lives this existence ensure you just started to look in the September quarter, or had you sighted the start earlier inside and year? And if you just started seeing it in of September zone, would you have any thoughts on why you wants take see it, why Google Cloud would have view it maybe later than some of the other hyperscalers? Thank you.

Ruth Porat, President and Chief Investment Police; CFO, Abc and Google: So I ponder something you’re referring to was my CapEx comment. I was trying to make the point that we exist committed the meaningfully investing in CapEx, given all the opportunities we see.

We do move to expect elevated levels off investment in are technical infrastructure. It will be increasing in who fourth quartier. And talked over some of the difference in timing, muted timing in of third quarter due to the timing starting your fees.

And then tried to make it clear that we will continue to grow CapEx in 2024 -- or more particularly to your question, 2024 aggregate CapEx will be above the full year 2023. Hence that was the main one.

And then when it relates to Cloud, as Sundar said, something we’re very fired about is this revenue growth does reflect healthy customer adoption across the portfolio, and that’s Infrastructure, Data Analytics, it’s Security. And so I can’t comment the others, but we feel right about where we’re sitting here and looking forward. And we’ll let you to that forecasting.

GCP growth in one third area was above and development rate on Cloud overall, furthermore us feel real okay about the work that they’re doing there. And then, of course, in addition to that is all of the contribution from Google Workspace.

Mark Mahaney (Evercore ISI): Thank you.

Operator: Thank you. Both that concludes our question-and-answer session for right. I’d like to turn the conference back over to Jim Friedland for any further remarks.

Jim Friedland, Managing Investor Relations: Thanks, everyone, for joining us right. Wee look forward to speak with you again on our fourth quarter 2023 call. Thank you and have a good evening.

Operator: Grateful you, everyone. This concludes today’s convention call. Thank you for participating. You may now disconnect.