Alphabet Inc.

Welcome, everyone, and thank you for standing by for the Alphabet fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your touch-tone telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Jim Friedland, Director of Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to Alphabet's fourth quarter 2020 earnings conference call. With us today are Sundar Pichai, Philip Schindler, and Ruth Peratt. Now I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business, operations, and financial performance, including the effect of the COVID-19 pandemic on those areas, may be considered forward-looking, and such statements involve a number of risks and uncertainties that could cause actual results to differ materially. For more information, please refer to the risk factors discussed in our most recent Form 10-Q filed with the SEC. Additional information will also be set forth in our upcoming Form 10-K filing for the year ended December 31, 2020. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our investor relations website located at abc.xyz slash investor. And now I'll turn the call over to Sundar.

Thank you, Jim, and good afternoon, everyone. 2020 was a year unlike any other. We are proud that people continue to choose Google's products to stay informed, connected, and comforted during uncertain times. Being helpful to people in moments big and small is the foundation of everything we do. The past year also accelerated the shift to cloud and adoption of online services. This has profound implications for all companies and consumers, and we are pleased that so many trust us to help them make this transition. In particular, Google's products and support have been a lifeline for millions of small-medium businesses hit hard by the pandemic. Today, I'll review some of the important work we have done this quarter across Google and Alphabet, with a particular focus on our growing cloud business, which we are breaking out as a separate segment for the first time. Then I'll welcome to the call Google's Chief Business Officer, Philip Schindler, who many of you know from investor conferences and events. Philip will speak about partnerships, business, and advertising trends in the Google services segment. We've heard you'd appreciate more texture and detail there. Then Ruth will go through the quarter in more detail. First, some highlights at Google. Since the pandemic began, our teams have built new features and products to help people and businesses. Now we are helping with the complex challenge of getting vaccines to billions of people around the world. Vaccination locations have started to roll out in Google Search and Maps. Google Cloud's intelligent vaccine impact platform is helping authorities improve vaccine distribution and forecasting. We are providing substantial new ad grants to the CDC, the World Health Organization, and others to promote vaccine education. We're also making direct grants to organizations addressing racial and geographic disparities in vaccination access, plus opening up Google's facilities as vaccination clinics are as needed. Elsewhere, in Maps, we added a new community feed in the Explore tab, and now you can track takeout and delivery orders when you book or order from Google Maps. At YouTube, we are building products to help creators benefit from two important trends, live video and short-form video. More than half a million channels livestreamed on YouTube for the first time in 2020, from artists performing in their living rooms to churches moving their services online. and videos in our new Shots Player are receiving 3.5 billion daily views. We are looking forward to expanding Shots to more countries this year. Philip will dive into the work to support online commerce and our partners, but I want to call out our new showcase product. It's a billion-dollar investment in partnerships with news publishers, and I'm really excited about our progress here. We have now signed agreements with nearly 450 publications, the majority of which are local and regional, across a dozen countries, including France, Germany, UK, and Brazil. And last month, we announced a new global deal with Reuters, as well as an agreement with one of the major French publishing associations to open access to a new showcase. We want to do more partnerships in more countries, and we'll have more to announce in the weeks to come. Among other highlights, we also launched a reimagined Google Pay app, making it easier to organize finances and save money. It's now used by over 150 million people in 30 countries. In hardware, we recently closed our acquisition of Fitbit, which will improve our product pipeline and help make health and wellness accessible to more people. To all the Fitbit employees, welcome to Google. We have a great portfolio of products, and I look forward to sharing more about our product plans. Now, a closer look at Google Cloud. I'm very pleased with the progress here, and as Rutul mentioned, we'll continue making disciplined investments to scale the business and improve profitability. Google Cloud delivered revenue growth of 47% year-over-year, with GCP growth remaining meaningfully above the growth rate for cloud overall. In addition, our backlog grew to nearly $30 billion, up from $19 billion in Q3, nearly all attributable to cloud. We continue to invest strongly in the business given the momentum we are seeing. These investments in our go-to-market organization have helped us win larger deals, including several billion-dollar deals in 2020. Deals over $250 million more than tripled in the same period. We are also seeing strong growth through our broad network of partners, with our channel partner ecosystem growing more than five times and indirect channel revenue more than doubling in the past two years. Our industry-leading customer satisfaction, as identified in a recent report from IDC, is helping us drive significant expansion and net revenue retention with existing customers. Our products are mature and highly differentiated in many segments. In infrastructure cloud, our leadership in multi-cloud and cybersecurity helped us win large data center and IT transformation deals with customers like Highmark Health and Vodafone. as well as cloud native leaders, including Wayfair and Etsy. Our leading data and analytics cloud provides new customers such as Kyoto University Graduate School of Medicine and Healthcare and MercadoLibre in retail with the ability to analyze any data in real time across any cloud. Our industry solutions based on our AIML expertise have helped us win customers like Optus and Communications and Autogroup in retail. I'm also particularly excited to see us winning large transformations by bringing the entire breadth of Google's technology to customers. Yesterday, we announced our multi-year partnership with Ford, which is using Google Cloud, Android, and other Google apps and services to transform their business. Google Workspace, the industry's only cloud-native communication and collaboration solution, is helping companies meet their evolving hybrid workplace needs. Workspace is driving innovation at many of the fastest-growing companies. Additionally, this quarter, we expanded our partnership with SAP. They'll extend their usage of Google Cloud for their cloud solutions, including SAP Business Technology Platform to provide the best experience for our joint customers. Across the Alphabet portfolio, our investments in AI continue to drive progress. For example, DeepMind's AI part protein folding breakthrough will enable researchers to tackle new and difficult problems from fighting diseases to environmental sustainability. Google's partnership with Mayo Clinic in developing AI systems that can help plan radiotherapy treatment. Waymo is now providing hundreds of fully autonomous rides per week and recently partnered with Daimler Trucks to develop fully autonomous trucks. To wrap up, last year I talked about our four big themes of helpfulness, trust, execution, and sustainable value. These will continue to guide our strategic focus across the company in 2021 and beyond. As we continue to advance our core information mission in products like Search, Maps, and YouTube, keep people's information safe and secure, drive substantial advancements in AI over the next three years, and ensure we are the most effective place to work beyond COVID, all supported by sustainable long-term businesses. I want to thank our teams across Google and Alphabet for all of their work this quarter and throughout all of 2020. 2021 gives us another chance to be helpful to people, businesses, and communities. While there's hard work ahead, I'm profoundly optimistic about what we'll accomplish together. With that, I'll turn it over to Phil.