Alphabet Inc.

Welcome, everyone, and thank you for standing by for the Alphabet First Quarter 2022 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 telephone. If you require any further assistance, please press star 0. I'd 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 first quarter 2022 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 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-K filed with the SEC. 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.investor. And now, I'll turn the call over to Sundar.

Thank you, Jim, and good afternoon, everyone. Over the last few months, guided by our mission, we continue to develop helpful technologies with a view towards empowering both people and businesses. Even as more people return to in-person activities, we are seeing hybrid approaches to learning and working are here to stay, and our products are helping partners seize these new opportunities. To help support our own flexible work plans, this year we plan to invest approximately $9.5 billion in our U.S. offices and data centers, creating at least 12,000 new Google jobs in the U.S. in places like New York and Atlanta. To enable our long-term growth, we are investing in areas like cloud, AI, YouTube, search and beyond. In 2020 and 2021 combined, we invested $40 billion in research and development here in the US. Beyond the US, we have announced new office investments in London and Warsaw and a new product development center in Nairobi. We are excited for the product development they will support. We'll share more about these investments at Google I.O., our annual developer conference on May 11, and I encourage you to tune in. Turning now to product highlights, AI continues to be at the heart of our core search and information products. We launched multi-search in Google Search this quarter. It's a new way people can find what they need using both images and words. For example, you can snap a photo of a shirt pattern and then type the word green to find a green shirt with that pattern. We also shared new features in search to help people find healthcare providers who take their insurance and book appointments online. With ads automation, search ads powered by AI are helping our customers quickly respond to the market conditions most relevant to their business. Philip will discuss this in more detail. Let's move to YouTube. We continue to support our community of creators, advertisers, and viewers. With over 2 billion monthly signed-in users, we are well positioned to do this. YouTube, over the past two years, has seen significant growth and has become a central destination for entertainment, learning, and educational content. And even as people have returned to in-person activities, time spent on YouTube has continued to grow. Just as YouTube evolved from desktop to mobile and that created huge opportunities, we are excited about the new opportunities we see now. Short-form video is one. YouTube Shorts is now averaging over 30 billion daily views. That's four times as much as a year ago. In the first quarter, we added new capabilities to video editing, and we are continuing to invest in making shots a fantastic experience for creators and viewers alike. As we've always done with products, we focus on building a great user experience first, and we will work to build monetization over time. The living room is another area of opportunity. On average, viewers are watching over 700 million hours of YouTube content on televisions every day. And in the year ahead, we will give YouTube's connected TV viewers new smartphone-controlled navigation and interactivity features, allowing people to comment and share content they are watching on television directly from their devices. Turning next to our computing platforms, a few weeks ago, we marked a big milestone, our 100th release of Chrome and Chrome OS. Over the years, we have worked with developer and OEM partners to improve speed, simplicity, and security and move the web forward. It's a great example of what we mean when we say we are building for the long term. And on Android, we'll showcase at I.O. the many helpful features and services that Android and its platforms provide. Over the coming years, we will continue to invest in new form factors, seamless multi-device experiences, and raising the bar for user privacy, while giving developers the tools they need to succeed on mobile. As you know, we have made changes to our Google Play pricing model to help all developers on our platform succeed. Today, 99% of developers qualify for a service fee of 15% or less. While this impacted our short-term results, we think it's the right long-term approach to support the ecosystem and to be the most developer-friendly app store and gaming platform available. We are also exploring alternative billing options, and as we do this, we'll continue to uphold high safety standards that protect personal data and sensitive financial information. Earlier today, we launched the data safety section in Play, where people can access more information about how apps collect, share, and secure their data. In hardware, Pixel 6 is a huge step forward for the Pixel portfolio, and it's been great to see the response from Pixel users. It's the fastest-selling Pixel ever, and we are building broad consumer awareness of the brand and making good progress. I'm excited about the products we have coming and look forward to sharing more at Google I.O. Next, on to cloud, where Q1 revenue grew 44% year-over-year with continued strong performance across Google Cloud Platform and Workspace. We continue to deliver differentiated products across four distinct areas. First, cybersecurity, where we introduced new offerings, including assured workloads to address digital sovereignty in the European Union. Virtual machine threat detection, a first-to-market agentless malware detection capability. An advanced intrusion detection system for network threat detection. Organizations like T-Mobile and DoorDash are protecting their critical systems and data with Google Cloud's trusted cybersecurity products. These include Security Command Center, which helps many companies, including UKG, Ultimate Chronos Group, and Ocado Group monitor and manage their security posture and risk. Our leading threat detection and response platform, Chronicle, is now paired with Simplify to more quickly automate incident detection and resolution. We also announced our intent to acquire Mandiant, a leader in dynamic cyber defense and response to help protect customers from the most advanced threats. Second, we continue to evolve a leading data cloud with Serverless Spark to run batch Spark workloads. Big Lake, a new storage engine that unifies data warehouses and lakes, and Dataplex, which provides unified management and governance of data across data warehouses and lakes. Our unified data cloud and AI platform is helping organizations like KeyBank, LG Electronics, and Macy's work intelligently with data across multiple clouds. BigQuery, our leading solution for analytics, is helping customers like Kraft Heinz, MercadoLibre, and Virta help create more personal consumer experiences. BT Group, UPS, and other leading brands continue to tap our deep expertise in artificial intelligence and machine learning to power their organizations. This includes our contact center AI platform, which helped the Home Depot improve their call containment by 185%, creating a more positive customer support experience. We are proud to share that more than 700 technology partners power their applications with our data cloud. Third, our open, secure infrastructure remains a differentiator as it enables customers to run their workloads and apps where they need them. This is winning global brands like Dun & Bradstreet, Boeing, and Kyocera. Our product leadership continued with the release of TAO VMs, which powers price performance that's more than 40% better than any other leading cloud. And Google distributed Cloud Edge, a new edge solution designed to run telecommunication networks at scale, which is helping Bell Canada evolve its 5G network. And we further expanded our regional footprint globally. Leading companies like Mahindra are choosing us for large-scale IT transformations and migrating their data centers to Google Cloud. While Sony's crunchy role uses our infrastructure and networking capabilities to power the largest anime streaming service in the world. Our scalability enables NinjaVan, the leading logistics provider in Southeast Asia, to handle more than 10x their normal traffic during peak times. Finally, we continue to advance Google Workspace. To support hybrid work, we recently introduced new collaboration features, including bringing Google Meet directly into Google Docs sheets and slides. You can now see and hear your team as you collaborate in real time without the need to schedule meetings. Google Meet can now live stream to up to 100,000 people who can also participate in Q&A and polls. We also launched the next wave of innovation in Google Docs with Smart Canvas, including auto-generated summaries and pageless format in Docs, Smart Chips, and automating workflow using Gmail. Smart Canvas has seen very rapid uptake with more than 6 million checklists and 6 million Smart Chips being added to documents each week. These innovations are helping employees adapt to hybrid work at large enterprises like Equifax and Ocean Network Express, digital natives including Flipkart, and organizations like the University of Alberta. Finally, our other bets. This month, Waymo became the first company to run fully autonomous ride-hailing operations in multiple locations simultaneously. Today, employees can take rider-only trips in San Francisco, joining the growing number of public Waymo One riders in Phoenix. Wing launched its on-demand drone deliveries in the Dallas-Fort Worth area. In the first quarter of 2022, Wing completed over 50,000 commercial deliveries. That's up more than 3x year over year. As you know, sustainability continues to be a big focus for us. In addition to our own ambitious goals to operate on 24-7 carbon-free energy by 2030, we recently joined Frontier, a new coalition with Stripe and many others, jointly committing more than $900 million to accelerate carbon removal solutions. Before I close, we remain deeply concerned about the war in Ukraine and the humanitarian crisis unfolding in the region. While I was in Warsaw, Poland last month, I met with many leaders across Central and Eastern Europe to reaffirm our commitment to the region. We are finding ways for our products and platforms to be helpful, including enhanced features on search to help refugees find resources. Across all these efforts, I feel inspired by the ways that our teams at Google work to help people in moments big and small. With that, let me thank Googlers everywhere for their contributions this quarter. Over to you, Philip.