Alphabet Inc.

Welcome, everyone, and thank you for standing by for the Alphabet Inc. second quarter 2022 earnings 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 that session, you will need to press star 1-1 on your telephone. 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 second 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.

I'm proud of how our teams continue to build helpful products and experiences for people and partners. Reflecting this, our performance in search in the second quarter was strong. We're also seeing momentum in cloud. With an uncertain global economic outlook, our strategy to invest in deep technology and computer science to build helpful products for the long term is the right one. Our ability to take the long view stems from our timeless mission to organize the world's information and make it universally accessible and useful. At Google I.O. in May, I talked about two key ways we move that mission forward, advancing both knowledge and computing. Those goals are at the heart of what we do. We know that our services are particularly helpful to people and businesses during uncertain moments. Whether it's using search or YouTube to find anything from anywhere, or highly efficient tools like search ads that help businesses of all sizes reach customers, or Google Cloud, which helps companies adapt to hybrid work and find efficiencies. We'll continue to invest in areas like AI, search, and cloud. and we'll do it responsibly and in a way that is responsive to the current environment. Earlier this month, I announced that we'll be slowing our hiring and sharpening our focus as a company. We are focused on hiring engineering, technical, and other critical roles. And we are working to improve productivity and ensure that the great talent we do hire is aligned with our long-term priorities. Turning now to product highlights. Years ago, we made a big bet on AI. We believed that it would be transformational for our business and for the world. We are still in the early days, yet AI already underpins many of our most helpful products and services. For example, AI is helping us create entirely new ways to search. People are using Google Lens to do visual searches more than 8 billion times per month. A new feature called multi-search helps people find what they need using words and images at the same time. Later this year, multi-search will be able to help people find local results near them. AI is also helping improve translation. With the new monolingual approach to translation, we've added 24 new languages to Google Translate spoken by 300 million people. And a new immersive view in maps uses computer vision, AI, and billions of images to create high-fidelity representations of places around the world. Beyond AI, we are also seeing a new frontier with augmented reality. We have been testing exciting prototypes in our labs, like the device we shared at I.O. that puts real-time translation and transcription in your line of sight. It's one example of how AR can solve real needs in the real world. And last week we announced that we will soon begin early testing of AR prototypes in real world scenarios. Our goal is to learn how they can help people in their everyday lives. Our investments in commerce are another way we deliver helpful experiences. People are shopping across Google more than a billion times each day. We see hundreds of millions of shopping searches on Google Images each month. Merchants will soon be able to submit 3D images of their products to appear directly on Google Search, so customers can try before they buy. We're also focused on bringing together hardware, software, and AI in a range of helpful devices. At IO, we announced great new products, including Pixel 6a, Pixel Buds Pro, and Pixel Watch. We are currently taking pre-orders for Pixel 6a and Pixel Buds Pro. It's been great to see the positive feedback so far. And on platforms, I'm proud that Android remains the world's most popular operating system with more than 3 billion monthly active devices worldwide. Last year alone, consumers activated 1 billion Android phones. We are making it easier for Android users to share photos and communicate with friends and family with the modern messaging standard called Rich Communication Services, or RCS. Across our platforms and beyond, we keep more people safe online than anyone else in the world. Safe browsing on Chrome browsers help protect billions of people every day by warning them when they try to access dangerous sites or files. Earlier this year, we rolled out a new machine learning model that identifies more than twice as many potentially malicious sites and phishing attacks as the previous model, helping to contribute to a safer and more secure web. We've also unified our password managers across Chrome and Android. Now stored passwords can be grouped and protected across devices, apps, and the web. Taking a closer look at YouTube, YouTube shots are watched by over 1.5 billion signed-in users every month, with more than 30 billion daily views. In Q2, YouTube TV surpassed 5 million subscribers, including trailers. There's also a lot of potential for shopping on YouTube. Just last week, we announced a partnership with Shopify. It'll help creators easily connect their stores to YouTube and enable shopping across their live streams and videos. There's more to come here. Moving on to cloud, which surpassed the $6 billion quarterly revenue mark for the first time. Q2 revenue grew to $6.3 billion with momentum across Google Cloud Platform and Workspace. We saw continued demand in all geographies with global brands like Target in North America, H&M Group in Europe, Banco Bibi in Latin America, and BioPharma in Asia. We launched Google Public Sector in June, expanding our commitment to help U.S. government agencies and public institutions accelerate their digital transformations, from New York State and Arizona State University to the U.S. Forest Service and the state of Rhode Island. Customers are choosing Google Cloud as their technology partner because of our leadership in four areas. First, we continue to lead in the data cloud market because we unify data lakes, data warehouses, data governance, and advanced machine learning into a single platform that can analyze data across any cloud. Companies like SC Johnson, Notwell Health, and the Golden State Warriors choose Google Cloud for our strength in data analytics. Our capabilities help Swiss Air optimize its flight operations. They're also helping NG explore ways to optimize wind energy management and fold to create smarter factory floors. Second, companies like Beta Bank and Mayo Clinic choose our open cloud infrastructure to modernize their IT systems on our cloud, at the edge, or in their data centers. Our infrastructure scales to help customers like Deutsche Telekom modernize its network. Wipro to modernize its core systems, and Garvan Institute of Medical Research to process 14,000 genomes in under two weeks. Our multi-cloud strategy remains a differentiator for customers like Elevance Health, formerly known as Anthem, and AMD. Third, cybersecurity. Google has always provided a secure cloud infrastructure. and we continue to introduce new cybersecurity products that help customers detect, protect, and respond to a broad range of cybersecurity threats. Customers like GitLab, Highmark Health, and Iron Mountain protect our critical systems and data with our products. Caribou Coffee and Etsy are among the 5 million websites protected by our cybersecurity technology. Finally, Google Workspace's easy-to-use and secure communication and collaboration tools continue to be chosen by many organizations as they return to hybrid work. Google Workspace helped St. Luke's Medical Center, a leading healthcare system in the Philippines, address a 38% increase in telehealth visits during the pandemic. Results like this are driving growth in many customer segments around the world, including digital natives like Canva, large enterprises like Travis Perkins PLC, and public sector institutions, including the central Dutch government. Finally, our other bets. Waymo expanded rider-only testing with employees to include downtown Phoenix and started testing at Phoenix's Skye Harbor Airport. It also began charging trusted tester riders in San Francisco, a step closer to launching a commercial service with fully autonomous trips. Waymo also opened a new facility to support Waymo Via, their autonomous Class 8 trucking solution, as they continue to increase their operations and investment across the Southwest region. Calico is testing an investigational drug treatment in patients with ALS, developed in collaboration with AbbVie. It's an early step of many in the development process. Wing recently surpassed 250,000 commercial deliveries and unveiled a series of delivery drone prototypes able to carry different sized packages. There is good progress here and will continue to be intentional across the portfolio. To close, while the economic outlook is uncertain, it's been great to see people gathering in person again. We are pleased to see people coming back into the office more often, resulting in more opportunities for collaboration. It's a privilege to build technology that's helpful in both good times and uncertain ones. And I want to thank everyone at Alphabet and Google for their work and support of people, businesses, and all of our partners everywhere. Over to you, Philip.