Earnings call · Google Wed Oct 28, Saidwire live coverage archive https://saidwire.com/archive/earnings-googl-oct29 STORY (final version) Alphabet Cloud Revenue Doubles to $30.7 Billion; Search Growth Slows to 12% as Executives Point to FX, AI Mode Monetization Executives said on the earnings call that currency, retail and media comparisons, and lower monetization in AI Mode weighed on search growth, and that fourth-quarter growth will face a tougher comparison. Alphabet said Thursday that Google Cloud revenue rose 103% to $30.7 billion in the third quarter, while search and other advertising revenue grew 12% to $63.3 billion, as executives told analysts that currency swings, retail and media comparisons, and lower monetization in AI Mode slowed search growth. Consolidated revenue rose 25% to $127.6 billion, but net income fell because of an unrealized loss on the company's investment in SpaceX. SEARCH GROWTH SLOWS Asked why search growth decelerated even as queries grew at their fastest pace in five years, Philipp Schindler, Google's chief business officer, named foreign exchange as "the single largest driver of search deceleration relative to q2." He also cited weakness in retail, where some Asia-Pacific advertisers were affected by the elimination of a de minimis exemption, and a normalization in media and entertainment spending after a strong second quarter tied to the FIFA World Cup. Schindler added that "strong growth in ai mode queries had an impact because of the lower monetization we are seeing in ai mode," but said ad experiments have shown promising results and that ads in AI Overviews and AI Mode are being scaled to more users and queries, including in international markets. CFO Anat Ashkenazi said Google would continue to lap a search acceleration that began in the third quarter of last year, which she said took about three points off growth in the third quarter, with a couple of points expected in the fourth. She also said foreign exchange should be a slightly larger headwind in the fourth quarter, primarily in search and YouTube ads. YouTube advertising revenue rose 9% to $11.2 billion, and network revenue rose 1% to $7.5 billion. CLOUD, TPU SALES AND CAPITAL SPENDING Google Cloud operating income more than tripled to $11.1 billion, with the operating margin rising to 36.2% from 23.7% a year earlier. Ashkenazi said sales of TPU systems, which Google sells to customers rather than only renting, were a meaningful contributor, and that Google expects them to keep scaling in the fourth quarter "followed by meaningful revenue ramp in 2027." Cloud backlog stood at $5.1 billion by the transcript's figure, and Ashkenazi said just over 55% should be recognized as revenue over the next 24 months. Ashkenazi said the company began using third-party compute capacity at the end of the third quarter and expects "margin headwinds in the near term" as it ramps that usage. Capital expenditures were $51.4 billion in the quarter, and the full-year 2026 range of $195 billion to $205 billion was left unchanged. She said capex is expected to "increase significantly" in 2027, with more details on the fourth-quarter call. CASH FLOW AND SPACEX LOSS Free cash flow was negative $9.1 billion in the quarter, which Ashkenazi attributed to capex, an inventory buildup for TPU system sales and a $5.2 billion payment of a 2018 European Commission fine after the appeal process concluded. Other income and expense was negative $8.2 billion, driven primarily by the unrealized loss on the SpaceX investment from a decline in its stock price. Operating income rose 30% to $40.6 billion, with a 31.8% operating margin. AGENTS AND TRUST CEO Sundar Pichai said Google plans to bring a consumer agent experience to the Gemini app's one billion users later this year, after launching an enterprise version first because of its higher bar for security and governance. Asked about consumer concerns, he said people are concerned about safety and trust, and that Google's track record of delivering consumer products safely at scale will be "a huge differentiator." BULLETINS 4:32:58 PM ET GOOGLE CEO: Q3 REVENUE GREW 25% Y/Y; GOOGLE CLOUD REVENUE GREW 103% 4:35:02 PM ET GOOGLE CEO: FIRST-PARTY MODEL APIS NOW PROCESSING NEARLY 32 BILLION TOKENS PER MINUTE 4:35:42 PM ET GOOGLE CEO: GEMINI APP NOW AT 1 BILLION USERS; YOUTUBE MUSIC, PREMIUM SUBS TOP 150 MILLION 4:36:24 PM ET GOOGLE CEO: ARGON USAGE ON DEVELOPER PLATFORMS RAMPED 3.5X FASTER THAN GEMINI THREE IN WEEK 1 4:37:06 PM ET GOOGLE CEO: LAUNCHES CARBON MODEL, RANKS NO. 1 ON AI INTELLIGENCE INDEX AT 59 4:38:28 PM ET GOOGLE CEO: SEARCH CROSSES 50 BILLION VISUAL SEARCHES PER MONTH; AI MODE QUERIES 3X LONGER 4:42:40 PM ET GOOGLE: EXPANDING ADS IN AI MODE INTO INTERNATIONAL MARKETS; MULTI-TURN ADS IN AI MODE IN U.S. 4:44:54 PM ET GOOGLE: IN Q3 LIVING ROOM ACCOUNTED FOR OVER ONE THIRD OF TOTAL YOUTUBE ADS REVENUES 4:46:14 PM ET GOOGLE CEO: AMAZON JOINING YOUTUBE SHOPPING; 1.3 MILLION CHANNELS ENROLLED IN PROGRAM 4:46:52 PM ET GOOGLE: EXPANDS AMERICAN EXPRESS PARTNERSHIP; UNITY SIGNS EXPANDED MULTIYEAR CLOUD DEAL 4:47:36 PM ET GOOGLE CLOUD: 18 PRODUCT LINES WITH MORE THAN $1 BILLION EACH IN ANNUAL REVENUE 4:48:18 PM ET GOOGLE CLOUD: SOLD MORE THAN 100 MILLION AI SEATS FOR KNOWLEDGE WORK ACROSS AI SERVICES 4:49:44 PM ET GOOGLE CLOUD: NEARLY 90% OF FORTUNE 100 USE GEMINI ENTERPRISE; SPEND MORE THAN QUADRUPLED YOY 4:50:30 PM ET GOOGLE CLOUD: BIGQUERY QUERY SPEED UP OVER 40% YOY, QUERY PROCESSING COST DOWN OVER 50% YOY 4:51:10 PM ET GOOGLE CLOUD: GEMINI FLASH CYBER MODELS AUTOMATE VULNERABILITY DISCOVERY ACROSS 20 LANGUAGES 4:52:36 PM ET GOOGLE CLOUD: GEMINI IN THREAT INTELLIGENCE 98% ACCURACY; OVER 95% OF WIZ CUSTOMERS ADOPTING AI 4:54:02 PM ET GOOGLE CLOUD: NEARLY 100 CUSTOMERS USE TPUS TODAY; APPLE SCALING PRE-TRAINING ON LATEST TPUS 4:55:28 PM ET GOOGLE: Q3 REVENUE $127.6 BILLION, UP 25% IN BOTH REPORTED AND CONSTANT CURRENCY 4:56:16 PM ET GOOGLE: Q3 OPERATING INCOME $40.6 BILLION, UP 30%; OPERATING MARGIN 31.8% 4:57:10 PM ET GOOGLE: Q3 CAPEX $51.4 BILLION; OPERATING CASH FLOW $42.3 BILLION, TTM $179.6 BILLION 4:57:52 PM ET GOOGLE: Q3 FREE CASH FLOW NEGATIVE $9.1 BILLION; TTM FREE CASH FLOW $19.7 BILLION 4:59:14 PM ET GOOGLE: QUARTERLY DIVIDEND $0.22/SHARE; Q3 CASH AND MARKETABLE SECURITIES $265.1 BILLION 5:00:12 PM ET GOOGLE: Q3 GOOGLE SERVICES REVENUE $96.3 BILLION, UP 11%; OPERATING MARGIN 40.7% 5:00:56 PM ET GOOGLE: Q3 CLOUD REVENUE $30.7 BILLION, UP 103%; OPERATING INCOME $11.1 BILLION, MARGIN 36.2% 5:01:34 PM ET GOOGLE: Q3 SEARCH & OTHER ADS REVENUE $63.3 BILLION, UP 12%; YOUTUBE ADS $11.2 BILLION, UP 9% 5:02:18 PM ET GOOGLE CLOUD: Q3 BACKLOG $5.1 BILLION; JUST OVER 55% TO BE RECOGNIZED OVER NEXT 24 MONTHS 5:05:16 PM ET GOOGLE CFO: AI INVESTMENTS IN SEARCH DRIVING HIGHEST QUERY GROWTH IN HALF A DECADE 5:07:38 PM ET GOOGLE CFO: FX SINGLE LARGEST DRIVER OF Q3 SEARCH GROWTH DECELERATION VS Q2 5:09:12 PM ET GOOGLE CFO: AI MODE QUERY GROWTH HAD IMPACT ON SEARCH GROWTH DUE TO LOWER MONETIZATION 5:12:02 PM ET GOOGLE CFO: FX EXPECTED TO BE SOMEWHAT OF A HEADWIND TO Q4 RESULTS AT CURRENT SPOT RATES 5:15:38 PM ET GOOGLE CLOUD: OVER 100 SIGNIFICANT TPU CUSTOMERS 5:17:24 PM ET GOOGLE: TPU SYSTEMS TO BE AVAILABLE IN CUSTOMER DATA CENTERS; ORACLE PARTNERSHIP ANNOUNCED 5:18:08 PM ET GOOGLE: LAUNCHES CRUX AI JOINT VENTURE WITH BLACKSTONE TO OFFER TPU SYSTEMS TO CUSTOMERS 5:20:52 PM ET GOOGLE CFO: SOME TPU SYSTEM SALES ALREADY IN REVENUE; EXPECTS MORE TO COME THROUGH 2027 5:23:48 PM ET GOOGLE: CONFIDENT IT CAN PROVIDE COMPELLING ADVERTISING MODELS FOR AGENTIC USE CASES 5:25:50 PM ET GOOGLE: TPU SYSTEM INVENTORY BUILT ONLY AFTER CONTRACTS SIGNED; ALL TIED TO COMMITTED CONTRACTS 5:28:44 PM ET GOOGLE CLOUD: Q3 REVENUE UP 103% TO $30.7 BILLION, RECORD GROWTH 5:31:32 PM ET GOOGLE: CAN SERVE A LOT MORE CLOUD DEMAND WITH CAPACITY; NEW GCP CUSTOMERS ACCELERATING GROWTH POSTS (quotes verbatim; each shows when the words were said and when we drafted it) Alphabet CEO Sundar Pichai said Google Cloud revenues "grew 103%" in the third quarter. He said total Alphabet revenue grew 25% year over year. said 4:32:42 PM ET · drafted 4:33:35 PM ET Alphabet CEO Sundar Pichai said "the Gemini app is now at 1 billion users and is the fastest growing product in Google's history." He said Google announced a new model, Carbon, on Wednesday. said 4:33:42 PM ET · drafted 4:34:39 PM ET "Our first party model apis are now processing nearly 32 billion tokens per minute, 40% more than last quarter," Alphabet CEO Sundar Pichai said on Google's third-quarter earnings call. said 4:33:24 PM ET · drafted 4:35:40 PM ET Alphabet CEO Sundar Pichai said AI is helping Google increase its training and launch pace. "I would expect the next 12 months to see continued acceleration because of RSI," he said on the earnings call. said 4:36:00 PM ET · drafted 4:36:42 PM ET "Queries in AI Mode are on average three times longer than traditional searches," Alphabet CEO Sundar Pichai said. He said one in five AI Mode searches globally use voice, images or documents. said 4:36:46 PM ET · drafted 4:37:27 PM ET "Agents will operate as a unifying layer across our products," Alphabet CEO Sundar Pichai said. He said Google will extend agentic features beyond Search and the Gemini app to Chrome, Android and Workspace. said 4:38:04 PM ET · drafted 4:38:28 PM ET Alphabet CEO Sundar Pichai said Waymo "now operates in 50 major u s cities" and has driven more than 300 million fully autonomous miles, with expansions planned into Canada, Germany, Singapore and Spain. said 4:38:52 PM ET · drafted 4:40:17 PM ET Google chief business officer Philipp Schindler said the company's personalization modeling innovations "delivered 18% incremental advertiser value." He said satisfaction with product listing ads rose 19%. said 4:40:26 PM ET · drafted 4:41:19 PM ET Google chief business officer Philipp Schindler said "the majority of AI Mode queries are incremental" and that click-through rates on sponsored and organic product listings in AI Mode are "already similar." said 4:41:58 PM ET · drafted 4:42:22 PM ET Google is expanding ads in AI Mode into international markets, Philipp Schindler said on the earnings call. "Today we are announcing the expansion of ads in AI Mode into international markets," he said. said 4:42:32 PM ET · drafted 4:43:27 PM ET "Today UCP enables direct checkout for hundreds of thousands of brands across Google," Google's Philipp Schindler said on the earnings call. He cited Chewy, Nike and Tapestry among those using the Universal Commerce Protocol. said 4:43:08 PM ET · drafted 4:44:25 PM ET Google said on its earnings call that it recently announced "amazon is joining YouTube shopping." U.S. creators can now tag Amazon products directly in their videos, Shorts and live streams, the company said. said 4:45:12 PM ET · drafted 4:45:34 PM ET "YouTube Premium has more than 150 million subscribers with Premium and Premium Lite," Google's Philipp Schindler said. He said subscriptions "continue to grow faster than ads." said 4:45:36 PM ET · drafted 4:46:31 PM ET Google Cloud CEO Thomas Kurian said Cloud growth was driven by strength in both AI and core GCP. "Tpu system sales were also a meaningful contributor," he said on the earnings call. said 4:47:22 PM ET · drafted 4:47:36 PM ET "We have sold more than 100 million seats for knowledge work," Google Cloud CEO Thomas Kurian said on the earnings call, adding that nearly 90% of the Fortune 100 use Gemini Enterprise. said 4:48:06 PM ET · drafted 4:49:06 PM ET Google Cloud CEO Thomas Kurian said more than 2,600 customers have used at least 100 billion tokens in the past 12 months, adding that "nearly 75 at least 10 trillion tokens." said 4:47:36 PM ET · drafted 4:50:21 PM ET Google said BigQuery "improved query speed over 40% year over year while reducing query processing cost by over 50% year over year" on its earnings call Wednesday. said 4:50:12 PM ET · drafted 4:51:38 PM ET Google Cloud CEO Thomas Kurian said "more than 95% of Wiz customers are adopting AI powered features and growth continues" on Google's earnings call Wednesday. said 4:51:46 PM ET · drafted 4:52:39 PM ET "Nearly 100 customers use tpus today and we're seeing strong and growing demand from many others," Google Cloud CEO Thomas Kurian said Wednesday. He cited work with Anthropic and Apple. said 4:53:18 PM ET · drafted 4:53:41 PM ET Alphabet reported other income and expenses of negative $8.2 billion in Q3, which CFO Anat Ashkenazi said was due primarily to an "unrealized loss from our investment in spacex." Net income and EPS decreased. said 4:56:16 PM ET · drafted 4:56:49 PM ET Alphabet CFO Anat Ashkenazi: "Had negative free cash flow of $9.1 billion in the third quarter driven by our investments in capex." Capex was $51.4 billion, she said. said 4:57:22 PM ET · drafted 4:57:50 PM ET "Future purchase commitments of $33 billion and pre commencement lease and other obligations of $152 billion." Alphabet CFO Anat Ashkenazi, on obligations at quarter end. said 4:58:16 PM ET · drafted 4:58:51 PM ET "Google search and other advertising revenues increased by 12% to $63.3 billion," CFO Anat Ashkenazi said. YouTube ads rose 9% to $11.2 billion; network ads were up 1%. said 4:59:10 PM ET · drafted 4:59:41 PM ET Alphabet CFO Anat Ashkenazi said: "We continue to expect our capex to increase significantly in" 2027. Full-year 2026 capex guidance of $195 billion to $205 billion is unchanged, she said. said 5:02:42 PM ET · drafted 5:05:20 PM ET Alphabet CFO Anat Ashkenazi said on Wednesday's earnings call: "Our sizable investments in technical infrastructure and inventory build of tpu systems as we scale that business will put pressure on free cash flows." said 5:03:48 PM ET · drafted 5:06:22 PM ET "It is one of the most meaningful internal productivity levers we have seen on software engineering," Google CEO Sundar Pichai said of deploying an AI model internally, on the company's earnings call Wednesday. said 5:05:54 PM ET · drafted 5:07:23 PM ET Google's Philipp Schindler said "the strong growth in ai mode queries had an impact because of the lower monetization we are seeing in ai mode," citing it as one factor in third-quarter search growth slowing. said 5:07:38 PM ET · drafted 5:08:33 PM ET Google CEO Sundar Pichai said the company will roll out its agent product to consumers after an enterprise launch. "Later this year we will bring that same experience to consumers," he said, starting with Gemini app users. said 5:10:46 PM ET · drafted 5:11:10 PM ET Alphabet CFO Anat Ashkenazi said that at current spot rates, foreign exchange will be "somewhat of a headwind to q4 results." She cited a similar effect on sequential search growth this quarter. said 5:11:50 PM ET · drafted 5:12:15 PM ET Alphabet CFO Anat Ashkenazi said search growth faced tougher comparisons: "We started lapping the acceleration we saw in search growth in 2025." She said it cost about three points of growth versus Q3. said 5:11:54 PM ET · drafted 5:14:19 PM ET Google Cloud CEO Thomas Kurian said the company has "over 100 significant tpu customers" for its TPU systems, on Alphabet's quarterly earnings call Wednesday. said 5:15:22 PM ET · drafted 5:15:27 PM ET Google CEO Sundar Pichai said on the earnings call that "we are seeing very very robust demand signals across a wide variety of areas," adding the company is "investing for that moment." said 5:14:38 PM ET · drafted 5:16:43 PM ET "We are seeing extraordinary demand and strong growth from both ai labs capital markets financial service institutions and enterprises," Google Cloud CEO Thomas Kurian said of its TPU systems. said 5:16:52 PM ET · drafted 5:17:45 PM ET Alphabet CFO Anat Ashkenazi on TPU system sales: "Once we sign that agreement you'll first see that showing up in our backlog and then we start building inventory." said 5:19:38 PM ET · drafted 5:19:46 PM ET Alphabet CFO Anat Ashkenazi said Google has recorded some TPU system sales as revenue to date but "expect more of it to come in through" 2027. She said the sales build inventory first, with "cash going out." said 5:20:52 PM ET · drafted 5:21:01 PM ET Google said it views "agentic" shopping and search experiences as "clearly additive," responding to a Bank of America analyst's question about search. Google said it is still early days. said 5:22:00 PM ET · drafted 5:23:06 PM ET Google executive says company is "actually confident that we can actually provide really interesting compelling advertising models for agentic use cases," in response to an analyst's question on Google's Q3 earnings call. said 5:23:05 PM ET · drafted 5:24:06 PM ET Google, on TPU system margins: "We're very focused on continuing to improve margins as we scale the business." The company said it doesn't break out margins for individual products. said 5:25:02 PM ET · drafted 5:25:08 PM ET A Google executive said all TPU system inventory is tied to signed deals: "All of the inventory that for tpu systems are associated with committed contracts." Google said it buys components only after signing contracts. said 5:25:18 PM ET · drafted 5:28:14 PM ET Alphabet's Google Cloud segment recorded "cloud revenues up 103% to 30.7 billion" in the third quarter, the company said on its earnings call Wednesday, calling it record growth. said 5:28:44 PM ET · drafted 5:29:24 PM ET Google on Cloud capacity: "We could obviously serve a lot more demand with capacity but we are managing all of these parameters and growth carefully." Said in response to an analyst's question on its earnings call. said 5:30:12 PM ET · drafted 5:30:44 PM ET Google CEO Sundar Pichai said the company has worked on its models with Apple, "with whom we compete in many many areas." He said Google views its TPU systems as "an important platform we are building." said 5:32:16 PM ET · drafted 5:32:37 PM ET "We clearly see people are concerned about safety and trust. I mean, it is a very, very high factor in how they want to use these things," Google CEO Sundar Pichai said of consumer use of agentic experiences. said 5:33:08 PM ET · drafted 5:33:37 PM ET TRANSCRIPT (copy-edited; times Eastern) [4:21:10 PM ET] Flex it. When it's shaking in your face, go [4:21:12 PM ET] and flex it, when they double in your face, [4:21:14 PM ET] go [4:21:14 PM ET] flex it when they're shaking in your face go ahead flex it when they're [4:21:18 PM ET] Eat a bump, eat the sick, right? [4:21:22 PM ET] Uh-huh. That's [4:21:24 PM ET] it, right? [4:21:26 PM ET] Yeah. That's it. When the shaking in your feet's [4:21:30 PM ET] going [4:21:34 PM ET] Yo, yo, yo, yo, yo, rearrangement, [4:21:36 PM ET] That's unnegotable. Go, go, [4:21:38 PM ET] exit. [4:21:40 PM ET] People are shocked when they find [4:21:42 PM ET] out that it's just the two of us. 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It [4:24:20 PM ET] up price hit the top and it's going up my friends set a train [4:24:22 PM ET] don't get better. No, read what I [4:24:24 PM ET] wrote, I'm a bestseller. [4:24:26 PM ET] yeah. Reach for my goals, it is dead sending [4:24:28 PM ET] Hit it dead center. [4:24:28 PM ET] yeah reach for my goals hit it dead center why hit it dead center [4:24:32 PM ET] You can be a fan your entire life and still ask [4:24:34 PM ET] what counts as a catch these days [4:24:34 PM ET] shit hot you can be a fan your entire life and still ask what counts [4:24:36 PM ET] anyway? Two feet for the [4:24:38 PM ET] pros and one for the rest. [4:24:38 PM ET] as a catch these days anyway two feet for the [4:24:40 PM ET] Now that's the catch. And what is [4:24:42 PM ET] does this mean? [4:24:42 PM ET] and one for the rest now that's the catch and what does this mean why [4:24:44 PM ET] Why we all scared on the turtle, ready? Look left, [4:24:46 PM ET] throw right. Gotta hit the tight [4:24:46 PM ET] real scat on the turtle ready look left throw [4:24:48 PM ET] end. [4:24:50 PM ET] And what was the first touchdown [4:24:50 PM ET] right gotta hit the tight end [4:24:52 PM ET] dance? The high [4:24:54 PM ET] steps. Old school. That's the thing about being [4:24:54 PM ET] and what was the first touchdown dance the high [4:24:56 PM ET] a fan man. You can never know [4:24:58 PM ET] enough. [4:24:58 PM ET] step old school that's the thing about being a fan man you can [4:25:00 PM ET] never know enough [4:25:10 PM ET] What is the [4:25:12 PM ET] I [4:25:26 PM ET] I don't see how I see. [4:25:50 PM ET] If I'm [4:25:52 PM ET] clear, you [4:26:00 PM ET] Uh [4:26:18 PM ET] And [4:26:40 PM ET] And I'm going to go to the bathroom. [4:26:44 PM ET] It's going down [4:26:46 PM ET] everywhere today. Buckle up, Brad. [4:26:46 PM ET] it's going down everywhere today buck [4:26:48 PM ET] Floor it, Tom. Over to Jen, a [4:26:50 PM ET] crafty player, building her bag biz. [4:26:50 PM ET] up brad floor it tom over to jen a crafty pledge [4:26:52 PM ET] She opens Gemini, takes a pick, [4:26:54 PM ET] then asks to see the bag on some [4:26:54 PM ET] building her bag biz she opens gemini takes a pick then asks [4:26:56 PM ET] studio backgrounds. That's how bullets [4:26:58 PM ET] Hobo goes pro, [4:26:58 PM ET] to see the bag on some studio backgrounds that's how boho hova [4:27:00 PM ET] Tom. Next, we have Mr. [4:27:02 PM ET] Beast. Uh what's the game plan here? Well [4:27:02 PM ET] goes pro tom next we have mister beast what's the game plan here [4:27:04 PM ET] first, he takes a pic of the pool and asks [4:27:06 PM ET] how much slime he'll need to fill it [4:27:08 PM ET] up. Gemini crunches the numbers and [4:27:08 PM ET] well first he takes a pic of the pool and asks how much slime [4:27:10 PM ET] whoa! Take me to [4:27:10 PM ET] need to fill it up gemini crunches the numbers and woah [4:27:12 PM ET] Flying Town! Brad, I'm [4:27:14 PM ET] just speechless. Well, it's both of [4:27:14 PM ET] take me to slime town brad i'm just speechless well [4:27:16 PM ET] a third and a logistical [4:27:18 PM ET] triumph. Finally, we have [4:27:18 PM ET] it's both a third and a logistical triumph [4:27:20 PM ET] Nick. Yesterday, he asked Gemini to [4:27:22 PM ET] let him know as soon as a good deal on a [4:27:24 PM ET] squat rack pops up. That's a pro [4:27:24 PM ET] we have nick yesterday he asked gemini to let him know as soon as a good deal [4:27:26 PM ET] move, Tom. It's scanning [4:27:28 PM ET] everywhere. Scanning? [4:27:28 PM ET] on a squat rack pops up that's a pro move tom [4:27:30 PM ET] Scanning? Gemini doesn't quit! [4:27:30 PM ET] it's scanning everywhere scanning and scanning gemini [4:27:32 PM ET] Oh, it found one! We got a deal [4:27:34 PM ET] here, Tom. Nick makes the snag [4:27:34 PM ET] doesn't quit oh it found one we got a deal here tom [4:27:36 PM ET] for cheap. He's saving his loot [4:27:38 PM ET] and blasting his glue. Working [4:27:38 PM ET] nick makes the snag for cheap he's saving his loot and blasting it [4:27:40 PM ET] quads and saving [4:27:42 PM ET] wads. I don't think we needed to double down there, [4:27:42 PM ET] gloop working quads and saving was i don't think we needed to double down there [4:27:44 PM ET] Tom. [4:27:44 PM ET] tom [4:27:52 PM ET] Can [4:28:10 PM ET] Mm-hmm. [4:28:16 PM ET] Oh my god. [4:28:16 PM ET] oh my [4:28:20 PM ET] name is Maria. [4:30:28 PM ET] Welcome, everyone. [4:30:28 PM ET] welcome everyone [4:30:30 PM ET] Thank you for standing by for the [4:30:32 PM ET] Alphabet Third Quarter [4:30:34 PM ET] 2026 Earnings Conference Call. [4:30:34 PM ET] thank you for standing by for the alphabet third quarter [4:30:34 PM ET] twenty twenty six earnings conference call [4:30:36 PM ET] At this time, all participants [4:30:38 PM ET] are in a listen-only mode. [4:30:38 PM ET] at this time all participants are in a listen only mode [4:30:40 PM ET] After the speaker [4:30:42 PM ET] presentation, there will be a question and [4:30:44 PM ET] answer session. [4:30:44 PM ET] after the speaker presentation there will be a question and answer [4:30:46 PM ET] To ask a question during the session, you will [4:30:48 PM ET] need to press star one on your [4:30:50 PM ET] telephone. I would now like [4:30:52 PM ET] to hand the conference over to your speaker [4:30:54 PM ET] today, Jim Friedland, head [4:30:54 PM ET] i would now like to hand the conference over to your speaker today [4:30:56 PM ET] of Investor Relations. [4:30:58 PM ET] Please go ahead. [4:30:58 PM ET] jim friedland head of investor relations please go ahead [4:31:00 PM ET] Thank you. Good afternoon, [4:31:02 PM ET] everyone, and welcome to Alphabet's third quarter [4:31:04 PM ET] 2026 Earnings Conference [4:31:04 PM ET] thank you good afternoon everyone and [4:31:06 PM ET] Call. With us today are Senator Pachai, [4:31:06 PM ET] to alphabet's third quarter twenty twenty six earnings conference call [4:31:08 PM ET] Philip Schindler, Thomas Curian, and [4:31:10 PM ET] Anat Ashkenazi. Now I'll [4:31:10 PM ET] with us today are sundar pichai philip schindler [4:31:12 PM ET] quickly cover the safe harbor. Some [4:31:12 PM ET] thomas curian and anat ashkenazi now i'll quickly cover the safe harbor [4:31:14 PM ET] of the statements that we make today regarding our [4:31:16 PM ET] business, operations, and financial [4:31:18 PM ET] performance may be considered [4:31:18 PM ET] some of the statements that we make today regarding our business operations and financial performance [4:31:20 PM ET] forward-looking. Such statements are based on current [4:31:22 PM ET] expectations and assumptions that are subject to [4:31:22 PM ET] may be considered forward looking such statements are based on [4:31:24 PM ET] a number of risks and [4:31:26 PM ET] uncertainties. Actual results could differ [4:31:26 PM ET] current expectations and assumptions that are subject to a number of risks and uncertainties [4:31:28 PM ET] materially. Please refer to our [4:31:30 PM ET] forms 10K and 10Q, including the [4:31:30 PM ET] actual results could differ materially please refer to our forms ten ks [4:31:32 PM ET] risk factors. We undertake [4:31:32 PM ET] and ten q including the risk factors [4:31:34 PM ET] no obligation to update any [4:31:36 PM ET] forward-looking statement. During this [4:31:36 PM ET] we undertake no obligation to update any forward looking statement [4:31:38 PM ET] call, we will present both GAAP and non-GAAP [4:31:40 PM ET] financial measures, a [4:31:40 PM ET] during this call we will present both gaap and non gaap financial measures [4:31:42 PM ET] reconciliation of non-GAP to GAAP measures is [4:31:44 PM ET] included in today's earnings press release, [4:31:44 PM ET] a reconciliation of non gaap to gaap measures is included in today's earnings press release [4:31:46 PM ET] which is distributed and available to the [4:31:48 PM ET] public through our Investor Relations [4:31:50 PM ET] website located at [4:31:50 PM ET] which is distributed and available to the public through our investor relations website located at [4:31:52 PM ET] abc.xyz forward slash [4:31:54 PM ET] investor. Our comments will be on [4:31:54 PM ET] abc xyzinvestor [4:31:56 PM ET] year-over-year comparisons unless we [4:31:58 PM ET] state otherwise. And now I'll [4:31:58 PM ET] our comments will be on year over year comparisons unless we state otherwise [4:32:00 PM ET] turn the call over to [4:32:00 PM ET] and now i'll turn the call over to sundar [4:32:02 PM ET] Sundar. Thanks, [4:32:04 PM ET] Jim, and hello, everyone. Q3 [4:32:04 PM ET] thanks jim and hello everyone [4:32:06 PM ET] was a strong quota for our [4:32:08 PM ET] alphabet. Our deep full stack approach [4:32:10 PM ET] is driving momentum across the [4:32:10 PM ET] q3 was a strong quarter for alphabet our deep full stack up [4:32:12 PM ET] business with many opportunities [4:32:12 PM ET] approach is driving momentum across the business with many opportunities ahead [4:32:14 PM ET] ahead. Let me give you a quick snapshot [4:32:16 PM ET] of the quarter. [4:32:16 PM ET] let me give you a quick snapshot of the quarter [4:32:18 PM ET] Alphabet revenues grew 25% year [4:32:20 PM ET] over year. We are now at a [4:32:22 PM ET] half a trillion dollar annual run [4:32:22 PM ET] alphabet revenues grew twenty five percent year over year [4:32:24 PM ET] rate. That's remarkable growth. [4:32:24 PM ET] we are now at a half a trillion dollar annual run rate that's remarkable growth [4:32:26 PM ET] Search has strong [4:32:28 PM ET] momentum. Our AI investments are driving [4:32:30 PM ET] increased usage and overall query [4:32:30 PM ET] search has strong momentum our ai investments are driving increased usage [4:32:30 PM ET] and overall query growth [4:32:32 PM ET] growth, including commercial [4:32:34 PM ET] queries. In fact, our [4:32:36 PM ET] year-over-year query growth rate is the [4:32:36 PM ET] including commercial queries in fact our year over year query growth rate [4:32:38 PM ET] highest it's been in the last five [4:32:38 PM ET] is the highest it's been in the last five years [4:32:40 PM ET] years. Google Cloud revenues grew [4:32:42 PM ET] 103%. [4:32:42 PM ET] google cloud revenues grew one hundred and three percent [4:32:44 PM ET] Our AI infrastructure and [4:32:46 PM ET] solutions are the major drivers for cloud [4:32:48 PM ET] growth, and our customers see us as [4:32:48 PM ET] our ai infrastructure and solutions are the major drivers for cloud growth [4:32:50 PM ET] the leading provider here so [4:32:52 PM ET] there's huge demand. [4:32:52 PM ET] and our customers see us as the leading provider here so there's huge demand [4:32:54 PM ET] We are working hard to bring more [4:32:56 PM ET] capacity online to meet this long-term [4:32:58 PM ET] demand. At the same [4:32:58 PM ET] we are working hard to bring more capacity online to meet this long term [4:33:00 PM ET] time, we are seeing strong demand for [4:33:02 PM ET] our TPU systems [4:33:02 PM ET] at the same time we are seeing strong demand for our tpu systems [4:33:04 PM ET] across a wide range of [4:33:06 PM ET] customers, and we expect that to continue as [4:33:08 PM ET] we scale. I'm [4:33:08 PM ET] across a wide range of customers and we expect [4:33:08 PM ET] that to continue as we scale [4:33:10 PM ET] excited to welcome Thomas to the [4:33:12 PM ET] call and he'll share more about clouds [4:33:12 PM ET] i'm excited to welcome thomas to the call [4:33:14 PM ET] Momentum. On our [4:33:16 PM ET] AI models, customers are [4:33:16 PM ET] and he'll share more about cloud's momentum on our ai models [4:33:18 PM ET] using our models more than ever. [4:33:18 PM ET] customers are using our models more than ever [4:33:20 PM ET] A first-party model APIs are now [4:33:22 PM ET] processing nearly 32 billion tokens per [4:33:24 PM ET] minute. [4:33:24 PM ET] our first party model apis are now processing nearly thirty two billion tokens per minute [4:33:26 PM ET] 40% more than last quarter, and [4:33:28 PM ET] more than four times what we [4:33:28 PM ET] forty percent more than last quarter [4:33:30 PM ET] processed a year ago. [4:33:32 PM ET] And with Gemini 4 argon, and now [4:33:32 PM ET] and more than four times what we processed a year ago [4:33:34 PM ET] carbon, which we announced today, we [4:33:36 PM ET] are excited to be leading at the [4:33:36 PM ET] and with gemini iv argon and now carbon [4:33:38 PM ET] frontier. The Gemini app is [4:33:38 PM ET] which we announced today we are excited to be leading at the frontier [4:33:40 PM ET] now at 1 billion users and is the [4:33:42 PM ET] fastest growing product in Google's [4:33:42 PM ET] the gemini app is now at one billion users and is the fastest growing product [4:33:44 PM ET] history. Lastly, we have surpassed [4:33:46 PM ET] 150 million YouTube [4:33:46 PM ET] in google's history lastly we have surpassed [4:33:48 PM ET] music and premium subscribers [4:33:50 PM ET] globally, including [4:33:50 PM ET] one hundred and fifty million youtube music and premium subscribers globally [4:33:50 PM ET] including trials [4:33:52 PM ET] trials. Today I'll talk more about [4:33:54 PM ET] our AI progress, our [4:33:54 PM ET] today i'll talk more about our ai progress [4:33:56 PM ET] global consumer platforms led by search [4:33:58 PM ET] and YouTube, then our long-term [4:33:58 PM ET] our global consumer platforms led by search and youtube [4:34:00 PM ET] bets. Starting [4:34:00 PM ET] than our long term bets [4:34:02 PM ET] with AI, highlighted by [4:34:04 PM ET] our Gemini 4 series of frontier [4:34:06 PM ET] models, we are seeing [4:34:06 PM ET] starting with ai highlighted by our gemini four series of frontier models [4:34:08 PM ET] strong demand and usage for Argon, which we [4:34:10 PM ET] launched two weeks ago. In [4:34:10 PM ET] we are seeing strong demand and usage for argonne which we launched two weeks ago [4:34:12 PM ET] fact, on our developer platforms, usage in [4:34:14 PM ET] the first week ramped up three and a half [4:34:16 PM ET] times faster than Gemini [4:34:16 PM ET] in fact on our developer platforms usage in the first week ramped up [4:34:18 PM ET] 3, even with capacity [4:34:20 PM ET] constraints. Oregon is proving to do [4:34:20 PM ET] 3.5x faster than gemini three even with capacity constraints [4:34:22 PM ET] really well in areas like finance, [4:34:24 PM ET] legal, cybersecurity and [4:34:24 PM ET] argonne is proving to do really well in areas like [4:34:26 PM ET] science. Developers and cloud [4:34:28 PM ET] customers are already using it for things [4:34:28 PM ET] finance legal cybersecurity and science [4:34:30 PM ET] like untangling legacy code [4:34:30 PM ET] developers and cloud customers are already using it for things like untangling legacy [4:34:32 PM ET] bases, accelerating scientific [4:34:34 PM ET] research, robotics, [4:34:34 PM ET] codebases accelerating scientific research robotics [4:34:36 PM ET] discovering product improvements, [4:34:36 PM ET] discovering product improvements [4:34:38 PM ET] and domain-specific tasks [4:34:40 PM ET] requiring in-depth reasoning. [4:34:40 PM ET] and domain specific tasks requiring in-depth reasoning [4:34:42 PM ET] And at Google, just in the last [4:34:44 PM ET] few weeks, teams [4:34:44 PM ET] and at google just in the last few weeks [4:34:46 PM ET] across Chrome, Ads and Search have used [4:34:48 PM ET] Argon to write and optimize code much [4:34:48 PM ET] teams across chrome ads and search have used oregon to write and optimize code much [4:34:50 PM ET] faster, shipping [4:34:52 PM ET] 35% more code with 30% [4:34:54 PM ET] fewer errors. [4:34:54 PM ET] faster shipping thirty five percent more code with thirty percent fewer errors [4:34:56 PM ET] Oregon is just the start of the Gemini 4 [4:34:58 PM ET] series. Today we [4:34:58 PM ET] argon is just the start of the gemini four series [4:35:00 PM ET] announced Carbon, it's our strongest frontier [4:35:02 PM ET] model with state-of-the-art [4:35:02 PM ET] today announced carbon it's our strongest frontier model with [4:35:04 PM ET] cybersecurity and long horizon [4:35:06 PM ET] capabilities. It ranks number one on the [4:35:06 PM ET] state of the art cybersecurity and long horizon capabilities [4:35:08 PM ET] recently updated artificial [4:35:10 PM ET] Analysis Intelligence Index at [4:35:10 PM ET] it ranks number one on the recently updated [4:35:12 PM ET] 59. [4:35:14 PM ET] Carbon outperforms argon across [4:35:14 PM ET] artificial analysis intelligence index at fifty nine [4:35:16 PM ET] almost every domain, like full stack [4:35:18 PM ET] web development, multimodal [4:35:18 PM ET] carbon outperforms argon across almost every domain like full stack [4:35:20 PM ET] understanding, complex knowledge [4:35:22 PM ET] work, and scientific reasoning. [4:35:22 PM ET] web development multimodal understanding complex knowledge work [4:35:22 PM ET] and scientific reasoning [4:35:24 PM ET] We are rolling carbon out first to [4:35:26 PM ET] a subset of trusted cyber defenders [4:35:28 PM ET] before we expand access and it's [4:35:28 PM ET] we are rolling carbon out first to a subset of trusted cyber defenders [4:35:30 PM ET] being tested by the US [4:35:32 PM ET] government. Beyond our Gemini [4:35:32 PM ET] before we expand access and it's being tested by the u s government [4:35:34 PM ET] 4 series, yesterday we [4:35:34 PM ET] beyond our gemini four series [4:35:36 PM ET] announced Genie 4, our most advanced world [4:35:38 PM ET] model yet that simulates safe, [4:35:38 PM ET] yesterday we announced genie four our most advanced world model yet that simulates [4:35:40 PM ET] realistic, interactive worlds [4:35:42 PM ET] with native audio in real [4:35:42 PM ET] safe realistic interactive worlds with native audio in real time [4:35:44 PM ET] time. This is an important building block [4:35:46 PM ET] for training robots and [4:35:48 PM ET] agents. This rapid progress [4:35:48 PM ET] it is an important building block for training robots and agents [4:35:50 PM ET] underscores our incredible model [4:35:52 PM ET] momentum. We are at the point [4:35:52 PM ET] this rapid progress underscores our incredible model momentum [4:35:54 PM ET] where AI is helping us increase [4:35:56 PM ET] our training and launch velocity. [4:35:56 PM ET] we are at the point where ai is helping us increase our training and launch [4:35:58 PM ET] I would expect the next 12 months [4:36:00 PM ET] to see continued acceleration [4:36:00 PM ET] i would expect the next twelve months to see continued [4:36:02 PM ET] because of RSI. [4:36:02 PM ET] acceleration because of rsi [4:36:04 PM ET] We have more models coming soon, [4:36:06 PM ET] including more efficient versions to [4:36:08 PM ET] help developers optimize for speed and [4:36:08 PM ET] have more models coming soon including more efficient [4:36:10 PM ET] cost and to [4:36:10 PM ET] versions to help developers optimize for speed and cost [4:36:12 PM ET] deploy across our billions of [4:36:12 PM ET] and to deploy across our billions of users [4:36:14 PM ET] users. Let's turn to [4:36:16 PM ET] search, which is bringing the benefits of AI [4:36:18 PM ET] to more people than any other product in the [4:36:18 PM ET] let's turn to search which is bringing the benefits [4:36:20 PM ET] world. Just like our shift to [4:36:22 PM ET] mobile over a decade ago, we are focused [4:36:22 PM ET] of ai to more people than any other product in the world [4:36:24 PM ET] on building the best search user experience [4:36:24 PM ET] just like our shift to mobile over a decade ago we are focused on building the best [4:36:26 PM ET] followed by [4:36:28 PM ET] monetization. We are building one [4:36:28 PM ET] search user experience followed by monetization [4:36:30 PM ET] seamless experience across AI [4:36:32 PM ET] overviews, AI mode, and [4:36:32 PM ET] we are building one seamless experience across ai overviews [4:36:32 PM ET] ai mode [4:36:34 PM ET] traditional search. And people are [4:36:36 PM ET] using our AI features more, searching [4:36:38 PM ET] in entirely new ways. [4:36:38 PM ET] and traditional search and people are using our ai features more [4:36:40 PM ET] Their queries are longer, [4:36:40 PM ET] searching in entirely new ways their queries are longer [4:36:42 PM ET] personalized, and [4:36:44 PM ET] multimodal. Queries in AI mode are on [4:36:46 PM ET] average three times longer than [4:36:46 PM ET] personalized and multimodal queries in ai mode are on average [4:36:48 PM ET] traditional searches, and one in [4:36:50 PM ET] five AI mode searches globally [4:36:50 PM ET] three times longer than traditional searches and one in five ai mode searches [4:36:52 PM ET] use voice, images or [4:36:54 PM ET] documents. We have now [4:36:56 PM ET] crossed over 50 billion visual [4:36:56 PM ET] globally use voice images or documents [4:36:58 PM ET] searches per month. One [4:36:58 PM ET] we have now crossed over fifty billion visual searches per month [4:37:00 PM ET] area I'm excited about is helping [4:37:02 PM ET] people get things done, be it [4:37:04 PM ET] booking reservations, filling in [4:37:04 PM ET] one area i'm excited about is helping people get things done [4:37:06 PM ET] forms, scheduling appointments, or [4:37:06 PM ET] be it booking reservations filling in forms scheduling appointments [4:37:08 PM ET] making purchases. As AI [4:37:10 PM ET] becomes more personal and starts taking [4:37:12 PM ET] action for people and [4:37:12 PM ET] or making purchases as ai becomes more personal and starts [4:37:14 PM ET] businesses, trust and security matter more than [4:37:16 PM ET] ever. People [4:37:16 PM ET] taking action for people and businesses trust and security matter more than ever [4:37:18 PM ET] already put their trust in Google to get [4:37:20 PM ET] things done in their daily lives and [4:37:20 PM ET] people already put their trust in google to get [4:37:22 PM ET] our leadership here remains an [4:37:22 PM ET] things done in their daily lives and their leadership here [4:37:24 PM ET] important differentiator. [4:37:24 PM ET] remains an important differentiator [4:37:26 PM ET] We focus first on getting [4:37:28 PM ET] these agentic experiences right with the [4:37:30 PM ET] Gemini Agent for Enterprise because [4:37:30 PM ET] we focus first on getting these agentic experiences right with the gemini agent [4:37:30 PM ET] enterprise [4:37:32 PM ET] the bar for security, safety, [4:37:34 PM ET] and governance is extremely [4:37:36 PM ET] high. As a next step, we are bringing these [4:37:36 PM ET] because the bar for security safety and governance is extremely high [4:37:38 PM ET] features to search and [4:37:40 PM ET] also, of course, to our billion users on [4:37:40 PM ET] as a next step we are bringing these features to search [4:37:42 PM ET] the Gemini app. People are [4:37:42 PM ET] and also of course to our billion users on the gemini app [4:37:44 PM ET] already using the Gemini app to do more [4:37:46 PM ET] than ask questions. They're [4:37:46 PM ET] people are already using the gemini app to do more than ask questions [4:37:48 PM ET] using it to do things including [4:37:50 PM ET] complex multi-step agentic [4:37:52 PM ET] queries. Our Gemini 4 series has [4:37:52 PM ET] they're using it to do things including complex multi step agentic queries [4:37:54 PM ET] been a really big step forward [4:37:56 PM ET] here and has already been handling [4:37:56 PM ET] our gemini four series has been a really big step forward here [4:37:58 PM ET] these complex tasks really [4:38:00 PM ET] well. Agents will operate [4:38:00 PM ET] and has already been handling these complex tasks really well [4:38:02 PM ET] as a unifying layer across our [4:38:04 PM ET] products, so you will see us extend [4:38:04 PM ET] agents will operate as a unifying layer across our products [4:38:06 PM ET] these agentic experiences beyond [4:38:08 PM ET] search in the Gemini app to Chrome. [4:38:08 PM ET] so you will see us extend these agentic experiences beyond search in the gemini app [4:38:10 PM ET] Android and our workspace products as [4:38:12 PM ET] well. [4:38:12 PM ET] to chrome android and our workspace products as well [4:38:14 PM ET] On to YouTube, which continues to lead in [4:38:16 PM ET] the living room as the number one streaming platform [4:38:16 PM ET] on to youtube which continues to lead in the living room as the number one [4:38:18 PM ET] in the US in terms of watch [4:38:20 PM ET] time. It's also seeing good subscriber [4:38:22 PM ET] growth, as I mentioned. [4:38:22 PM ET] streaming platform in the u s in terms of watch time [4:38:24 PM ET] At Made on YouTube last month, we announced more [4:38:24 PM ET] it's also seeing good subscriber growth as i mentioned [4:38:26 PM ET] than 30 products and features for [4:38:28 PM ET] creators and viewers. One great [4:38:28 PM ET] at made on youtube last month we announced more than thirty products and features [4:38:28 PM ET] for creators and viewers [4:38:30 PM ET] example is custom feeds, where you can simply [4:38:32 PM ET] pick a topic you love and get a [4:38:34 PM ET] tailored video home feed based on that [4:38:34 PM ET] one great example is custom feeds where you can simply pick a topic you love [4:38:36 PM ET] topic. Philip will say more on [4:38:38 PM ET] YouTube. On to our [4:38:38 PM ET] and get a tailored video home feed based on that topic [4:38:38 PM ET] philip will say more on youtube [4:38:40 PM ET] long-term bets. Waymo is on a great [4:38:40 PM ET] onto our long term bets [4:38:42 PM ET] trajectory. We have now driven more than [4:38:44 PM ET] 300 million fully autonomous [4:38:44 PM ET] waymo is on a great trajectory we have now driven more than [4:38:46 PM ET] miles. Woemo now operates in [4:38:48 PM ET] 15 major U.S. cities and just [4:38:48 PM ET] three hundred million fully autonomous miles waymo now [4:38:50 PM ET] recently opened up service to the public in San [4:38:52 PM ET] Antonio, San Diego, and [4:38:52 PM ET] operates in fifty major u s cities and just recently opened up service to the [4:38:52 PM ET] public in san antonio [4:38:54 PM ET] Tampa with planned [4:38:56 PM ET] expansions into Canada, Germany, [4:38:56 PM ET] san diego and tampa with planned expansions [4:38:58 PM ET] Singapore, and Spain. [4:38:58 PM ET] into canada germany singapore and spain [4:39:00 PM ET] We are also seeing strong progress [4:39:02 PM ET] across our other long-term [4:39:04 PM ET] initiatives. Isomorphic is [4:39:04 PM ET] are also seeing strong progress across our other long term initiatives [4:39:06 PM ET] using Oregon to support drug design [4:39:08 PM ET] research. We demonstrated [4:39:08 PM ET] isomorphic is using oregon to support drug design research [4:39:10 PM ET] magic state cultivation for the first time [4:39:12 PM ET] in quantum computing and [4:39:12 PM ET] we demonstrated magic state cultivation for the first time in quantum computing [4:39:14 PM ET] launched our TPUs into space with [4:39:16 PM ET] Project Suncatcher. So it's [4:39:18 PM ET] been a busy quarter, and there's much more to [4:39:18 PM ET] and launched our tpus into space with project suncatcher [4:39:20 PM ET] come. I want to thank our employees [4:39:20 PM ET] so it's been a busy quarter and there's much more to come [4:39:22 PM ET] for their work this quarter [4:39:24 PM ET] and over to you, Philip. [4:39:24 PM ET] i want to thank our employees for their work this quarter and over to you philip [4:39:26 PM ET] Thanks, Ondar, and hello, [4:39:28 PM ET] everyone. I'll highlight our [4:39:28 PM ET] thanks sundar and hello everyone [4:39:30 PM ET] momentum across search, YouTube and [4:39:32 PM ET] partnerships. We continue to [4:39:32 PM ET] i'll highlight our momentum across search youtube and partnerships [4:39:34 PM ET] accelerate the deployment of Gemini models across [4:39:36 PM ET] our entire ads infrastructure [4:39:36 PM ET] we continue to accelerate the deployment of gemini models across our [4:39:38 PM ET] to boost performance in the three areas I've [4:39:40 PM ET] highlighted before: ads [4:39:40 PM ET] entire ads infrastructure to boost performance in the three areas i've highlighted before [4:39:42 PM ET] quality, advertiser tools, and AI user [4:39:44 PM ET] experiences. First, ads [4:39:44 PM ET] ads quality advertiser tools and ai user experiences [4:39:46 PM ET] quality. The integration [4:39:48 PM ET] of Gemini models into our ads [4:39:48 PM ET] first ads quality the integration of gemini models into our ads [4:39:50 PM ET] infrastructure is improving how we decode [4:39:52 PM ET] user intent and drive ads [4:39:54 PM ET] relevance. For example, in [4:39:54 PM ET] infrastructure is improving how we decode user intent and drive ads relevance [4:39:56 PM ET] Q3, we made the biggest update to [4:39:58 PM ET] product listing ads in a decade, adding [4:39:58 PM ET] for example in q3 we made the biggest update to product [4:40:00 PM ET] new AI capabilities to help users [4:40:02 PM ET] make more confident purchase [4:40:02 PM ET] listing ads in a decade adding new ai capabilities [4:40:04 PM ET] decisions. Already, we've seen [4:40:06 PM ET] satisfaction increase by 19% [4:40:06 PM ET] to help users make more confident purchase decisions [4:40:08 PM ET] and dissatisfaction drop more than [4:40:08 PM ET] already we've seen satisfaction increase by nineteen percent [4:40:10 PM ET] half. We're also seeing AI [4:40:12 PM ET] models enable better prediction of [4:40:12 PM ET] and dissatisfaction dropped more than half we're also seeing ai models [4:40:14 PM ET] clicks and conversions, stronger [4:40:16 PM ET] overall performance, and deeper personalization [4:40:16 PM ET] enable better prediction of clicks and conversions [4:40:18 PM ET] of ads. For [4:40:18 PM ET] stronger overall performance and deeper personalization of ads [4:40:20 PM ET] instance, through several innovations and [4:40:22 PM ET] personalization modeling, we delivered [4:40:22 PM ET] for instance through several innovations and personalization modeling [4:40:24 PM ET] 18% incremental advertiser [4:40:26 PM ET] value and an 8% increase in [4:40:26 PM ET] we delivered eighteen percent incremental advertiser value [4:40:28 PM ET] user sentiment on Discover ads in [4:40:30 PM ET] 2026. [4:40:30 PM ET] and an eight percent increase in user sentiment on discover ads in twenty twenty six [4:40:32 PM ET] Overall, AI is accelerating our ads [4:40:34 PM ET] development and drives the majority of our [4:40:34 PM ET] overall ai is accelerating our ads development and drives the [4:40:36 PM ET] product launches. [4:40:38 PM ET] Second, advertiser tools. We're [4:40:38 PM ET] majority of our product launches second advertiser tools [4:40:40 PM ET] ensuring every advertiser from global [4:40:42 PM ET] brands to small businesses, can [4:40:44 PM ET] seamlessly participate in our AI [4:40:44 PM ET] we're ensuring every advertiser from global brands [4:40:46 PM ET] services. AI Max and [4:40:46 PM ET] to small businesses can seamlessly participate in our ai services [4:40:48 PM ET] Performance Max continue to see strong [4:40:50 PM ET] adoption to give marketers even more [4:40:50 PM ET] ai max and performance max continue to see strong adoption [4:40:52 PM ET] control, we're now introducing a way [4:40:54 PM ET] to test different budgets and ROI [4:40:54 PM ET] to give marketers even more control we're now introducing a way to test [4:40:56 PM ET] targets across multiple search [4:40:58 PM ET] campaigns in a single AI [4:40:58 PM ET] different budgets and roi targets across multiple search campaigns [4:41:00 PM ET] A-B test. [4:41:00 PM ET] in a single ai max ab test [4:41:02 PM ET] To drive better performance, we [4:41:04 PM ET] integrated our AI creative tools [4:41:06 PM ET] directly into AI Max. [4:41:06 PM ET] to drive better performance we integrated our ai creative tools [4:41:08 PM ET] In Q3 alone, Gemini [4:41:10 PM ET] models helped advertisers generate over [4:41:10 PM ET] into ai max in q three alone [4:41:12 PM ET] 1.5 billion campaign [4:41:12 PM ET] gemini models helped advertisers generate over one point five billion campaign assets [4:41:14 PM ET] assets, up over 7x [4:41:16 PM ET] year over year, for [4:41:18 PM ET] example, by using AI Max to capture [4:41:18 PM ET] up over seven x year over year for example [4:41:20 PM ET] long-form and multilingual [4:41:22 PM ET] queries, Telstra saw a 52% [4:41:22 PM ET] by using ai maps to capture long form and multilingual queries [4:41:24 PM ET] increase in conversions and a [4:41:26 PM ET] 36% reduction in cost per [4:41:26 PM ET] telstra saw a fifty two percent increase in conversions [4:41:28 PM ET] order showing up in key moments, however, [4:41:28 PM ET] and a thirty six percent reduction in cost per order showing up in [4:41:30 PM ET] the customer search. [4:41:30 PM ET] key moments however the customer search [4:41:32 PM ET] Third, AI user [4:41:34 PM ET] experiences. Sonder mentioned the [4:41:36 PM ET] distinct behavioral changes we are seeing as [4:41:36 PM ET] third ai user experiences [4:41:38 PM ET] users ask entirely new categories of [4:41:38 PM ET] sundar mentioned the distinct behavioral changes we're seeing as users ask and [4:41:40 PM ET] questions. We think of search [4:41:42 PM ET] holistically, a unified [4:41:42 PM ET] entirely new categories of questions we think of search holistically [4:41:44 PM ET] product spanning traditional results and [4:41:46 PM ET] AI-powered search. On [4:41:46 PM ET] a unified product spending traditional results and ai powered search [4:41:48 PM ET] AI mode, many of these queries are upper [4:41:50 PM ET] funnel queries, allowing us to capture [4:41:50 PM ET] on ai mode many of these queries are upper funnel [4:41:52 PM ET] new high-value commercial [4:41:54 PM ET] intent. In addition, the [4:41:54 PM ET] queries allowing us to capture new high value commercial intent [4:41:56 PM ET] majority of AI mode queries are [4:41:58 PM ET] incremental, creating more monetization [4:41:58 PM ET] in addition the majority of ai mode queries are incremental [4:42:00 PM ET] opportunities over time. [4:42:02 PM ET] Additionally, our user research shows that [4:42:02 PM ET] creating more monetization opportunities over time [4:42:04 PM ET] people are comfortable with ads on these [4:42:06 PM ET] surfaces and find them highly [4:42:06 PM ET] additionally our user research shows that people are comfortable with ads [4:42:08 PM ET] relevant. Click-through rates are already [4:42:10 PM ET] similar between sponsored and organic [4:42:10 PM ET] on these surfaces and find them highly relevant click through rates are already [4:42:12 PM ET] product list items within AI mode. [4:42:14 PM ET] Based on [4:42:14 PM ET] similar between sponsored and organic product list items within ai mode [4:42:16 PM ET] these collective results, we're now [4:42:18 PM ET] scaling high-quality ads within AI [4:42:18 PM ET] based on these collective results we are now skating [4:42:20 PM ET] overviews, in AI mode, to more [4:42:22 PM ET] users and queries. This [4:42:22 PM ET] high quality ads within ai overviews in ai mode to more users and queries [4:42:24 PM ET] includes taking our monetization [4:42:26 PM ET] footprint global for the first time. [4:42:28 PM ET] Today we're announcing the [4:42:28 PM ET] this includes taking our monetization footprint global for the first time [4:42:30 PM ET] expansion of ads in AI mode into [4:42:32 PM ET] international markets alongside [4:42:32 PM ET] today we are announcing the expansion of ads in ai mode into international markets [4:42:34 PM ET] multi-turn ads in AI mode in the [4:42:36 PM ET] US. As [4:42:36 PM ET] alongside multi turn ads in ai mode in the u s [4:42:38 PM ET] always, our approach is deliberate. [4:42:40 PM ET] prioritizing the user experience and engagement [4:42:40 PM ET] as always our approach is deliberate prioritizing the user experience and engaging [4:42:42 PM ET] first, and then scaling the formats [4:42:44 PM ET] that drive proven RI for [4:42:46 PM ET] advertisers. That discipline is what [4:42:46 PM ET] first and then scaling the formats that drive proven roi for advertisers [4:42:48 PM ET] gives us a strong, durable [4:42:50 PM ET] foundation for the future. [4:42:50 PM ET] that discipline is what gives us a strong durable foundation for the future [4:42:52 PM ET] As Sondar mentioned, we're in the [4:42:54 PM ET] early stages of agentic experiences [4:42:56 PM ET] across our surfaces and excited about the [4:42:56 PM ET] as sundar mentioned we are in the early stages of agentic experiences across our [4:42:58 PM ET] commercial opportunities [4:43:00 PM ET] ahead. The Universal Commerce Protocol, [4:43:00 PM ET] services and excited about the commercial opportunities ahead [4:43:02 PM ET] is being rapidly adopted [4:43:04 PM ET] by retailers. Today, [4:43:04 PM ET] the universal commerce protocol ucp is being rapidly adopted by retailers [4:43:06 PM ET] UCP enables direct checkout [4:43:08 PM ET] for hundreds of thousands of brands across [4:43:08 PM ET] today ucp enables direct checkout [4:43:10 PM ET] Google including Chewy, Nike, [4:43:12 PM ET] Tapestry, and many more. [4:43:12 PM ET] for hundreds of thousands of brands across google including chewy nike tapestry [4:43:14 PM ET] We're combining this with the Agent Payments [4:43:16 PM ET] Protocol as we build for the future of [4:43:16 PM ET] and many more we're combining this with the [4:43:18 PM ET] commerce. Our focus [4:43:20 PM ET] spans two fronts: unlocking [4:43:20 PM ET] agent payments protocol as we build for the future of commerce [4:43:22 PM ET] agentic capabilities that act on behalf of [4:43:22 PM ET] our focus spans two fronts unlocking agentic capabilities that act [4:43:24 PM ET] the consumer and designing [4:43:26 PM ET] practical tools that give shoppers [4:43:28 PM ET] confidence and control. [4:43:28 PM ET] on behalf of the consumer and designing practical tools that gives shoppers confidence [4:43:28 PM ET] and control [4:43:30 PM ET] We launched Universal Card this [4:43:32 PM ET] quarter to support that second [4:43:34 PM ET] track, mirroring how people actually shop [4:43:34 PM ET] we launched universal card this quarter to support that second track [4:43:36 PM ET] today across Google. This allows [4:43:38 PM ET] retailers to maintain their relationships with [4:43:38 PM ET] mirroring how people actually shop today across google [4:43:40 PM ET] customers while helping to capture [4:43:40 PM ET] this allows retailers to maintain their relationships with customers [4:43:42 PM ET] sales and avoid abandoned [4:43:44 PM ET] cards. Moving to [4:43:44 PM ET] while helping to capture sales and avoid abandoned carts [4:43:46 PM ET] YouTube. We view YouTube as [4:43:48 PM ET] a flywheel of creators, viewers, [4:43:48 PM ET] moving to youtube we view youtube as a [4:43:50 PM ET] and advertisers. First, [4:43:52 PM ET] creators. Every day, more than [4:43:52 PM ET] flywheel of creators viewers and advertisers first creators [4:43:54 PM ET] 20 million videos are being [4:43:56 PM ET] uploaded. We are making [4:43:56 PM ET] every day more than twenty million videos are being uploaded [4:43:58 PM ET] creation easier with new generative AI [4:44:00 PM ET] tools in YouTube Studio, plus [4:44:00 PM ET] we are making creation easier with new generative ai tools in youtube studio [4:44:02 PM ET] a conversational editing assistant [4:44:04 PM ET] in Shorts and YouTube [4:44:04 PM ET] plus a conversational editing assistant in shorts and youtube create [4:44:06 PM ET] Crate. Looking at [4:44:08 PM ET] viewership. At Made on YouTube, we [4:44:10 PM ET] introduced short series where creators can [4:44:10 PM ET] looking at viewership it made on youtube [4:44:12 PM ET] structure their shorts into seasons and [4:44:14 PM ET] episodes. Sequential playback makes [4:44:14 PM ET] we introduced short series where creators can structure their shorts into seasons and episodes [4:44:16 PM ET] it seamless for viewers to discover [4:44:18 PM ET] new shorts and keep [4:44:18 PM ET] sequential playback makes it seamless for viewers to discover new shorts [4:44:18 PM ET] and keep watching [4:44:20 PM ET] watching. The third part is [4:44:22 PM ET] monetization, starting with ads. [4:44:24 PM ET] Our focus remains on delivering [4:44:24 PM ET] the third part is monetization starting with ads [4:44:26 PM ET] value across the entire funnel. [4:44:28 PM ET] In Q3, living room accounted [4:44:28 PM ET] our focus remains on delivering value across the entire funnel [4:44:30 PM ET] for over one-third of total [4:44:32 PM ET] YouTube ads revenues. [4:44:32 PM ET] in q3 living room accounted for over one third of total youtube ads [4:44:34 PM ET] Small and medium advertisers continue to adopt [4:44:36 PM ET] demand gen driving direct [4:44:36 PM ET] revenues small and medium advertisers continue to adopt [4:44:38 PM ET] response on [4:44:38 PM ET] main gen driving direct response [4:44:40 PM ET] YouTube, Wayfair's demand gen campaigns [4:44:42 PM ET] drove a 2.3 times higher return [4:44:42 PM ET] on youtube wayfair's demand gen campaigns drove it [4:44:44 PM ET] on ad spend compared with traditional video [4:44:46 PM ET] reach campaigns. Our [4:44:46 PM ET] two point three times higher return on ad spend compared with traditional video reach campaigns [4:44:48 PM ET] YouTube Creator Partnerships [4:44:50 PM ET] program connects brands with over three [4:44:50 PM ET] our youtube creator partnerships program [4:44:52 PM ET] million creators to drive highly [4:44:54 PM ET] effective campaigns. Brands like [4:44:54 PM ET] connects brands with over three million creators to drive highly effective campaigns [4:44:56 PM ET] Lexus continue to partner with creators [4:44:58 PM ET] like Colin and Samir, driving the [4:44:58 PM ET] brands like lexus continue to partner with creators like colin and samir [4:45:00 PM ET] eleven percent lift in brand [4:45:02 PM ET] consideration. More than [4:45:02 PM ET] driving eleven percent lift in brand consideration [4:45:04 PM ET] 1.3 million channels are [4:45:06 PM ET] enrolled in YouTube shopping [4:45:06 PM ET] more than one point three million channels are enrolled in youtube shopping [4:45:08 PM ET] globally. Building on this momentum, we [4:45:10 PM ET] recently announced that Amazon is joining YouTube [4:45:12 PM ET] Shopping. U.S. creators can now [4:45:12 PM ET] building on this momentum we recently announced that amazon is joining youtube shopping [4:45:14 PM ET] tag Amazon products directly in their [4:45:16 PM ET] videos, shorts, and live streams, [4:45:16 PM ET] us creators can now tag amazon products directly in their videos [4:45:18 PM ET] driving direct conversions. [4:45:20 PM ET] Importantly, [4:45:20 PM ET] shorts and live streams driving direct conversions [4:45:22 PM ET] our subscription ecosystem continues [4:45:24 PM ET] to complement our advertising [4:45:24 PM ET] importantly our subscription ecosystem continues to complement our advertising [4:45:26 PM ET] business. Subscriptions continue to grow [4:45:28 PM ET] faster than ads, led by YouTube Music [4:45:30 PM ET] Premium. YouTube Premium [4:45:30 PM ET] business subscriptions continue to grow faster than ads [4:45:32 PM ET] has more than 150 million [4:45:32 PM ET] led by youtube music premium youtube premium [4:45:34 PM ET] subscribers with Premium and Premium [4:45:36 PM ET] Light, viewers have [4:45:36 PM ET] has more than a hundred fifty million subscribers with premium and premium lite [4:45:38 PM ET] choice. As more people opt into premium [4:45:40 PM ET] experiences, it's a win for [4:45:40 PM ET] viewers have choice as more people opt into premium experiences [4:45:42 PM ET] viewers, creators and our [4:45:44 PM ET] business. Subscriptions help fund the [4:45:44 PM ET] it's a win for viewers creators and our business [4:45:46 PM ET] creator ecosystem and drive the [4:45:48 PM ET] platform forward. [4:45:48 PM ET] subscriptions help fund the creator ecosystem and drive the platform forward [4:45:50 PM ET] Finally, strategic [4:45:52 PM ET] partnerships. Businesses are choosing Google [4:45:54 PM ET] because we bring together cloud, [4:45:54 PM ET] finally strategic partnerships businesses are choosing google [4:45:56 PM ET] AI, ads, and consumer platforms [4:45:58 PM ET] to accelerate their transformation. [4:45:58 PM ET] because we bring together cloud ai ads and consumer platforms [4:46:00 PM ET] We expanded our partnership with American [4:46:02 PM ET] Express to support the ongoing [4:46:02 PM ET] to accelerate their transformation we expanded our partnership with american express to support [4:46:04 PM ET] modernization of their contact centers [4:46:06 PM ET] and collaborate on agent [4:46:06 PM ET] the ongoing modernization of their contact centers and collaborate [4:46:08 PM ET] e-commerce across search and wallet. [4:46:10 PM ET] And Unity signed an expanded [4:46:10 PM ET] on agentic commerce across search and wallet [4:46:12 PM ET] multi-year cloud deal to use our full [4:46:14 PM ET] AI stack to power the next generation [4:46:14 PM ET] and unity signed an expanded multiyear cloud deal to use our full ai stack to [4:46:16 PM ET] game engine. Our [4:46:18 PM ET] commercial priorities are clear. Expanding advertising. [4:46:18 PM ET] power the next generation game engine our commercial priorities are clear [4:46:20 PM ET] RI, systematically [4:46:22 PM ET] advancing our AI monetization [4:46:22 PM ET] expanding advertiser roi systematically advancing our ai [4:46:24 PM ET] efficiency and scaling our ecosystem [4:46:26 PM ET] partnerships to support the next era of [4:46:26 PM ET] monetization efficiency and scaling our ecosystem partnerships to support the next area of [4:46:28 PM ET] discovery. In closing, I want to [4:46:30 PM ET] thank Googlers Everywhere for the [4:46:32 PM ET] incredible execution and our customers [4:46:32 PM ET] discovery in closing i want to thank googlers everywhere for the [4:46:34 PM ET] and partners for their continued [4:46:36 PM ET] trust. Thomas, over to [4:46:36 PM ET] incredible execution and our customers and partners for their continued trust [4:46:38 PM ET] you. [4:46:38 PM ET] thomas over to you [4:46:40 PM ET] Our strong momentum is driven by our [4:46:42 PM ET] integrated AI [4:46:42 PM ET] our strong momentum is driven by our integrated ai [4:46:44 PM ET] portfolio of chips, [4:46:46 PM ET] models, data. [4:46:46 PM ET] portfolio of chips models [4:46:48 PM ET] security, and agent [4:46:50 PM ET] platforms, all designed [4:46:50 PM ET] data security and agent platforms [4:46:52 PM ET] to work together. We [4:46:52 PM ET] all designed to work together [4:46:54 PM ET] have strong [4:46:56 PM ET] diversification across our product [4:46:56 PM ET] we have strong diversification across our product lines [4:46:58 PM ET] lines, industries and [4:47:00 PM ET] customers. Google Cloud [4:47:00 PM ET] industries and customers [4:47:02 PM ET] now has eighteen product [4:47:04 PM ET] lines with more than one [4:47:04 PM ET] google cloud now has eighteen product lines [4:47:06 PM ET] billion dollars each in [4:47:08 PM ET] annual revenue and our [4:47:08 PM ET] with more than one billion dollars each in annual revenue [4:47:10 PM ET] growth this quarter was driven by [4:47:12 PM ET] strong growth in Google [4:47:12 PM ET] and our growth this quarter was driven by strong growth [4:47:14 PM ET] Cloud Platform with [4:47:16 PM ET] strength in both AI and core [4:47:16 PM ET] in google cloud platform with strength in both ai and [4:47:18 PM ET] GCP. TPU [4:47:18 PM ET] core gcp [4:47:20 PM ET] system sales were also a [4:47:22 PM ET] meaningful contributor. Over [4:47:22 PM ET] tpu system sales were also a meaningful contributor [4:47:24 PM ET] the past 12 months, more than [4:47:26 PM ET] two thousand six hundred [4:47:26 PM ET] over the past twelve months more than two thousand six hundred customers [4:47:28 PM ET] customers have used at least [4:47:30 PM ET] 100 billion [4:47:32 PM ET] tokens and nearly seventy [4:47:32 PM ET] have used at least one hundred billion tokens [4:47:34 PM ET] at least ten trillion [4:47:36 PM ET] tokens on Gemini [4:47:36 PM ET] and nearly seventy five at least ten trillion tokens [4:47:38 PM ET] Enterprise. [4:47:38 PM ET] on gemini enterprise [4:47:40 PM ET] Nearly 90% of the Fortune [4:47:42 PM ET] 100 use Gemini [4:47:42 PM ET] nearly ninety percent of the fortune one hundred [4:47:44 PM ET] Enterprise, and [4:47:46 PM ET] customers who use Gemini [4:47:46 PM ET] use gemini enterprise and customers [4:47:48 PM ET] Enterprise in Q3 twenty twenty [4:47:50 PM ET] more than [4:47:50 PM ET] who use gemini enterprise in q3 twenty twenty five [4:47:52 PM ET] quadruple their spend with us year [4:47:54 PM ET] over year. One of the [4:47:54 PM ET] more than quadrupled their spend with us year over year [4:47:56 PM ET] important ways in which [4:47:58 PM ET] customers are using [4:47:58 PM ET] one of the important ways in which customers are using gemini [4:48:00 PM ET] Gemini is for knowledge work. [4:48:02 PM ET] Across all our AI [4:48:04 PM ET] services, we have [4:48:04 PM ET] is for knowledge work across [4:48:06 PM ET] sold more than one hundred [4:48:06 PM ET] all our ai services we have sold more than [4:48:08 PM ET] million seats for knowledge [4:48:10 PM ET] work. Gemini [4:48:10 PM ET] one hundred million seats for knowledge work [4:48:12 PM ET] Enterprise now [4:48:14 PM ET] includes the Gemini agent. That [4:48:14 PM ET] gemini enterprise now includes [4:48:16 PM ET] is deeply integrated across [4:48:18 PM ET] our entire cloud [4:48:18 PM ET] the gemini agent that is deeply integrated [4:48:18 PM ET] across our entire cloud portfolio [4:48:20 PM ET] portfolio. It can [4:48:22 PM ET] research and answer questions. [4:48:24 PM ET] write and run [4:48:24 PM ET] it can research and answer questions [4:48:26 PM ET] code, and automate process [4:48:28 PM ET] flows with one [4:48:28 PM ET] write and run code and automate process flows [4:48:30 PM ET] agent, one API, and a [4:48:32 PM ET] single prompt window. It [4:48:32 PM ET] with one agent one api and a single prompt window [4:48:34 PM ET] gives companies strong [4:48:36 PM ET] security and cost [4:48:36 PM ET] it gives companies strong security and cost controls [4:48:38 PM ET] controls, and the widest choice [4:48:40 PM ET] of frontier models. [4:48:40 PM ET] and the widest choice of frontier models [4:48:42 PM ET] Customers include BNP [4:48:44 PM ET] Pariba, who is deploying Gemini [4:48:46 PM ET] Enterprise to more than [4:48:46 PM ET] customers include bnp paribas [4:48:48 PM ET] 65,000 employees to [4:48:48 PM ET] who is deploying gemini enterprise to more than [4:48:50 PM ET] streamline workflows [4:48:52 PM ET] while maintaining strict [4:48:52 PM ET] sixty five thousand employees to streamline workflows [4:48:54 PM ET] enterprise-grade security and data [4:48:56 PM ET] governance, Tata [4:48:56 PM ET] while maintaining strict enterprise grade security and data governance [4:48:58 PM ET] Steel, who deployed more than three [4:49:00 PM ET] hundred specialized AI [4:49:00 PM ET] tata steel who deployed more than [4:49:02 PM ET] agents in just nine [4:49:04 PM ET] months to enhance [4:49:04 PM ET] three hundred specialized ai agents in just nine months [4:49:06 PM ET] manufacturing safety, [4:49:08 PM ET] optimize supply chains, and cut [4:49:08 PM ET] to enhance manufacturing safety optimize supply chains [4:49:10 PM ET] service times for customers by [4:49:12 PM ET] 50%. [4:49:12 PM ET] and cut service times for customers by fifty percent [4:49:14 PM ET] Alta Beauty, who built [4:49:14 PM ET] ulta beauty [4:49:16 PM ET] the Alta AI [4:49:18 PM ET] shopping assistant, [4:49:18 PM ET] who built the ulta ai shopping assistant [4:49:20 PM ET] resulting in a 3x [4:49:22 PM ET] higher conversion rate than [4:49:24 PM ET] traditional browsing on their site. [4:49:24 PM ET] resulting in a 3x higher conversion rate [4:49:24 PM ET] than traditional browsing on their site [4:49:26 PM ET] Gemini is also [4:49:28 PM ET] driving acceleration for our [4:49:30 PM ET] database, analytics, and [4:49:30 PM ET] gemini is also driving acceleration [4:49:32 PM ET] cybersecurity products. [4:49:34 PM ET] Gemini can now help [4:49:34 PM ET] for our database analytics and cybersecurity products [4:49:36 PM ET] users find, [4:49:38 PM ET] analyze, and visualize [4:49:38 PM ET] gemini can now help users [4:49:40 PM ET] information from structured and unstructured [4:49:40 PM ET] find analyze and visualize information from [4:49:42 PM ET] data. Gemini [4:49:44 PM ET] uses our knowledge catalog [4:49:44 PM ET] structured and unstructured data gemini uses our knowledge catalog [4:49:46 PM ET] to find the right sources and [4:49:48 PM ET] definitions of [4:49:50 PM ET] information, improving [4:49:50 PM ET] to find the right sources and definitions of information [4:49:52 PM ET] accuracy, lowering token cost, [4:49:54 PM ET] and making responses more [4:49:54 PM ET] improving accuracy lowering token cost [4:49:56 PM ET] reliable. Gemini uses [4:49:58 PM ET] our lake house to [4:49:58 PM ET] and making responses more reliable [4:50:00 PM ET] access information from multiple [4:50:00 PM ET] gemini uses our lakehouse to access [4:50:02 PM ET] systems with zero [4:50:04 PM ET] copy. To respond [4:50:04 PM ET] information from multiple systems with zero copy [4:50:06 PM ET] to agentic analysis, [4:50:08 PM ET] BigQuery improved query [4:50:08 PM ET] to respond to agentic analysis [4:50:10 PM ET] speed over forty [4:50:12 PM ET] year over year while [4:50:12 PM ET] bigquery improved query speed [4:50:14 PM ET] reducing query processing [4:50:14 PM ET] over forty percent year over year while reducing [4:50:16 PM ET] cost by over fifty [4:50:18 PM ET] year over year. [4:50:18 PM ET] query processing cost by over fifty percent year over year [4:50:20 PM ET] Customers include Deutsche [4:50:22 PM ET] Telekom, which uses [4:50:22 PM ET] customers include deutsche telekom [4:50:24 PM ET] BigQuery, cloud storage, and knowledge [4:50:26 PM ET] catalog to build a [4:50:26 PM ET] which uses bigquery cloud storage and knowledge catalog [4:50:28 PM ET] unified data lake house [4:50:30 PM ET] across 40 plus legacy [4:50:30 PM ET] to build a unified data lakehouse across [4:50:32 PM ET] on-premise systems. [4:50:32 PM ET] forty plus legacy on premise systems [4:50:34 PM ET] Etsy, which [4:50:34 PM ET] etsy [4:50:36 PM ET] migrated three petabytes of [4:50:38 PM ET] data to Unified [4:50:38 PM ET] which migrated three petabytes of data to unified lakehouse [4:50:40 PM ET] Lake House. By using BigQuery and [4:50:42 PM ET] Iceberg, they now [4:50:44 PM ET] perform critical data joins up to [4:50:44 PM ET] by using bigquery and iceberg they now [4:50:46 PM ET] 60% faster. [4:50:46 PM ET] perform critical data joins up to sixty percent faster [4:50:48 PM ET] The growing risk of cybersecurity [4:50:50 PM ET] threats is also [4:50:52 PM ET] driving strong demand for [4:50:52 PM ET] the growing risk of cybersecurity threats [4:50:54 PM ET] our AI-powered security [4:50:54 PM ET] is also driving strong demand for our ai powered [4:50:56 PM ET] platform. Our [4:50:56 PM ET] security platform [4:50:58 PM ET] Gemini flash cyber [4:51:00 PM ET] models are frontier models that [4:51:00 PM ET] our gemini flash cyber models [4:51:02 PM ET] automate vulnerability [4:51:04 PM ET] discovery across twenty programming [4:51:04 PM ET] are frontier models that automate [4:51:06 PM ET] languages and [4:51:06 PM ET] vulnerability discovery across twenty programming languages [4:51:08 PM ET] patch 2.6 times more [4:51:10 PM ET] reliably than other [4:51:10 PM ET] and patch two point six times more reliably [4:51:12 PM ET] models. And there's even better [4:51:14 PM ET] performance to come as [4:51:14 PM ET] than other models and there's even better performance to come [4:51:16 PM ET] we roll out Argon. [4:51:16 PM ET] as we roll out argonne [4:51:18 PM ET] and carbon. [4:51:18 PM ET] and carbon [4:51:20 PM ET] Our security platform [4:51:22 PM ET] integrates threat [4:51:24 PM ET] intelligence, cyber response [4:51:24 PM ET] our security platform integrates [4:51:24 PM ET] threat intelligence [4:51:26 PM ET] prioritization, automated [4:51:26 PM ET] cyber response prioritization [4:51:28 PM ET] scanning, code remediation [4:51:28 PM ET] automated scanning [4:51:30 PM ET] and monitoring. [4:51:32 PM ET] Gemini and Google Threat [4:51:32 PM ET] code remediation and monitoring gemini in google threat intelligence [4:51:34 PM ET] Intelligence autonomously [4:51:36 PM ET] analyzes millions of external [4:51:38 PM ET] events every day with ninety-eight [4:51:38 PM ET] autonomously analyzes millions of [4:51:40 PM ET] accuracy. [4:51:40 PM ET] external events every day with ninety eight percent accuracy [4:51:42 PM ET] And more than 95% of [4:51:44 PM ET] WISC customers are [4:51:46 PM ET] adopting AI-powered [4:51:46 PM ET] and more than ninety five percent of wiz customers [4:51:48 PM ET] features, and growth [4:51:50 PM ET] continues. These security [4:51:50 PM ET] are adopting ai powered features [4:51:52 PM ET] tools protect critical [4:51:52 PM ET] and growth continues these security tools protect critical [4:51:54 PM ET] infrastructure, including financial [4:51:56 PM ET] institutions like Van Norte [4:51:58 PM ET] and Jack Hendry and [4:51:58 PM ET] infrastructure including financial institutions like van norte [4:52:00 PM ET] telecommunication providers such as [4:52:02 PM ET] ATT. [4:52:02 PM ET] and jack henry and telecommunication providers such as at and t [4:52:04 PM ET] All of this is [4:52:06 PM ET] powered by leading AI [4:52:06 PM ET] all of this is powered [4:52:08 PM ET] infrastructure, spanning our TPU [4:52:10 PM ET] systems, Axion [4:52:10 PM ET] by our leading ai infrastructure spanning our tpu systems [4:52:12 PM ET] CPUs, the latest [4:52:14 PM ET] NIDA GPUs, and [4:52:14 PM ET] axione cpus the latest nvidia gpus [4:52:16 PM ET] our agent compute [4:52:18 PM ET] engine, which is specifically designed [4:52:20 PM ET] for AI agents. [4:52:20 PM ET] and our agent compute engine which is specifically designed [4:52:20 PM ET] for ai agents [4:52:22 PM ET] TPU systems are [4:52:24 PM ET] specialized systems built [4:52:26 PM ET] for AI, combining [4:52:26 PM ET] tpu systems are specialized systems [4:52:28 PM ET] hardware, compute storage, [4:52:28 PM ET] built for ai combining hardware [4:52:30 PM ET] and networking with [4:52:32 PM ET] systems components and [4:52:32 PM ET] compute storage and networking with systems components [4:52:34 PM ET] optimized software for training and [4:52:36 PM ET] inference. TPU [4:52:36 PM ET] and optimized software for training and inference [4:52:38 PM ET] 8T and [4:52:40 PM ET] 8I offer up to [4:52:40 PM ET] tpu 8t and 8i [4:52:42 PM ET] 2.7 times better trading [4:52:44 PM ET] performance and [4:52:44 PM ET] offer up to two point seven times better trading performance [4:52:46 PM ET] 80% better inference price [4:52:48 PM ET] performance, [4:52:48 PM ET] and eighty percent better inference price performance [4:52:50 PM ET] respectively, versus our previous generation [4:52:52 PM ET] of TPUs. To make [4:52:52 PM ET] respectively versus our previous generation of tpus [4:52:54 PM ET] it easy for developers to [4:52:56 PM ET] port workloads to [4:52:56 PM ET] to make it easy for developers to port workloads to tpus [4:52:58 PM ET] TPUs. We recently [4:53:00 PM ET] worked closely with Meta [4:53:02 PM ET] to deliver Torch [4:53:02 PM ET] we recently worked closely with meta [4:53:02 PM ET] to deliver torch tpu [4:53:04 PM ET] TPU, which allows users to [4:53:06 PM ET] train, serve, and [4:53:08 PM ET] deploy PyTorch models on [4:53:08 PM ET] which allows users to train serve [4:53:10 PM ET] TPUs using the [4:53:10 PM ET] and deploy pytorch models on tpus [4:53:12 PM ET] tools they're already familiar [4:53:14 PM ET] with and rely on. [4:53:14 PM ET] using the tools they're already familiar with and rely on [4:53:16 PM ET] Nearly a hundred [4:53:18 PM ET] customers use TPUs [4:53:18 PM ET] nearly one hundred customers use tpus today [4:53:20 PM ET] today, and we're seeing strong [4:53:22 PM ET] and growing demand from many [4:53:24 PM ET] others. In addition to our [4:53:24 PM ET] and we're seeing strong and growing demand from many others [4:53:26 PM ET] work with Anthropic, [4:53:28 PM ET] both directly and [4:53:28 PM ET] in addition to our work with anthropic both directly [4:53:30 PM ET] via Broadcom and [4:53:30 PM ET] and via broadcom [4:53:32 PM ET] public reference customers like [4:53:34 PM ET] Apple, who are scaling [4:53:34 PM ET] and public reference customers like apple [4:53:36 PM ET] pre-training of their foundation [4:53:38 PM ET] models on the latest generation of [4:53:38 PM ET] who are scaling pre training of their foundation models [4:53:40 PM ET] TPUs. We're [4:53:42 PM ET] also working with new [4:53:42 PM ET] on the latest generation of tpus [4:53:44 PM ET] frontier model companies, [4:53:46 PM ET] including Mirandal [4:53:46 PM ET] we're also working with new frontier model companies [4:53:48 PM ET] and Physical Intelligence, [4:53:48 PM ET] including mirandel and physical intelligence [4:53:50 PM ET] capital markets firms [4:53:52 PM ET] including Citadel Securities and Jump [4:53:54 PM ET] Trading, [4:53:54 PM ET] capital markets firms including citadel securities and jump trading [4:53:56 PM ET] universities like Caltech [4:53:58 PM ET] and public sector service [4:53:58 PM ET] universities like caltech [4:54:00 PM ET] providers including [4:54:02 PM ET] Cassava and Cirascale. [4:54:02 PM ET] and public sector service providers [4:54:02 PM ET] including kosovo and cirrascale [4:54:04 PM ET] Given continued [4:54:06 PM ET] strong and exhilarating [4:54:08 PM ET] demand, we've recently entered [4:54:08 PM ET] given continued strong and accelerating demand [4:54:10 PM ET] into partnerships to [4:54:12 PM ET] deliver TPU systems [4:54:12 PM ET] we've recently entered into partnerships [4:54:14 PM ET] with both Crux AI and [4:54:16 PM ET] Oracle, with more in the [4:54:16 PM ET] to deliver tpu systems with both crux ai [4:54:16 PM ET] and oracle [4:54:16 PM ET] with more in the works [4:54:18 PM ET] works. Over to you, [4:54:20 PM ET] Anat. Thank [4:54:20 PM ET] over to you anat [4:54:22 PM ET] you, Thomas. My comments will focus [4:54:24 PM ET] on year-over-year comparisons for the third [4:54:24 PM ET] thank you thomas my comments will focus [4:54:26 PM ET] quarter unless I state [4:54:28 PM ET] otherwise. I will start with the results at [4:54:28 PM ET] on year over year comparisons for the third quarter unless i state otherwise [4:54:30 PM ET] the alphabet level and will then [4:54:32 PM ET] cover our segment results. I'll end with [4:54:32 PM ET] i will start with the results at the alphabet level and will then cover our segment results [4:54:34 PM ET] some commentary on our outlook for the [4:54:36 PM ET] fourth quarter and full year [4:54:38 PM ET] 2026. We had a [4:54:38 PM ET] i'll end with some commentary in our outlook for the fourth quarter [4:54:38 PM ET] and full year twenty twenty six [4:54:40 PM ET] strong third quarter [4:54:40 PM ET] we had a strong third quarter [4:54:42 PM ET] delivering our thirteenth consecutive [4:54:44 PM ET] quarter of double-digit revenue [4:54:46 PM ET] growth. Consolidated revenues were [4:54:46 PM ET] delivering our thirteenth consecutive quarter of double digit revenue growth [4:54:48 PM ET] $127.6 [4:54:50 PM ET] billion dollars, up twenty five [4:54:50 PM ET] consolidated revenues were one hundred and twenty seven point six billion dollars [4:54:52 PM ET] in both reported and constant [4:54:54 PM ET] currency. Total costs [4:54:54 PM ET] up twenty five percent in both reported and constant currency [4:54:56 PM ET] of revenue was $51.4 [4:54:58 PM ET] billion, up [4:54:58 PM ET] total cost of revenue was fifty one point four billion dollars [4:55:00 PM ET] 24%. TAC was [4:55:02 PM ET] $16.4 billion [4:55:02 PM ET] up twenty four percent tac was sixteen point four billion dollars [4:55:04 PM ET] up 10%. [4:55:06 PM ET] Other cost of revenues was [4:55:08 PM ET] $35.1 billion. [4:55:08 PM ET] up ten percent other cost of revenues [4:55:10 PM ET] up 32%, driven [4:55:12 PM ET] by hard work costs primarily [4:55:12 PM ET] was thirty five point one billion dollars up thirty two percent [4:55:14 PM ET] related to the sales of TPU [4:55:16 PM ET] systems, increasing [4:55:16 PM ET] driven by hardware costs primarily related [4:55:18 PM ET] appreciation, content acquisition [4:55:18 PM ET] to the sales of tpu systems increase in depreciation [4:55:20 PM ET] costs, and technical infrastructure [4:55:22 PM ET] operations costs. [4:55:22 PM ET] content acquisition costs and technical infrastructure operations costs [4:55:24 PM ET] Total operating expenses were up [4:55:26 PM ET] 20% to [4:55:28 PM ET] $35.6 billion. [4:55:28 PM ET] total operating expenses were up twenty percent [4:55:28 PM ET] to thirty five point six billion dollars [4:55:30 PM ET] RD expenses increased by [4:55:32 PM ET] 36 percent, driven by [4:55:34 PM ET] compensation, primarily for investment in [4:55:34 PM ET] r and d expenses increased by thirty six percent [4:55:36 PM ET] AI talent, as well as [4:55:36 PM ET] driven by compensation primarily for investment in ai talent [4:55:38 PM ET] depreciation. Sales and [4:55:40 PM ET] marketing expenses were up twenty-two [4:55:40 PM ET] as well as depreciation sales and marketing [4:55:42 PM ET] due to investments in [4:55:44 PM ET] Gemini and [4:55:44 PM ET] expenses were up twenty two percent due to investments in gemini and [4:55:44 PM ET] compensation [4:55:46 PM ET] compensation. And GMA expenses [4:55:48 PM ET] decreased 17%, [4:55:50 PM ET] primarily due to lapping of higher legal [4:55:50 PM ET] and g and a expenses decreased seventeen percent [4:55:52 PM ET] expenses that occurred in Q3 last [4:55:54 PM ET] year, partially offset by [4:55:54 PM ET] primarily due to lapping of higher legal expenses that [4:55:56 PM ET] current-year legal [4:55:56 PM ET] occurred in q3 last year partially offset by current year legal charges [4:55:58 PM ET] charges. Operating income increased [4:56:00 PM ET] 30% to $40.6 [4:56:02 PM ET] billion, and operating [4:56:02 PM ET] operating income increased thirty percent [4:56:04 PM ET] margin was [4:56:04 PM ET] to forty point six billion dollars and operating margin [4:56:06 PM ET] 31.8%. Other [4:56:06 PM ET] was thirty one point eight percent [4:56:08 PM ET] income and expenses was negative [4:56:10 PM ET] $8.2 billion due primarily [4:56:10 PM ET] other income and expenses was negative eight point two billion dollars [4:56:12 PM ET] to an unrealized loss from our investment [4:56:14 PM ET] in SpaceX, from a decline in [4:56:16 PM ET] its stock price in the third [4:56:16 PM ET] due primarily to unrealized loss from our investment in spacex [4:56:18 PM ET] quarter. Net income and earnings per [4:56:18 PM ET] from a decline in its stock price in the third quarter [4:56:20 PM ET] share decreased due to the [4:56:22 PM ET] decline in OINE. [4:56:22 PM ET] net income and earnings per share decreased due to the [4:56:22 PM ET] decline in oi and e [4:56:24 PM ET] We generated strong operating cash [4:56:26 PM ET] flow of $42.3 [4:56:26 PM ET] we generated strong operating cash flow [4:56:28 PM ET] billion in the third quarter. [4:56:30 PM ET] and $179.6 [4:56:30 PM ET] of forty two point three billion dollars in the third quarter [4:56:32 PM ET] billion for the trailing 12 [4:56:34 PM ET] months. Operating cash [4:56:34 PM ET] and one hundred and seventy nine point six billion dollars for the trailing twelve months [4:56:36 PM ET] flow was negatively impacted by the [4:56:38 PM ET] buildup of inventory for TPU [4:56:38 PM ET] operating cash flow was negatively impacted by the buildup of inventory [4:56:40 PM ET] system sales, as well as [4:56:42 PM ET] a $5.2 billion cash [4:56:44 PM ET] payment for a [4:56:44 PM ET] for tpu system sales as well as a five point two billion dollars [4:56:46 PM ET] 2018 EC fine following the conclusion [4:56:48 PM ET] of the appeal process. [4:56:48 PM ET] cash payment for a twenty eighteen ec fine [4:56:50 PM ET] CapEx was $51.4 [4:56:52 PM ET] billion in the third quarter. [4:56:52 PM ET] following the conclusion of the appeal process capex [4:56:54 PM ET] with the vast majority of the spend in [4:56:54 PM ET] was fifty one point four billion dollars in the third quarter [4:56:56 PM ET] technical infrastructure to support [4:56:58 PM ET] our investments in AI. [4:56:58 PM ET] with the vast majority of the spend in technical infrastructure [4:57:00 PM ET] Approximately [4:57:02 PM ET] 65% of our investments in technical [4:57:02 PM ET] to support our investments in ai approximately [4:57:04 PM ET] infrastructure in Q3 was [4:57:04 PM ET] sixty five percent of our investments in technical infrastructure in q3 [4:57:06 PM ET] related to servers and networking [4:57:06 PM ET] was related to servers [4:57:08 PM ET] equipment, which generally [4:57:10 PM ET] have useful lives of six [4:57:10 PM ET] and networking equipment which generally have useful lives of six years [4:57:12 PM ET] years. The remaining thirty-five [4:57:14 PM ET] was for data centers, which [4:57:16 PM ET] have useful lives of 7 to 40 [4:57:16 PM ET] the remaining thirty five percent was for data centers [4:57:18 PM ET] years. We [4:57:18 PM ET] which have useful lives of seven to forty years [4:57:20 PM ET] had negative free cash flow of [4:57:22 PM ET] $9.1 billion in the third [4:57:22 PM ET] we had negative free cash flow of nine point one billion dollars in the third [4:57:24 PM ET] quarter, driven by our investments in [4:57:24 PM ET] quarter driven by our investments in capex [4:57:26 PM ET] CapEx. Free cash flow in the third quarter [4:57:28 PM ET] was also affected by the aforementioned [4:57:30 PM ET] inventory bill to support TPU [4:57:30 PM ET] free cash flow in the third quarter was also affected by the aforementioned inventory [4:57:32 PM ET] system sales and payment of [4:57:34 PM ET] the EC fine. Free [4:57:34 PM ET] build to support tpu system sales and payment of the ec fine [4:57:36 PM ET] cash flow was $19.7 [4:57:38 PM ET] billion for the trail in 12 [4:57:40 PM ET] months. We ended the [4:57:40 PM ET] free cash flow was nineteen point seven billion dollars [4:57:40 PM ET] for the trailing twelve months [4:57:42 PM ET] quarter with $265.1 [4:57:44 PM ET] billion in cash and marketable [4:57:44 PM ET] we ended the quarter with two hundred and sixty five [4:57:46 PM ET] securities, which [4:57:48 PM ET] includes $90.4 [4:57:48 PM ET] point one billion dollars in cash and marketable securities which includes [4:57:50 PM ET] billion of marketable equity [4:57:52 PM ET] securities. Long-term debt was [4:57:52 PM ET] ninety point four billion dollars of marketable equity securities [4:57:54 PM ET] $125.1 [4:57:56 PM ET] billion. [4:57:56 PM ET] long term debt was one hundred and twenty five point one billion dollars [4:57:58 PM ET] We have also entered into multi-year [4:58:00 PM ET] agreements to secure capacity for [4:58:00 PM ET] we have also entered into multi year agreements to [4:58:02 PM ET] technical infrastructure and [4:58:04 PM ET] inventory, as well as leases and energy. [4:58:04 PM ET] secure capacity for technical infrastructure and inventory as well as leases and energy [4:58:06 PM ET] At the end of the third quarter, we [4:58:08 PM ET] had future purchase commitments [4:58:10 PM ET] of $924 [4:58:10 PM ET] at the end of the third quarter we had future purchase commitments [4:58:12 PM ET] billion and pre-commencement leases [4:58:14 PM ET] and other obligations of [4:58:14 PM ET] of nine twenty four billion dollars and pre commencement lease [4:58:16 PM ET] one hundred fifty two billion dollars. [4:58:16 PM ET] and other obligations of one hundred and fifty two billion dollars [4:58:18 PM ET] These dollar amounts reflect the [4:58:20 PM ET] maximum contractual obligations. [4:58:22 PM ET] However, a number of these agreements have variable [4:58:22 PM ET] these dollar amounts reflect the maximum contractual obligations [4:58:24 PM ET] pricing and volume [4:58:26 PM ET] flexibility, which could result in lowering [4:58:26 PM ET] however a number of these agreements have variable pricing and volume flexibility [4:58:28 PM ET] spend. And as mentioned in our press [4:58:30 PM ET] release, our board of directors declared a [4:58:30 PM ET] which could result in lower spend and as mentioned in our press release [4:58:32 PM ET] quarterly cash dividend on our common [4:58:34 PM ET] stock of twenty two cents per [4:58:34 PM ET] our board of directors declared a quarterly cash dividend on our common stock [4:58:36 PM ET] share, which is payable in [4:58:36 PM ET] of zero point two two dollars per share which is payable in december [4:58:38 PM ET] December. Turning to segment [4:58:40 PM ET] results, Google Services revenues [4:58:42 PM ET] increased 11% to [4:58:42 PM ET] turning to segment results google services revenues increased eleven percent [4:58:44 PM ET] $96.3 billion, [4:58:46 PM ET] reflecting strong growth in search [4:58:46 PM ET] to ninety six point three billion dollars reflecting strong growth [4:58:48 PM ET] and subscriptions. [4:58:50 PM ET] Total advertising revenues were up [4:58:50 PM ET] in search and subscriptions total ad [4:58:52 PM ET] eleven percent, with growth across [4:58:54 PM ET] all major verticals. [4:58:54 PM ET] advertising revenues were up eleven percent with growth across all major verticals [4:58:56 PM ET] As we stated in our outlook last [4:58:58 PM ET] quarter, FX was a slight headwind [4:59:00 PM ET] on year-over-year growth [4:59:00 PM ET] as we stated in our outlook last quarter [4:59:02 PM ET] rates and had a more significant impact [4:59:02 PM ET] fx was a slight headwind on year over year growth rates [4:59:04 PM ET] on a sequential basis. [4:59:04 PM ET] and had a more significant impact on sequential basis [4:59:06 PM ET] Google search and other advertising [4:59:08 PM ET] revenues increased by twelve percent [4:59:10 PM ET] to $63.3 [4:59:10 PM ET] google search and other advertising revenues increased by twelve percent [4:59:12 PM ET] billion, with retail driving the [4:59:14 PM ET] largest contribution, followed by [4:59:14 PM ET] to sixty three point three billion dollars with retail driving the largest [4:59:16 PM ET] finance. YouTube advertising [4:59:18 PM ET] revenues increased nine [4:59:18 PM ET] followed by finance youtube advertising revenues [4:59:20 PM ET] to $11.2 billion. [4:59:22 PM ET] with brand driving the largest [4:59:22 PM ET] increased nine percent to eleven point two billion dollars [4:59:24 PM ET] contribution and notable strength in [4:59:26 PM ET] living room. [4:59:26 PM ET] with brand driving the largest contribution and notable strength in living room [4:59:28 PM ET] Network advertising revenues of [4:59:30 PM ET] $7.5 billion were up 1%. [4:59:30 PM ET] network advertising revenues of seven point five billion dollars were up one [4:59:32 PM ET] Subscription [4:59:34 PM ET] platforms, and devices revenues increased [4:59:36 PM ET] 11% this quarter to [4:59:36 PM ET] percent subscription platforms and devices revenues increased eleven [4:59:38 PM ET] $14.3 billion. [4:59:40 PM ET] driven by strong growth in YouTube [4:59:40 PM ET] percent this quarter to fourteen point three billion dollars [4:59:42 PM ET] subscriptions, [4:59:44 PM ET] particularly in YouTube Music and [4:59:44 PM ET] driven by strong growth in youtube subscriptions [4:59:46 PM ET] premium, and strong demand for AI [4:59:46 PM ET] particularly in youtube music and premium and strong demand [4:59:48 PM ET] plans in Google One. [4:59:48 PM ET] for ai plans in google one [4:59:50 PM ET] Google Services operating income [4:59:52 PM ET] increased 17% to [4:59:52 PM ET] google services operating income increased seventeen percent [4:59:54 PM ET] $39.2 billion and operating [4:59:54 PM ET] to thirty nine point two billion dollars [4:59:56 PM ET] margin was $40.2 [4:59:58 PM ET] and operating margin was forty point seven percent [5:00:00 PM ET] The Google Cloud segment [5:00:02 PM ET] delivered record growth in the third [5:00:04 PM ET] quarter. Cloud revenues were [5:00:04 PM ET] the google cloud segment delivered record growth in the third quarter [5:00:06 PM ET] up 103% to [5:00:08 PM ET] $30.7 billion, driven by [5:00:08 PM ET] cloud revenues were up one hundred and three percent to thirty point seven billion dollars [5:00:10 PM ET] strong growth in GCP, was [5:00:12 PM ET] with strength in AI, including both [5:00:12 PM ET] driven by strong growth in gcp with strength in ai [5:00:14 PM ET] AI infrastructure and AI [5:00:16 PM ET] solutions, and core [5:00:16 PM ET] including both ai infrastructure and ai solutions [5:00:16 PM ET] and core gcp [5:00:18 PM ET] GCP. TPU system cells were [5:00:20 PM ET] also a meaningful contributor. [5:00:22 PM ET] GCP accounted for the vast majority of [5:00:22 PM ET] tpu system sales were also a meaningful contributor [5:00:24 PM ET] the revenue generated in [5:00:26 PM ET] Q3. The cloud revenue growth rate, excluding [5:00:26 PM ET] gcp accounted for the vast majority of the revenue generated in q3 [5:00:28 PM ET] the impact of TPU [5:00:30 PM ET] systems, was again incredibly [5:00:30 PM ET] the cloud revenue growth rate excluding the impact of tpu systems [5:00:30 PM ET] was again incredibly strong [5:00:32 PM ET] strong. Cloud [5:00:34 PM ET] operating income was $11.1 [5:00:36 PM ET] billion, more than tripling [5:00:36 PM ET] cloud operating income was eleven point one billion dollars [5:00:38 PM ET] year over year. Operating [5:00:38 PM ET] more than tripling year over year [5:00:40 PM ET] margin increased from [5:00:42 PM ET] 23.7% in the third quarter last [5:00:42 PM ET] operating margin increased from twenty three point seven percent in the third quarter [5:00:44 PM ET] year to [5:00:46 PM ET] 36.2 percent. The third [5:00:48 PM ET] bridging capacity, which we [5:00:48 PM ET] last year to thirty six point two percent [5:00:50 PM ET] discussed on our prior call, came [5:00:50 PM ET] the third party bridging capacity which we discussed on our prior call [5:00:52 PM ET] online only at the very end of [5:00:54 PM ET] Q3 and therefore had [5:00:56 PM ET] limited negative impact to our margin in the [5:00:56 PM ET] came online only at the very end of q3 [5:00:58 PM ET] quarter. Google [5:00:58 PM ET] and therefore had limited negative impact to our margin in the quarter [5:01:00 PM ET] Cloud's backlog was [5:01:02 PM ET] $561 billion in the third [5:01:02 PM ET] google cloud's backlog was five [5:01:04 PM ET] quarter, with the majority of the backlog related to [5:01:06 PM ET] typical GCP [5:01:06 PM ET] one billion dollars in the third quarter with the majority of the backlog [5:01:08 PM ET] contracts, we expect to recognize [5:01:10 PM ET] just over 55% of the [5:01:10 PM ET] related to typical gcp contracts [5:01:12 PM ET] total backlog as revenues over the [5:01:12 PM ET] we expect to recognize just over fifty five [5:01:14 PM ET] next 24 months. [5:01:14 PM ET] percent of the total backlog as revenues over the next twenty four months [5:01:16 PM ET] In other bets, [5:01:18 PM ET] revenues were $372 [5:01:20 PM ET] million, and the operating loss [5:01:20 PM ET] in other bets revenues were three seventy two million dollars [5:01:22 PM ET] was $2 billion as we continue to [5:01:24 PM ET] expand Waymo's business and invest [5:01:24 PM ET] and the operating loss was two billion dollars as we continue to expand waymo's business [5:01:26 PM ET] in key other bets. [5:01:28 PM ET] In alphabet level activities, [5:01:30 PM ET] the operating loss was $7.7 [5:01:30 PM ET] and invest in key other bets in alpha bet level activities [5:01:32 PM ET] billion, driven by shared [5:01:34 PM ET] AI RD expenses. [5:01:34 PM ET] the operating loss was seven point seven billion dollars driven by shared ai r and d [5:01:34 PM ET] expenses [5:01:36 PM ET] I'll now turn to [5:01:38 PM ET] our outlook for the remainder of [5:01:40 PM ET] 2026. First, in terms of [5:01:40 PM ET] i'll now turn to our outlook for the remainder of twenty twenty six [5:01:42 PM ET] revenues, at current spot [5:01:44 PM ET] rates, we would expect a slightly larger [5:01:44 PM ET] first in terms of revenues at current spot rates [5:01:46 PM ET] FX headwind to our consolidated revenues in [5:01:48 PM ET] Q4 relative to the [5:01:48 PM ET] we would expect a slightly larger fx headwinds to our consolidated revenues in q4 [5:01:50 PM ET] prior quarter. This impact [5:01:52 PM ET] will be seen primarily in search [5:01:52 PM ET] relative to the prior quarter this impact will be seen primarily in search [5:01:54 PM ET] and YouTube ads. In [5:01:56 PM ET] Google Services, we will continue to lap [5:01:58 PM ET] the search performance acceleration that [5:01:58 PM ET] and youtube ads in google services we will continue to lap the [5:02:00 PM ET] began in the third quarter last year. [5:02:00 PM ET] search performance acceleration that began in the third quarter last year [5:02:02 PM ET] which will pressure revenue growth in [5:02:04 PM ET] Q4. [5:02:06 PM ET] In Google Cloud, we expect TPU [5:02:06 PM ET] will pressure revenue growth in q4 [5:02:08 PM ET] system sales to continue to scale in [5:02:10 PM ET] Q4, followed by meaningful [5:02:10 PM ET] in google cloud we expect tpu system sales to continue to scale in q4 [5:02:12 PM ET] revenue ramp in [5:02:12 PM ET] followed by meaningful revenue ramp in twenty twenty seven [5:02:14 PM ET] 2027. With respect to cloud [5:02:16 PM ET] margins, given the supply constraint [5:02:18 PM ET] environment, we started utilizing [5:02:18 PM ET] with respect to cloud margins given the [5:02:20 PM ET] third-party compute capacity at the end of [5:02:22 PM ET] Q3 and will ramp [5:02:22 PM ET] supply constrained environment we started utilizing third party compute capacity [5:02:22 PM ET] at the end of q3 [5:02:24 PM ET] usage in Q4. We [5:02:26 PM ET] expect margin headwinds in the near [5:02:28 PM ET] term as we utilize this [5:02:28 PM ET] will ramp usage in q4 we expect margin headwinds [5:02:30 PM ET] capacity. Moving to investments, our [5:02:30 PM ET] in the near term as we utilize this capacity [5:02:32 PM ET] full year 2026 CapEx guidance [5:02:34 PM ET] range of $195 to [5:02:34 PM ET] moving to investments our full year twenty twenty six capex guidance range [5:02:34 PM ET] of one hundred and ninety five million [5:02:36 PM ET] $205 billion [5:02:36 PM ET] dollars to two zero five billion dollars [5:02:38 PM ET] remain unchanged. We [5:02:40 PM ET] continue to expect our capex to increase [5:02:42 PM ET] significantly in [5:02:42 PM ET] remain unchanged we continue to expect our capex to increase significantly in [5:02:44 PM ET] 2027, and we'll provide further details on our [5:02:46 PM ET] Q4 call. In terms [5:02:46 PM ET] twenty twenty seven and we'll provide further details on our q4 call [5:02:48 PM ET] of expenses, the significant increase in [5:02:50 PM ET] our investment in technical [5:02:52 PM ET] infrastructure will continue to weigh on the PL and [5:02:52 PM ET] terms of expenses the significant increase in our investment in technical infrastructure [5:02:54 PM ET] in the form of higher depreciation [5:02:56 PM ET] expenses and related data centers [5:02:56 PM ET] will continue to weigh on the p and l in the form of higher depreciation expenses [5:02:58 PM ET] operation costs such as [5:03:00 PM ET] energy. Before we move to [5:03:00 PM ET] and related data centers operation costs such as energy [5:03:02 PM ET] QA, let me say a few words on how [5:03:04 PM ET] we think about return on invested [5:03:04 PM ET] before we move to q and a let me say a few words on how we [5:03:06 PM ET] capital and free cash [5:03:06 PM ET] think about return on invested capital and free cash flow [5:03:08 PM ET] flow. We're in a unique position to be able [5:03:10 PM ET] to monetize our AI [5:03:12 PM ET] investments across many products that reach billions [5:03:12 PM ET] we're in a unique position to be able to monetize our ai investments [5:03:14 PM ET] of users and [5:03:16 PM ET] enterprises. Our AI investments in search [5:03:16 PM ET] across many products that reach billions of users and enterprises [5:03:18 PM ET] are driving our highest query growth [5:03:20 PM ET] in half a decade. [5:03:20 PM ET] our ai investments in search are driving our highest [5:03:22 PM ET] Google Cloud has generated tens of [5:03:24 PM ET] billions of dollars in AI revenues year to [5:03:24 PM ET] query growth in half a decade google [5:03:26 PM ET] date, and Google One is our [5:03:26 PM ET] cloud has generated tens of billions of dollars in ai revenues year to date [5:03:28 PM ET] fastest-growing subscription [5:03:30 PM ET] products driven by demand for AI [5:03:30 PM ET] and google one is our fastest growing subscription products [5:03:32 PM ET] plans. Throughout this [5:03:34 PM ET] investment cycle, we expect to generate an [5:03:34 PM ET] driven by demand for ai plans throughout this investment cycle we [5:03:36 PM ET] attractive ROIC that [5:03:38 PM ET] remains meaningfully above our cost of [5:03:38 PM ET] expect to generate an attractive roic that remains meaningfully above our cost of [5:03:40 PM ET] capital and anticipate generating [5:03:42 PM ET] strong cash flow from [5:03:42 PM ET] capital and anticipate generating strong cash flow from operations [5:03:44 PM ET] operations. Our sizable investments in [5:03:46 PM ET] technical infrastructure and [5:03:48 PM ET] inventory build of TPU systems as [5:03:48 PM ET] our sizable investments in technical infrastructure [5:03:50 PM ET] we scale that business will put [5:03:50 PM ET] and inventory build of tpu systems as we scale that business [5:03:52 PM ET] pressure on free cash [5:03:52 PM ET] will put pressure on free cash flows [5:03:54 PM ET] flows. Q3 was a strong [5:03:56 PM ET] quarter, highlighted by our [5:03:58 PM ET] innovation and disciplined [5:03:58 PM ET] q3 was a strong quarter highlighted by our innovation [5:04:00 PM ET] execution across all areas of the [5:04:02 PM ET] business, including the launch of Gemini [5:04:02 PM ET] and disciplined execution across all areas of the business [5:04:04 PM ET] 4. I want to take this [5:04:06 PM ET] opportunity to thank our employees for their [5:04:06 PM ET] including the launch of gemini four [5:04:08 PM ET] contributions to our performance. [5:04:08 PM ET] want to take this opportunity to thank our employees for their contributions to our performance [5:04:10 PM ET] We will now open the call for [5:04:10 PM ET] we will now open the call for q and a [5:04:12 PM ET] QA. [5:04:16 PM ET] Thank you. As a reminder, to ask a question, [5:04:16 PM ET] thank you [5:04:18 PM ET] you will need to press star one on your [5:04:20 PM ET] telephone. To prevent [5:04:22 PM ET] any background noise, we ask that [5:04:24 PM ET] you please mute your line once your [5:04:26 PM ET] question has been stated. [5:04:28 PM ET] And our first [5:04:30 PM ET] question comes from Doug [5:04:32 PM ET] and our first question comes from doug anmuth [5:04:34 PM ET] with jpmorgan your line is now open [5:04:40 PM ET] thanks for taking the questions one for sundar and one for philip [5:04:42 PM ET] sundar on a recent podcast you said that [5:04:48 PM ET] twenty twenty seven could be the golden age of productivity for google because of the new cloud [5:04:52 PM ET] of models and how they'll integrate with your other products [5:04:56 PM ET] i was hoping you could elaborate on that and just share more how you think about the opportunity set [5:04:56 PM ET] there ahead [5:05:02 PM ET] and then philip just on query growth the fastest in five years [5:05:04 PM ET] but obviously some deceleration in search growth [5:05:10 PM ET] you just help us understand the disconnect there [5:05:12 PM ET] is it simply that you haven't been showing as many ads [5:05:16 PM ET] basically in ai overviews and ai mode and that's [5:05:20 PM ET] now becoming a bigger percentage of the overall queries thanks [5:05:26 PM ET] thanks doug [5:05:28 PM ET] we definitely started seeing [5:05:32 PM ET] step change i would say with three point eight flash [5:05:38 PM ET] internally as our models got better at [5:05:40 PM ET] long horizon tasks agent decoding [5:05:44 PM ET] etcetera but i'm definitely [5:05:48 PM ET] seeing a huge point of inflection [5:05:52 PM ET] once we have started deploying oregon internally [5:05:54 PM ET] it is one of the most meaningful internal [5:06:00 PM ET] productivity levers we have seen on software engineering [5:06:02 PM ET] directly tracking high quality code that's getting checked in the rate at which [5:06:08 PM ET] getting checked in reducing the number of rollbacks [5:06:10 PM ET] but more importantly people are [5:06:16 PM ET] tackling massive problems [5:06:20 PM ET] as well as we are beginning to see innovation on the [5:06:24 PM ET] product and the consumer experience side from deploying those models but [5:06:28 PM ET] all this happened only about four weeks ago we are now [5:06:32 PM ET] deploying carbon internally and carbon is a meaningful step up from oregon [5:06:36 PM ET] so as we roll it out and make it all widely available to googlers with more [5:06:42 PM ET] compute i expect to that's what i was referring to and i [5:06:46 PM ET] i'm even more excited since i said that in the podcast and what i would view as [5:06:50 PM ET] a golden year ahead in terms of us being able to be more [5:06:54 PM ET] productive and so excited for the innovation ahead philip yes doug on the second part of your [5:06:58 PM ET] question look in q3 search grew twelve percent year over year to [5:07:02 PM ET] sixty three billion euros and when you look at the change in growth rate from q2 to q3 [5:07:06 PM ET] there were a few drivers here so first there was fx it was the single largest driver of [5:07:12 PM ET] search deceleration relative to q2 [5:07:14 PM ET] second there were vertical specific dynamics in [5:07:18 PM ET] retail some of our apac advertisers were impacted by the eu eliminating its [5:07:22 PM ET] de minimis exemption in media and entertainment spend [5:07:26 PM ET] normalized after an unseasonably strong q2 driven [5:07:30 PM ET] by the fifa world cup which had more matches and prefer more [5:07:34 PM ET] advertising budgets allocated in june than actually in july [5:07:38 PM ET] it's also to the next part of your question it's worth noting that the strong growth in ai mode [5:07:44 PM ET] queries had an impact because of the lower monetization we are seeing in ai mode [5:07:48 PM ET] to be clear we feel very good about our trajectory here our [5:07:52 PM ET] ad experiments have shown promising results and we're now scaling ads [5:07:56 PM ET] within both ai overuse and ai mode to more users and more queries [5:07:58 PM ET] including as i mentioned international markets and multi turnouts in the u s [5:08:02 PM ET] thank you [5:08:10 PM ET] our next question comes from the line of brian nowak with morgan [5:08:10 PM ET] stanley [5:08:14 PM ET] your line is now open thanks for taking my questions i have two maybe [5:08:18 PM ET] let me start with agenteq you rolled out [5:08:24 PM ET] spark to some of the users throughout the year [5:08:26 PM ET] i know sundar you've talked a lot about shipping more agentic products to the broader base of users [5:08:28 PM ET] can you just help us understand a little bit some of the [5:08:30 PM ET] the key hurdles [5:08:34 PM ET] have to overcome technologically to ship out [5:08:38 PM ET] agentic products to the full base of users is it model efficiency is it [5:08:42 PM ET] capacity is it the technologies that ready like what do we have to do technologically to do that [5:08:48 PM ET] and then the second one just on to doug's question on search [5:08:50 PM ET] anant can you help us better understand the search performance comparison [5:08:56 PM ET] factor that you talked about impacting search and how do we think about [5:09:00 PM ET] that as we kind of go into 4q 1q just kind of looking at the compares thanks [5:09:04 PM ET] thanks brian first of all on agents [5:09:08 PM ET] what an exciting and dynamic area i think [5:09:12 PM ET] when i look at our new models [5:09:16 PM ET] and we see the capabilities of [5:09:20 PM ET] the kind of complex tasks they can take in [5:09:22 PM ET] in an automated way and execute with very very high quality [5:09:28 PM ET] it's clear that the agentic capabilities we have all [5:09:32 PM ET] envisioned are going to be real and so [5:09:34 PM ET] i couldn't be more excited to bring the next generation agent experience [5:09:40 PM ET] to our users to your question i would say a few things [5:09:42 PM ET] i think the gemini four model series has been important we are [5:09:48 PM ET] working on distill versions of our carbon models [5:09:50 PM ET] so that we can deploy it across a billion user [5:09:54 PM ET] scale efficiently both from a compute from a latency [5:09:58 PM ET] standpoint and from a quality standpoint so that's been [5:10:02 PM ET] an important area of investment definitely making sure you need more than [5:10:08 PM ET] capable model at scale you need a robust harness [5:10:10 PM ET] you need a highly secure runtime and this is where gcp comes in [5:10:14 PM ET] being able to give each and every one of our users [5:10:18 PM ET] a secure runtime with twenty fourseven availability in the cloud [5:10:22 PM ET] the right ecosystem of skills and connectors so all of that is the foundation [5:10:28 PM ET] we've been hard at work and we decided to roll it out to enterprise [5:10:32 PM ET] first which we announced with our gemini agent for enterprise [5:10:36 PM ET] essentially because they have the highest bar for security governance and [5:10:40 PM ET] controls and it's been well received and we are in the process of [5:10:46 PM ET] expanding that later this year we will bring that [5:10:50 PM ET] same experience to consumers obviously starting with the [5:10:52 PM ET] one billion users in our gemini app we already see people in the app [5:10:58 PM ET] moving beyond chat to what our task and agent like [5:11:02 PM ET] experiences and so the trust [5:11:06 PM ET] users have in our products the fact that all their context is right there i [5:11:12 PM ET] think sets us up well but we are really focused as a company on [5:11:16 PM ET] delivering that unified experience across our products [5:11:20 PM ET] and you should expect to see a lot of progress later this [5:11:20 PM ET] year [5:11:24 PM ET] thanks and on the [5:11:28 PM ET] second question with regards to my comments i believe you're referring to the outlook [5:11:32 PM ET] with regards to search a couple of dynamics that i've mentioned one is on sequential [5:11:38 PM ET] related to impact of fx headwinds which we saw this [5:11:42 PM ET] this quarter as well versus the previous quarter so [5:11:44 PM ET] where we are today with current spot rates we expect that this will be [5:11:50 PM ET] somewhat of a headwind to q4 results and then when we look at the year over year [5:11:54 PM ET] comparisons this quarter we started lapping the acceleration we [5:11:58 PM ET] saw in search growth in twenty twenty five the back end of twenty twenty five [5:12:02 PM ET] we left about three points of growth [5:12:06 PM ET] versus q3 and then we expect to see that [5:12:10 PM ET] continue in q4 a couple of points of [5:12:12 PM ET] lapping that growth acceleration that we saw at the end of [5:12:16 PM ET] at the end of twenty twenty five [5:12:24 PM ET] our next question comes from the line of eric sheridan with goldman sachs [5:12:26 PM ET] your line is now open [5:12:30 PM ET] thanks so much for taking the question based on some of [5:12:34 PM ET] comments you've made recently sundar on compute constraints can you refresh [5:12:40 PM ET] for us your key priorities for [5:12:42 PM ET] the application of compute as it becomes available across the organization [5:12:48 PM ET] and the second part maybe either for you or thomas would be within [5:12:52 PM ET] google cloud specifically how does your view continue to evolve with [5:12:56 PM ET] respect to the application compute to cloud [5:12:58 PM ET] needs relative to external tpu thanks so much [5:13:04 PM ET] thanks eric i'll start and then thomas will [5:13:06 PM ET] answer the second half [5:13:12 PM ET] definitely compute allocation is an area where [5:13:16 PM ET] we are spending a lot of time on because of [5:13:18 PM ET] the forward planning that's needed i would start with saying we feel [5:13:24 PM ET] fortunate to have an extraordinary set of opportunities ahead of us [5:13:26 PM ET] we are operating a scale consumer business that reaches billions of people [5:13:32 PM ET] a hyperscale cloud business with a lot of momentum [5:13:34 PM ET] and of course a range of other highly important areas across google and alphabet [5:13:38 PM ET] we always take a long range planning and so [5:13:44 PM ET] each of our business areas submit long range [5:13:48 PM ET] plans with a very disciplined roic framework [5:13:50 PM ET] and so i would broadly think of all of this as a long range [5:13:54 PM ET] planning process not a short term allocation exercise [5:14:00 PM ET] obviously our ai models underlie everything we do from search and youtube to [5:14:04 PM ET] cloud to waymo and so on so it's the foundation and [5:14:08 PM ET] we view it as a highly leveraged [5:14:12 PM ET] approach the full stack approach [5:14:16 PM ET] drives a lot of efficiency as well as gives us a lot of [5:14:20 PM ET] optionality across a wide variety of opportunities [5:14:22 PM ET] so obviously that is the foundation and we plan for that for the long term too [5:14:28 PM ET] and about that as i said we really look at our businesses [5:14:32 PM ET] and really take a disciplined long range planning approach [5:14:34 PM ET] to us obviously [5:14:38 PM ET] we are seeing very very robust demand signals across a wide [5:14:42 PM ET] variety of areas and so we view it as an extraordinary [5:14:46 PM ET] set of opportunities and we are investing for that moment thomas [5:14:50 PM ET] eric on the demand in cloud [5:14:54 PM ET] we are always managing our portfolio to ensure we have a breadth of [5:15:00 PM ET] customers and we have different types of customers from digital natives [5:15:04 PM ET] ai labs traditional enterprises [5:15:08 PM ET] financial and capital markets customers so it's a broad set [5:15:12 PM ET] of customers many of them have either started with [5:15:16 PM ET] using tpu systems for example in our cloud [5:15:22 PM ET] we have over one hundred significant tpu customers [5:15:26 PM ET] who start in our cloud they learn to use tpus [5:15:30 PM ET] and remember tpu system is a combination of hardware [5:15:34 PM ET] system software compilers [5:15:38 PM ET] the whole thing assembled as a system including optical networking and other things [5:15:44 PM ET] we've taken a very deliberate approach on how we're bringing tpus to [5:15:48 PM ET] the first one is to build the right silicon so we have eight [5:15:52 PM ET] for training ai for inference they both offer [5:15:56 PM ET] substantial price performance and performance [5:16:00 PM ET] improvements relative to prior generations [5:16:02 PM ET] second we've optimized the software [5:16:06 PM ET] the optimization of the software is not just to make [5:16:08 PM ET] the systems run better and to give you great performance but also to [5:16:14 PM ET] make portability seamless recently we introduced [5:16:18 PM ET] for example pytorch which opens up a much larger market for us [5:16:20 PM ET] by optimizing pytorch on the tpu [5:16:24 PM ET] third we are broadening distribution so in the past [5:16:30 PM ET] you could use tpus in our cloud now we make for customers who want [5:16:34 PM ET] tpu systems in their data centers we're making tpu systems available [5:16:38 PM ET] in their data centers we're also broadening availability to [5:16:42 PM ET] other providers for example we announced a partnership with oracle [5:16:46 PM ET] and we've launched along with blackstone an agreement [5:16:50 PM ET] for crux ai a joint venture to offer customers [5:16:52 PM ET] tpu systems we are seeing extraordinary demand [5:16:56 PM ET] and strong growth from both [5:17:02 PM ET] ai labs capital markets financial [5:17:06 PM ET] service institutions and enterprises and if you imagine these one hundred [5:17:10 PM ET] plus customers growing to many more and also scaling their use [5:17:14 PM ET] in into tpu systems we see strong demand over the future [5:17:24 PM ET] our next question comes from ross sandler with barclays [5:17:26 PM ET] your line is now open [5:17:32 PM ET] thanks i wanted to stick with the tpu [5:17:34 PM ET] resale business topic [5:17:40 PM ET] that you just mentioned so last quarter kind of said that [5:17:44 PM ET] the revenue will be recognized on [5:17:48 PM ET] system sales i believe if a gigawatt [5:17:48 PM ET] of tpu [5:17:52 PM ET] full system costs around thirty five billion [5:17:56 PM ET] for the compute and all the kind of components around it [5:18:00 PM ET] what percent of that are we actually recognizing as revenue [5:18:04 PM ET] and what kind of flow through does that have [5:18:08 PM ET] in terms of margin profile relative to [5:18:12 PM ET] where the google cloud segment currently sits and then [5:18:16 PM ET] i guess the second part of the question would be [5:18:20 PM ET] as you help companies like anthropic bring on [5:18:22 PM ET] more of their own kind of first party infrastructure [5:18:26 PM ET] what does that mean for the capex intensity of alphabet [5:18:28 PM ET] you start to kind of hand off some of the [5:18:30 PM ET] future capex [5:18:32 PM ET] to the ai labs and may not require [5:18:34 PM ET] as much capex intensity [5:18:40 PM ET] on your own in your own data centers thoughts on that would be great thank you [5:18:44 PM ET] yeah let me combine these two questions [5:18:48 PM ET] first obviously don't provide specific financials at the product [5:18:52 PM ET] level but let me walk through how to think about the financials [5:18:58 PM ET] associated with the tpu system sales and obviously just as a reminder [5:19:02 PM ET] and thomas can elaborate on that as well a tpu system is not just [5:19:06 PM ET] a chip but it's a specialized system that combines multiple things in [5:19:10 PM ET] hardware compute storage networking [5:19:14 PM ET] so we are selling much more than just a chip [5:19:16 PM ET] software training inference there is a [5:19:22 PM ET] significant added value that's being provided to the customer that's purchasing a t [5:19:26 PM ET] system and the way this works and this is linked to your second portion of the [5:19:32 PM ET] when we sign an agreement with the [5:19:34 PM ET] customer to sell tpu systems [5:19:38 PM ET] once we sign that agreement you'll first see that showing up in our backlog [5:19:42 PM ET] and then we start building inventory [5:19:46 PM ET] think about this from a capex versus cash perspective [5:19:48 PM ET] we build the inventory ahead of getting the revenue stream in [5:19:54 PM ET] so i think i've alluded to this on the previous call [5:19:56 PM ET] you see inventory balances go up or previously [5:20:00 PM ET] inventory balances primarily were some of our hardware products [5:20:04 PM ET] now those tpu systems that are not yet sold will be showing up so you see cash [5:20:08 PM ET] going out and we're building up the inventory base [5:20:12 PM ET] and then as we start [5:20:16 PM ET] delivering and billing customers for these tpu systems [5:20:20 PM ET] then you see cash coming in so it's not the traditional kind of capex [5:20:24 PM ET] as you're thinking about this and i think that's the essence of your question [5:20:28 PM ET] but rather a different cycle of cash flow generation [5:20:32 PM ET] now given that we are in the process of building up and ramping up that business [5:20:36 PM ET] you're seeing that cash needs [5:20:40 PM ET] in our cash flow statements [5:20:44 PM ET] and you see those inventory build [5:20:46 PM ET] to date we've had some system sales recorded as revenue but [5:20:52 PM ET] expect more of it to come in through twenty twenty seven [5:21:06 PM ET] our next question comes from the line of justin post [5:21:06 PM ET] with bank of america [5:21:08 PM ET] your line is now open [5:21:14 PM ET] great thank you i have some questions on the agenic [5:21:16 PM ET] transition you did launch the universal shopping cart [5:21:20 PM ET] clearly people are liking and using agenic use cases [5:21:24 PM ET] as more of that happens how do you plan to manage the [5:21:28 PM ET] search transition to agentic use do you think that could be a headwind [5:21:32 PM ET] and second do you think agentic could actually drive more monetization [5:21:34 PM ET] for your traffic over the long term [5:21:38 PM ET] and then i'll go again at tpu margins we're wondering [5:21:42 PM ET] do you think this is a really good business for you and maybe why if you can't give [5:21:48 PM ET] us the margins you think this is a good way to use all this capacity thank you [5:21:52 PM ET] justin we're near [5:21:56 PM ET] early days of agendaq but maybe directly to the second part of your question but we view agendaq [5:22:00 PM ET] agendaq experiences as clearly additive our focus is build it [5:22:04 PM ET] trusted secure super scale experiences that users love [5:22:08 PM ET] anchored frankly on a generic commerce foundational blocks like [5:22:12 PM ET] mentioned at universal commerce the card the agents payments protocols and so on [5:22:14 PM ET] when users shop and that's important there's [5:22:22 PM ET] to enhance not just [5:22:24 PM ET] automate away the discovery experience [5:22:26 PM ET] that people frankly love in so many [5:22:26 PM ET] to enhance not just automate away the discovery experience that [5:22:28 PM ET] cases. Users like [5:22:30 PM ET] choice, they want to consider things way [5:22:30 PM ET] people frankly love in so many cases users like [5:22:32 PM ET] beyond price like brand [5:22:34 PM ET] loyalty, customer service, and so on. [5:22:34 PM ET] choice and they want to consider things way beyond price like brand loyalty loyalty [5:22:36 PM ET] we're really architecting these agentic [5:22:38 PM ET] workflows in a way that we can [5:22:38 PM ET] customer service and so on so we're really architecting these agentic workflows [5:22:40 PM ET] intentionally design the time and [5:22:42 PM ET] the space for users to explore [5:22:42 PM ET] a way that we can intentionally design the time [5:22:44 PM ET] those choices. So, simple [5:22:46 PM ET] example: an agent could [5:22:46 PM ET] and the space for users to explore those choices [5:22:48 PM ET] respond: here's the insurance product we [5:22:48 PM ET] so simple example an agent could respond here's [5:22:50 PM ET] found and here's another strong [5:22:52 PM ET] option, one of which is a higher [5:22:52 PM ET] insurance product we found and here's another strong option [5:22:54 PM ET] premium, maybe a little deductible, and they're [5:22:56 PM ET] currently offering a very special [5:22:56 PM ET] one of which is a higher premium maybe a lower deductible and they are currently offering a very [5:22:58 PM ET] discount. So, given that there's [5:23:00 PM ET] almost never only one perfect option for [5:23:00 PM ET] special discount so given that there's almost never only one [5:23:02 PM ET] a decision, we're actually confident that we [5:23:04 PM ET] can actually provide really [5:23:06 PM ET] interesting, compelling advertising models for [5:23:06 PM ET] perfect option for a decision we're actually confident that we can actually provide really interesting [5:23:08 PM ET] agenda use cases. And obviously, you can [5:23:10 PM ET] imagine going beyond those with [5:23:10 PM ET] compelling advertising models for agentic use cases and obviously you can imagine going beyond the [5:23:12 PM ET] subscriptions and other payment methods. [5:23:14 PM ET] But I'm really actually excited about the advertising. [5:23:14 PM ET] with subscriptions and other payment methods but i'm really actually [5:23:16 PM ET] opportunities in an Agentic [5:23:18 PM ET] world. Overall, I would add and [5:23:18 PM ET] about the advertising opportunities in an agentic world overall i would [5:23:20 PM ET] say: look, I would view it [5:23:20 PM ET] would add and say [5:23:22 PM ET] as a you know [5:23:24 PM ET] expansion opportunity, [5:23:24 PM ET] look i would view it as [5:23:26 PM ET] right? Anytime, just like a few [5:23:28 PM ET] years ago, being able to [5:23:28 PM ET] expansion opportunity right anytime just like a few years ago [5:23:30 PM ET] incorporate AI chat use [5:23:32 PM ET] cases in search allowed [5:23:32 PM ET] being able to incorporate ai chat use cases [5:23:34 PM ET] people to ask more and do more in [5:23:36 PM ET] search, which is what is playing [5:23:36 PM ET] in search allowed people to ask more and do more in search which is what [5:23:38 PM ET] out in our usage. [5:23:40 PM ET] I think agents would, [5:23:40 PM ET] is playing out in our usage [5:23:42 PM ET] again be an opportunity to expand [5:23:44 PM ET] the types of problems we solve for our [5:23:44 PM ET] i think agents would again be an opportunity to expand the types [5:23:46 PM ET] users. I think people always [5:23:48 PM ET] underestimate all the [5:23:48 PM ET] of problems we solve for our users i think people always underestimate [5:23:50 PM ET] components you need to deliver these agent [5:23:52 PM ET] these complex [5:23:52 PM ET] all the components you need to deliver these [5:23:54 PM ET] experiences for users. [5:23:56 PM ET] And search on the surface looks [5:23:56 PM ET] complex experiences for users and search on the surface look [5:23:58 PM ET] simple, but there's [5:24:00 PM ET] extraordinary deep. [5:24:02 PM ET] levels of [5:24:02 PM ET] simple but there's extraordinary deep [5:24:04 PM ET] investment and things we have built over [5:24:06 PM ET] time, like knowledge graph being an [5:24:06 PM ET] levels of investment and things we have built over time [5:24:08 PM ET] example, and so our understanding of the [5:24:10 PM ET] world, etc. So, I [5:24:10 PM ET] like knowledge graph being an example and so our understanding of the world etcetera [5:24:12 PM ET] think I'm excited about agents, and I [5:24:14 PM ET] would view it as a new frontier, which [5:24:14 PM ET] so i think i'm excited about agents and i would view it as a new frontier which [5:24:16 PM ET] brings in a new set [5:24:18 PM ET] of use cases to search. [5:24:20 PM ET] and so we are excited to work through. [5:24:20 PM ET] brings in a new set of use cases to search [5:24:22 PM ET] work through that. [5:24:24 PM ET] On TPU systems [5:24:24 PM ET] and so we are excited to work through that [5:24:26 PM ET] and margins, we don't break out [5:24:26 PM ET] on tpu systems and margins [5:24:28 PM ET] margins for individual [5:24:30 PM ET] products or infrastructure [5:24:30 PM ET] we don't break out margins for individual products or infrastructure [5:24:32 PM ET] components. However, we [5:24:34 PM ET] see several benefits [5:24:34 PM ET] infrastructure components however we see several benefits [5:24:36 PM ET] from designing and [5:24:36 PM ET] from designing and manufacturing [5:24:38 PM ET] manufacturing TPU systems. [5:24:40 PM ET] So, first of all, to remind you, the TPU [5:24:42 PM ET] system is not just a chip, but it's a [5:24:42 PM ET] tpu systems so first of all to remind you the tpu system is not just [5:24:44 PM ET] complete system. [5:24:46 PM ET] Given the price performance [5:24:46 PM ET] a chip but it's a complete system given the [5:24:48 PM ET] benefits of TPU systems. [5:24:50 PM ET] relative to competitors. [5:24:50 PM ET] price performance benefits of tpu systems [5:24:52 PM ET] growing demand [5:24:54 PM ET] for accelerated [5:24:54 PM ET] relative to competitors growing demand for [5:24:56 PM ET] compute and the scarcity of accelerated [5:24:58 PM ET] compute. We're very focused [5:24:58 PM ET] accelerated compute and the scarcity of accelerated compute [5:25:00 PM ET] on continuing to improve margins as we [5:25:02 PM ET] scale the business. Two [5:25:02 PM ET] we're very focused on continuing to improve margins as we scale the business [5:25:04 PM ET] additional points. First of [5:25:06 PM ET] all, when Anat mentioned [5:25:06 PM ET] two additional points first of all [5:25:08 PM ET] that we procure [5:25:10 PM ET] components to build [5:25:10 PM ET] when anat mentioned that we procure components [5:25:12 PM ET] inventory. We only do that [5:25:14 PM ET] after we have signed contracts. So all [5:25:14 PM ET] to build inventory we only do that [5:25:16 PM ET] of the inventory [5:25:18 PM ET] that for TPU systems are associated [5:25:18 PM ET] after we have signed contracts so all of the inventory [5:25:20 PM ET] with committed contracts. [5:25:22 PM ET] Additionally, by putting TPU [5:25:22 PM ET] that for tpu systems are associated with committed contracts [5:25:24 PM ET] systems in third-party [5:25:26 PM ET] facilities and in customer data [5:25:26 PM ET] additionally by putting tpu systems in [5:25:28 PM ET] centers. It allows us, one, to [5:25:28 PM ET] third party facilities and in customer data centers [5:25:30 PM ET] broaden our addressable markets. [5:25:32 PM ET] For some industries, they have [5:25:32 PM ET] it allows us one to broaden our addressable markets some [5:25:34 PM ET] data in their premise that they cannot [5:25:36 PM ET] move to a cloud, and it allows us to [5:25:36 PM ET] for some industries they have data in their premise [5:25:38 PM ET] bring accelerated compute to where [5:25:40 PM ET] the data sets. [5:25:40 PM ET] that they cannot move to a cloud and it allows us to bring accelerated compute [5:25:42 PM ET] Additionally, it also offsets the need for [5:25:44 PM ET] us to have to [5:25:44 PM ET] to where the data sets additionally it also offsets the need for us [5:25:46 PM ET] pre-build facilities to host [5:25:48 PM ET] these TPU systems. [5:25:48 PM ET] to have to pre build facilities to host [5:25:50 PM ET] these tpu systems [5:25:54 PM ET] Our [5:25:56 PM ET] next question comes from the line of [5:25:58 PM ET] Mark Schmullek with Alliance [5:25:58 PM ET] our next question comes from the line of mark [5:26:00 PM ET] Bernstein. Your line is now [5:26:02 PM ET] open. Yes, thanks [5:26:02 PM ET] schmullich with alliance bernstein your line is now open [5:26:04 PM ET] for taking the questions. [5:26:06 PM ET] I'm going to be on the same couple topics, but Philip, [5:26:06 PM ET] yes thanks for taking the questions [5:26:08 PM ET] just on Agentic, you [5:26:10 PM ET] know, if you've kind of just taken a look at some of the early [5:26:10 PM ET] i'm going be on the same couple of topics but philip just on agenteq [5:26:12 PM ET] more agentic-style use cases on [5:26:14 PM ET] Gemini AI mode and kind of observing some [5:26:14 PM ET] as you've kind of just taken a look at some of the early more agentic style [5:26:16 PM ET] of the 3P integrations with [5:26:16 PM ET] use cases on gemini ai mode and and kind of observing some of the [5:26:18 PM ET] Google properties. Anything that's [5:26:20 PM ET] surprised you or changed your view? I know we've talked a lot [5:26:20 PM ET] three p integrations with google properties anything that's [5:26:22 PM ET] about commerce, but perhaps on like consumer [5:26:24 PM ET] productivity as well. [5:26:24 PM ET] you or changed your view i know we've talked a lot about commerce but perhaps on like consumer product [5:26:26 PM ET] And then either Thomas or not, just on [5:26:28 PM ET] uncomfortable cloud growth, is there anything you [5:26:28 PM ET] productivity as well and then either thomas or not just on kind of cloud growth [5:26:30 PM ET] could share just around the rate of growth [5:26:32 PM ET] of Google Cloud excluding the TPU [5:26:32 PM ET] is there anything you could share just around the rate of growth of google cloud [5:26:34 PM ET] system sales, and just how much of that's been kind [5:26:36 PM ET] of constrained by capacity [5:26:36 PM ET] excluding the tpu system sales and just how much of that's been kind of constrained by capacity [5:26:38 PM ET] and as some of that 3P [5:26:40 PM ET] capacity comes online in Q4, is it fair [5:26:42 PM ET] to kind of assume an [5:26:42 PM ET] capacity and as some of that 3p capacity comes online in q4 is it fair to kind of [5:26:44 PM ET] acceleration of that Google Cloud business? Thank [5:26:46 PM ET] you. Look, you know, maybe I'll take [5:26:46 PM ET] assume an acceleration of that google cloud business thank you [5:26:48 PM ET] the first part on [5:26:50 PM ET] w what we are observing on these early [5:26:50 PM ET] look maybe i'll take the first part on what [5:26:52 PM ET] agentic style use cases. [5:26:54 PM ET] We are definitely seeing it. Just [5:26:54 PM ET] are observing on these early agent style use cases [5:26:56 PM ET] recently in the Gemini app, we [5:26:58 PM ET] have added a task tab and where [5:26:58 PM ET] we are definitely seeing it just recently in the gemini app [5:27:00 PM ET] people are actually typing. [5:27:02 PM ET] in agentic queries and so we can observe [5:27:02 PM ET] we have added a task tab and where people are actually typing and [5:27:04 PM ET] that. Look, [5:27:04 PM ET] agentic queries and so we can observe that look [5:27:06 PM ET] in all of this, [5:27:08 PM ET] users really want, and they want to [5:27:10 PM ET] be delighted, so they effectively [5:27:10 PM ET] in all of this users really want [5:27:12 PM ET] are, you know, looking for, they have a [5:27:14 PM ET] high bar. What in [5:27:14 PM ET] they want to be delighted so they effectively are looking for [5:27:16 PM ET] repeat use [5:27:18 PM ET] is your ability [5:27:18 PM ET] they have a high bar what in courageous repeat use is [5:27:20 PM ET] to more handle [5:27:22 PM ET] these longer tasks and [5:27:22 PM ET] your ability to more handle these [5:27:24 PM ET] actually deliver a [5:27:26 PM ET] satisfactory outcome at the end. [5:27:26 PM ET] longer tasks and actually deliver a satisfactory outcome at the end [5:27:28 PM ET] You know, just like having seen this in [5:27:30 PM ET] other areas, including coding, et [5:27:32 PM ET] cetera, when you're doing it at [5:27:32 PM ET] just like having seen this in other areas including coding etcetera [5:27:34 PM ET] 70%, it looks like it doesn't [5:27:34 PM ET] when you're doing it at seventy percent [5:27:36 PM ET] work until you cross a certain [5:27:38 PM ET] threshold and it really takes [5:27:38 PM ET] looks like it doesn't work until you cross a certain threshold [5:27:40 PM ET] off. And so [5:27:42 PM ET] we are closely. [5:27:42 PM ET] and it really takes off and so we are [5:27:44 PM ET] learning from all of it. [5:27:46 PM ET] you know, identifying gaps, [5:27:46 PM ET] closely learning from all of it [5:27:48 PM ET] laying all the foundations I talked about [5:27:50 PM ET] earlier, and I'm [5:27:50 PM ET] identifying gaps laying all the foundations i talked about earlier [5:27:52 PM ET] confident it's an area where you will see a lot of [5:27:54 PM ET] progress across our [5:27:54 PM ET] and i'm confident it's an area where you will see a lot [5:27:56 PM ET] surfaces as we go [5:27:58 PM ET] through later this year in 27. [5:27:58 PM ET] progress across our surfaces as we go through later [5:28:00 PM ET] The one thing as we [5:28:02 PM ET] transition to TPUs, one of the [5:28:02 PM ET] year in 'twenty seven the one thing as we transition to tpus [5:28:04 PM ET] comment I would make on the TPU systems [5:28:06 PM ET] is: look, in the semiconductor industry, [5:28:08 PM ET] economies of scale matter. [5:28:08 PM ET] one other comment i would make on the tpu systems is look in the semiconductor industry economies [5:28:10 PM ET] So I would look at our ability to [5:28:12 PM ET] do, you know, [5:28:12 PM ET] of scale matter so i would look at our ability to do [5:28:14 PM ET] uh TPUs [5:28:16 PM ET] both for [5:28:16 PM ET] tpus both for [5:28:18 PM ET] deploying [5:28:18 PM ET] deploying [5:28:20 PM ET] in our data centers and TPU systems and [5:28:22 PM ET] others' data centers as an [5:28:24 PM ET] ability to scale up [5:28:24 PM ET] in our data centers and tpu systems and others data centers as an [5:28:26 PM ET] the product, which directly translates [5:28:28 PM ET] into better [5:28:28 PM ET] ability to scale up the product which [5:28:30 PM ET] economics. [5:28:30 PM ET] directly translates into better economics [5:28:32 PM ET] To address the question on the [5:28:34 PM ET] rate of growth of [5:28:34 PM ET] to address the question on the rate of growth of cloud [5:28:36 PM ET] cloud, you know, a Google Cloud [5:28:38 PM ET] segment delivered record growth in the [5:28:40 PM ET] third quarter with [5:28:40 PM ET] our google cloud segment delivered record growth [5:28:40 PM ET] in the third quarter [5:28:42 PM ET] cloud revenues up one hundred and three [5:28:44 PM ET] percent to 30 point seven [5:28:44 PM ET] with cloud revenues up one hundred and three percent to thirty point seven billion [5:28:46 PM ET] billion. The strongest growth [5:28:48 PM ET] contributor was Google Cloud [5:28:50 PM ET] Platform, with strength in both [5:28:50 PM ET] the strongest growth contributor was google cloud platform with strength in both [5:28:52 PM ET] AI and core [5:28:54 PM ET] GCP. So GCP [5:28:54 PM ET] ai and core gcp [5:28:56 PM ET] accounted for the vast majority of [5:28:58 PM ET] revenue generated in Q3. [5:28:58 PM ET] so gcp accounted for the vast majority of revenue generated in [5:29:00 PM ET] and cloud revenue [5:29:02 PM ET] growth, excluding the impact of TPU [5:29:02 PM ET] q3 and cloud revenue growth [5:29:04 PM ET] system sales, was again very, very [5:29:06 PM ET] strong. Demand [5:29:06 PM ET] excluding the impact of tpu system sales was again very very strong [5:29:08 PM ET] was also strong across [5:29:10 PM ET] our product lines. So [5:29:10 PM ET] demand was also strong across our product lines [5:29:12 PM ET] we see three things going [5:29:14 PM ET] on. One, as people [5:29:14 PM ET] so we see three things going on one [5:29:16 PM ET] use Gemini, we see revenue growth from [5:29:18 PM ET] Gemini itself, but [5:29:18 PM ET] as people use gemini we see revenue growth from gemini itself [5:29:20 PM ET] we also see that as people use [5:29:22 PM ET] Gemini, it drives growth in other [5:29:24 PM ET] parts of our portfolio. [5:29:24 PM ET] but we also see that as people use gemini it drives growth in [5:29:26 PM ET] For instance, as they build agents, they [5:29:28 PM ET] use compute to perform [5:29:28 PM ET] other parts of our portfolio for instance as they build agents [5:29:30 PM ET] a task, and so they [5:29:32 PM ET] buy compute, they use [5:29:32 PM ET] they use compute to perform a task [5:29:34 PM ET] storage to store memories of [5:29:34 PM ET] and so they buy compute they use storage [5:29:36 PM ET] the agent, database [5:29:38 PM ET] to serve up what's called context for [5:29:38 PM ET] to store memories of the agent database to serve up what's [5:29:40 PM ET] the agent to reason on. [5:29:42 PM ET] And obviously, given all this [5:29:42 PM ET] called context for the agent to reason on and obviously given all this [5:29:44 PM ET] cybersecurity threats, we're seeing strong growth in [5:29:46 PM ET] our cybersecurity [5:29:48 PM ET] portfolio. So we are confident [5:29:48 PM ET] cybersecurity threats we are seeing strong growth in our cybersecurity portfolio [5:29:50 PM ET] about our growth and [5:29:52 PM ET] the diversity in our [5:29:52 PM ET] so we are confident about our growth and the [5:29:54 PM ET] growth. We're also seeing [5:29:56 PM ET] new customers buy into [5:29:56 PM ET] diversity in our growth we're also seeing new customers [5:29:58 PM ET] GCP and accelerating [5:30:00 PM ET] growth in new customer [5:30:00 PM ET] buy in to gcp and accelerating growth in new customer [5:30:02 PM ET] adoption. So we also see that as a growth vector for [5:30:04 PM ET] us, and we're [5:30:06 PM ET] are always at any point in [5:30:06 PM ET] so we also see that as a growth vector for us [5:30:08 PM ET] time, we could obviously serve a lot [5:30:08 PM ET] and we are always at any point in time [5:30:10 PM ET] more demand with capacity, but we have [5:30:12 PM ET] are managing all of these parameters and [5:30:12 PM ET] we could obviously serve a lot more demand with capacity but we are managing [5:30:14 PM ET] growth carefully. [5:30:14 PM ET] all of these parameters and growth carefully [5:30:22 PM ET] And our last question comes from [5:30:24 PM ET] Michael Nathanson with [5:30:26 PM ET] Moffitt Nathanson. Your line is [5:30:26 PM ET] and our last question comes from michael [5:30:28 PM ET] now open. [5:30:28 PM ET] with moffettnathanson your line is now open [5:30:30 PM ET] Thanks. I have two for [5:30:30 PM ET] thanks i have two for sundar [5:30:32 PM ET] Sundar. In an early answer [5:30:34 PM ET] to Eric's question [5:30:36 PM ET] about CPU and [5:30:36 PM ET] in an early answer to eric's question about [5:30:36 PM ET] tpu and cloud [5:30:38 PM ET] cloud. We heard a [5:30:40 PM ET] willingness to work with some of your [5:30:42 PM ET] competitors or companies that we may view as [5:30:42 PM ET] we heard a willingness to work with some of your [5:30:44 PM ET] competitors in models and [5:30:44 PM ET] competitors or companies that we may view as competitors [5:30:46 PM ET] cloud. So, I wonder how you think [5:30:46 PM ET] in models and cloud [5:30:46 PM ET] wonder how you think about [5:30:48 PM ET] about the philosophy here about work with people that [5:30:50 PM ET] maybe are competing with [5:30:50 PM ET] the philosophy here about work with people that maybe [5:30:52 PM ET] you and why this strategy is an [5:30:54 PM ET] opportunity, not a risk, longer term that makes [5:30:54 PM ET] competing with you and why the strategy is an opportunity not a risk [5:30:56 PM ET] sense. And then, secondly, on [5:30:56 PM ET] longer term that makes sense [5:30:58 PM ET] ejectic consumer behavior. One of [5:31:00 PM ET] the debates is around [5:31:00 PM ET] and then secondly on agentic consumer behavior one of the debates [5:31:02 PM ET] safety and trust. If you share with us [5:31:04 PM ET] what you've learned so far [5:31:04 PM ET] is around safety and trust can you share with us what you've learned so far [5:31:04 PM ET] about [5:31:06 PM ET] about safety and trust? Are those [5:31:08 PM ET] variables that matter to consumers? [5:31:10 PM ET] and how do you think if those variables [5:31:10 PM ET] safety and trust are those variables that matter to consumers [5:31:12 PM ET] matter, what are you doing to [5:31:12 PM ET] and how do you think if those variables matter [5:31:12 PM ET] what are you doing to [5:31:14 PM ET] protect consumer trust and privacy as [5:31:16 PM ET] you build out Agenti Consumer [5:31:18 PM ET] Tools. Thanks. [5:31:18 PM ET] protect consumer trust and privacy as you build out [5:31:20 PM ET] Thanks, Michael. Great questions. [5:31:20 PM ET] the consumer tools thanks thanks michael great [5:31:22 PM ET] On the first one, look, you [5:31:24 PM ET] know, a long [5:31:24 PM ET] questions on the first one look [5:31:26 PM ET] viewed uh what we built as you [5:31:28 PM ET] categories of things which we build as [5:31:28 PM ET] i've long viewed what we build as [5:31:30 PM ET] products, and then there are [5:31:32 PM ET] categories of things which we build as platforms, [5:31:32 PM ET] categories of things which we build as products and then [5:31:34 PM ET] right? And you need to have a clear [5:31:36 PM ET] view on which is which. [5:31:36 PM ET] there are categories of things which we build as platforms right and you need to have a [5:31:38 PM ET] And when you're building things as [5:31:40 PM ET] platforms you really work [5:31:40 PM ET] clear view on which is which and when you're building things as platforms [5:31:42 PM ET] hard to make the platform great and make [5:31:44 PM ET] sure it works for everyone. [5:31:44 PM ET] you really work hard to make the platform great and make sure it works [5:31:46 PM ET] we have a long history of operating many [5:31:48 PM ET] platforms, be it a browser, be it [5:31:48 PM ET] for everyone we have a long history of operating many [5:31:50 PM ET] an operating system, be it a [5:31:52 PM ET] extraordinarily successful [5:31:52 PM ET] platforms be it a browser be it operating system be it [5:31:54 PM ET] cloud platform, and in [5:31:56 PM ET] all of that, [5:31:56 PM ET] extraordinarily successful cloud platform [5:31:58 PM ET] you know, we worked hard to provide it [5:32:00 PM ET] to all players. [5:32:00 PM ET] and in all of that we worked hard to provide it to [5:32:02 PM ET] and be a great [5:32:04 PM ET] customer. You've seen us [5:32:04 PM ET] all players and be a great customer [5:32:06 PM ET] work on our models [5:32:08 PM ET] with other companies, including [5:32:08 PM ET] you've seen us work on our models with other [5:32:10 PM ET] Apple, with whom we compete in many, many [5:32:12 PM ET] areas. [5:32:12 PM ET] companies including apple with whom we compete in many many areas [5:32:14 PM ET] Similarly, we view our TPU systems as [5:32:16 PM ET] an important platform we are [5:32:16 PM ET] similarly we view our tpu systems as an [5:32:18 PM ET] building. We want to be [5:32:20 PM ET] world-class in how we build it. That [5:32:20 PM ET] important platform we are building we want to be world class [5:32:22 PM ET] means you're putting it [5:32:24 PM ET] against market forces. [5:32:24 PM ET] in how we build it that means your [5:32:26 PM ET] testing it, and competing [5:32:28 PM ET] for people who would have the [5:32:28 PM ET] putting it against market forces testing it [5:32:30 PM ET] most demanding workloads on top of [5:32:30 PM ET] and competing for people who would have the most demanding workloads on top [5:32:32 PM ET] it. And I think that's [5:32:34 PM ET] what makes sure. [5:32:36 PM ET] those teams are [5:32:36 PM ET] of it and i think that's what makes sure [5:32:38 PM ET] continuing to be at the [5:32:40 PM ET] frontier. So that's how we think about it. [5:32:40 PM ET] those teams are continuing to be at the frontier [5:32:42 PM ET] And over time, I think that [5:32:44 PM ET] always ends up in [5:32:44 PM ET] so that's how we think about it and over time i think that [5:32:46 PM ET] expanding opportunities [5:32:48 PM ET] and we've been able to do well [5:32:48 PM ET] always ends up in expanding opportunities [5:32:50 PM ET] taking that approach over a very long [5:32:52 PM ET] period of time. [5:32:52 PM ET] and we've been able to do well taking that [5:32:54 PM ET] Second, [5:32:54 PM ET] approach over a very long period of time [5:32:56 PM ET] on agentic behavior. [5:32:58 PM ET] I mean, to the earlier [5:32:58 PM ET] second on agentic behavior [5:33:00 PM ET] question, and I think I should have [5:33:00 PM ET] i mean to the earlier question and i think i should have emphasized [5:33:02 PM ET] emphasized, people really, when people are [5:33:04 PM ET] approaching these agentic [5:33:06 PM ET] experiences, we clearly [5:33:06 PM ET] people really when people are approaching these agentic experiences [5:33:08 PM ET] see people are concerned [5:33:08 PM ET] we clearly see people are concerned about [5:33:10 PM ET] about safety and [5:33:12 PM ET] trust. I mean, it is a very, [5:33:14 PM ET] very high [5:33:14 PM ET] safety and trust i mean it is a very very [5:33:16 PM ET] factor in in how they want to use [5:33:18 PM ET] these things [5:33:18 PM ET] high factor in how they want to use these things [5:33:20 PM ET] And over [5:33:20 PM ET] and over [5:33:22 PM ET] decades, the trust we have [5:33:24 PM ET] built by delivering these [5:33:26 PM ET] experiences in a safe way [5:33:26 PM ET] decades the trust we have built by delivering these experiences [5:33:28 PM ET] across many consumer products with [5:33:30 PM ET] scale in billions of [5:33:30 PM ET] in a safe way across many consumer products with scale [5:33:33 PM ET] users, as well as this putting [5:33:35 PM ET] in [5:33:35 PM ET] in billions of users as well as this product putting in [5:33:38 PM ET] end-to-end as we are building our models and [5:33:40 PM ET] agents, deploying them both with [5:33:40 PM ET] end to end as we are building our models and agents [5:33:42 PM ET] extensive testing, the kind [5:33:44 PM ET] of real-time monitoring we do as [5:33:44 PM ET] deploying them both with extensive testing [5:33:46 PM ET] we deploy these at scale. [5:33:46 PM ET] the kind of real time monitoring we do as we deploy these at scale [5:33:48 PM ET] I think all of that will end up being a huge [5:33:50 PM ET] differentiator, and we already [5:33:52 PM ET] hear about it from our users. [5:33:52 PM ET] i think all of that will end up being a huge differentiator [5:33:54 PM ET] and I think they would vote with their [5:33:54 PM ET] and we already hear about it from our users and i think they would [5:33:56 PM ET] feet as this frontier goes [5:33:58 PM ET] through. [5:33:58 PM ET] work with their feet as this frontier goes through [5:34:00 PM ET] Thank [5:34:00 PM ET] thank you [5:34:02 PM ET] you. [5:34:04 PM ET] Thank you. [5:34:04 PM ET] thank you [5:34:06 PM ET] And that concludes our question and answer [5:34:08 PM ET] session for today. I'd like to turn the [5:34:10 PM ET] conference back over to Jim [5:34:10 PM ET] and that concludes our question and answer session for today [5:34:12 PM ET] Friedman for any further [5:34:12 PM ET] i'd like to turn the conference back over to jim friedland for any further remarks [5:34:14 PM ET] remarks. Thanks, everyone, for joining us [5:34:16 PM ET] today. We look forward to speaking with you [5:34:18 PM ET] again on our fourth quarter 2026 [5:34:18 PM ET] thanks everyone for joining us today we look forward to speaking with you again [5:34:20 PM ET] call. Thank you and have a good [5:34:22 PM ET] evening. [5:34:22 PM ET] on our fourth quarter twenty twenty six call thank you and have a good evening [5:34:26 PM ET] Thank you. Everyone, this concludes today's [5:34:28 PM ET] conference call. Thank you for [5:34:28 PM ET] thank you everyone this concludes today's conference call [5:34:30 PM ET] participating. You may now [5:34:32 PM ET] disconnect. [5:34:32 PM ET] thank you for participating you may now disconnect [5:35:24 PM ET] Had some system [5:35:24 PM ET] sales use cases early days of agenda, but maybe [5:35:25 PM ET] direct way the discovery experience that so given that there's almost in search allowed people [5:35:25 PM ET] had some system sales genic [5:35:25 PM ET] to investment and things we have built over time, like GPU systems. So, we only do that after you have to pre-build [5:35:25 PM ET] use cases as days of agendic but maybe direct way the discovery [5:35:25 PM ET] our style use cases, we definitely deliver a satisfactory end of this year in 2027. [5:35:25 PM ET] experience that so given that there's almost [5:35:25 PM ET] To address the question on the rate sales was again very, very serve up what's called context for [5:35:25 PM ET] all of these parameters and growth in models and [5:35:25 PM ET] in search allow people and things we have built over time like if you use systems [5:35:25 PM ET] cloud. Thanks. [5:35:25 PM ET] so if we only do that after [5:35:25 PM ET] Thanks, Mark. You know, extraordinarily successful cloud market forces. [5:35:25 PM ET] test to the earlier question, as well as this putting [5:35:25 PM ET] have to prebuild facilities anything that's surprise style use cases [5:35:25 PM ET] in end-to-end as we are building our models and agents, deploying them both with [5:35:25 PM ET] we definitely deliver a satisfactory this year in twenty seven [5:35:25 PM ET] extensive testing, the kind of real-time monitoring we do as we do. [5:35:26 PM ET] Any further remarks? [5:35:26 PM ET] to address the question on the rave sales was again very very [5:35:26 PM ET] what's called context for the all of these parameters and growth [5:35:26 PM ET] in models and cloud thanks [5:35:26 PM ET] thanks mark extraordinarily successful cloud market forces [5:35:26 PM ET] test i mean to the earlier question and as well as this putting in [5:35:26 PM ET] end to end as we are building our models and agents [5:35:26 PM ET] deploying them both with extensive testing [5:35:27 PM ET] the kind of real time monitoring we do as we do any further remarks -- Saidwire · verified quotes, live transcript and a running story from live events · support@saidwire.com