Alphabet 2020 Q1 Earnings Call Summary

April 29, 2020 by Stilgar

Drafted my notes on Alphabet’s 2020 Q1 Earnings Call

Brief overview of how the world has changed as a result of COVID-19 and how the organization is grateful for all the essential workers.
Small Business are concerned about business continuity, managing remote workforce, employee safety, and supply chain
Expect significant and lasting long term accelaration of transition of businesses to digital services such as online work, entertainment, education, shopping, and medicine.

Identifying how effective social distancing is via community mobile reports and and communicating it to researchers and authorities
Working with HCU to identify how many ICU beds are available, ventilator supplies, and test results.
Up-to-date answers from health authorities for queries related to COVID-19 when using Google search
Removing conspiracy content actively from Youtube
Supporting small businesses through an $800 million commitment via grants, ad credits, and small business loans.
Journalism Emergency Relief fund for local, small, and medium publishers

Saw a significant increase in usage of Android apps and specifically 30% increase in downloads of apps from Feb to Jan.
Increase in time people have spent watching Youtube
Twice the people (100 million teachers and students) are using Google Classroom
Chromebooks have seen a massive increase in demand
Schools and businesses are using Google’s Video Conference feature (What is the impact on Zoom?)
Meet has 3 million new users each day
Since January have seen a 30 fold increase in usage in Meet
Daily meeting participants are at 100 million in Meet

Advertising Business in the 1st Quarters of 2020 was strong, minus a a significant and sudden slowdown in ad revenues in March 2020
Changed focus to help our users including enabling merchants to list products for free in Google Shopping
Recovery of advertising revenue will depend on returning of economic activity to normal
Alphabet has a had a diversified business since 2008
Helping government agency (ex: New York) with unemployment application system
Supporting large enterprises like Loblaws and Way to scale as a result of increased traffic
Supporting Unity Technologies in ensuring their real-time online games work as usual
Supporting Vodafone in analyzing network traffic to ensure they can maintain their communication system and keep everyone online
6 Million paying G Suite Customers
Supporting employers to transition their business to remote workforce, such as Twitter, Schnucks, Shopify, Credem.
Increase in Youtube Subscriptions
Launch of Youtube Kids in 15 new countries
Preview of Android 11 which supports seamless 5G connectivity
Significant growth in Play
2.5 billion Monthly Active play devices
But also saw a fall in Hard device activation in quarter
Product Roadmap for the year includes Pixel Buds 2
Slowdown of hiring for 2020
Looking at pace of investments in machines and data centers and non-essential marketing and travel

2020 1st Quarter: Total Revenues: 41.2 Billion up 13% Year-on-Year, driven by Search, Youtube, and Cloud
Total Cost of Revenue was $19.0 Billion, up 19% year-on-year
Other cost of revenues on a consolidated basis was 11.5 billion primarily driven by Google-related expenses, up 26% year-on-year
$14.2 in Operating expenses with headcount growth being the largest driver
$3.2 billion in stock-based compensation
Most new hires were Product Managers and Engineers
Google Cloud saw the most increase in headcount
$8 billion in operating income, down 4%
11.9% Effective tax Rate
$6.8 billion in Net Income
$9.87 in Earnings per Diluted Share
$6 billion in Cash Capex for the quarter
$11.5 OCF (Operating Cash flow)
$5.4 billion in FCF (Free Cash Flow)

You can also watch the Youtube Video here: