Highlights on Google Cloud from Alphabet's Q4'22 earnings call

This is a summary of Alphabet Inc's Q4'22 earnings call, focusing on Google Cloud. Find the full transcript here.

• Google Cloud Platform (GCP) saw greater revenue growth than Google Cloud overall, driven by increased seat count and average revenue per seat for its Workspace products.

• Consumption slowed due to customers optimizing GCP costs amid macroeconomic conditions resulting in a $480 million operating loss during Q4; however, long-term market opportunity remains strong as enterprises and governments turn to Google cloud for digital transformation initiatives across verticals and geographies.

• To improve efficiency, AI is being used along with automation to increase productivity while also implementing work streams that take longer time but provide added upside over time; this will have more impact in 2024 than 2023, according to Ruth M Porat from Alphabet Inc.

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Google Cloud segment revenues were $7.3 billion in the fourth quarter, an increase of 32% from the prior year.

Google Cloud Platform (GCP) saw more significant revenue growth than Google Cloud overall, driven by increased seat count and average revenue per seat for Google Workspace products.

Consumption slowed in Q4 due to customers optimizing GCP costs amid macroeconomic conditions; this resulted in a $480 million operating loss for Google Cloud during that period.

Google Cloud remains excited about the long-term market opportunity and business trajectory as enterprises and governments turn to Google Cloud for their digital transformation initiatives across verticals and geographies.

While investing for growth, Google Cloud is focused on its path to profitability.

Google Cloud is making AI available to customers via its Cloud AI platform, including infrastructure and tools for developers and data scientists.

Workspace users benefit from features like Smart Canvas for collaboration and Smart Compose for creation.

Google also offers specific AI solutions in sectors like manufacturing, life sciences, retail, etc., and brings large language models to Gmail and Docs.

Ruth M. Porat indicated that AI is already incorporated into many of Alphabet's products, and the company is focused on optimizing the cost of computing across all elements.

Capital expenditure for 2023 will be in line with 2022, but there will be a mixed shift towards investing more in technical infrastructure and less in office facilities.

The focus to improve efficiency includes using AI and automation to increase productivity while also implementing work streams that take longer to execute but provide added upside as time progresses, resulting in more impact seen on 2024 than in 2023.