Google, Inc. (GOOG)
Q1 2010 Earnings Call
April 15, 2010 4:30 pm ET
Maria Shim – Investor Relations
Patrick Pichette - Chief Financial Officer
Jeff Huber – Senior Vice President of Engineering
Susan Wojcicki – Vice President of Product Management
Nikesh Arora - President, Global Sales Operations and Business Development
James Mitchell - Goldman Sachs
Mark Mahaney – Citigroup
Benjamin Schachter - Broadpoint Am Tech
Imran Khan – JP Morgan
Justin Post – BAS-ML
Doug Anmuth – Barclays Capital
Brian Pitz – UBS
Spencer Wang - Credit Suisse
Ross Sandler – RBC Capital Markets
Mary Meeker – Morgan Stanley
Jeetil Patel – Deutsche Bank
Jason Helfstein - Oppenheimer
Youseff Squali – Jefferies & Co.
Mark May – Needham & Co.
Jordan Rohan – Thomas Weisel Partners
Marianne Wolk – Susquehanna Financial Group
Aaron Kessler – Kaufman Bros.
Collin Gillis – BGC Partners
Scott Devitt – Morgan Stanley
Previous Statements by GOOG
» Google Inc. Q4 2009 Q&A Earnings Call Transcript
» Google Inc. Q4 2009 Earnings Call Transcript
» Google Inc. Q3 2009 Extended Q&A Call Transcript
Good afternoon everyone and welcome to today’s first quarter 2010 earnings conference call. With us are Patrick Pichette, Chief Financial Officer; Jeff Huber, Senior Vice President of Engineering; Susan Wojcicki, Vice President of Jonathan Rosenberg, Senior Vice President of Product Management; and Nikesh Arora, President Global Sales Operations and Business Development.
Also, as you know we are now distributing our earnings release exclusively through our newly revamped Investor Relations website located at investor.google.com. So going forward please refer to our IR website for our earnings releases as well as supplementary slide decks that accompany the calls. This call today is also being webcast from investor.google.com. A replay of this call will also be available on our website in a few hours.
Now let me now quickly cover the safe harbor. Some of the statements we make today may be considered forward-looking including statements regarding investments in our innovation agenda, expected performance of our business and our expected level of capital expenditures. These statements involve risks and uncertainties that could cause actual results to differ materially and reflect our opinions only as of the date of this presentation. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.
Please refer to our SEC filings, including our annual report on Form 10-K for the year ended December 31, 2009, as well as our earnings press release for a more detailed description of the risk factors that may affect our results. Copies can be obtained from the SEC or by visiting investor.google.com.
In addition, certain financial measures we use on this call, such as operating profit and operating margin, are expressed on a non-GAAP basis and have been adjusted to exclude charges relating to stock-based compensation. We have also adjusted our net cash provided by operating activities to remove capital expenditures, which we refer to as free cash flow. Our GAAP results and GAAP to non-GAAP reconciliation can be found in our earnings press release.
With that I will now turn the call over to Patrick.
Thank you Maria. Good afternoon. This is Patrick Pichette speaking. Thank you for joining us. Starting the New Year provides us with a great opportunity to tune and streamline our quarterly earnings communications. As a result, we have today for you a new format for the call. First, the two calls we had last year will be merged into a single call going forward and slightly longer for the Q&A.
Second, Eric will not be joining us going forward so I will be leading the call. In the new format Jonathan Rosenberg and I will review the quarter with prepared remarks and then Nikesh Arora, our head of Global Sales and Operations will be joining us for Q&A. Unfortunately today Jonathan couldn’t be with us. However, we have with us Jeff Huber, our Senior Vice President of Engineering for Ads and Susan Wojcicki, our Vice President for Advertising Products sitting in for Jonathan.
So here we go. Let me start by giving you some high level thoughts about our situation in Google before I go into the details of our Q1 performance. As we enter 2010 it is really clear the digital economy continues to grow rapidly and at Google our users and advertisers all continue to benefit from this profound and positive trend.
Our Q1 results are simply a reflection of these trends and this really fuels our optimism as we continue to invest in innovation for the long run. Consequently, we are continuing to invest heavily in people, products and acquisitions. So you see this already in our results for Q1. On people we have already stepped up hiring which is evident obviously with the numbers presented and we expect to continue hiring aggressively through the year. We have a strong pipeline of candidates primarily focused on engineering and ad sales and we are on-boarding them to fuel our growth agenda as fast as possible.
On product we continue really to push the envelope on two fronts. First, we are intensely focused on user experience. Our continued success really depends on delighting users with differentiated products that really inspire. Think of Google Goggles for example. Second, we are continuing to improve our ad business to show the right ad in the right format to the right person at the right time, all of this regardless of device. Susan and Jeff will really cover in the coming minutes both of these sections.
Finally, acquisitions. We have been very active so far this year and we have a strong M&A pipeline in place. It is really designed to build on our existing focus areas and to bring new talent and new technology to Google, feeding our entrepreneurial spirit. It really matters to us. So in sum, we continue to be incredibly excited by the opportunities in front of us and in consequence we should expect to see continued investment in each of these areas.
On the business front, Q1 was really a strong quarter. The healthy momentum from Q4 and the general economic recovery has simply continued, resulting in a very positive start to the New Year for us. Large advertisers have come back in force versus last year, reflecting really an improved economy and a few really key important trends. For example, it is clear now our offerings are much broader in scope. By this I mean they offer highly measurable but also integrated campaigns across search, display and mobile. As a result, our conversations with advertisers are becoming more and more strategic because of this integration. You can see this in our results and our performance.
By this I mean we perform well across every major product area including search, display, mobile and enterprise in Q1, running on all cylinders.