Google's newly appointed CFO makes earnings call debut, stating the company's ability to implement additional cost cuts.

• As Alphabet's first CFO, Anat Ashkenazi stated that more streamlining is necessary for the company to invest in AI.
• Headcount management, facilities management, and other process efficiencies contributed to the boost in earnings at Alphabet, where Ashkenazi joined in July.
• Alphabet shares rose in extended trading after reporting better-than-expected results.

Ruth Porat, who left Wall Street for Silicon Valley in 2015, held the CFO role at Google and its parent company for nine years and received a large pay package.

Anat Ashkenazi, Porat's successor, made her earnings call debut on Tuesday and stated that one of her top priorities will be to increase "cost efficiencies" across the company, a strategy initiated by her predecessor and Alphabet CEO Sundar Pichai.

"Ruth, Sundar, and the lead team did excellent work in re-engineering the cost base, as stated by Ashkenazi, who spent 23 years at Eli Lilly. However, he believes that any organization can always strive for more and is looking for additional opportunities."

In July, almost a year after Alphabet announced Porat's new role as president and chief investment officer, Ashkenazi joined the company. Her appearance on Tuesday was prompted by Alphabet's third-quarter earnings report, which exceeded expectations due to strong revenue growth from the search and cloud units.

The stock price of Alphabet, which had already increased by 21% throughout the year, experienced an additional 5.8% rise in extended trading following the release of the report.

As AI startups such as OpenAI and Perplexity gain traction, and TikTok introduces ad targeting based on search queries, and companies like Google and Amazon continue to develop conversational AI tools, the company is striving to maintain its position as a leader in search advertising.

Google has made cuts and initiated internal shakeups to adapt to the changing competitive landscape and economy. Ashkenazi's priority is to identify "further efficiencies" to invest in new areas and maintain the company's competitive edge and margins.

In the third quarter, Alphabet reported $13 billion in capital expenditures, and Ashkenazi anticipates the same amount in the fourth quarter. The majority of the spending was on technical infrastructure, specifically servers and data center equipment that support cloud and AI products, as Ashkenazi stated during the call.

The need to scale AI products necessitates investment in cloud technology, she emphasized.

Ashkenazi and Pichai both warned that the company will be making higher capital expenditure in 2025, with Pichai emphasizing the aggressive roadmap ahead for search and cloud. Ashkenazi stated that the investments are based on customer demand and will translate to revenue in the short term.

Meanwhile, the leadership team will continue cutting costs across the company to offset some of these investments.

In the Q&A session of the call, Evercore ISI's Mark Mahaney queried, "Can you see any new or ongoing cost savings when examining the company freshly?"

In the recent period, earnings were increased due to "headcount management, facilities management, other process efficiencies," and there are further improvements to come, stated Ashkenazi.

One way Google can increase efficiency is by incorporating AI into its own processes and workflows.

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