Take-away from Amazon’s Financials & Earning Call

Amazon released their quarterly earnings today. I took a stab at trying to derive insights from the numbers. Here is what I learn:

AWS is the driver of their operating margin

AWS’ revenue and operating income grew impressively year over year

Meanwhile, North America operating income grew even more impressively year over year, making up for the International segment

Q1 2019 saw the shipping cost growth slow down and the explosion of growth in free cash flow

Across segments, YoY revenue growth decreased quite a bit, especially in the subscription and advertising. AWS makes up 13% of Amazon’s revenue

Net Income as % of Revenue Increased Sharply

Other take-aways

  • Amazon announced intention to turn a two-day shipping Prime into a one-day shipping Prime, though it admits that the endeavor will take time
  • The company said that they signed up more members for Prime in 2018 than any other year. Except the 100 million figure mentioned in the past, there was no other revelation in the earning call today
  • The company refused to comment on the acceleration or deceleration of advertising business
  • Little was mentioned about groceries. The word appears once in the press release and 4 times in the earning calls

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