Amazon.com (AMZN) 30 Jul 202020 Q2 Earnings call transcript

Thank you for standing by. Good day, everyone, and welcome to the Amazon.com Q2 2020 Financial Results Teleconference. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today’s call is being recorded.

will Relations, the David I Director over remarks, Investor of Fildes. opening be call turning to For Please go ahead.

Hello, and call. financial results welcome to our QX XXXX conference

Olsavsky, today CFO. us to your is Joining answer Brian questions our

against today’s conference release all Please results results note, the XXXX. press of our as As you as front will in listen call, encourage this and have in our you includes which comparable stated, quarter. metrics the unless comparisons period we call you, well otherwise our to financial be for on to commentary of

and Our Actual views only results July to and comments of XXXX, materially. differ responses management’s your questions XX, statements. may as reflect will forward-looking include today,

and factors impact filings. SEC, could potentially the about annual is including our our information most included on that subsequent filings press and our Form XX-K recent with results Additional release report financial in today’s

the accompanying is non-GAAP you release, During additional these and measures, our may our comparable the call, disclosures measures GAAP of will we including with with press each certain non-GAAP In IR measures. these this regarding website, webcast on measures. our SEC, financial of slides find discuss reconciliations filings posted which

the today date seen that trends what we and believe Our we’ve incorporates to guidance assumptions. order appropriate be to

significant the customer the COVID-XX and we world many our on is the our be including foreign and dependent of by economies in or pandemic, global taken detailed response including various and events, governments, businesses numerous the results scope any also in control, of employee are Our date This the individuals inherently not the as to unpredictable reflects duration spending online on including pandemic consumer guidance our spending, highly factors our of operations, and by the creditors the in on staffing to the of productivity on economic pandemic; of factors, with may effects including: cloud in impact regarding spending measures; SEC, in growth filings and sellers, that actions well conditions SEC. may discussed and as Internet, and factors and on economic activity, estimates affected our ability and recurrence; impact workforce fluctuations materially those with services able affected in third-party continue and suppliers, the exchange predict and which filings are our regional to changes and pandemic operations patterns areas; rate the commerce rates, and be and demand the to continuing and of the global safety uncertain. all

other not acquisitions, among differ and services, assumes, to don’t guidance. materially over I’ll our conclude also legal guidance call Our and any actual to Brian. things, possible settlements. or restructurings results It’s for demand our business predict now from turn that And our accurately the we could goods therefore, investments, additional

customers Thank I’d thanking quarter. medium-sized of you hundreds contributions and in working uncertain times. around for and to these Amazon’s hard delivery employees and thousands like to start our by businesses the of quarter small thousands unusual joining are all us was Amazon today. the of who another and partners serve of highly hundreds of second recognizing world

related safety, beginning and earnings significant we customers employees Strong see consumable customer safety $X and to getting demand billion and began mentioned more in and early help elevated increase expenses, of well-being March, in costs call, of up product QX, operations, logistics a the and compensation other You In these wages bonus to QX. than last on we largest employees, focus COVID-related and I demand demand in to than Thank May our through to more partners. of quarter the like throughout our demand and products The continue groceries time, and million higher portion same frontline major categories June. stepped At the our As softlines. keeping in $XXX employee our our for QX, a of hourly continued on products end early including we fulfillment increased remained employees during ensure in safe. into particularly in incurred while to hardlines the

hired We train distancing also billion over also onboard headwinds customer This well included the over demand. new our facilities. facilities. XXX as protective This our to in for experienced for XXX,XXX cleaning enhanced to for processes provide employees and in included of higher who equipment and costs productivity our employees changes to to as are investments personal $X meet social

led our revenue the significantly increased consolidated line Strong demand, by top consumer income was by and guidance exceeded Prime Our of operating top performance members. range. driven end

see continue shop to member hours engagement video. largely members Prime basket streaming the throughout quarter. by high with often larger sizes. We doubled driven Prime more Prime video year-over-year Worldwide

rates We’re reaching accelerated growth rate Existing the U.S. grocery both worldwide. more Prime customers the member offerings. Prime renewal improved, year-over-year. and our and with grocery sales Online member in tripled

XP Our of to medium-sized largely and for and businesses seen significant sales. have make selection stepped as businesses, in also more these help are customers. up their small growth small who available And sellers, comprised medium-sized a result,

fulfilled strong merchant Amazon revenue Our third-party seller stores MFN growth online faster and sales. in revenue services by in than both or with seller grew QX, fulfillment

volume, sellers. helped continue active represent in more to quarter-over-quarter by half overall growth improved units unit Third-party of than

allowed We faster a of medium-sized meet able more Amazon the capacity this quarter enhance were we were with improvements committed point few ever that up throughput. more their more and us of open We in demand sell are the also able products to heightened thousands capacity have businesses to supporting because to small across to to selection. stores. I’d to hundreds than network success of the fulfillment delivery as progressed

the year-over-year in economy. jobs of of and First, in continues and welcomed our March XXX,XXX of than regular more new whom headcount QX from grow. April, grew XX% the to as displaced We end employees were many other

process I we’re would we Amazon wages into over are proud the during positions. great than any full-time good this jobs time. that to we seen jobs and industry-leading note benefits create created these continuing demand more challenging also remain of the we’ve employees XXX,XXX has that As other and are decade with regular company, in of last high, bringing

combined We’ve of had to place. implement, to X and in on also been and currently seasonal process iterate in number new Our time we’ve employees the million. existing able is as over we output expand paths regular put our facilities learn the

can Additionally, led strong That’s to quarter in as used case reminder, but demand. this the QX retail that’s for we business. second typically into space leverage volume This what not our QX. a normally lightest operating that peak for meant flex half is the year, is

peak fulfillment second towards the second space needs move the we and capacity of in we’ll half and year. As adding significant our ramp year, up in be the transportation center further, the half of we will even

rate $XX Turning industries Customer to XX billion in rate in up varies COVID-XX crisis. remains run as of AWS. usage months. nearly the a This annualized run the strong, now billion business, a across result $XX is last growth although

Lastly, this earnings which additional as guidance. we our QX guidance, I’ll on our touch upon provided release. points few part data A of

be in in high are PP&E due at expected than safe, QX including social more incur demand levels We expect to and $X investment distancing, to billion QX to help continued better the in primarily seeing. to lower employees COVID-related we in Costs cost keep expenses testing. than are efficiency

the open that majority and this when expect you remind I’ll fulfillment our network third of the the year. quarter we new addition, is same we typically capacity, In

centers are in by including We continue investments headwind up XX% a for increase an year-over-year QX square invest and XX%. expect primarily year, footage square these CapEx This driven as footage network they meaningfully strong in in and and delivery as as meaningfully, to stations. higher year-over-year, well fulfillment in profitability prepare approximately leases peak. increased logistics XX%. center growth finance we Once and of we This they a includes $X.X growth our of In billion XXXX, footprint. alone, open, space to new we by QX buildings ramp fulfillment approximately sort

in capacity majority QX. the expect QX and to of come into online late We this

are has to The QX Lastly, host which host than time, been we we one Day customers. rather than Prime India, to is August years. prior more exception and year In in will X that on serve and to this people online plan capacity August on X. hard add summary, during unprecedented QX shopping this relying working Day are Amazon as ever in know it we Prime

grateful to With up customers. across continuously extremely stepping that, let’s for Q&A. We’re employees to needs our the Amazon to of on move meet

caller, the your line one each time, question. questions. of call comes question proceed ask yourself Instructions] to Please UBS. Your from Eric question. open up please first Sheridan We we’ll At with limit with this now the for [Operator

get and on so exit you’re into I Thanks could Maybe seeing as the just for in much trends you June the taking dive July. normalized question.

in made of to of region call. you You that mix in and right the you either versus any of talked deemphasized are offering or Prime? Where between affairs push in those the great. world, color was are be on of the would non-essentials terms as there next-day earnings in getting into Where so a much. geo we If normal initiatives to of terms last terms two-day returning non-essentials, Thank we customers? and on shipping essentials essentials of to the with company drive state by the about

for Thanks Eric. question. your Sure,

So trend. the first, on

to, the mid-April. had lot end of in remember, So into We we and decision spoke if that incoming that April eliminated warehouses, a steps and reversed limit first, we or then the you and at March products exited non-essential our QX of taken April. in

early as expected channel MFN lot up. or that we strong would sellers can drop So our to and the we as extent, even we FBA normalize that because as April sales started MFN say, MFN we between FBA toggle mix. I May, picked on to a large But see would remained FBA moved up. picked late a of into And

quarter, So to started will, little the end mix, from a high. the a levels favorable more remains still on. coming March if normal normalize towards of you but bit to MFN we had very It

March And zero of you more coming sales I’d April and much or the cost normal in the mix a part factored we of – fact at in, resumed when we groceries on On side, about We’ve zero lot our and pretty cost also was structure, early profit me, we a costs. items. talked May. the and say, in that excuse consumables and of lot got product better early what was that, a saw safety COVID-related

member They would There’s basket quarter have it’s sales grocery of still normal sizes. a as to a in What online engagement. driven high. by capacity year-over-year They’re tripled then, still what we So on larger it’s – heavy there. is – seeing mix. more the super component Prime grocery we’re added shopping and since Demand getting often. closer we call more members I say Prime

want. increased. capacity faster customers safe, our rate very day, what quarter, So the well, the the on to keep there’s high getting looking On and very Once behind priority we’ve before but more two-day on shipments. happen. level. in shifts this the a our it’s in staying still first considerably we done and get little that through second employees and focus is realize seen And our a It’s the we’ve at it’s based of mix normal, is to probably one going are that, recover one-day hard any we working

increasing So priority is we’ll second employees to is first capacity. But on safe, our work definitely again, that. continue and keeping

Yes. David. is just this And

America geographic perspective, are North trends and activity, and segment lot these you there, from comments well. can order just opening of a growing a International the see both think that I the Brian’s

trends of lot think a it particular, kind across North or about performances as U.S. be category the established our seller international a as international our and board, and regions. America of merchant kind the sellers, whether in of FBA third-party when growth, those fulfilled seeing first-party regions, more lot and in broad growth we’re So well you similar-type of trends

Please is question. from question with RBC. your next with Our proceed Mark Mahaney

Okay.

would I levels the out And So about follow-up happy in And a he secondly, of Brian, being They’re business-to-business I’m COVID building operations, and to ton also and ask the using to profit when areas. high facetious, becoming? do areas, on like at aggressively when back be one a of Eric’s historically, same really international revenue investment want and of new you’ll it quick Is surge really Is areas, two, list, how terms Jeff at – the new and becoming these like that. asked Amazon the aware super new about new super are really company these sure obviously, when I the some like is company India, just the kind Mexico are top the then in you of costs. ex there’s of is investing now, Brazil the or you what if it’s par day? of that get profitable this high seems you’ve But being I’m now. it? maybe of think the think some you investment and question. launches day out markets kind one

I five really of How So about COVID, lot. these those? years, Thanks that. just as to areas? about want you those a to you on know do spend deploy you’ve surges. into talk think how three profit Or the investment can next got but you you’ve some got the newer deploy

Thanks for Sure. Mark. questions, your

know First, we par, when we on yet. don’t get back to

stepped but better, demand We’re be getting in what and to QX. QX very and going up balancing capacity progressively we’re also is

QX run revenue quarter was, of year, And last QX historic can our to So which how is be a QX rates than is forecast was of higher and if also look than big unheard last QX higher of. now QX year. see actually you at

employees So and safe keep forward, and continue different do getting healthy. sure we’ve is the everybody mainly, like said, safe of distancing moved our and making are – and kind for priority we reasons, that trying is peak social first as to I we’re to,

I online capacity because to demand. have Second getting that lower QX, have revenue. serve the – to in priority QX, capacity mentioned, did generally use in higher do like is excess we able the And were exist we not we

we’ve more of need Now run space. QX, to as we inventory into the move out starting build and QX, for we we’re – to

Marketing, got our have that’s when in in trying because to And probably But end It challenge, are the this also but lower. somewhat late marketing that mention in we’re we’ve team hands down see costs – higher really that mainly of we’ll QX, on we’ll talk we’ve QX about profitability, normalize marketing that got QX. gone level probably – been good couple in manage X/X on to normal by to cut about as demand. interim. since working but started of – very So there full hard a the levels February back were get and therefore, and expenses a issue. at we a certainly, you

go in costs cases You in it some probably to lot halt. over to examples in lot in time. quickly. there have a expenses go don’t people been as saw play. far even as We as have the think almost doctor investments, normalize Travel companies. a drawn of that costs, or or got will medical Meeting And some don’t as we’ve a already of delayed investments

delivery grocery, capacity would that XXXX, didn’t think our investment. expanded ops that’s pulled in But greatly until don’t So this we say would make investments We of grocery later. be maybe On our probably we’re I always needed to or think us. matter investment necessarily of – schedule. for that actually ahead looking it’s new during I we’ve capacity, sense also accelerating we’ve probably and accelerated time, a

is This Dave. Yes.

some a focus, of Just opening still about such supporting we that, not lot just membership other where whether that’s U.S. stats than strength saw some other States focusing add of the of in doubling broader really that of think that another regions, call, momentum in some the sort can Prime big the but the program. to I to And regions. of We the set at we’ve more it’s or or sign. video of growth those usage of or there’s on got like of in a a and us, hours, United encouraging the was Brian for some talked the value services worldwide in just we and to the statements acceleration the add Prime is grocery the think it

focus like And so out. we’ve many got Middle building places about talked times, Australia, India of but the East. We’ve that lot a on

lot work I with as They digitization and We that sellers businesses Indian to well. and launched sellers. think by brands is some features small done – many like geographies of around the some and we’re getting work, hiring a help more more all on of just micro, with the place a lot great what’s new digitizing place there. board goals being on great support efforts some people A about a there have there focused really India of team. those medium-sized

lot of So focus there. a

Brian with comes your question next Our from Nowak proceed Stanley. Morgan with Please question.

Thanks for two. have taking my I question.

to year talk on spend behind this and about not less you The first hear the in whether have about profitable more takes now Japan? could you you give capital thought to be puts current investments Japan. curious the appreciate demand your for year may XXXX us around you shelter because where and you’re think international to the be one, see then markets, some been Europe customers out to strength, the been and man examples qualitatively Brian, going often you’re customer can Thanks. Europe were that And core of than they the that seeing? at is actually higher international second of long-term? plan. the areas the Maybe what pushed the I start going guess have more And about you’ve back I So U.S. multiyear us than just investments, or to making of investment Nice allocation some and how and areas of the one, color the or to profitability. place offerings, the plan? the I’d sort and were and of in

Sure.

– second that one. with starting think I you’ll

demand have in some going on as multiple probably time. cycle International we and accelerated great healthy mentioned, established Prime we internationally devices that was is we the in is would in and a countries the life their you U.S. believe, have very It music of calls. sign. in that’s And pickup a the been other this driven I benefits. the quarter, that than notice pushed We’ve I we’ve video by What’s profitable and to You’ll countries in heavily segment that things adoption saw, probably earlier and those seen have long

So there’s in also Australia recent is investment extent, a on are addition. Middle what new the also, of Turkey in But biggest Obviously, countries. bit to those of a many the but you lesser one, benefits India see a and investments forward countries. Brazil, East, are Prime

there. element look essentially But on source you or what an the volumes a QX, on always a Advertising if in of we had growing, at it happened that’s anticipated going expansion there’s had good So of so higher profitability. much just is was run rate. than

So UK our much fixed and things but pretty costs all capacity fulfillment that some we Obviously, leveraged a demand. strong orders probably add in in strong the more to and developing particular, fixed hilt. transportation The because and costs on was was were leveraged were had higher will centers, very, other UK. in very the way there. quarter the there’s We very economy stay-at-home the

say So sure have earlier couple trends I’m trajectory purchases little the that more that surge maybe to higher Prime a And drive that. of Prime shown. internationally, is it’s – not lot would in and sizes. And helped that, the of going could in same but were U.S. I we quarters, leverage than the next frequent apparent that that profitable, sign demand basket good a a also would for internationally the the continue higher

a and future signs, all perhaps the of glimpse good demand curve. got So the we on

people delay very hasn’t list we’ve We’ve cost investments. been slowing it’s The Your to what point for reasons. I’d The it short mostly to done second had – production. done on It’s necessarily slow is reasons, question one down. for had been to studios. is on

augmented movies. our having most by And cinema new we’re have. some where think I like Amazon run things first been studios that’s

not want people think intentionally. And that’s doing And creating in are new a so when this something but I people across it’s time, bit having of trouble we’re content entertainment, a board. the challenge,

and the we decision. it think the that’s We’re right doing film and protect crews, to actors

you the of quarter. pick can especially whole a stores As up on on grocery number that lot pulled and upside being said, food A pickup. same-store investments this I deliveries the tripled are delivery, in, of

the slowing looking new the just down at some for especially changed adapting is have we’re and entertainment short in on, So creating on It’s things things that area. things would list say. the and probably we’re whether I some environment,

Doug with from Our Please next question question. your comes JPMorgan. proceed with Anmuth

rate just behavior And over Thanks e-commerce customers. curve two. the curious for your years. on challenged new the clients impacted separately, how quarter, anything around you of IT questions. AWS whether comment that some forward? those on decision-making shifted existing possible to for thoughts the AWS, billion taking more growth the on by in run and I overall here going $XX could is it hoping And still have just slowed has exposed due the this but about can you the been environment, some highly pace first, And obviously then can you’re adoption accelerate next in Brian, Thanks. few to factors, share verticals?

Yes.

Let Doug. me second one. start Thanks, that with

we the in hard expenses, in board. like travel across really AWS much but the pretty hospitality to see revenue, segment especially are are and challenged businesses cut right more So now what the companies working

We’re them. helping

sales our makes actively, architectural includes where with This for we their can usage things best benchmarking We’re help force, or down save workloads against practices. sense ways money. the scaling them it that like looking our

but the our money. fixed their we them. out to health especially this on customers but think really a so is also realize their that’s time shape relationship of it’s as situation. scale the progress and cost will not it particular more sinking to at and or with the flexible help the down provider. for lot a thing we’re growth can are either can come seeing save infrastructure a not of they into demand, up They their AWS usage really also our turn seeing cost going in on not they short they’re cloud to depending are that’s a an So help companies in better how big on And run, them for go up of only that right that the do, for made on-premise cloud that success down. But of the scale And companies those because wishing had variable or long-term

certainly So think we more moving They’re that be plans seeing to a we going happen right this in we’re like a will video world expect in – conferencing, area gaming, direction. that And but long-term now, out usage it’s not winners see learning overnight, are entertainment. things there’s companies migration certainly there. remote accelerate. trend. good And bifurcated seeing and All We growth.

your on it’s e-commerce – to the I hard adoption, think So tell.

I We’re super encouraged our by certainly more. what are into We the members store, fact shopping up that there options buying that’s grocery to reasons delivery stores frequently now. there in that accelerated who less have has want are been thought. retail glad there, especially would and go options mean go other but be there there’s picked Prime up, limited. pick know We perhaps out that people are versus to and we always for are to more are do

versus are is what and time see curve a step-up to onetime onetime the purchases, getting to things point in – gloves things sales what have like cleaning supplies the in hopefully, but like we’ll become see. quicker and masks and to going some maybe a we’re So fullness of and

customers your was sorry, on customers. versus point existing last new And

We’re trends. seeing similar

saw, people number size growth and Prime number increased. the in – good certainly growth seeing well, the years. members, both accelerated in as of basket Prime you the Prime Prime new a as of members same pickup retention for for But and of We’ve been it’s encouraging. internationally. has We’re not in U.S. the frequency as And have members

happy a long-term that’s that And So about. sign has we that, that good ramifications. hope we’re

Our question with next proceed from Ross your Sandler Barclays. comes question. with Please

Yes.

to that comment. Just follow-up a last

like you the countries, behind, overall behind. a international bit behavior about little XX, how the selection a levels XX the have Prime little members, service are for So guys Prime talked in bit is

for the Prime terms versus pushed Any few in markets see you in guidance, XQ in meaningfully there? gap per you months the the U.S.? So pandemic what GMV western member for comment XQ. has closed then of the on day And Prime that into last international

can how Thank it’s growth decelerating go – bit. into kind So seeing mostly is XQ, Day? little strong Is a right much the deceleration you’re number Or obviously really talk you of what just the of about Prime that now but for XQ? rate from a as you. you behaviors

up those on up A trends Well, through with the in are continuing and an of ramped basis. quarter year-over-year QX. in – XX% growth Right. we into QX FX-neutral lot ended FX-neutral

range $XX revenue is billion our $XX of to billion $XX off billion see You coming quarter.

I say would – QX. growth translates that So the in look at in XX% that somewhere you into to rate if XX% rate, the growth the

purchasing because really we’ll So revenue the does it I driver a what to of suffice in turns – on would localized how response break into I both but out on higher – exactly can’t give is Prime there’s the I very impact why to generally, because it’s XX% more to would in can’t out closed I that big be said actually on say, they what growth say goes I growth up. in volume. trends patterns. behavior, set you on And that by is, there. XX% what went XX% international, turns in international QX then QX we’re see much. Prime it’s not it In staff seeing gap. is from a And similar And wouldn’t country. COVID I aggregate it say matter say to –

differences a buy a as as to Prime our and into selection what they factors definitely there’s be or differences member go they benefits far decision member’s what myriad we use There’s a any to in and give shipping. Prime them. that think in that of I

want don’t I to now. So make too right many on comments that sweeping

Jefferies. with Brent proceed Please from question. Our with next your Thill question comes

you’ve perhaps just the about Thank disclosed little know backlog There AWS. you I’m just curious and on filings, be expand in just Thanks, certainly the has I there. And curious the on a number a across helpful. trend of talk AWS could numbers. the bit that if seeing you. you’re board a afternoon. good I cloud the improving been color was of if backlog. common a was would there’s but little a more slowdown

give the I’ll year-over-year grew backlog quarter-over-quarter. XX% you sure. and number. Yes, XX% It

and is over and contracts. this healthy, the contract AWS period. have that’s negotiations our volume maintained So for through would years have contract I three length are strong say average we and

that’s They’re help and industry So we’re and of looking a a in short-term COVID our good incentives sign. by best not long-term It bring the but you’re – also money of the ways network really security it the economy, only down a evolution that for that have, in versus that’s fixed And been to heavily advantage click we – to to to you’re impacted use do trying have be services the and is an the to and does the save that long-term variable money here boil to trying you’re for able to customers. to cost, regard. if lot is turn of it could products to be constant partner ways a cost, it save we take a also of we to into market. one that in cloud,

Our next Please Raymond with Aaron question. your proceed with question comes from James. Kessler

of couple A Great. questions.

technology was changes there. I competitors of that markets you First, seeing just more have probably guess, in Are any just Maybe up, noted that one slowing some in just your thoughts growth starting maybe in opened open Europe. that of you of you. the as Thank acquisition, – to And kind on Zoox the sort that term use how markets up? can any are commentary longer well?

mean you business, consumer imagine countries opening I on up.

Correct.

demand. strong see still we Well, Yes.

the We think moderate still starting was and very to UK any stronger by particular regard QX, is believe, probably So do strongly that, I that a very have I but on than normal. – in color don’t bit grew country.

evident. start So sizes. country, to I our still more the I will frequently want from but to by those basket continue members point, the larger to in become think order – Prime and vantage don’t go But perhaps trends

there’s which I in on Yes. space, to probably but Zoox, without still on second they with ride-hailing Aaron, this mean, point. saying early, a it your tremendously do just too it’s that say resonates And then, goes much kind pioneer team, And really question forward-thinking space. us. think it’s the – pretty at not I It’s of

mind autonomous that. passenger, and So focused a work in designing cool doing, they’re lot on front of of right, vehicles in the

us years of to it’s bring innovation vision and for kind commitments the as fruition pretty components just with to again, in customers, to challenges think, and be kind to I and the for exciting about think solving So ahead. them work of that we able problems

Our question. comes your final Please from Justin proceed with Bank question with America. of Post

of cost Great. And call anything questions. Any the great and changes e-commerce on Obviously, gross that’s gross to interesting? in a A the side. or margins there shift scale quarter margins leverage of on Is size, improving couple then mix getting out? times? one by day And Thank were COVID, year. we lot the about last to you shipping kind a where Obviously, you back about investment? on are you. secondly, day impacted investment are one but normal talked times the

Sure. On day, employee one again, safety. prioritizing first we’re

changed instituted We process over that and employees both have of transportation in temperature XXX regard. warehouse with our effort taking, distancing, also We’ve our We’ve paths. a lot social cleaning, employees.

of half still the over the So one. is capacity into the of a first head volume year, in generally even especially second that’s really we year. priority half second step-up And the sees which expansion, as

the So we percentage of one improving are day. will – we

where but improve it. continue And back not will for in run, base. we be don’t to consumer noticeable back were pre-COVID. We’re we’re to hopefully, it’ll going We the less be think to short we our

can the XXX country. Gross already the was lower efficient. We’ve certainly go And are AWS capacity strong costs negative and created could out There’s structure. way feel to margin and as good been not. already quarter the much didn’t to a warehouse already the we our basis get even matter shipping from we’ve It’s our able we just one-day probably to built and be we But margin. where right on has mix have Advertising consumables it’s played you now. – was the was But the a AMZL have started the into not grocery, about are – margin which Product a post We’ve points to one COVID a either are. network. we through down this of of day ship. tied for whether to in or becoming It’s as XX.X% as one-day or it gross On reconfigured margin, on shipping. out, component year. COVID, do COVID much were and one-day were bag the of costs been depending the impact addition doing – very outbreak, side, positives shipping more margin last costs if of generally – – mixed were gross the before increases. gross delivery more

will again your of A with us your forward today quarter. end the Thanks replay appreciate joining for We you look and Amazon, call for and to talking through on Investor Relations quarter. next questions. website the on interest our be available at in the least