Amazon.com (AMZN) 30 Apr 212021 Q1 Earnings call transcript

Thank you for standing by. Good day, everyone, and welcome to the Amazon.com Q1 2021 Financial Results Teleconference. [Operator Instructions]. Today's call is being recorded.

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

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

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

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

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

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

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

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

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

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Thank you today. us for joining

Before few first from get quarter will Q&A, of the we to highlights year. I touch upon the a

across customers. me momentum the highlighting of Let quarter, In AWS. seeing in broad AWS are by range we accelerated revenue growth start the a first

their own manage innovation. of During better infrastructure. to partnering AWS moving to and decide with technology better them longer cost, gives and seen speed COVID, cloud enterprises see they many no They better that we've capability want that the

recovery. engagement across There's expect deep industries. the and to world, we trend into around We as this move the broad continue post-pandemic momentum including major significant

most commitments the new leagues, For and National world's Hockey from X and sports some Tour, Bundesliga. migrations PGA of renowned the the example, German the last quarter, we announced League, Formula

availability we've X the launch footprint regions strong infrastructure We zones seeing. XX to announced the more to offers in availability support expand our growth AWS XX more AWS around we're geographic And zones across to continue XX world. regions. plans

in grew quarter. we lockdowns the business, Revenue and on XX% in FX-neutral first in demand seen an regional throughout growth since of customer as months in America, In of the the Europe. restrictive continuation international the early and XX% national revenue have see segment QX strong quarter, largely pandemic. trends North particularly to the of U.K. globally the year-over-year basis we our to continue demand consumer growth Turning were that place reflects in the

continue Third-party comprised small- and medium-sized of sellers were largely and see customers. serve businesses, strong sales to more

basis on seller increased XP first XX% stores revenue. than revenue quarter, growing the Our services online FX-neutral an year-over-year faster significantly in

QX Prime of with greater total also XX% to also paid Prime's continue have benefits. our members to before from and of represented the in in pandemic. frequency across units year. up units QX, trends categories These Third-party extended digital than XX% shop last more

XX up We're Prime a members with of Thursday next were original and doubled to and exclusive NFL more award Over Amazon NFL be can months, million XX best yet, daily featuring year-over-year. XX% great the had strong hours of average the an creators. also past content, seeing the watched Football nearly Hours forward upcoming over Twitch live also Twitch we're partner series to of group season slate and in on diverse than quarter, the into roster first Prime Studio look now Night of and our we home is and momentum. to films visitors. sports Video year-over-year impressive the expand talent its decade. streaming excited continuing and

to quarter. X-day of is the our bit benefit event a hold are more will We'll we customers, quarter. and dates Prime this is Prime during to big opportunity on more partners we have for again selling event Day businesses make and focus great a Prime including to share year. this a small later supporting reach excited Day, savings that the also will the membership Prime announce Another Day, popular second

of reaching held frontline to Amazon In on-site and the continue vaccination states, in XXX,XXX the contractors. our prioritize We events and XX employees U.S., than has employees. well-being safety more

as Total ventilator local safety partners, came and and put finally, logistics We'll health and as watching employees and are delivery employee place guidance $XXX.X to billion for the closely support, well range initiatives, results. continue have events XXX financial Europe medical summarize revenue teleconsulting, And we to of billion in financial India, in particular, our $XXX of ICU above in $XXX to billion. lines, global where rooms in particularly our our fulfillment hospitals. of health We hotel invest from the donating to and in in quarantining operations. units

COVID-XX-related performance addition revenue, In operating results, higher to within segments the North to our income with strong QX we the had segment billion. little quarter. billion a accelerated first international the We of on costs projected as in well. to Operating $X.X strong are advertising was and $X less seeing leverage income operating quarter. America higher billion during that we revenue this above in guidance incurred the $X.X $X in also of operational led billion combined range our than The

global safety. network as our impacts measures, social in across our costs these incur to investments which we productivity and as distancing direct continue employee fulfillment maintain we We make

we costs $X.X COVID-XX-related operating in approximately the ahead, to incur quarter. billion second Looking in expect

With Lastly, a an congratulate to for to Q&A. employees sought-after We that, great work. on list to the I'd from place U.S. for annual companies identifying across appreciate move LinkedIn's on let's in teams passion top our the innovation like and to most company #X Amazon obsession ranking, customer thank XXXX make to making Amazon and the places the work.

Instructions]. [Operator

Sandler from with question is first Barclays. coming Our Ross

delivery. question on last-mile A

congrats everywhere last-mile So We fulfillment. Amazon that. in vans you aggressively to Area around so Bay pretty see guys build driving the the on are investing out control blue that

controlling does question feel set stage how that's as is And where the Can of what or as start where right guess up. at that, you if these high I talk essence. cost last major you you metros gain shipping allowing all to like further initiatives? delivery is in in improve long So about is to I level, place please? to of from that is, share certain the the until categories far the your guess, you want mile market the And penetrate unit speedy

let Yes, Ross, general. thanks mile with last in for me start your questions.

heavily. about increased trailing So investment, it numbers, from CapEx infrastructure, last months. you our talked course, can year, the Amazon fulfillment, CapEx, months we see XX capacity of prior XX%. our to the including Logistics XX We the XX% in our we're And over including by trailing increased investing

but where large the certainly, call line transportation, centers, we Air, Amazon a only also not elements So mile sort of fulfillment centers, putting X trailers, what area we're haul, middle of investment, final and seeing DSP the between well. think warehouses movements all then stations, our as delivery partners intermediate And stations. that delivery our service delivery and of our was just mile last

Its products It warehouse think whole external cetera. that is But ability So with end from is cost see, you talked right better the route to very we gets costs. with the customer. et batch measure our would delivery, a either certainly now We density, a flow about the amortization very to helpful, flow demand process hand control have a times and competitive our actually closely. options, we churn the very going off warehouses of of process, which is and -- to orders continuous DSP let's continually and was we we a day, third then our to partners. once normally X drivers mile a final day through middle leaving or party where orders through where say, and batch a, AMZL X, would to large our

more not in us precise where of it, I of estimates We're you'll also seeing as customer see but delivery. So that lot product, lot And a the of to of ability starting area. gives of flow to progress only the a a control information. get you're that think flow too,

can be You'll -- being to delivery see to and you're when there stops get you from But Because put just on it is X big for later. get busy. Of lot it the we doorstep -- notes you part say, cetera. everyone's A that's benefit that. away from of Other there course, sometimes of et delivery, that have a times, hey, your delivery. need actually your get

perfect going the We placement warehouses can to see times that a box its and pick between and that up there's on it because product allocation cutoff we of have to way. where much we're extend, information we the send lot also pretty again, order

So lots of advantages.

a it in invest, And do That through the AMZL really should continuing as well. XXXX. already, large capacity. of XXXX good today. our and stead with may spill that also going We this through us see are to We to in units area up investment are set we'll our think majority

Ross. David, is This

we've just folks for and few to start than And and the become their -- for it's program employs years. that this And past network. growing touched with a been to an it's Just incentive there services last partner Ryan program it, had, the this delivery effort program, upon of mile the the last Brian part part has important or the -- -- an more an to it's own it's owners business. the called reminder, those package of business a but been mentioned as that XXX,XXX -- important that, small mile add DSP, really are, drivers, delivery

a great build that lot support as cool it's helps help minority to volumes elements those So folks got as part really technology of tapping entrepreneurs have really them diverse the and us program, the network. delivery package And on out the we and groups and access a business way for support and well. a to and programs grant we've community of

next of the question comes with from line Jefferies. Thill Your Brent

have seeing On give you now of could the backlog curious accelerating. seems backlog us revenue growth that you've the between finally lot been and a about growth I'm it quarters, questions that if AWS, and the you're last there backlog strength seen in several a conversions number. incredible And

trend. little just and to If a more conversion that you on it comment you how could expect

Brent, it's hey Dave. Yes,

just average little growth, life the about I The of quarters, where average figures terms give a backlog think over the been it's in we've years March weighted -- for for about so -- $XX.X you several the remaining is weighted billion. X it's life. to XX, past the

So right now. that's about up XX%

to So it and really that. continues with be really pleased strong really

of I is also and reaching figures, momentum revenue here work on the innovation out we're with those. think the growth seeing lot teams and and growing the just hard working that's and in and backlog teams but a

line been multiyear been you think a commitments. are of And a they with able engaged have to they want add so sight us over us, better a it's partnership want with a you of as worked that as And comfort just think with to representation and lot build do. can We relationship expect get with these long-term even making those what see us, it's that to more And value companies of customers continue to periods. us. great we services, to they and with

the from with Securities. comes line Truist next Your Youssef Squali question of

Maybe question. just a two part

going where there. COVID you touch And slowdown have speak you declines particularly directions know a if upon markets these It lockdown, in in, or the grown decline maybe remarks it major just First, like demand in or e-commerce seen drivers your in instance, acceleration issue, still little don't has Europe, this in they're growth? negative in in is for particular your a Brian, lot international much in growth. about bit -- like under the seems or international maybe are of there a to prepared business no a very pretty positive I just is Can the longer yet any correlation. seems different you significantly. markets

grew Yes, would in by this rate Thanks, FX-neutral basis, QX on a an a strength country. step post-COVID, although XX% if year. We I Prime in last XX% we just across growth international back quarter, And been it does by segment, Yes. on prior you minute, even we're Youssef. grew tripling even the an, the at pretty on was to FX-neutral say has you in seeing But an in board prior in But that quarter. look vary much if their growth the and the revenue rate that's the on basis, anyway. COVID -- aided fact Day international.

them music, and also offering of in to the place in So in a digital of need get shipments value pandemic, the in our seen year the that homes lot we've not ability only to during and model probably they that we've advancement deliver been we're or devices. what really strength of pleased our able with a And the to by video, our and customers, more. adoption our very the strong show those to and but countries survive

as it's investing, really lot know, a in you So benefits. international with those Prime and we're that, forward -- in of

part shipping good we're -- business, grows, consumer still So it's that really engagement. it it's growing as to underlying see healthy engagement of seeing the and

a have case don't downside yet. I So

don't off have assets, to volumes in And efficiently. the think our surprised Costs QX. team, very the leverage were fixed I XX% see handled operations normally growth our But certainly center to much hat's fulfillment -- would assets. especially forecasted In a stressing We strong the they I would control. under fact, QX operations. transportation growth. bit our very by started and in we of my

been the aren't just of growth was for in is Dave. with We're Brian this some any I big efforts these open we've up And by numbers And countries talking contributors period continuing think time. But along to about. those regions. means in to new

in up like back, in regions look the March, last quarter back you for a And recently of If in we opened the last fourth year. places years, up Poland in of opened Sweden launched Prime even some year. in Turkey, been that few half we've

lot each presence the of broader effort So of what into to we've the kind and geographies local into good -- a it feeding learned everything back these by and consumer-facing advantage in there's taking thought continue of a and to of Prime experience. teams take with we're learning going

Markets. with question next line from Capital of Your Yruma Ed comes the KeyBanc

with share pandemic. and market took grocery clearly some guys delivery the You during

is kind about how fresh proving sticky? the has And how out, talking broadly, consumer of be zooming wondering -- to what been the behavior post just it performed? store's -- Just grocery

period great Sure. the during Grocery has a here. been revelation post-pandemic

I think delivery. the that value we've to people really as And go get post-pandemic. up home considerably ability pre numbers and seen

customers Foods Whole -- free of strong pickup XXXX. it we're and during In up you really stores. a continue also benefit, of hard pick Fresh Foods period. States, to greater at late worked became to engaged see -- delivering part expansion out growth. in know, increase the adopted that of allowed we've Amazon United stores, our Whole Prime as a And to So time be very the we'll capacity but our we've and

fresh Just stores, we're on still that in the stores excited too very themselves, in think early. will a Out it's X. And The day the to technology that I about customers. but works, that's benefit the Walk a little really be what's confident boon, we're So a early

We've in, stores here we've with then us got Ed, fresh -- Jersey coming some are is and New Illinois, Seattle we've and right this Southern got XX open, California additional confirmed. area. now We've in Yes. and -- And got Dave. that it's about the ones

technology the So -- as the customers said, the with feedback the really and far. Brian pleased from start so

John from of the comes with line Cowen. question next Blackledge Your

Great. on the pandemic drivers then acceleration. the strong, just range was The in seeing you drivers Two can business, Could expected guide and And levels just the strong on of if despite advertising e-commerce discuss other initial questions. the quarter. the just you some the of about revenue XQ you're talk comps. second key demand growth side, key of of kind revenue

of quarter I acceleration. like third in row maybe think it, the a feels it it's

how what's through trajectory And for kind business the about should year? that? the So the as round of we we think driving

Sure, John.

Let question advertising. second your me start on with

traffic seeing, has seeing large So discounts space. that products advertising has enjoy. what kind it relevancy out, of also rolling the is, that But new in been the we're that of certainly, been improvement a the team the driver customers also we're and

I the new of the well. So products. to more sponsored turning done a as productive relevant results job us team's We're learning advertising into valuable deep clicks sales, advertising great and think is to models using that show

And the to relevancy improve video continue detail other we've brands, seen things. of being among pages. creative the sponsored format ads shown adoption rapid the for on the We of product

segments. again, very our our the vendors, advertising customers, things find very of them So bit you're our think unfolds. have pleased for later will has discover also I receptiveness we performance on you to of than helping that -- in We for We it's On team again, traffic. and QX, Day and Prime more products. we'll more seeing the quarter projecting, and been are well, our as would valuable a of say, consumers our all guidance, strength little of that yes, new with just authors easily remind across scheduled And QX more that and continued sellers brands. I as the

consideration a So that's as well.

the Anmuth of with JPMorgan. Doug comes question next from Your line

strengthens year follow contribution also deal, and you wanted you we XQ. within Football in dollars Night talk XQ, then just given for there, that Just terms in just you. to also how could ad tell of the in timing, on now the drives XQ up Prime about you're engagement or And just that XQ then historically for Brian. Thursday and quantifying there about Can the moved Day, hoping needs last guidance? just the rationale us at and on all And also how ecosystem strategy to for the what it then thinking

First on -- Day, of quantifying it. we're not the size the Prime

I think probably there's it's say out guidance. to than can some pretty there contemplated this leverage. you other good in estimates that But

On intended out the we there this Olympics, timing, last factors, Day had -- there We Prime are which year, number hold the a earlier. still year. of to are

In fact, vacation many areas, in some is big July a -- month.

for with the -- sellers a to it by experimented might it it QX. and believe we obviously, a We vendors timing other customers, but better better in have period. that different might be October, moving So way, later time to XXXX be experiment into in

this On opportunity size Night that's excited Thursday sure we're Football, what we're not year. right Night So But exclusive -- advertising testing the the Thursday say could content Football. to I for have now. I'm I very would just

with for we earnest. really things with and the Thursday that can we've think of now, and We those forward NFL, a to that number years of partners. new shared that looking do responsibility some we're in Night -- other games, with Football with innovative a off kicking course, Of lot broadcast

Your Justin Bank Post next line from with comes of of the America. question

questions. Two

then video. see at you more million in release, XQ sectors? related that? that AWS the of all about on coming X your maybe for acceleration, Prime talked to back more watching volumes transaction I XXX secondly, X members cyclical It's even of users. about think And First could And was

Prime driver could overall you the just as Amazon. your So you for spending. retail a Video content is wondering provide how see effect from business what you on think Any that? And on about updates

$XX customers industries point By we perspective let a So any we growth, prior $XX months usage to expansion enterprises. at to revenue of had to a it months of also way XX were annualized which a from billion rate, We opposed billion number number and last it of that rate, billion types -- the XXXX, is, of you, a wouldn't a great $XX seeing while the on This XX% in in billion startups AWS to all particular year, billion year-over-year $XX QX to before is billion of put XX% run across run XX group. rate. We're year, To me run $XX up that. which the revenue increase. prior in added acceleration. increased little $XX the start as and in bit customer last we're for

can in at would So absolute the I a little quarter. were although growth, the look dollar you strong percentages very both be this deceiving. encourage to

we across seeing, board. again, are strength So the

firm have then advantages super vibrant customers, ecosystem. we confidence of We of is security and AWS think security, partner nowadays. robust less have a really, customers from we to all offer also our important I that downtime which better lot And and to a especially functionality to

AWS. why you on pick the... that's don't Dave, So up -- On

Yes.

launched the rates, you of overall It's and and free it's at that there's Just preceded Prime to broader places video-only that launch countries. trial is. great Video with shipping and that making of higher like higher membership membership just we new in the there's And I reiterate sure engagement. or where a in Prime terms for higher that broader look in it great subscription, renewal rates, broader a And examples components, it Brazil, to example, a video surprising, it have probably driving example, at folks watch Prime into but Amazon. that and as was we think Brazil, people an mechanism of component retention it, to we significant Prime conversion program. a as to Prime as nothing a who adoption way members as acquisition was, the great see expose look strategy, channel And

be as lot experiences studios a filmmakers talent, for a indicate, viewership, of, striving that Jeff's of home the are And I -- folks lot enjoy just to but I So would critically, think best kind in people a quote there. and, continuing But team the of more noticing done there. of job, a lot it. great has different momentum lot really the diverse of artists both of good to course, as and getting are terms think a

Just to of in on too. and expect talked terms basis to that absolute beyond of content. invest an about into that spend, grow feed original live a we the say just that, and Brian in lot sports continue to great that opportunities

So a lot of continued excitement there.

question Nowak Stanley. Our Brian with from Morgan final comes

I level ask one have I two. you Brian, wanted to high one.

have sort guys focused what a for of consumers room consumer on really access such offering? can one. in across for And out installed on look with great improvement? journey, learned base What the are of couple many of where an a just to talk of when you've countries most opportunities us then secondly, have to Give categories still about innovate, goods. us you the where and Echo just areas more had to done see Echo network improve areas of you've of to That's building examples and success, larger You so to invest you areas existing sort job the ecosystem. and impact a the about your experience, categories, the you and you delivery providing all

improve to for Sure. we're of questions. Thanks, that upon. your a There's Brian, always working lot areas

speed very and country always it the way be want the globally make want Amazon, we always is innovation quick same best take everywhere. to quicker. but to we it I the And from sure consistent, we're think at want to generally, it to doing we X practices of be

progress process strong is percentages shipment We're we've back starting Europe Europe, they of broad, function list not tend pre-pandemic. improvements currently in made go hand-in-hand. U.S., were how our a but and In orders is process timely the well our really digital and there they XXXX. X-day, get the volumes, to much say of X-day getting benefits. more the been it's everything I across It's selection, But also to the space. rapid getting see end same-day in benefits we we adoption the or consistently America. manner right board, our of by that Prime would also the to higher and in challenged especially a the been better. we're now to up before where the it, think on handle delivery and can hope very that only North we I are the of in even all making We're by expansion we're excited in nonetheless, in about with but challenged so pretty

very and able forward though some awards the looking new that are were studios even to and We year. they and content, this to the we're for content happy with the performance, business garner nominated were

quicker. have type and We our Lord members the that things about getting of big content to some on including horizon, Prime of the Rings, we're very excited

question just Alexa could level, kind broadly, take of then and really on it Echo and up if your And on Brian. a Yes, I devices.

also want and Our more has customers' features. continues new lives Alexa to make bring smarter but been more just we convenient. choices that goal that to -- with really make be easier hardware with case, to to continue in And

in those machine As manufacturers. third-party a them. help working just deliver that smart really developers with before, a talked capabilities and tools community, of with devices, advances lot devices variety we the AI seen home also momentum that it's about and and We've makers but our and because learning, with build in and of Alexa, Echo of not for device

of so with bar, recognition smarter. about that us, a really sure it and speech areas, capabilities, with it's with many that is getting other technology and the I think high and maintaining we're making -- so of And behind intelligence type a lot

loved And last going been customers usage behavior the for see customers help some and on, the their what's be connected to we of you or expectations that has customers like have using isolated them as played healthy. that's customer I the Alexa over with that are with Alexa that months and ones. Alexa higher using capabilities, to XX have if and stay becomes seen, to We're back great. higher And seeing people look just help unable a as mobile, role something there, responsibility think Alexa, and you've been stay

with whether or apps increased Alexa So fitness the for to or of health-related information. that's TV, usage and tips interacting they're Fire looking

using services and services too, like course, entertained other the don't and apps. so up things of And or they're Alexa-enabled part stay have that, educational the then, sure making access. trapped And is when devices and of our cooped they for

encourages to really teams good that they and think of in examples see just I serve customers. with resonate utility, So see you strive example when lot of a and types even those given how harder I our customers, you just, think, to can it

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