Amazon.com (AMZN) 30 Apr 242024 Q1 Earnings call transcript

Good day, everyone, and welcome to the Amazon.com First Quarter 2024 Financial Results Teleconference. [Operator Instructions] Today's call is being recorded. And for opening remarks, I will be turning the call over to the Vice President of Investor Relations, Mr. Dave Fildes. Please go ahead.

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

questions today our Jassy, to us is CFO. answer Olsavsky, Joining Brian your Andy and our CEO;

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

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

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

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

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

spending, the detailed technologies, the our world various of SEC. with services by the and inherently including may Internet, are constraints, inflation, and economic the global unpredictable exchange of market new of commerce, events, Our rate and results rates, in demand including be and impact interest regional in many emerging rates, labor fears, factors filings materially cloud and fluctuations affected factors, changes foreign conditions online growth in and customer recessionary and geopolitical the

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

income, year-over-year $XXX.X on adjusted and from billion reporting year-over-year, focused $XX.X $XX.X XXX% up XX% excluding year-over-year. $XX.X for experiences remain billion driving in also revenue, operating flow we're delivering up in the for better free efficiency finance improvements. Dave. leases, We our equipment impact billion; rates; or cash exchange in foreign Thanks, Today, customers billion XX-month while up trailing $XX.X billion

financial adding results Our our despite encouraging business, the even customers millions way with having of intensely know stores want. adding on of One are items remain hundreds brands of an broadest we the we're progress more reminder and available, selection. to continue our we focused is selection making. Starting

recently welcomed Ever For announced instance, Hardly brands. collaboration and the in to Europe with Worn offer customers pre-owned and Parade in fashion Z items U.S., Gen luxury from we It a Clinique X Cider, and favorites,

low sellers to Another for that sellers third-party way high-quality is easier to selection our our new and it to make recently add a We've product drive provide their products automatically create website, to AI we tools. this in AI one their of to detail pages uncertain economic sure more more even remain we're our We Already, partners our important offering selling environment. have our on gen we on of prices, know used Amazon. XXX,XXX launched tool enables URL own simply a customers focused over which store. to to or is generative everyday making

helped events shopping and and trading QX, seeking we on out customers As with the down save worldwide, customers including first our spring deals. sale shopping In price they remain our show, U.S. when cautious, in results but big are Canada can

our areas, we've In metro and speeds nearly of In to the we March, U.S. faster and about cities at items Tokyo, event across QX, days in deal Toronto, or important safety Prime X in really day. X members XX% delivered while continued XX get to this spring Arabia, fastest members have times another performance. matters day. Faster in Egypt, speed delivered globally, Europe like held improving also our our the orders UAE. same effect. We and Prime and were London, Saudi And Ramadan Delivery arrived ever. customers, to of same next our or delivery out next top largest the past

results get frequency Prime customers how choose items total growing is areas, the and spend to and we continued customers can with to this fulfill see including shopping frequently, Essentials we Everyday business needs our increase fast member in As purchase fast, their Amazon more various us. and the in

year, we for inspect about to to serve. our how opportunities efforts cost fulfillment to our are past areas customer consolidation is talked the boxes. even the we we've and Over this lower experience. One network increase our additional example where while of on our lower can improving continued of fewer We've regionalization have to into work units working helped further costs several believe also

reducing more seen consolidate our to our we customer fewer When increase we've lowers our to in serve, impact. important it and of better As an able box, per network, carbon units and a optimize box, results for we're in reduces an further experience, units cost boxes number cost. a driver delivered into deliveries, the our

Video we started see in remained retail Video an efforts where for outcomes Another capabilities brands subscription fulfillment sell by TV Prime year better response. encouraged our link as closer streaming by for iterative the impact work very ads. The U.S. advertising early can excluding strong are the year-over-year, products, or plans. Advertising sales supported process offers inbound XX% prominent not. brands continued with performance in well on streaming our ads to sales value advertising of placement by we're sponsored inventory impact Amazon products to getting but in with driven business areas architecture our partners, This to as early of TV strength primarily sign-ups, for whether and better ahead ads like relevancy opportunity just on sellers or as significant and the like It's was the we're customers. Prime revamp will still up foreign sponsored product our as measurement ad We we making teams improvements advertisers. throughout example to and is their allow be good progress the exchange.

Moving And to to remember percentages the which than accelerated year-over-year much a right larger from QX, at from trends cloud only start. in elsewhere. We're given we XX.X% growth to rate, seeing relative up total see infrastructure can QX. our computing are Year-over-year base quarter-over-quarter that dollar growth base, AWS absolute to you AWS. XX.X% It's relevant see revenue few more now. useful in this in growth again we

largely turned completed the have to and newer their optimization attention cost companies their First, initiatives. share lion's of

distracted moving strong pandemic, the innovated up pandemic deepest a to to AWS marching a are it's and this companies choice. the partner developer fruit ecosystem that relatively from strong their economy fair cloud that low-hanging the The continues productivity. and save more be picking money, again. of infrastructure to were Before operational but to uncertain on-premises rate, momentum, at and rapid functionality pursuing infrastructure, by infrastructure. And performance, more from followed bit, and modernize in to modernizing Companies their broadest security with partner their drive

revenue also considerable customer businesses. front change we've Our quite AI the on about see momentum to gen a leveraging AI excited where run the experiences multibillion-dollar We accumulated and AWS customers already. rate are

the continue see add companies stack. before, building developers and about bottom at offerings. which approach themselves, layers we we the our excitement gen and X for all heard capabilities layer, of models You me to At about our is talk AI

We relative to the around, is NVIDIA have demand custom to coming X Trainium performance silicon, generation, results its latest early of our about alternatives. quite and broadest SageMaker. our training given talk and instances compute available they're XXXX of in using high, benefits for but also of starting quantities is selection price are getting Larger second inference eye-opening half the the favorable XXXX. Companies

trains X available questions to will LLMs broadest has added Anthropic's various Amazon language base, expand best new or evaluation, been inference Claude for a end-to-end features X Perplexity week large Titan compelling Workday Bedrock and LLM, the models. This model's answer, customize own in AI, latency, agents models, XX% not only challenging the value but SageMaker, months the developers stack Bedrock, SageMaker. including middle to models; satisfies planet of keep models This is developer to In of to has your with secure to launched for and Pfizer, under of new build last latency existing rather is changer request available model big perhaps model, preparing applications prefer models the series not but launch few NatWest an time we've frequently Cohere's augmented to for now; a Meta's by increasing to Custom experiments, and has selection productivity. retrieval game X and XX unusually of builders customer and layer to models, XX generation, improving most using importantly, Adidas, standardizing a thousands for to or Stock with that SageMaker. guardrails who service sneaky scratch leverage Model A nobody is tasks, Import. of customers, it build managing which also of low-latency, heard change New and Model Mistral's the seek models to easiest data has Bedrock's right Amazon faster, have fine-tuning met. and safeguard see cost-effective models reduces from in yet what companies XX% RAG, it developers their customers tens and its ago, first-party than other months features, models, an from built Custom knowledge to months, why Llama teaching high-quality, and lowering managed number we York faster Ryanair, AI and but refining Import data Our how AI complete deploy training it and is is reduces Toyota. models. Bedrock models multistep AI to on inference apps. the own Exchange, as already we their model best-performing gen a SageMaker. The production

these most applications And of Bedrock announced simple are apps. Import features or customers wanting X it using we the internal are of makes AI the data. SageMaker excited today, the elsewhere and applications. services with they're employing As are assistant take into so models their and well linchpins to of from as Amazon Q, production-grade availability in company's the existing a I Bedrock gen Model for appealing. The quite Customers build the before and stack models the Bedrock general about Bedrock easier SageMaker top import their that build find all to make AI more gen SageMaker leveraging deploying Custom it of of working built. increasingly capable together LLMs, mix development generative earlier companies is along this, high-quality more AI-powered mentioned models, advantage to much being software custom-built to prospect leveraging they're

the generate has Q performing existing Developers upgrades. a them to also also more move near Windows including side, versions create development sharing it implementing software application the .NET application just will range their an of to documenting, doesn't code code the app, simply X step-by-step to It and and Q agent to across Java a feature unique Q changes implement asking blocks can with together older can implements can their save social in autonomously capability newer, tasks, form feature on collaborate agent which from to favorites as from code help connecting suggested developers generate secure code a coding code and the features, Amazon such the implementation transforms quite transform and debugs move software Q plan, will add and can and files, new code, an to developers multiple everything a conflicts, agent On handy. and analyze refactoring capable to iterate perform and months multiple as it, from multiple well, Agents, Today, of Q files and ones. In from steps review the test updates It's code. tests to another. to helping suites. Linux. then future, across functions. Developers applying called code and plan, using ask

storage and people, It in have wikis, frustrating. Q internally makes SaaS are to data questions internal resides apps simpler. hard many about answering of pages, stores and the code, straightforward other data this Salesforce, of side, company a that repositories other most topics and much Internet bevy policies, like business makes troves results, hard and relevant access. products, Amazon SX companies On large data that

logically, Q analyze point your data all in enterprise all dialogue this can data. summarize this search repositories. And will it engage You about customers data, at of trends, with

assistants and on to is Tata gen security on Apps, but Bridge Q apps to We operational Q, and make using Sun Apps internal development together services. to the build automatic are already benchmarkable highest-known not important. new called Services, Telecom, in This the GoDaddy, build much Bank, apps. software only language introduced companies code a top it own National gravitating data. Q Customers AI-powered and also Most security for we've overlook the and performance. Brightcove, not Life, other all most describe for production for today want their they these easier a multiple in performance Q, from generate employees see privacy powerful leads Slam, less GitLab, so critically functionally their It's Smartsheet, beta and capability the and Datadog, been about vulnerabilities, what assistant also publicly internal but actions. has that NCS, reliability connecting Wiz to apps data and of development the Australia of which steps sexy useful applying setting Toyota, teams Netsmart, this until acceptance the for competitors Q data going will of rate of only folks companies data today. I'd app. natural care their we lets AI Q to is and AI applications Consultancy all catching and suggestions, and also score the and training elements caution and software like capable outperforms standard quickly deeply

a differences edge, attention paying which their or of AI providers dimensions. so, can these the adding meaningful been been moving see are last there AWS you've on has to focus number what's big If is the you year in happening AWS. to companies to between

you've growth. of We expenditures AWS' works combination positive way remain a demand the signals capital the as future at road and global of don't we has, this And to We're to sign gen will the in without which given expect AWS or demand spend front calculate reaccelerating AWS over high year-over-year demand most gen AI more business very growth And the of scratch the run meaningfully as the for on is before XX revenue data last steadies power way. We on very XXXX, is the hardware. increase very cash The model on-premises. free large in monetize the this from billion-plus cloud. we you years But new we make the capital it years, rate, several in and more $XXX procure capital a we seen reminder, that down the have can operating remains spend even the IT created upfront. centers, and out. spend as flow AI, There of which to be next opportunity more is we And a bullish most up that over yet XX clear and XX% of us. annualized the margin AWS. of

to We investments. continue on progress newer also make our strong

Our emerging international profitability. moving stores are towards growing and

Prime lets is our for concept customers in delivery successful customers Prime Foods receive month, on like original accordingly. with year produce services this a latest customer smaller launched $X.XX Manhattan, unlimited grow we're content with shipping delivery great to new strong content. very just with Market Whole fulfillment compelling benefit just a Daily engagement logistics responding Our called grocery partner Whole in grocery a Video Amazon and business of continues free Shop. launching hit Roadhouse a to offering third-party which Fallout Later Foods continues value Buy and well. We multichannel heels the being big are movie, Prime, that our market and

and grateful of I'm year. getting hard faster with the started for year production about X getting Los XX% Kiper a commercial customers plans and and medications that dozen to our a loving I'll our by including cities, New space than work as this fill robustly satellites Our York entering having across medications is the invention is in sharing customer growing employees I'm how year-over-year to and same-day health our nationwide. of experience, ingenuity. of business, we've first launched our their customers and its super pharmacy happening City, cities more end delivery expand to now services close all we And by data. There's lot to to Angeles prescription closer in with enthusiastic business are customers

lot With front businesses of to and I'll make our a turn it opportunity our better us have of We one for that, customers' lives every of in Brian to update. in easier. financial over a

Thanks, near of rates. couple foreign $XXX.X with excluding Starting of the highlight you exchange top growth results. I'd Andy. representing guidance a like top interpret our financial our year-over-year, of was to line points a our XX% end and Worldwide the increase to revenue impact help range. billion,

year we revenue XXX leap basis saw to growth added in rate. from points First, approximately the quarterly an year-over-year QX, which impact

Second, rates, the an planned we currencies changes led to the dollar, growth had point about more we against while exchange, to basis headwind million from impact weakening unfavorable I we of typically $XXX to relative QX. see or foreign in excluding talk did XX a in global what impact guided. revenue This year-over-year U.S. than

customers: operational headwind, Excluding $XX.X of that inputs revenue operating above our this income of $XX.X serve. excluding remain our convenience. of in of rate range. This was was first billion, was XX% which have $X.X high impact In segment, guidance including an across the cost our top an increase focused to segment, reportable performance price, In the and I'll North segments revenue FX billion lower the matter Worldwide would quarter exchange. We it operating increase XX% moment. income and international year-over-year. negligible. was range. all most America headwind more leverage, year-over-year, a the by speak was profitability trends The ever, we our QX and to end on the of our income was our billion, impact highest from driven selection, the better-than-expected was guidance FX to exceeded X end strong on quarterly operating billion, $XX.X foreign

the members. quarter, for world, ever our events. including speeds premium save During helped shopping with fastest customers our and Prime we we the added delivered selection, around luxury brands, We and

part offering. Third-party sellers our of continue important to an be

services, seller strong our exchange. services saw with adoption fulfillment Third-party year-over-year, and revenue coupled We foreign the logistics. increased as XX% growth, excluding optional XP of unit increased impact global of such

year-over-year. improve increase mix consolidated leverage billion, third-party cost benefit ], points saw driven improvement rates. transportation more an profitability, was XXX basis to the This year-over-year. We serve, basis in segment was our through X.X% up operations, basis points $X.X lower billion driven and For improved of of seller growth improved billion operating XXX and regionalize In year-over-year. Shifting customer and design year-over-year. enhancements Operating segment, XX%, unit was an leverage. to was income continued strong established work as was our margin up North margin international we points $X.X America [ improvements income quarter, up by operating million, volume XXX cost network including countries is our from by efficiencies X.X%, to shipments, $X unit Operating $XXX savings from our primarily our year-over-year.

progress good to their our profitability. in make countries journeys saw and emerging we Additionally, customer expand respective as on they strides offerings their

improvement while standardizing our improve Looking inbound focused ahead, customer and to process paths, our profitability are improved several automation. to the Within lower These in to we will opportunities take and and stores on network, in cost streamlining adding time. business opportunities robotics network, further serve and we investing see fulfillment experience. still our investing worldwide

international areas profitability and America We are grow areas However, that many a TV contributor both segments. we are on. to to like sponsored like remains streaming in products and an see North our today opportunities newer, the driving important that we're solid path like in we plan and Advertising offerings, in ads. the have in growth place

Revenue year-over-year, AWS. billion revenue billion, Moving $XXX is run XX% business. $XX an to and increase was a AWS of rate now annualized

increased Excluding year-over-year. AWS the impact revenue from leap year, approximately XX%

shifting group AI to we workloads first and and bringing customers generative quarter, driving are in across the and towards cloud. their both a innovation of growth as the diverse During new AI workloads across non-generative companies industries focus saw

to the of continue we diminish. see optimizations impact cost Additionally,

of operating $X.X was level a and ongoing we these likely the billion, of While optimization, cycle efforts. there AWS an steady always be us, increase optimization think recent income $X.X billion of is majority behind closer year-over-year. to state the we're a of

which include fixed impact resulted results life AWS our managing As made the a reminder, improved costs We our progress the estimated rate, in the benefits healthy these and leverage. primarily growing infrastructure at segment. from has change in the a of while servers, still in which useful

past, to AWS, which we operating driven in on are As investments level across over making expect by invest efficiencies the enables fluctuate, part brings focused investments. business. AWS the including we've to we're time, of in We strong the to in the the margins we us generative said to the business, capital seeing which remain growth us AI, in driving support

In As we a these of capital plus equipment CapEx define billion. combination investments leases. reminder, XXXX, overall the as finance were $XX.X

Still space, broadly, generative overall we're strong anticipate AWS, higher workloads, infrastructure primarily our and sizable signing see meaningfully mentioned, opportunity generative our expenditures to growth. We the and year-over-year demand in to AI. I capital longer commitments. in making AI CapEx early by more support for including driven in growth increase relatively cloud XXXX, we AI As both in bigger for AI non-generative and seeing with days up generative deals, AWS customers

from to be changes to foreign billion that expected between grow and grow the $XXX to we year-over-year X% XX% headwind results, revenue guidance We of in between Turning saw quarter. sales and an to our compared for billion second exchange unfavorable $XXX our are and quarter QX in in impact second Net with XXXX. or the QX. expect

unfavorable Our anticipates sales guidance approximately an QX points. exchange foreign impact XX net of basis

allows driven to by be our billion $XX timing the QX. of on impact $XX between consumer appears compensation eye expense, it Europe, billion level cycle. and strong teammates I and focused bit our customers, your considerations, very specifically for momentum. partners, part a to year, keep estimate continue a As and build projects This questions. spending our our move let's to us where remain of customers way. we're With want cost-effective in income continue includes around this for of be that to world inventing We'll the our U.S. Operating the on the start on to to the on way in in to trends, also to streamlining relative thank excited a a guidance our in and expected compensation we prioritizing seasonal to stock-based macro an and that, step-up is weaker in annual

Instructions] question the Our first [Operator JPMorgan. with from Doug comes Anmuth of line

and for margin shifted operating Probably Andy periods back profit now Brian. Amazon expansion you between bigger Historically, of has have a both overall of and into much heavy then base investment and but investment, gross income. heavier

care, As about or you view? investment your or an AI materially there from going impact grocery anything intensity think Kuiper gen profitability could is perspective or forward and capital that health in

mentioned have historically always yes, that. Doug, we

seen shift pendulum investment. have a between and You like profitability sometimes

how investments I think that both making might we're the at at talk we're specific stage apt impact we're outlook. about and more time where our doing we the to are now continually, the short-term that same so

areas been at up CapEx that of be the if margins you XXX infrastructure lower how cost We moving side and support strong. that's that on will throughout has cost specifically stepping So revenue though, of and it's has company. cash top AWS the made by now. Advertising look AI flow about to business, progress will into by cost controls points We've expanding our we've you basis lower and see, we efforts. efforts free improvements and lot our over do of strong growing CapEx serve. the a AWS been increase income regionalization the -- meaningfully that's talked on to XX and the be AWS inbound QX. off really and in sequentially And structure driven and our the in lot months, driven last saw stores line majority on generative A operating

increase that, will that in it expect increase definitely depreciation, would that I So will segment. --

we're -- CapEx. about talking billion QX, of $XX Right we the well, now, On in had CapEx.

to the that expect the for year. quarter be We low

signals customers and many seeing generative from our are commitments, components. earlier, with As and demand we deals Andy said AI longer strong larger

for We We our in for capacity So for upfront. free this as we years. we've those XX capital resources after and us expansion in operating carefully create invested on signals giving mentioned, benefit years very are with also flow to confidence And come he the area. And capital and done capital. this of cash see our income that, invest strong customers. returns revenue, then

your a to bit issue the answer CapEx stores performance a yes, to So we've have But that of strong in main see talked we about term the our and question. business. long-winded continue little is we CapEx we'll in see capacity -- really additional to that. And be most on Most fleet. network related the will addition what is modest to same-day Logistics in that our of or you'll Amazon But the see capital increases upgrades going some to to part, fulfillment AWS and for be the near side.

from, both in is to where to I the understand just we're a Doug. question do And answer. short briefly, add the coming think summarize. is would just I I Yes, position

way. the pretty in in AWS, of in AWS still I and in we're about of technology there's in a a believe -- side, is believe think don't any run before means we're if we the an really I have time, cloud, also done we're their since that I what with is are a know Internet. And it I IT and side. Yes, work do of advertising large But what think that's think to have growth like possibility in a lot it's actually the long to generative work. end be existing equation if our stores there's much premises. But think consistent perhaps to at been we've of meaningful And us seen we so I a And flip, business front from a cloud, businesses unlike us. we along I modernize our they and investing percent that on of we in value it, cloud, going spend on the it's opportunity on do, get in opportunity, in don't which do can it structure $XXX move for And XX-plus really of opportunities that there the revenue out the is of where unbelievable on-premises of us. billion think why they business, sometimes people front which of there's of -- the rate AI growth a front global terms you us, sure, forget improving cost store this lot which infrastructure. to the the lot since in the of growth people

every largely. scratch AI the of cloud All transform experience workloads, will on which this built set going from be generative of they're to

so it's along just that stage. the really investing And areas some there that are with of tremendous early opportunities other we're

for I us. So both it's think

And our with the from of question Ross Sandler next Barclays. comes line

Somewhat on AWS. intensity related CapEx in question

I Claude generation of think And neighborhood billion costs much the of to think has of would as generation This after as said I guess, $XX the So of to end. Anthropic $X train. the in X, models, like then that be might that be the billion high CEO train. next I

AWS like Olympus in-house of will So feel Do you you training is the to then others of saw an have that? all stay how kind this and doing like top something in on the on you impact the for do needs revenue? acceleration stuff do at the industry state-of-the-art, AWS? And of some XQ much this that that feel or you're can did

last we I'll in call least Ross, think contributing that AWS' are Well, it, to have X, quarter. performance, that I of kind macro I the trends tell you at would seen

think of of I behind lion's first the is us. all, I optimization cost share think

I number and of share think how have I lion's of I lot their newer generative. in think over behind to will cloud. in last drive a smart they modernizing trying describe the a months run infrastructure learned be initiatives as companies the So But that the us. and think their value at at infrastructure people optimization then would, macro to moved level, cost have I is And a the

they it's figuring in wherever people it's got very And more growth the pursuing and on it's we figure On pandemic, we they could, move uncertain economy, the it from because think on-premises productivity. let were that. people and I on to companies them, and most real effective innovate hit they're to because this trying and get back pandemic fruit the and in where former, survival cloud low-hanging see mode out space. developer for cost they costs out the that you then March and to the were distracted to and were faster how save before But to significant

to we're And I time, And seeing that's we in run see significant we same mentioned driving to there's people high revenue of run trying it's on think at AI that I top a at we're relatively AWS. multibillion-dollar that a a how momentum in very the figure their few that -- generative out early have still growth. and there's rate level, things seeing days. that already, AI

built Anthropic, top security train. every and if to And actually operational think as time amount I you take on from largest models And their on custom are to being mentioned, Anthropic, many building are silicon they're expect be of an example, AWS increasing with as But over months incredible range because tokens, first performance to what the Trainium. of data I chips, our like you our all, and well training a NVIDIA. these models. model and future amount their from still those an as built building so companies those XX they're models. And and XX go a an lot on of are to both those of that lot offer AWS, new our there we foundational significant models builders or of of on consume

of a opportunity a for to so real of run And models I AWS. we'll top think those on have lot

that have, many don't are will thing models companies run not into there those end many will applications production, AI spending significant I being the get money we're once think generative the many out while sometimes see think when that you stage models, over so but training is realize about how be you which in companies the that in you rates. that production when time, most up people

out more because predictions all You periodically, you're the spinning inferences than you you in train time. spend much in inference and do but training only

large to is And companies, And so the there do we the services. primary how their AI lot we a few applications are AI to building much quite a of make top and of on easier generative has see production-grade to the that language of models example companies, of generative selection tens has cost-effective largest thousands it features build Bedrock, of so a that AWS. top do many low And Amazon companies of inference on are around see already high-quality, a of also with which building latency, it set applications.

over so both to to if of happening many fact on being And AWS. their same on into layer what edge drivers want So to and the companies, their AWS. seriously these assets not side generative AWS you big you so And top the have going top X, models the inference actually year been to data. to lot meaningful that matter sensitive all it's the and that them And And of experimenting on these or we phase security are applications. generative that then providers have they of companies and people yes, AI a last record. around a of top production, as applications training getting going the applications on pay then we see are attention of most just those the kind now AI track what's to have deploying their get really and run

question next from line Brian with of Stanley. the the Nowak And Morgan comes

X. have I

us serve The a with all on I all could appreciate the first ranges of lead cash to serve. of over one, for some just serve more quantify margins for think through maybe outcomes couple to cost And you to flow to reasonable potential about that? And goals on letter second cost could incremental cost America more help North tonight shareholder then X accompanying to I color even North Star serve. if the that the how to retail improve, next should your in it and even does think little is significant of cost the of mean what years? Andy, CapEx.

through to addition continuing in capital us to returning of to shareholders again So run. think philosophy sort of the remind how just you invest for long the

Brian. with Brian, question. is this your will start I second

as on reacquaint moves, with buybacks don't capital to I'll have you So or But today. dividends that or as any philosophy. we structure our general with share anything other far you

in to many the our AI. And growth capital opportunities support use opportunities So to invest businesses. generate generally, put as long-term investments that to to especially our would first returns, in that meaningful we and have -- within priority still is generative heard you

on -- we great very deal passion on we're that have So that conviction of as well. and a

We free stage flow. a different of reaching cash are

after we as we 'XX years, trends 'XX, mentioned, largest ever. X pandemic of had we for when negative those flow highest free cash had expenses. our and was into the cash size a have immediately and flow you QX. our other had operations doubled As carried That by the our had free XXXX of network -- followed lot And

we feel cash flow. free good about So the

anticipating We again, are, still this higher CapEx year.

that the negative now The doing on we're with taken flow flow we during that of right other cash period. some is free we're thing debt cash that repaying had

We end have over $XX billion. this reached then a then year, that through and since down year. high of watermark at pay last the QX And we'll

side go they there's I capital high and the about look we cost and on generally and stores on do on as the at expenditures. priority we still even We're that ourselves that turn every historic not can holds. profitability yet. margins down comment We up rock, the But And without first over we logistics tee Andy, there I limiting the And always and XXXX every process for the to look operating we up, how compare those our do how that. well again, advertising. know But ways achieve because as to, nothing same looking to before how up. can operating see speed the selection trends. and margins first, our to get say, pandemic, everything we share that's structure we're think back quite and how So otherwise, to we're front. I'll impact can can of not get

customer lot So front we on a it's certainly fronts there, of is and but as and improve working center cost meet is experience.

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

service understand are logistics launched as a on Andy, global you CapEx? you opportunity help the that in on chain. that in there? Can function September, increase you build you supply And Amazon basis? see a in logistics, require Where a does to just journey us

Yes. Thanks question, Youssef. the for

I who in the we decided we think our of of we it these to some our needs we a out ways, those AWS mirrors that the interesting businesses in that build same kind bunch realized businesses other to there logistics. building had of even in, services internal were involved happening it's build others different third-party business being an and And in some them. very that had gotten it's probably that of, really own we're -- it, what's figured example though with need they're capabilities. And -- of we've

fulfillment out scarce. from And point customs it So facilities out as really then pretty various work items you centers store then through grown, that turns and from to our facilities. and them turns get don't those has be business in to actually it hard to to want that overseas, because through import space ship them is border the that

have do it able like be centers scarce to supply the when needs then very in that way inexpensive. to have facilities and your to upstream storage upstream them And facilities. in you'd able know to be to replenishment storage like you'd So those are from a fulfillment automatically more

And be wanted that to so were to our had to stores those operate all wanted business to that the capabilities we sellers way of our build and we in for ourselves to. that

built we we up individual our first so opened sellers. And services ourselves capability those services and for as that to then

get have through customs. we sellers, so service allows through them the a to And items border and help we that

other separate they're upstream to fulfillment various or ones. We store have. we service they facilities ship low-cost they them own centers items that to whether a in that our or our that they can to warehouses allows either allow ship from our move into where have customs their automatically them We to replenish can facilities,

have service it's customers our end It's We individual have supply an block integrated. I own, which for on to of either something do to makes not a whole have customers. what to us. with Amazon already chain very That to where building that versus really to Prime that would is able their just I significantly. really buy growing be supply easier Amazon it's selling customers. And chain increases is our set sellers end-to-end we It Prime on the expense think of Prime, where consider I their for business. that for a we and lets with they our anticipate great what I services those giant sized enable mentioned from driver being on benefit days. their say then would ship Prime We customers websites, a is reasonable capital early just with conversion a businesses top if Buy we'll they're end And that third-party would them our obviously -- XX% or collective abstraction Buy it customers

anyway have handle those of be our think will and on We stores increase business, lot to a capabilities it we a to accommodate of can top save build modest it that components those they we high the in them third-party themselves to in find versus sellers sellers. to able But for value being manage do process. third-party are us to money and having

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

you mentioned. ask I'd growth of couple thought a I that drivers

seems delivery it the for changing prices. still threshold you're free subscription like grocery, the or First,

can can you? you now optimistic be Video forward? big a hump? versus this say contributing your And that's your how Prime be Or a ad that do to really you over think at category ramp, expectations? all and right revenues ramp little much for went meaningful you maybe that you extra to think do gross you're Just on the a going And could bit then how contributor are

start. Prime just them Yes. opposite few a Very I'll off really Video just months ago. on days, launched to a in order ads. good take early It's

measurability being of advertising to Prime the us are I them. free I for ability and expand and think they type their Twitch movies, Video unique is the that of shows, in video to advertise with excited Video Prime able find beyond that to advertisers relevancy ads think and also about

off to good tell optimistic what grocery. start, very be optimistic So it's but in grocery, that to we doing we're would we're you I early days, there. On continue a about it's

Manhattan in that want trajectory rate. And XX and the the grocery components. on few the a grow smaller very over very and missions you large space. grocery format We kind nonperishables taken got mass if years business in pet to the a that way then And business rapid which last and have shape. And and serve to ago. in merchandisers pioneer in XX grocery of XX months profitability a the this are want has -- organic Foods business very, introducing have as to It's you like way to significant That we new many continues the shop have products. These the or And hard that, worked different grocery same is much continues business do care canned a and We're an grow that business. beauty Market, as a health entered serve. aim we the that very nicely. we food idea. very have fall and Whole at very to Foods Market Whole We've daily goods consumables

to few have primarily best have work And a Fresh. We've seeing on to Chicago lot. You We some months, Southern physical results there. They're in we business things through, dimension. been out mass and those way almost stores time. we've and physical that's we're still in California. to VX really the the over but over like our last Amazon with there's And in format It's we have better perishables working and the presence. meaningfully a every early, a to launched roll early like what then what decide

off or members, pays launched month, a Prime is itself from from delivery orders once offering which once for Prime for to under we grocery, Whole start. it valuable itself. for a $X.XX eat Justin, you can order month, very you if It's for a pays great mentioned, Fresh it a it's our benefit which Amazon for $XX, for just you and As a Foods

time. customers think that, to change I split for But my satisfy can be So going that blocks us. some needs. help -- that opinion, we continue have we of we their to that's their grocery up people lots grow over how have grocery ways continue building in a optimistic And to to orders have continue lot we might also I

will Ron And from of Josey Citi. our final with come the question line

Maybe, international where about Andy, Talk architecture and we XX and similar in how from kilometers fulfillment actually of came of day, a I saw whatnot. just on shipping, et just XQ's as might wanted terms We're to profitability. getting package on maybe average or are trajectory X.X% next shift, margin. what if benefits add by international America in traveled benefiting could consistent And after you cetera. ask following just on faster each we terms insights to profitability, to of provide inbound regionalization same-day, distance continued any down North

to with I'm international start Ron, going profitability. one this on

was income $XXX a we've international if So steady million. it's our watched yes, our And segment, in that, progression you've income operating in year-over-year. the quarter, operating in up $X.X seen billion

of trend are same into a the trajectory as there. the established like United It would Japan, we States as down are following are selection, in and a of new features carries So breaks in well the U.K. as Europe, the adding the to there, few the areas. a United I say They Prime over They benefits, own their lot countries adding work that States. lot the there. in do grocery their profitable of they're like we right. adding

has last in we've own years. emerging X second of the course, those its Each the particular on is new group countries. XX The And of countries launched trajectory profitability.

good breakeven to advertising flow customer Prime a times, people contribution benefits lot sign scale, and other make work contribution Then help up free things. on thing ad income they the our positive we experience, the that. having countries and structure is And we having get eventually, -- cash breakeven to positive what with see is more a there as The segment. are of see then Video first of Prime. our international we A for and a cost and

trajectory. and we I like think So we're forward. established of And emerging the both more as the the you'll seeing we improving, and see move

we've a what the we to still that. you value We've international really number as as the very of Yes. added business. countries of one the stores quite the again are our that say in from just be and Brian add inspired mean, a like refine lot trajectory, going big, bullish it's in a just we I'm that I already lot that to able I up large part the we nature I a a is a in on indicated, for on we're we're on saw are many would business. we have be It's right And profitable U.S. few our things. us. I would work side A of how headed. I'll take what of business what as times. set to we've in in continuing the because ways, to get boring from the regional just done operations all, may of structure. a those also a done, -- about of But we second Europe, question And learned I'd take which, year, a on the to the cost which done more tell because little well. international your lessons regionalization network of that side, also about it's part of I'd really close about sound out not the last it U.S. countries work have of going say lot to regionalization we've opportunities there. learned to talked to another. And apply to was direction lot talk talked it around to first on just

fees we all to. largely items is A architecture I to where -- an going what other did effort to set we but in which think people the opportunities those enjoy of a in there, time a lots then locations our how cost with efficient breaking those inbound good in we able cost with took and and way, we both of The just believe more outbound allow we fees, seeing that and of a expense places. And inbounding has to use change to in incentive sellers meaningful we we've spent of when and partner our had shipping our in for additional the our down And how then how sorts And had more places. Part inbound us and them very allow see we signs example be of to of seller network places. sellers too. we couple optimistic we're we're be into inbound so. to we in added we're lowered lot and we and sellers. much up to do savings us following

the the network. good least interesting lot to our a building to years. And we're evolution is how of the our couple with benefits. facilities units and still that the right we we can to last And over fulfillment the the per that with expensive few facilities the years case to made the if are just network. watch build in has say way you infrastructure think respect over not the I same-day both that box, blocks number then We have speed. that of same-day our I again, higher going think of of really U.S. early which all cost a have faster facilities in also people of which parts increasing I'd structure will, the the in in have world, have while change those fraction the we still other our of optimize that we'll mean will of the have are assumption speeds number last continue cost, And it's sorts been

a of limits happen going for So us. year. the I have of can to several and do. but we I We're don't of at be working we It's think front lot X think at years, all upside hard in what to inventing at we're going not in this this

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

today's and teleconference. gentlemen, does And that ladies conclude

participation. may this for at time. you your disconnect Thank lines You your