Amazon.com (AMZN) 1 Aug 242024 Q2 Earnings call transcript

Thank you for standing by. Good day, everyone, and welcome to the Amazon.com Second 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, Dave Fildes. sir. you, Thank ahead. Please go

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

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

to conference As to includes commentary our well front call, on have as which our results metrics we of you you, press today's encourage as listen financial the in release you and quarter.

for and We stated, call reflect as will forward-looking to our and differ results may Please -- questions this be XXXX. materially. will results of comments in note, the all unless management's period comparisons of responses X, otherwise your today, include our comparable XXXX, Actual against views statements. August only,

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

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

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

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

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

over the to turn I'll Andy. call now And

XX% revenue, in billion, cash the adjusted or reporting exchange $XX.X XX-month XXX% Thanks, year-over-year. income from $XXX foreign Operating Dave. up and $XX.X billion rates. for leases impact up excluding free XX% Today, was up we're year-over-year billion, trailing year-over-year, finance $XX.X equipment billion flow was

therefore a XX.X% customers to growth. As I long continuing like in year-over-year and We're about about lot matters Amazon, seeing. X Starting AWS, drive there's what what AWS to QX. term in revenue XX.X% again macro trends accelerated to to QX we're think to see with from growth

their efforts First, are companies have of completed efforts. focused majority significant and cost optimization on new the again

infrastructure spending on moving are from their their to cloud. the on-premise again energy and modernizing infrastructure Second, companies

This modernization the enables developers. builders majority innovate global to in in the most I've companies' resources talked is that at premises, is spend today we and clip IT a the on rapid productivity keep drive expect flip of about scarcest save time. past, to where money, over more vast and This inverting

broadest strong slip security the performance the the of and be the customer's to of deepest beneficiary from biggest choice With partner and cloud. ecosystem, functionality, continues the this to AWS on-premises partner and operational

excited are all leveraging and about And third, sizes Builders companies of AI.

firmly of offerings and it. rate X options be analytics They choice for there rule continues with conversations our held option revenue Our that business results flexibility see to or can since best we've or job want for that AWS is the suspicious container world. heart X to despite unique don't multibillion-dollar beginning and the each customers done. the tool AI of which strategy dramatically but had our companies just to we this multiple in not are and is Developers such customers. reject a use belief with approach but X the type. being days. tool not resonating only run early want People it, grow database to X and with At it are a of

The is true in AI. same

argue and earliest be moments but customers. dominated model tried is X several data The the when a companies some the overtook options choice TensorFlow boom, AWS that what same this and of want we generative ago either, will not have PyTorch determined others then approach saw to the suggests and or years it. deliver framework our chip that only and You X this to that AI of lot customers is here for team machine mattered learning

generative You the and layers building permitted models get the can building blocks we're compute scale. is critical, building is see models to for inference layer, in Gen which of at all of stack. themselves, cost the bottom the this X training especially AI AI those philosophy At for as

NVIDIA with but NVIDIA partnership deep better a have clear instances the that and of they broader customers and we've relish performance. from selection heard We loud price available,

Trainium for we've Trainium in our It's on coming very compelling year why this those invested and of second versions custom in price training with inference. silicon And own later performance. chips for are the Inferentia

data, achieve are for We these while considerable time saving to services models, model all much high-quality also that These performance, manage significant builders the easier experiment, desire construct the it to deploy chips. make demand seeing and production money. and

that seeing including That's networking SageMaker. performance and standardized most models, model Hyper large does SageMaker increasingly builders changes we're on well. what recently the game launched Amazon feature for so its pods called and

agenting companies somebody their their provides great tens that Bedrock build and will has AI largest capabilities does others of think middle model capabilities. generative frontier the Bedrock model and best of makes the broad will of in and then what we as like thousands to between and else's already. This areas model guardrails, a own and it data valuation, models, what own critical teams leverage easy types RAG and service AI generative lots Bedrock different Amazon selection models, customize selection of why the using sizes. model model, seek is many has with layer it of it switch While

to Llama Mistral's new And quite X.X an open are models. our on planet, X Claude added compelling Anthropic X.X recently Meta's models and models, customers best-performing Llama's performance and the Bedrock as and benchmarks well. models which nature Large Mistral's impressive has new are the

on money the code, vulnerabilities the application see software muck and the steps casing than development provide it also outperforms other data. applying highest multiple nobody all for test together to At and team's about. on Amazon automatic to likes most connecting software the saves action. score a and and It adoption on coach suggestions. acceptance benchmarkable publicly competitors assistant your rate does security assistance strong top time all Q capable layer, It has leads development Q, talk and to of code own lot but known we're development generative leverage continuing more AI-powered suggestions, for or

sometimes few For burning instance, developers version development valuable turning framework to With hate costs and capabilities, migrated of the company when developer in tedious JDK another, opportunity companies decide otherwise Java to it caused. would saving upgrade to a months, takes many this Amazon though work. has million Q's XX,XXX $XXX game and changer. from months, X,XXX That's have applications it teams over who X transformation code important the years years a compared what

highly might transformation this other think evolve but elusive And address how migrations. desired to capability Q about

learning AWS for not our close and launched but adding all cloud many combined. major team has being customers. more capability as During This providers the than months, to done the than past we're machine [indiscernible] availability into generative other general is XX AI features twice cooking,

Even revenue ads very in beginning there. today, over more revenue see generated For opportunity the trailing in Sponsored we further our video XX growth, important in $X realize perspective, $XX billion in at what's advertising. revenue we've and the majority billion added it's advertising and with our to of year-over-year we're possible the than of months. drive advertising this

first the directly value the connect and sign-ups. content, feedback awareness, we opportunity on to for at upfronts, been case has reach, a offer subscription across the and like tech. is the or differentiated ads the on outcome advertising focused is In we're and May, product as we encouraged Video, made driving our by sales brands TV, traditionally signals ad exciting advertiser appearance for Prime With to the business agency and ability our

through that continually tech, and measurement brands of relevance can our ad the and We're to so able performance their ads. do improve

fewer of other have an and streaming preferring for that While experience, And for an course, of become offer video, month. meaningfully customers TV ad-free linear we providers. we than a ads TV option norm additional ads a have streaming aim to $X.XX

growth growth year-over-year the X% In segment of year-over-year North in in business, North few saw XX% we America segment. International notes on our A rate. and America stores the our revenue

year-over-year XXX First, leap growth. added day last of points basis quarter's about

or or growing a we're they when price more to like more delivery earning seeing faster economy of everyday prices see but because we what discretionary ticket our more items TVs than our slowly we trade in more industry, down lower electronics continued continue in speed us the higher than customers average or business. ASPs right selling Second, see essentials on can are for computers now and elsewhere is us customers' faster robust

our changes a lower fees changes. our expected seen than given seller behavior the we've Third, little are latest fee from

short-term trends. we these generally these revenue, While of issues like compress some

While American delivery price, resonating. is consumers are prices work being unit growth, outpacing sales our and growth low North continued as on careful is selection, our on meaningfully our

our day X ever than speed with of or Prime units same before, day. So this year, arriving next for than far faster the has delivery been more billion customers

essentials to and their Amazon the acceleration experience phenomenon. customers of they our more everyday example As continued needs business as an delivery, looked of our this of fast for shopping more

of we'd so more the send they customers effort better the prices On inbound where ] ideas given to facilities seller speed. shortage developments sellers in of [ apparel substantial and and can no in multiple and getting lower we've will There's collective aimed experience year-over-year delivery us spurred faster money for is fees, Store's customers. hoped. at unit lowering their items growth traction benefit even apparel incentive form save fees has selection, the Amazon than save improving These money to they

common a our to For medications adding even restaurant grocery we're subscription when Medicare a many stores. recently gives all subscribers in grocery value to offering more access of you on that delivery free items the help to geos is consume most and members. U.K. can our introducing Prime, Amazon's just fresh expanding $X generic U.S. shopping for a This save pharmacy RxPass benefit and instance, month,

we pursue As lowering focused to our initiatives, remain on serve. cost these we

automation items more same-day further and We out further expect X our as inventory speeds, have our consolidate reach we of inventory robotics, enable network building use expanding fulfillment center. our costs, box placement, more opportunities a produce once faster facility and optimal of With transfer in inbound to network. a to orders regionalizing inbound number including reduce and

discussed we've won't we but our see of execution, the take quarter a has process with value innovation to customers fell outstanding to serve, our which happen cost improvements X as to for business. lot cost and in or in path swoop. in lower technology They X These continuing past, meaningful very a

our As economically low we needs the can in add lower cost which, we for puts more delivery with ASP selection fast can coupled support to Amazon more shopping set our increasingly for customers. consideration we serve, that

the how many iterative for so it or straight X decisions. Rufus the areas to line AI customers We on customer investing. AI experiences. shopping the impact listing A see make But way stimulate and changing muscle few shopping We around We solve apparel see AI remain required. tools powered experience. see X problems. much quite we have which AI features our we create of sellers previously assistant and customers companies that to generative to in medium imagine. allow in about buying every trying line or bullish to other the our Generative items may best the selection is actual to very We companies. forms new business AI customer text build be potential know better especially change long-term generative comments not in how it can The how we're to in progress our versus with in of see enabling helping is

how reach of is our customers. private in vision which our AI defects and helping We where in generative how many uncover across centers teams music and their and of computer customers in and a our uses project see out it both like services and Alexa reinvent video. SageMaker customer [ our we it's are discover We rolling our generative combination see before see businesses. We investigator, silicon how it helping custom ] Bedrock it fulfillment to making AI external thousands and we're it smart new in internal products companies experiences North and see America,

lot of a across us. as doing and investing are and we in we'll ahead see board the We what like what we we're so AI, seeing keep

progress the Video. like to in continue also We Prime

nearly millions of data MGM watched Video. of another debuted in resonating countries supporting attracted worldwide live weeks, received X continue and The the title Video second point. our million Prime viewers in XXX weeks momentum most Amy viewers Boys, of X Our recently recently we of with Fallout, #X We monthly XX You, Season Amazon to worldwide, storytelling The reached for and ever nominations which is see it's Video titles sports. and which XX the Prime hundreds X like is original and opening Idea first the Studios on in on Prime

in Washington. video. satellite manufacturing recently We deals original best Video buy and evolve NBA low services, the landmark licensed streaming Kuiper, continues accelerating announced films and satellite streaming we're into combined orbit to facility Kirkland, partner content When our for And rent WNBA. our in for earth and constellation, with XX-year shows, titles, the Project our or with destination Prime the

distribution who customers We've satellite continue announced and entities. network the to we offer Sky broadband Kuiper with Brazil South DIRECTV significant X America countries and field agreement and residential to from government distributes enterprise Project a demand America Vrio service for to in Latin across

this and expect late continue a to believe business We us. this shipping start very could production large to for be satellites year

we'll but team the to invent here. the in the focused deliver on, a lot go several and over and feel years, to business. customers remains about continuing could on There's stop I our for collectively optimistic next

it financial for that, With update. over turn I'll Brian to a

Andy. Thanks,

to about had our a XX% excluding Worldwide our headwind we exchange. results. higher Let's from the is foreign guidance start which equates in impact million quarter, $XXX than billion, top in billion year-over-year, This $XXX with of exchange financial $X revenue an was increase foreign the QX line anticipated range.

managing to investing million $XX.X high billion, can Worldwide all to end operating on in customers. that innovating was above which of areas costs and remain year-over-year for needle continue $XXX focused move us we income nearly our segments, that the a way doubled our of Across guidance think the our in range. we allows

broad Starting North our with Customers year, continue like beauty spend delivered prices, fastest respond These their growing to items and nonperishable members shipping speeds focus in health, on everyday America so far fast selection which Amazon. areas our like and international as essentials. care personal ever and this positively helps segments. the drive low to strength shopping increase Prime continue include their foods We to and well offers. our items while as frequency on

of grew sales XXX was revenue XX% growth $XX.X our excluding billion, was of year-over-year, the segment year-over-year segment in year. adjust which International impact rates XX% revenue after North X% with unit an you is increase exchange. the consistent year-over-year, $XX QX an Overall for increase approximately leap basis foreign of of point billion, America and impact

XX year-over-year. segment up points income Operating of X.X%, billion, operating and North was America was increase margin $X.X $X.X XXX billion an basis down points year-over-year quarter-over-quarter. basis

North core including manufacture of the in at The investment due we some space quarter-over-quarter overall decreased our we're to starting we segment Kuiper, increased in again America North business, margin will of QX. America our in profitability margin improved in spend QX. areas, slightly where QX the satellites to actually launch look If stores operating

We our per saw in inventory to to by more driven units improvements in more This higher efforts closer with cost resulted are. to box consolidated serve where our shipments our regionally, shipped. customers place

led also productivity to our packages traveling and network. in transportation shorter better saw distances customers, this also to We on-road

year-over-year. our and QX, established operating basis again is primarily cost $XXX This as more we income better profitable International driven XXX margin consolidated inventory billion an improvement by Our X.X%, of a our shipments. with up million, countries segment improve with of placement structure was increase Operating in year-over-year. was we $X.X -- points

and benefits. emerging offerings, to expand countries leverage expanding in structure their customer their our continue Additionally, invest cost Prime

to We as are pleased make progress they countries with strides the overall path on these of respective their profitability.

base remains profitability to this North segments. an contributor And revenue saw increasing quarter. on in and we growth larger Advertising an international strong important America the

our growth expand further to sponsored Video like areas opportunities are in see newer that ads. as like well areas as products to continue We today offering driving Prime

year-over-year, Moving impact increase $XXX foreign more now Revenue segment. the annualized $XX.X is of revenue next an run was billion. than exchange. XX.X% to of our of rate excluding an billion, AWS AWS

and second or to quarter, turn workflows. cloud, AI to to their both across the generative the initiatives, workloads During cloud We into tap accelerate growth newer existing we restart of non-generative and companies AI. bring more continued attention saw the saw migrations on-premises from AI the generative power

continued increase an driven cost including AWS year-over-year. It's was $X control, by operating of on $X.X a hiring. pace our income measured billion, of focus billion

useful in Additionally, servers approximately estimated impact AWS our instituted favorable operating of an point change includes from that the life the XXX basis in margin QX. we

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

capital Now let's to attention investments. our turn

of As a these finance CapEx plus equipment a we define combination reminder, as leases.

CapEx the For half the first year, of $XX.X billion. was

Looking XXXX, demand our be generative the to to AI in in non-generative majority as be strong need the second investments will see ahead we for continue the AI of both of to year. to and growing the half AWS of we infrastructure rest capital workloads. support spend expect the higher The

a For to few seasonal in mind. the third quarter, highlight specifically, I'd factors keep

as Prime saved across From First, the was It billions and the driven we mid-July. headwind was Day largest and by margin marketing a QX globally category. product successful operating dollars to well Prime of in perspective, every Day event. seen our on hosted surrounding ever. in deals deals we've historically our another profitability Prime spend tenth members as Day a Prime

NFL we expect handle lastly, network. only first an quarter-over-quarter holiday return our way the digital create content night in QX ramp better the to costs to remain to Additionally, increase football. in lasting experience, And shareholders. a began capacity also customers Thursday we customer focused volumes in reliable who heads-down driving putting up of We our our on is believe our for fulfillment value from QX,

With questions. that, let's on your to move

our first question comes line And Instructions]. Eric Goldman the [Operator Sachs. of from with Sheridan

have all the the during overinvest last on detail to for prepared remarks. in of earnings AWS. been a the of couple a terms as the you for against opposed term a a curious, in cadence as of Maybe AWS of on Thanks broad underinvest capitalizing of as Andy, a elements to potential theme There's segment? theme in potential team. X-parter if perspective weeks thinking longer investment the that AI on about I'm basic of on the

over How And more silicon. a custom the from to the then about a second think your you be about to a feel custom broadly, coming back silicon it silicon profile on as to return on of custom do medium part term? investment? how your would you And portfolio comments long both more in pace pivot

Thanks, Eric. order. I'll them take in

in the what think years business. I and last think I the one of a question think the the to investment is least about about XX I on on has understood where massive is, over been AWS challenge side, I'd AWS parts that start it AI run logistics

have includes scale of you -- availability fact does if services with means land little SKUs XX quite data think those zones, availability roughly think then you about can't is if applications. at the of multiple And center, regions service then really too to disruptions, end each zones you sometimes quantities, of in across capacity, the equivalent as their it's having region thousands multiple about nobody actually XXX because multiple. and think right AWS which and about and up that to a XXX you companies centers about the difficult. it thousands of data And it a a which If have cluster we

So more capacity than most they companies need. deliver

income. woeful we are amount manage revenue done time actually our having you pretty the However, think disclosed capacity, deliver if over of too our of the period this operating have well. you from sophisticated don't to can and and over the on long that same the -- reasonably much we both time models we've thing in you that like economics we've land tell capacity. algorithmic that of AI I are the AWS operating right a income returns and And the built side. And learned And

advanced And of Now it's want asking few like that do it's have have AI up shows for a different take a cluster take signal that Like significant day? is same that a clumps down I capacity hundred but that company people the you down in are true training to chips a you not true thousand also capacity. mean a it's of newer. sometimes. lot to AI when -- very customers

and think, from So fluent, lot also more capacity while over need. a we've we the of true that models they signals built, in of are and muscle building lot signal skill what on also and are I customers it's time getting these a models,

it's I would while AI infrastructure, now. -- it's think the demand have right investing I space and in more business very very, I capacity think a us. a that the like we than today. mean to be already of significant to right large a we're reality for have have lot we going that is we now And amount in

much inventing an -- when and but for more is that less offering for you it's per customers. really per When very is AWS it But and you we building value still spend for unit, started Intel been partnership you space. and And even less they On return, informed really running you're generalized up by we deep what CPU has -- and spending customers found on you XX had -- a actually with point, also a enables though free high spend and our the don't custom your strategy years. to do the have you AWS, find approach interesting unit, what's less, here you it's happened from so that silicon we here. high

a actually that learning unless yourself what lot optimize you price from existing when want more, you your customers you're of you you're to price decide performance then push getting. and players that to times, hard spending for envelope performance And you're from yourself. better And get than it's what

with we're the XX% on about so fourth for And -- to up built silicon they other that our been And generalized which versus has business space very use. leading our xXX the to it is processors we CPU AWS that now. could right custom customers in XX% customers Graviton, price saves and model for successful about performance

And happening the we in -- and in really saw really space, price the are want GPU good, more there the performance the primarily And customers space same accelerator wanted. improved but X supply X scarce about trend people the where was products was provider years ago than people all time. what our

in so it's and about to demanding all to high excited get move went of today, chip the versions world hard over And price on our the is performance inference scarce clip. and where a they have our a which schedules customers which Inferentia, and continue Trainium, building we that's is at why are those, second compelling both GPUs supply we're time. quite chip, very which will training relative is of and

it we're and as we silicon, fast custom as Our producing can.

it I think another have be feature that's think others. like good around and to has very going return I AWS differentiating relative just profile Graviton will to

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

I have X.

little drivers to math, the retail I Was trying second So margins wanted in retail shipping? monkey do there sort than ask the Or gross of a look margins think how gross extra we about pressure of quarter, first Kuiper of because expected. retail that any the in one we're the quarter the some the weaker gross where to about Or on is do margins of discounting? is? of that

you Can the internal the America And years? investments time sort over reinvesting remind new margins line of improvement are Sort again in balancing of of getting Is of about that? showing one, philosophy versus on profitability of serve second the a you prepandemic next us the that the like Kuiper there cost talked couple next you back North about to years sort of improvement to over past, Andy, and on some levels. perhaps that? to sort executing pressing the profits couple and those deliver how of on just

on with start North let America Brian, me question the margins. first

XX you of remind each operating at we billion in $X.X the from year, you if that of margins, that to at stock-based have versus I'll QX. So QX sequentially the we expense step-up points compensation in QX. basis QX and look did annual seen segment end the stock-based added decrease about QX comp

extent, some impacting segments. So all X that's to

the But the stock-based step of margin up, increase even America with segment, part last the stores North comp again that quarter.

we're continuing cost serve improvements as well in speed, So to in see strong improvement selection, safety. as better added to

a So key strong. hitting we're of lot areas on that are the

bit like tick as some usually in investment had devices this mentioned seeing expenses satellites lightest going things of. for stepping QX in launch you're on a to QX. the year. investment of QX. is versus that our And in segment we QX that and those quarters. But investment it that's areas not What the investment we'll And in unheard a up versus is is Kuiper and Video we quarter, QX one Prime in I less up think thing QX the I'd build point QX start out, and have

to long the that going expand believe a on we margin calls X that the of to second to and happen stores continues period we've swoop, to I've it's a fell team our it's question, I to in have opportunity going the of business. over work in And continue time. as not the number done, in your said take it's Brian, not happen quarter, going X And

the we will, ricochet over the challenges first that even really to in number we cost network. in think out all our one U.S. of driving I network. we that the had it had forced period long the been ago and of seen so a the unveiled that did a serve was what keep regionalization that the of you And of about was, everything that X.X one years closely us felt play growth if And the opportunities it to down. of linings, reevaluate time. pandemic or silver and you've to have believe the serve we beliefs to the And year But most has really, over the last cost

one is regionalization first to And it. than when will theorized of thing impact it's to think to that had about continue while we even we ways lot fully still continue I to remember that not that we it, honing cost There's that we're serve. architected done lower bigger we optimize that bear think U.S. maybe a

number at our also of cost the same a take the we customer believe can we down where time, improving areas But experience. we found while other

only which changed things speed it with took the get we're about not our the customers. served but was it regionalization to able meaningfully items great One of to costs down,

so a other have those And opportunities. we of number

of is our example close serve which get going users also get them end customers. regionalizing it Another to cost the items of and to to more time inbound to our lower amount diminish and is network, takes that to

us like combine a box, units have which and better allow working as better things we're units per number the more box. our lowers that We on costs well a customers that of lot it's having that environment, to more of per for because

continue that as -- lot have cost our were think alluding other and to strategically and philosophically, you to I X And question. of opportunities we to down take a things to So serve. just

because there, selling we're take think that cost that that of as to I economic to And items, from offer customers. to don't ASP serve. selection to we're there items we're it to they're means lot current have down, perspective, to average cost not lower stock price are stock our we with to more that able afford a our able serve able to

add selection, we lowering we in to with make customers -- more when cost progress that as and time hard are us out and spend see add more on down we to we more to like for purchases work allows their selection. serve, But that actually more consider And of line. time our us this the we us

to we as But trying don't can years. XX the thing, do that tell our or we the We I any way down. we be can history both. serve here been think the I've on don't investing working way, I I be we believe other in can would it of either too, take company. cost ever to it you being binary see in as this have nor is seen of I really it think

and the on you businesses. you -- business examples the different just business are about working gave, people Kuiper they're stores If the think those

our stores working the of and take out who granted figure how to speeding broadband down our XXX we don't hard households a to delivery selection help expanding do get prices and Kuiper connectivity to and to and to world driving So work allow continue connectivity. is around really XXX to the times team for cost that our broadband to going up while million team the lot them have today how with on is connectivity serve low things our keeping on million

binary. they're So both time. same going not the them at going to be We're work on to

Evercore. line from Mahaney of comes with Mark next question our And the

of through I'll QX at growth of kind ask X see causing factors the there any are rates acceleration questions. and the AWS, reason level a half that in those those recovery shouldn't sustainable? we back X some of acceleration year ago, in ongoing year? that that from sound sort Is

marketing ask about seem a kind that. me into secondly, and there's want to consumer It to more suggests that interest that greater at survey to And pharmacy. in seems anecdotally for of small I work I like to segment lean us least just of

kind business leaning Amazon adoption? you? Just you into is customer like early mass at talk -- it you for where move getting more a and adoption of is that and where point feel beyond And about are

revenue at lion's point. AWS billion be, optimization run seen question, it's we rate it's do relatively large growth happen. to hard rates and On this predict the the what think are going share But have the $XXX cost of business that the I to a always at

save pandemic money invent people more a and to and productivity. difficult are were in really do and believe and their developer how we are then they on to means and survival the figure infrastructure, moving modernize on-premises the most can to to also March pre-pandemic, trying mode I that then companies cloud And which economy get quickly people that from came trying money. where out were save this And happen because better

here. we own and -- don't to which And low partner And just be well the makes themselves, ecosystem be a to as centers. cloud. back matters from I'm the to and can I more aren't actually my we mean people it I to hanging just lot invent AWS see asking stronger want using run really more with quickly people taking why I data going fruit this cost-effective my operational more the continues performance deeper of functionality, security, to choice partner are a customers if customers as cloud. moving and

it's of we from multibillion-dollar look And and look it say rate and It's if its at component as of so But that interesting in -- early. early we revenue that sometimes in is AI, a days. we run I the it's think the significant. now, amount at that demand I AI right have generative kind very have customers we it's said, very already

a out X likely think all next those I -- And of years. of will have and nets see time. that over where things growth we'll number over and rate continue chance So the

is it's the -- premises. equation IT about in Mark, dimensions one I the a mentioned. rate the that, as thing flip, believe of to I as of I spend think AWS which still of if there's revenue of leader run I say growth that business, do, in you XX% too, -- us going those that all a the that global is business mentioned, is I on other would lot about And today, $XXX billion ahead

built a when by working could is in continue from non-AI allows originally and of the where grow. premises for going businesses AI the cloud, lot customers to long migrate in that But of the cloud, not work, it which period a think over factored really this infrastructure whole that's on AI is we space, how large were mean about generative thinking itself and as AWS to I been I and a be of that basically something going be AI taking also large. it's all you're it unlike we get-go big to to help get time those fast space, to opportunity with the way, the to the which it's going built be to them it's generative all the largely and

side, of a grown you're retail has the business. extension has grow it on natural from work for business get think that But that I the think I a to XX to build what quickly, always done resonance business On the has more continue really lot last you you're seeing us what I think months the right paid you've in team customers. our the a of relatively that was lot the offering off. a customer seen to see is with really experience over And that pharmacy pharmacy and

it's by store, And of pharmacy we way, the ease can and in especially, think you walk you order into a into physical you if Customers experience love and about Pharmacy. today, and how the press and which behind to out a lifting you open experience you pretty with stores. in locked cities where to is and a have in much come shop -- to cabinets, of button cabinets on lot customer versus experience when Amazon pharmacies the speed the with get the the for a going tough a walking somebody

customer pharmacy a of So resonance of how and in our happening made and much lot is the what's the driving behavior. world we've buying experience physical combination improved

see allows members a our continuing And medications there. be and -- to of members program program same-day you common I RxPass get Medicare launch just be to to expand to XX that package members, delivery continue customers and able think us to also $X month. to up Prime cities. to expanded we We for to medications

with cities, more and of the New a cities in dozen today X to them including Angeles plans than the expand year. have by to Los We end York

lot a there, of optimistic seeing we're it. about and very growth we're So

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

a move in for return know curious these What early, cloud, to having And I AI? On guess, not you to for seeing but of the Andy, I'm you get ready, workloads to ready backlog a seeing state if step-up to AI could you is you about those I most see if to stay even share when this you when day to motions? think quarter. are are had number are the sales getting moving in companies data AWS, public you they're adopt ready today

you figure. is the Dave. I'll to start This backlog just just off give

it end billion. at So of the was quarter, the second $XXX.X

that's up So XX% about year-over-year.

say them such able would true what your that maybe it's AI true AI, analytics, your can access you top and to that of Brent, On the run data application. question, effectively more data way be do organized the that so of the then build not a I is that it's is and if to in second is quite on difficult in models but part in which it's even

everyone with hurry on when true and like, work is systems that the first show as your is partners, AI ask we both of questions So with going as this we customers, when you're to where a one work generative show going with to work customers when directly doing us integrator well we is in us we how and lake what us show data access your is, data. that data looks get

the to cloud, to are that the of it's because of there so remembering the again, for to your who IT premises, lot and ability in growth. associated who effectively the who number -- many use we've right able advantage of to cloud, global are The take and companies lot AI. be right X of fortunately, with generative the a ready the worth the there's often do will, in drivers seen where is AI move a the work AI, to doing there's to also shape companies work have But being in many XX% companies spend on getting to a going done And of of move be a to and remember to data spot the more so very yet them. have that's

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

Great. Two questions.

income margins First, strong, again, the op mid-XX% were area. AWS

the a down year? then Q-over-Q. drivers? should we what of think the half of bit the income AWS kind international were key about in how Just And stepped back margin the margins And op

curious about Just that.

you, Thank John. Yes.

Let me start with AWS profitability.

So It's the QX. range range mid-XX% in the last percent mid-XXs yes, year. margin is up the from in

that we've you're the a of the made impact number in efficiencies So and cost business. seeing of we've reductions driven

year-over-year. happened margin also last about XXX an to we in that life contributed servers about of basis Talked points the quarter, useful There's adjustment that QX. made of that

the on structure. operating be quarter-to-quarter. said But work past, the fluctuate margin lumpy as cost in these to will continue we we've again, So and

build products our to -- customers are that new work and work We on attract continue new to efficiencies.

was? question Second

International segment margin.

Yes, this is Dave.

that. on quick real Just

That the for of there's we're You million as XXX about up we the stages a there. past, perspective. different existence about from points is quarter. of in year-on-year talked countries basis mentioned about $XXX that a maturity number margin and profit And

established I so on you're seeing progress, both with countries. basis And a certainly our continued think year-over-year

and So with build and continued experience. U.S., to operational particular, in focused similar customer there, the contributors U.K., out expanding the Germany that while about improvement efficiency business, we Japan on factors sizable the being the talked to

emerging about as expanding the X the years solutions past said we've benefits then in building the again, out for really the Prime quarters, XX launched customers. countries over we last customer on, while several And member over countries, experience, building scalable that focused

both established year-over-year in emerging think good in working that I so there. seeing progress improvement And areas, for and further

JPMorgan. question from final come of Doug will with our Anmuth line And the

in you as computers, especially some and out Europe, I TVs pressures XQ think in into indiscretionary factored macro electronics You called your guide, XQ well. and in maybe

And Just see does influence kind curious, the of through that you you outlook? XQ trends expected? did softening your as how the macro Or generally quarter? were

separately, can about? help the that you Brian, Kuiper investment us around quantify talked incremental you then And

for with we into QX, in as well. lower Yes, deals. for Consumers spend, talking continue I of being it careful sure. of We're The and we lot last the it same consumer you, trading trends think their the looking that seeing Thank signs That macro I it We're have earlier into ASP for down, factors, seeing expect about year. products, looking QX. to QX. continuing Doug. if step discussed back, a been continued Andy

in QX. when again, volume accelerated growth. America very actually you year unit unit We we North had The adjust was growth difference slightly in that, strong in leap for QX

of in sequentially about as categories. drop to we -- also both growth but in essentials trends, our was talked business and revenue existing sequentially the growth tied ASP continuation So revenue and everyday

we selling lower the items, but in while deliver, it's so it's normalized And to -- are essentials, we Kuiper right we everyday we'd as strong And certainly ticket consumers products quantify especially to So you like a holding market -- not itself, in we're ASP speed been consideration well think of be the mix up economy. number of and certainly allows higher us as in now. your a more those -- for and like because, again, question. quickly, thank the not items. today, I set on going for to that are our

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