Amazon reports Q2 revenue of $63.4B, up 20% YoY, net income of $2.6B, up from $2.5B in Q2 2018, and AWS revenue of $8.4B, up from $6.1B in Q2 2018
Amazon.com, Inc. engages in the provision … Tweets: @jeffersongraham : How to account for a $63.4B quarter? Amazon CEO chalks it up to faster delivery. ""Customers are responding to Prime's move to one-day delivery," sez Bezos. “Free one-day delivery is now available to Prime members on more than ten million items, and we're just getting started.” Ari Levy / @levynews : AWS is 13% of Amazon's revenue, 52% of operating profit via @jordannovet https://www.cnbc.com/... Lauren Johnson / @laurenjohnson : Amazon's ad sales are growing but the growth rate is relatively flat from last quarter. $3 billion and up 37% year-over-year in Q2, similar to Q1's 34% year-over-year jump. Jason Del Rey / @delrey : Amazon CFO says the company ended up spending more than the expected $800 million that he estimated last quarter as Prime transitioned from two-day shipping to one-day shipping. “productivity was off” inside warehouse network as one-day shipping ramped up @jeffersongraham : Amazon says Fire TV has 34 million owners, and is no. 1 streaming device in US, UK, Germany, Japan and India. Charlie Bilello / @charliebilello : Amazon Revenue (Billions)... 2019 (est): 276 2018: 233 2017: 178 2016: 136 2015: 107 2014: 89 2013: 74 2012: 61 2011: 48 2010: 34 2009: 25 2008: 19 2007: 15 2006: 11 2005: 8.5 2004: 6.9 2003: 5.3 2002: 3.9 2001: 3.1 2000: 2.8 1999: 1.6 1998: 0.61 1997: 0.15 $AMZN Charlie Bilello / @charliebilello : Amazon Net Income (Millions)... '19 (est): 13,300 '18: 10,070 '17: 3,033 '16: 2,371 '15: 596 '14: -241 '13: 274 '12: -39 '11: 631 '10: 1,152 '09: 902 '08: 645 '07: 476 '06: 190 '05: 359 '04: 588 '03: 35 '02: -149 '01: -567 '00: -1,411 '99: -720 '98: -125 '97: -31 $AMZN
Context & Ripple Effects
Five years ago Amazon's first quarter of 2016 brought in $29.1B — this quarter alone does more than double that. The 2019 story isn't the 20% top-line jump to $63.4B, though; it's what Bezos spent it on: the margin whiplash that shows up repeatedly in later quarters has its origin here, when Amazon blew past its own $800M estimate to convert Prime from two-day to one-day delivery.
First-order effects
- Prime members immediately get free one-day delivery on over ten million items, while Amazon's net income stays essentially flat at $2.6B versus $2.5B a year earlier — the shipping transition consumed nearly all of a 20% revenue gain.
- AWS grows to $8.4B from $6.1B and now delivers 52% of operating profit on just 13% of revenue, making cloud earnings the direct funding source for the delivery buildout.
Second-order effects
- Retail rivals are forced into a delivery-speed arms race they must fund without an equivalent AWS profit engine, pressuring their own e-commerce margins.
- Advertising emerges as the offset: $3B in quarterly ad sales, up 37% YoY, gives Amazon a high-margin revenue stream largely insulated from the shipping costs dragging on retail.
Third-order effects
- If the pattern holds, Amazon structurally separates profit generation (cloud, ads) from revenue generation (retail), letting it sustain thinner commerce margins than competitors can tolerate — the template visible in every subsequent quarter's results.
The trend: Amazon is converting its cloud and advertising profit pools into a permanent logistics moat, trading near-term net income for delivery speed rivals cannot cheaply match.