Amazon Q4: $87.4B revenue, up 21% YoY, net income of $3.3B, up from $3B in Q4 2018, AWS revenue of $9.9B, up from $7.4B in Q4 2018; stock up 9%+

SEATTLE—(BUSINESS WIRE) January 30, 2020—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2019.

Amazon 2020-01-31

Context & Ripple Effects

This print closes out a volatile year for Amazon's bottom line: Q3 net income had slipped to $2.1B from $2.9B a year earlier, so the Q4 rebound to $3.3B is the story investors are paying for, alongside a 21% revenue acceleration to $87.4B. It also extends a steady climb from the prior-year Q4 of $72.4B in revenue and $3.0B in net income.

AWS remains the swing factor: $9.9B in Q4 revenue, up from $7.4B a year ago, keeps the cloud segment compounding faster than the company overall. The market read it that way immediately — AMZN jumped more than 9% on the results.

First-order effects

Amazon converts a soft Q3 into a strong close: net income recovers to $3.3B and revenue growth accelerates to 21% YoY, rewarding shareholders with a 9%+ same-day stock move.
AWS crosses to $9.9B in quarterly revenue, up roughly a third year-over-year, widening its lead as Amazon's fastest-growing major segment.

Second-order effects

A 21% growth quarter off an $87.4B base resets expectations for 2020 guidance, raising the bar Amazon must clear each subsequent quarter to sustain this valuation.
AWS's continued outgrowth of the retail business increases pressure on rival cloud providers' own reported growth rates, since enterprise buyers benchmark against the segment leader's cadence.

Third-order effects

The pattern visible across these reports — retail revenue scaling while AWS compounds faster and carries outsized profit weight — points toward Amazon being valued increasingly as a cloud-and-infrastructure company with a commerce arm attached.
If quarterly net income keeps swinging as widely as it did between Q3 2019 and Q4 2019, investor focus will keep shifting toward AWS as the predictable earnings anchor, reshaping how the whole company is underwritten.

The trend: Amazon's quarterly reports are turning AWS into the company's valuation engine, with retail scale funding a cloud business that grows faster than the consolidated top line.

Discussion

@zerohedge @zerohedge on x
AMZN now employs 798,000 https://twitter.com/...
@benedictevans Benedict Evans on x
Amazon in 2019. https://twitter.com/...
@cnbcnow @cnbcnow on x
Amazon shares surge more than 8% after beating earnings expectations, reporting higher-than-expected AWS revenues and positive guidance https://www.cnbc.com/... https://twitter.com/...
@stevekovach Steve Kovach on x
Jeff Bezos' net worth up more than $12 billion after Amazon's blowout quarter https://www.cnbc.com/...
@shiraovide Shira Ovide on x
This number is bananas. It's more than 500 new hires EVERY SINGLE DAY. It's only slightly less bananas because Amazon had hired nearly 100,000 people (!) the prior three months. https://www.nytimes.com/... https://twitter.com/...
@_cingraham Christopher Ingraham on x
Amazon paid no federal taxes last year https://twitter.com/...
@shasharealsmove Shaaa on x
All cuz they hit me for a 5k aws charhe https://twitter.com/...
@whatthebit Stefan Constantine on x
I basically think you're dumb ass if you think $AMZN should be broken up. AWS doesn't have a monopoly on anything. UPS and FedEx can ship anything anywhere. And Whole Foods is still just for rich people. What's your argument?
@tmfinnovator Simon Erickson on x
So even after paying all of its operating, financial & capital commitments, $AMZN still generated $12.5 billion of free cash flow this yr for the most visionary capital allocator on the planet to play with. Things are about to get even more interesting. https://ir.aboutamazon.com…
@papadetre Jamie Gray on x
Once people realize Amazon pays 0 in federal income taxes while closing 30% of stores and malls... #YangWillWin https://twitter.com/...
@cnbcnow @cnbcnow on x
Amazon shares extend surge to more than 11%, company crosses $1 trillion market value in after-hours trading https://www.cnbc.com/... https://twitter.com/...
@lanceulanoff Lance Ulanoff on x
The cloud is everyone's success story https://twitter.com/...
@fmanjoo Farhad Manjoo on x
So now apple, Amazon, Microsoft and alphabet are worth more than a trillion each. Poor FB!
@shaig Shai Goldman on x
AWS as stand alone business would be worth at least $350B , making it a top 10 market cap company in the US https://twitter.com/...
@shaig Shai Goldman on x
Amazon with a nice little side business called AWS 👀 $35B top line, $9B net $AMZN https://ir.aboutamazon.com/... https://twitter.com/...
@zerohedge @zerohedge on x
*AMAZON SPIKES 9.9%, TOPS $1 TRILLION IN VALUE POST-MARKET
@tomkrazit Tom Krazit on x
AWS quarterly revenue just surpassed Oracle quarterly revenue, and one of them is growing at 34 percent while the other is growing at 1 percent. https://twitter.com/...
news.bloombergtax.com news.bloombergtax.com on x
States Build Momentum to Stop Amazon HQ2-Like Tax Bidding Wars
@ldrogen Leigh Drogen on x
So much for that completely asinine talking point about no taxes. So dumb. https://twitter.com/...
@mnickelsburg Monica Nickelsburg on x
Amazon is sharing more detail than ever before on its federal tax obligation. It's the latest sign of the company's changing PR strategy since it has become a political target. https://www.geekwire.com/...
Vox Jason Del Rey on x
Amazon now has more than 150 million Prime members across the world
@jrichlive Jeff Richards on x
Q: How does a company add $100B in market cap in a week? A: https://twitter.com/...
@delrey Jason Del Rey on x
Amazon CEO Jeff Bezos says in earnings release statement that company now has more than 150 million paid Prime members across the globe. 21 months ago, he announced that company had crossed 100 million members. Prime continues to be the main moat that keeps shoppers locked in.
@bradcasemore Brad Casemore on x
In Q4 2019, AWS revenue grew 34% y/y to reach $9.95 billion. Some will cite decelerating growth, but that's 34% y/y growth on an already big number. Many would welcome that sort of decelerated growth. https://venturebeat.com/...

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