Amazon reports Q2 revenue of $88.91B, up 40% YoY, net income of $5.2B, up from $2.5B in Q1 2019, and AWS revenue of $10.81B, up 29%; stock up 4%+
SEATTLE—(BUSINESS WIRE)—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its second quarter ended June 30, 2020.
Amazon.com
Context & Ripple Effects
This print sits mid-arc in Amazon's Q2 record: three years earlier the company reported $38B in Q2 revenue growing 25%, with AWS at $4.1B and net income actually falling year-over-year. By the quarter ended June 30, 2020, revenue has more than doubled to $88.91B and growth has accelerated to 40% — the fastest Q2 pace in the related coverage — while AWS alone now out-earns what the whole company made in 2017.
The profitability story also flips: net income of $5.2B is more than double the $2.5B reported the prior quarter, and the market rewards it with a 4%+ after-hours move. That sets the expectation bar that later prints will be judged against.
First-order effects
Shareholders capture the immediate gain — the stock rises over 4% on the print — while AWS's $10.81B quarter, up 29% YoY, confirms cloud as the company's primary profit engine behind the $5.2B net income.
AWS customers and competitors now face a hyperscaler growing 29% at over $43B annualized scale, hardening AWS's position as the benchmark every rival's cloud results are measured against.
Second-order effects
The market's bar ratchets immediately: when Amazon next reports Q2 growth of 27% on $113.08B in revenue, the stock falls more than 5% — a beat on absolute numbers becomes a miss once the 40% baseline set here is priced in.
Sustained AWS momentum at this scale pressures enterprise IT buyers' negotiating stance, since the vendor they are standardizing on keeps consolidating share faster than its own retail arm grows.
The longer shift is that Amazon's valuation narrative migrates from e-commerce margin questions to infrastructure economics, with AWS and eventually silicon as the durable high-margin layers.
The trend: Amazon's Q2 prints show compounding hyperscale economics, where each year's record baseline resets investor expectations so sharply that growth rates, not absolute profits, decide the stock's reaction.
Just for the LOLZ: Amazon's cumulative annual net income from 1994 to 2016 was $4.9 billion — less than the net profit in the June Q, according to Capital IQ. (Amazon lost money in some of these years, which I subtracted from the sum.)
From investor update: “Amazon announced new or expanded Alexa integrations with global automotive brands including General Motors, Volkswagen, Toyota, and Lexus.” https://www.businesswire.com/ ... https://twitter.com/...
.@RBReich $88b represents service & convenience to millions globally. It also represents jobs & income for small merchants globally. It is there because @JeffBezos took a risk. Stop hating on his success, which is definitely creating economic empowerment for others!! https://twit…
Count the number of times you see the word “cash” in this Amazon earnings release. That's what the 1997 letter said they would focus on: https://www.businesswire.com/ ...
These $AMZN results just kinda make you go wow. Holy operating leverage. Amazon's Q2: $4 billion spent on COVID-19 and still nets $5.2 billion https://www.zdnet.com/... via @ZDNet & @ldignan
Mega winner: Amazon, for convincing investors not to expect profits for years & instead invest in best fulfillment network in the world, which becomes crucial during a pandemic Booster: pandemic lockdown of nonessential stores
Fwark. Amazon revenue up 40%. You-know-who is going to see their networth increase another few tens of billions when the Nas reopnes tomorrow https://twitter.com/...
Yoooowza. Amazon's unit growth - the old fashioned, how much stuff did you sell on the website, metric - surged 57% in 2Q. Less than two years ago that figure was sliding toward single digits. Covid-19 has people buying a lot of stuff online.
$AMZN Q2 2020: - AWS up 29% - Subscriptions up 29% - ‘Other’ up 41% - North American sales up 43% - International sales up 38% - $2.0 billion of costs related to COVID-19 for Q3 2020 https://venturebeat.com/...
In its earnings report, Amazon says that the number of first-time Prime Video viewers nearly doubled and video rentals were up as more people stayed at home during the pandemic
In internal discussions I said “With Covid, more and more of life moves online, that's good for us. But a few big customers are gonna hit the wall. That's bad for us.” https://www.cnbc.com/... A biz that grows “only” 29% in these crazy times is still a pretty good place to be.