Amazon(US:AMZN)2026-02-05 23:00Financial Data and Key Metrics Changes - The company reported revenue of $213.4 billion, a 12% increase year-over-year, excluding foreign exchange impacts [5][29] - Operating income was $25 billion, which included special charges that reduced operating income by $2.4 billion [29] - Trailing twelve-month free cash flow was $11.2 billion, reflecting strong growth [5] Business Line Data and Key Metrics Changes - AWS revenue grew to $35.6 billion, with a growth rate of 24% year-over-year, marking the fastest growth in 13 quarters [6][35] - The North America segment revenue was $127.1 billion, up 10% year-over-year, while the international segment revenue was $50.7 billion, up 11% year-over-year [30] - The company saw a 12% increase in worldwide paid units, the highest quarterly growth rate in 2025 [30] Market Data and Key Metrics Changes - The company expanded its grocery business significantly, achieving over $150 billion in gross sales, making it a large grocer [19] - Same-day delivery for Prime members increased by nearly 70% year-over-year, with significant adoption of perishable grocery services [20][33] - Advertising revenue grew 22% year-over-year, reaching $21.3 billion in the quarter [24] Company Strategy and Development Direction - The company is focusing on AI, chips, and quick commerce as key growth areas, with strong demand already observed [5][6] - Investments in AWS and custom silicon are expected to drive long-term returns on invested capital [41][44] - The company plans to expand its grocery offerings and improve delivery speeds, aiming to enhance customer experience [19][33] Management's Comments on Operating Environment and Future Outlook - Management highlighted the unpredictability of results due to various external factors, including economic conditions and customer demand [4] - The company remains optimistic about the future, particularly in AI and cloud services, expecting continued strong demand [44][46] - Management emphasized the importance of customer experience and operational efficiency as key drivers for long-term value creation [39] Other Important Information - The company plans to invest approximately $200 billion in capital expenditures, predominantly in AWS [17] - The launch of Amazon Leo aims to provide connectivity in underserved areas, with significant interest from enterprise customers [27][37] Q&A Session Summary Question: Insights on long-term return on invested capital - Management discussed the strong demand for AI services and the expected long-term returns from current investments, emphasizing the importance of operational efficiencies [41][42][44] Question: Update on Project Rainier and financial guardrails - Management expressed excitement about the growth of Trainium and its applications, noting that the project is progressing well and has significant interest [51][52][56] Question: Changes in the AI market and relationships with companies like OpenAI - Management described the AI market as barbelled, with significant opportunities in enterprise production workloads and expressed optimism about extending partnerships with AI companies [59][60][64] Question: Retail business efficiency and investment areas - Management highlighted ongoing investments in expanding selection and improving delivery speeds while also identifying areas for cost efficiencies [73][75]