Amazon posted a net profit of $79 million for the quarter ended September 30 compared the the net loss of $437 million in the same quarter last year. Here are five things we learned from their results and analyst call:
1) Breakneck growth in India
The company had mentioned in the preceding quarter that India was its fastest growing geography in terms of sales and that it would double down investments in the country. This quarter, we got some numbers: The number of sellers on Amazon India has grown 250% year-on-year. Amazon has been adding 40,000 products per day this year and has 30 million products on it platform. So far, Amazon.in’s 2015 Diwali season sale is the company’s largest ever, with daily sales of approximately four times what the had last year. In the third quarter, active customers on Amazon.in grew over 230% compared with last year.
2) 90% of sellers use Amazon’s warehouse and logistics service
Chief financial officer Brian T Olsavsky mentioned in the call that 90% of the sellers in Amazon India use the company’s warehouse and logistics services, which means that Fulfiled by Amazon should be generating cash for Amazon India. Amazon also said that it has nearly tripled its fulfillment capacity, compared with last year.
Earlier this month, Amazon opened a second fulfillment centre in Gujarat to handle demand during the Navratri festival demand. With this, Amazon.in has 21 fulfillment centres operational across 10 states in India with a total storage capacity of over five million cubic feet.
3) Amazon is hiring aggressively, globally
Amazon expects to create over 100,000 seasonal positions in North America, and over 40,000 across its European Fulfillment Network for the holiday season. Last year, Amazon converted tens of thousands of temporary employees into regular, full-time roles, and expects to do the same this year. “Headcount was up 49% year-over-year, which is higher than Q2. This is going to be primarily in our ops area,” Olsavsky mentioned in the call. Amazon has also said that it converted tens of thousands of temporary employees into regular, full-time roles, and expects to do the same this year.
4) Amazon Web Services growing at high pace
Amazon Web Services (AWS), the company’s cloud computing arm, had sales of $2.085 billion, a growth of 78.35% when compared to the same quarter last year. The segment had posted sales of $1.82 billion, a growth of 81% y-o-y, in the preceding quarter.
5) Chose restaurant delivery over hotel booking and travel:
Amazon shut down its hotel booking and travel website Amazon Destinations this month. Oslavsky had this to say about the Destinations: “So on destinations, we’re constantly trying new things and testing and measuring and iterating here at Amazon. We learned a lot, but we’ve discontinued that.”
Amazon also started a new restaurant delivery service. “On the restaurant delivery, we’ve had it for a couple months here in Seattle and recently announced it in Portland. It fits very well with Prime Now. So at this point, it’s pretty small, but something we’re excited to do for customers.”
Amazon reported net sales of $25.4 billion during Q3 2015, up 23% from $20.6 billion in Q3 2014. However, net profit was up and stood at $79 million in this quarter, compared to loss of $437 million in Q3 2014.
AWS, the company’s cloud computing arm, had sales of $2.085 billion, a growth of 78% when compared to the same quarter last year.
Amazon’s media business revenues in North America were at $2.96 billion, up by 8.37% from $2.73 billion in Q3 2014. Revenues from other international regions for the media business stood at $2.32 billion down 7.56% from $2.51 billion from the same period last year. The media business includes books, music, movies, video games and consoles, software, and digital downloads.
Revenues from electronics & other merchandize business for the quarter stood at $11.84 billion in the North America region up 34.63% from $8.79 billion from the same quarter last year. For other international areas, the segment reported $5.90 billion, up 14.36% from $4.91 billion in the same period last year.