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Amazon continues record run despite reopening of several key markets

Amazon has had another good quarter even as western markets, where most of its revenue comes from, open back up after the pandemic. Demand for online shopping remains strong, and Amazon Web Services is growing strongly, with its head Andy Jassy soon set to take over as Amazon’s CEO from the company’s founder Jeff Bezos.

Key Highlights and Financial Snapshot

  • Revenue jumped from US$2.5 billion in Q1 2020, to US$8.1 billion Q1 2021
  • AWS had an operating income of US$4.1 billion, up from US$3.07 billion in the same quarter last year.
  • International markets contributed to 28% of sales, up from 25% in the same quarter in the last year. The share contributed by AWS reduced by one percentage point to 13%.
  • Net sales increased 44% to $108.5 billion in the first quarter, compared with $75.5 billion in first quarter 2020. Excluding the $2.1 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 41% compared with first quarter 2020.

Highlights from release and transcript

  • On India: With respect to India, Amazon mentioned its US$250 million Smbhav investment, the fact that it has hired 300,000 people against its 1 million new hires by 2025 target, and its purchase of around 100 electric delivery vehicles from Mahindra. “Amazon India announced it has digitized 2.5 million small and medium-sized businesses, [and] enabled cumulative exports worth $3 billion,” the company said in its press release. “We are watching events closely in Europe and in particular, India [with regard to the COVID-19 pandemic], where we have put in place employee initiatives, from medical health lines, teleconsulting, hotel rooms for quarantining and financial support, as well as donating 100 ICU ventilator units to local hospitals,” Chief Financial Officer Brian Olsavsky said.
  • Grocery delivery continues to work: “Grocery has been a great revelation during the post-pandemic period here. I think people really value the ability to get home delivery. And we’ve seen that as numbers go up considerably pre and post-pandemic,” Olsavsky said, indicating that a lot of the gains for the delivery industry during the pandemic might well be permanent.
  • AWS notes: Amazon Web Services is among the brightest parts of Amazon’s business, and as a vendor for big businesses, it gets to leverage high amounts of growth from rapidly scaling businesses. “The Walt Disney Company [is] working with AWS on the expansion of Disney+ to more than 100 million subscribers around the world,” the company said. AWS will add 15 more “Availability Zones”, the company said, some of which will be in India.

Press ReleaseEarnings Call Transcript

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