Jeff Bezos may have quit the CEO job, but Amazon.com Inc. continues to hum.
Amazon today released its first quarterly earnings report since Andy Jassy took over from Bezos as CEO on July 5, and it shows Amazon grew its second quarter net profit by 48.4% through compared to the same period last year, while total revenues increased by 27.2%.
North American sales increased 21.9% and international sales increased 35.5%. Sales in North America had grown at least 39% year-over-year over the previous four quarters, driven by increased online shopping during the COVID-19 pandemic. With the opening of physical stores, especially in the United States, this spring, the growth in online shopping has slowed.
However, Amazon increased its revenue in the second quarter by moving its annual Prime Day sale, which normally takes place in July, to June, placing that revenue in the second quarter. (The 2020 sale was in October due to the pandemic.) Consumers around the world spent $ 11.19 billion on Amazon sites during the two-day Prime Day event in June, up from 7.6% from $ 10.39 billion in the October 2020 sale, according to Digital Commerce 360.
CFO Brian Olsavsky told stock analysts on a conference call after the results were released that moving from Prime Day to June boosted revenue growth by around 4% in the second quarter.
He said the rollout of COVID-19 vaccines around the world has resulted in slower growth in Amazon’s online sales, including by Amazon Prime members, who are the most loyal customers in the world. – trader. While these Prime members are still spending heavily on Amazon, “Prime member spending growth has moderated from the growth seen during the height of the pandemic,” Olsavsky said.
Amazon said in April that it has 200 million Prime members worldwide, and Olsavsky noted today that more than 50 million consumers have joined Prime in the past 18 months. Of those Prime members, 147 million are in the United States, according to market research firm Consumer Intelligence Research Partners.
Olsavsky said that since mid-May, excluding Prime Day, Amazon’s sales growth has been in the mid-teens, rather than the 35-45% growth it experienced during shutdowns and store closures due to coronaviruses. He said he expected this trend to continue. For the third quarter, Amazon was forecasting net sales of between $ 106.0 billion and $ 112.0 billion, which would represent 10-16% year-over-year growth.
North American operating income increased 47.0% from the second quarter of last year. Amazon’s profits, while strong during the pandemic, were impacted in the second quarter of 2020 by heavy Amazon spending to protect workers and customers during the pandemic. The company announced in its post for the second quarter of last year that it incurred $ 4 billion in such spending from March to June 2020.
As usual, a large chunk of Amazon’s profit came from its industry-leading cloud computing unit, Amazon Web Services. AWS increased its revenue by 37.0% and operating profit by 24.9% in the second quarter. While AWS only accounted for 13.1% of Amazon’s sales in the second quarter, it contributed 54.4% of operating income, up from 57.5% in the same quarter last year.
An increase of nearly $ 3.7 billion, or 87.5%, also helped boost profits in what Amazon calls its “Other” category, which is primarily the ad revenue that retailers and retailers have. brands buy to promote their products to Amazon buyers on company websites. Facebook Inc. and Google’s parent company Alphabet Inc. also reported strong increases in online advertising this week, with companies increasing ad spend this spring in response to a surge in post-pandemic purchases, the both online and offline.
Amazon’s second-quarter net profit of $ 7.8 billion was just short of its record profit of $ 8.1 billion in the first quarter of 2021.
Another area of strong growth for Amazon in the second quarter is third-party seller services, which include Amazon’s commissions on sales made by external merchants in its marketplaces and fees charged for its Fulfillment by Amazon delivery service. . Revenue in this category increased 49.3% to $ 48.79 billion, from $ 32.67 billion a year ago.
Asked about the increase, Olsavsky noted that third-party sellers now account for 56% of unit sales on Amazon, up from 53% a year ago.
Asked about the leadership transition at Amazon, Olsavsky said of Jassy: “Andy got the upper hand by running.” He added, “Jeff, of course, is the executive chairman. He’s not leaving and he continues to be very involved, especially in one-way door decisions, ”which is Amazon’s jargon for hard-to-reverse initiatives.
For the second quarter ended June 30, Amazon reported:
- North America net sales of $ 67.55 billion, an increase of 21.9% from $ 55.44 billion in the second quarter of 2020.
- International sales of $ 30.72 billion, an increase of 35.5% from $ 22.67 billion a year ago.
- Global revenue of $ 113.08 billion, up 27.2% from $ 88.91 billion a year earlier.
- Net product sales, the value of goods Amazon sells on its own account, rose 15.4% to $ 58.00 billion, from $ 50.24 billion. Net sales of services reached $ 55.08 billion, an increase of 42.4% from $ 38.67 billion. Net sales of services include revenue from Amazon web services, Prime subscriptions, and Amazon’s commission on marketplace merchant sales and fulfillment fees charged to those merchants. Third-party vendor fees alone rose 37.9% to $ 25.09 billion from $ 18.20 billion.
- Amazon Web Services revenue of $ 14.81 billion, up 37.0% from $ 10.81 billion. AWS operating profit was $ 4.19 billion, up 24.9% from $ 3.36 billion.
- Other income, which comes mainly from advertising, increased 87.5% to $ 7.91 billion from $ 4.22 billion.
- Operating profit of $ 7.70 billion, an increase of 33.1% from $ 5.84 billion. AWS accounted for 54.4% of total operating income, up from 57.5% in the same period in 2020.
- Net income of $ 7.78 billion, up 48.4% from $ 5.24 billion.
For the first 6 months of 2021, Amazon reported:
- North American sales of $ 131.92 billion, an increase of 29.9% from $ 101.56 billion in the same period a year ago.
- International sales of $ 61.37 billion, up 46.9% from $ 41.77 billion.
- Global revenue of $ 221.60 billion, up 34.8% from $ 164.36 billion a year earlier. Net product sales increased 25.4% to $ 115.50 billion from $ 92.09 billion. Net sales of services reached $ 106.10 billion, an increase of 46.8% from $ 72.28 billion.
- AWS sales of $ 28.31 billion, an increase of 34.7% from $ 21.03 billion. AWS operating profit was $ 8.36 billion, up 29.9% from $ 6.43 billion.
- Other income, which comes mainly from advertising, rose 82.3% to $ 14.82 billion from $ 8.13 billion.
- Operating profit of $ 16.57 billion, up 68.5% from $ 9.83 billion. AWS accounted for 50.4% of total operating income, up from 65.4% in the same period in 2020.
- Net profit of $ 15.89 billion, an increase of 104.2% from $ 7.78 billion in the same period a year ago.
Amazon is # 1 in the Digital Commerce 360 Top 1000 in 2021.
Percentage changes may not add exactly to dollar figures due to rounding.