AMZN Q4 2019 Earnings

Call Details

• Call Title: Amazon.com, Inc. Q4 2019 Earnings Call
• Date: January 30, 2020 at 10:30 PM UTC
• Management Team:
  • Shelley K. Pfeiffer (Director of Investor Relations)
  • Brian Olsavsky (Chief Financial Officer)
  • Dave Fildes (Director of Investor Relations)

Call Summary

Financial Performance

• Revenue was $87.4B in Q4 2019, which exceeded the high end of the company's guidance range of $86.5B by $0.9B.
• $400M of the revenue beat was attributed to foreign exchange benefit on the quarter.
• Seller services revenue grew 31% year over year in the quarter.
• Other revenue, led by advertising, grew about 41% year over year in the quarter.
• Outbound shipping costs grew around 43% year over year in the quarter.
• AWS moved from roughly a $30B revenue run rate at the end of 2018 to a $40B run rate at the end of 2019 in dollar terms.
• The company reiterated that quarterly comparisons are against the comparable period of 2018 and noted several one-time timing effects that impacted international seasonality.

Guidance

• Q1 2020 was estimated to include approximately $1.0B of incremental costs year over year related to one-day delivery expansion.
• The company incorporated current order trends and assumptions into its guidance and warned actual results may differ materially due to macro and operational variability.
• Depreciation useful life change for servers (3 years to 4 years) reduced quarterly depreciation by about $800M and was reflected in 2020 guidance ranges.
• The useful life change produced an approximate $2.3B impact to 2020 on an annualized basis according to the commentary.
• Future multi-year AWS customer commitments were disclosed at $30B at year-end and were noted as a factor in multi-year revenue visibility.
• The guidance commentary explicitly excluded the impact of any additional acquisitions, investments, restructurings, or legal settlements.