Amazon 1Q15 Earnings Call Notes

Wide growth range

“For Q2, 2015 we expect net sales of between $20.6 billion and $22.8 billion or growth of between 7% and 18%. This guidance anticipates approximately 750 basis points of unfavorable impact from foreign exchange rates.”

Dont have specific metrics on Prime Now…

” On Prime Now, we don’t have specific metrics we want to share today. But we have expanded to seven cities with more on the way. Customers are really enjoying the one hour and two delivery of tens of thousands of daily essential products. So the response has been great.”

You’re going to see a lot of invention from us in China

“Yes, let me start with China. So, I think you’ll see a lot invention, you’re seeing a lot of invention from us in China right now. Amazon is trusted source of authentic [ph] international products and that’s really what we’re doubling down on now with a Amazon global store on our own site, which gives Chinese customers access to over 1 million Amazon products globally.”

Investments for the long term

“the way you should think about it is, we are making some great investments for the long-term and that’s really what’s reflected in the operating results that you are seeing in terms of – so it is certainly impacting the operating margins both for North American and International.

So it’s the things that we – both Brian and I talked about that we’re doing globally to support Prime platform all of those things that we mentioned, video content, original content, Prime Now, category expansion, investing on behalf of FBA, which also helps Prime devices. ”

Spent $1 B on content. Higher prime retention from those who stream

“We mentioned last call that we spent approximately $1.3 billion on content globally for Prime customers and what we’ve seen and to date is was certainly still an investment for us, its certainly impacting our operating results, but we like what we see. We see customers who come in through our free trial pipeline if you will for video content. They convert it at a higher rate. We see – we have a great retention of Prime members, but those who stream actually, we retain those at a higher rate and we bring in new customers through our video pipeline.”

Video customers will buy other things from us

” this video content that we’re spending is helping us customers who buy consumable from us, they will buy clothing from us, they will buy shoes from us, they will buy electronics, they will buy media items.”

AWS is obviously growing extremely fast

“In terms of web services, it’s obviously growing extremely fast. We saw some acceleration of growth from a revenue perspective. Over the last few quarters here, usage is growing faster than that, so we will be deploying more capital as we go there.

In terms of the amounts, specific amounts, we’re not giving guidance on that today and one of the reasons it is growing so fast that we wan to make sure we put the right amount of capital in place and the teams has done a great job doing all the planning and the execution around that, so that’s what we’re doing there.”