Amazon.com Inc (AMZN)

“Excluding the impact of Prime Day in both 2025 and 2026, third quarter 2026 year-over-year growth would have been nearly 400 basis points higher.”

“The Q3 guidance anticipates an unfavorable impact of approximately 80 basis points from the year-over-year changes in foreign exchange rates based on current rates.”

“Q3 operating income is expected to be between $22.5 billion and $26.5 billion.”

“Q3 net sales are expected to be between $197 billion and $202 billion.”

“We're on pace with the capacity build that we talked about a few quarters ago, where we said we expect to have double the power capacity by the end of 2027 that we had in 2025, and we continue to be on that track.”

“As we get a few years out and the revenue growth outpaces the incremental CapEx growth, which will happen at some point, the resulting revenue, free cash flow, and return on invested capital is very compelling.”

“We think, as I mentioned earlier, it has the potential to be a $1 trillion revenue business for AWS, and we intend on continuing to be the leaders.”

“We expect this relationship to strengthen over time as more AI workloads move into full-scale production and drive additional demand for our core services.”

“We expect to more than double our fleet of robotic arms, like Cardinal and Sparrow, in 2026.”

“We expect Continuum to grow quickly.”

“We long believed AWS could become a few hundred billion-dollar revenue business and now believe it'll be at least double that, and very possibly be a trillion-dollar annual revenue business for us in time, with very appealing accompanying free cash flow and return on invested capital.”

“Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027, too.”

“We now believe we will spend approximately $220 billion in cash CapEx in 2026.”

“We do have an increasing number of customers who are interested in us providing the Trainium chips to them, separate from our cloud, and we're actively having those conversations and exploring, and I expect there's a real chance we'll do that in the future.”

“My view of it is that within the next few years, you're going to have at least a half dozen models that are comparably good to each other.”

“We will enable the most recent 5.5 model in the next couple of weeks.”

“Within the North America segment, we do expect a year-over-year cost increase of approximately $1 billion related to Amazon LEO, as we manufacture and launch more satellites in preparation for our service offering, and we expect to begin capitalizing certain costs in Q4.”

“We continue to see strong sales trends carrying into Q2, and I will mention a few items on the operating income guidance.”

“We estimate the year-over-year impact of changes in foreign exchange rates based on current rates, which we expect to be a headwind of approximately 10 basis points in the quarter.”

“Of the AWS CapEx we intend to spend in 2026, much of which will be installed in future years, we have high confidence this will be monetized well, as we already have customer commitments for a substantial portion of it and that it will yield compelling operating margins and ROIC.”

“We have over 20 launches planned this year. We have over 30 launches planned in 2027.”

“As we have been sharing, the faster AWS grows, the more short-term CapEx we will spend.”

“We expect that Trainium will save us tens of billions of dollars of CapEx each year and provide several hundred basis points of operating margin advantage versus relying on other chips for inference.”

“But I expect over time there is a good chance we are going to sell racks in the next couple of years.”

“We are seeing very strong demand for Tranium three and expect nearly all of our Tranium three supply of chips to be committed by mid-2026.”

“We expect to double it again by the '27.”

“We have more than 20 launches planned in 2026, and more than 30 in 2027 which means we are spending more on launching satellites each year.”

“Within the North America segment, we do expect a year over year cost increase of approximately $1 billion related to Amazon LEO.”

“We've launched 180 satellites have more than 20 launches planned in 2026, more than 30 in 2027, and expect to launch commercially in 2026.”

“We plan to expand in many more communities in 2026, and we also plan to open more than 100 new Whole Foods Market stores over the next few years as we work to make grocery shopping easier, and more affordable for customers.”

“And as fast as we're bringing in right now, we are monetizing it.”

“Rufus is on track to deliver over $10 billion in incremental annualized sales.”

“You're going to see us continue to be very aggressive in investing in capacity because we see the demand.”

“I expect Trainium3 will be about 40% better than Trainium2 and Trainium2 is already very advantaged on price performance.”

“Trainium3 should preview at the end of this year with much fuller volumes coming in the beginning of '26, we have a lot of customers, both very large, and I'll call it, medium-sized who're quite interested in Trainium3.”

“Looking ahead, we expect our full year cash CapEx to be approximately $125 billion in 2025, and we expect that amount will increase in 2026.”

“we've already increased the number of rural communities with access to our same-day and next-day delivery by 60%, reaching roughly half of the total communities we plan to expand to by the end of the year.”

“Today, Trainium is being used by a small number of very large customers but we expect to accommodate more customers starting with Trainium3.”

“we have 3 that we've launched that are off to very good starts that you should expect to see more of as well.”

“I expect that we'll continue to buy more NVIDIA both next year and in the future.”

“we brought in quite a bit of capacity, as I mentioned in my opening comments, 3.8 gigawatts of capacity in the last year with another gigawatt plus coming in the fourth quarter and we expect to double our overall capacity by the end of 2027.”

“we expect that amount will increase in 2026.”

“we're on track to double again by 2027.”

“we have a lot of other customers who are interested in employing large clusters of Trainium chips that we're going to hopefully give them a chance to do so with Trainium3.”

“We will continue to invest more capital in chips, data centers and power to pursue this unusually large opportunity that we have in generative AI.”

“We're very helpful to get the service into commercial -- into commercial data later this year or early next year.”

“The rest in the U.S. coming in the next couple of months and it's starting the international rollout more broadly later in the year.”

“It's starting the international rollout more broadly later in the year.”

“I don't believe that we will have fully resolved the amount of capacity we need for the amount of demand that we have in a couple of quarters. I think it will take several quarters. But I do expect that it's going to get better each quarter, and I'm optimistic about that.”

“We expect Q2 CapEx to be reasonably representative of our quarterly capital investment rate for the back half of this year.”

“As we've said in the past, we expect AWS operating margins to fluctuate over time driven in part by the level of investments we are making at any point in time.”

“I do believe that the supply chain issues and the capacity issues will continue to get better as the year proceeds.”

“So, we do have a lot of investment in infrastructure going on and planned for the second-half of the year. So, that will -- we'll start to see the impact of that.”

“And I think we could be doing more, more if we had more capacity and I expect that the capacity to ease in the coming months.”

“We estimate the year-over-year impact of changes in foreign exchange rates based on current rates, which we expect to be a headwind of approximately 10 basis points in the quarter.”

“We plan to bring on an increasing amount of capacity in the back half of the year.”

“As we've said before, we expect AWS operating margins to fluctuate over time, driven in part by the level of investments we're making at any point in time.”

“You'll also see us expand the number of delivery stations that we have in rural areas of the U.S. So, we can get items to people who live in less densely populated areas much more quickly.”

“Looking ahead, we'll continue to refine our newly redesigned inbound network, build out our same day delivery sites and add additional robotics and automation throughout our buildings.”

“And so we expect throughout 2025 that the number of occasions where you're not sure which you wanna buy and you want help from Rufus are gonna continue to increase more and more helpful to customers.”

“But I expect that we'll have opportunities to keep taking our costs to serve down this year, and that'll be a big part of”

“I think that is reasonably representative of what you can expect in the annualized CapEx rate in 2025.”

“we anticipate this will increase full-year 2025 operating income by approximately $900 million.”

“We anticipate this will decrease full-year 2025 operating income by approximately $700 million.”

“on an aggregate basis, we estimate this will decrease full-year 2025 operating income by approximately $400 million for the assets on our balance sheet as of December 31, 2024.”

“As we've said in the past, we expect AWS operating margins to fluctuate over time, driven in part by the level of investments we're making.”

“While these efforts will take time to implement, and progress may not be linear, We have a good plan to continue to drive improvements in our cost structure.”

“Looking ahead, we have several opportunities to keep lowering our costs through even better inventory placement, which also allows us to deliver items to customers faster.”

“As we look to 2025 and beyond, we see opportunities to reduce costs again as we further refine inventory placement, grow our same-day delivery network, and accelerate robotics and automation throughout the network.”

“over the long term, we feel the margins will be comparable to non AI business as well.”

“We're seeing significant interest in these chips, and we've gone back to our manufacturing partners multiple times to produce much more than we'd originally planned.”

“The second version of Trainium, Trainium2 is starting to ramp up in the next few weeks and will be very compelling for customers on price performance.”

“And so I think we've proven over time that we can drive enough operating income and free-cash flow to make this a very successful return on invested capital business and we expect the same thing will happen here with Generative AI.”

“We expect to spend approximately $75 billion in CapEx in 2024.”

“As we said in the past, we expect the AWS operating margins to fluctuate, driven in part by the level of investments we're making at any point in time.”

“Next year, we plan to launch operations in 20 new cities, so nearly half the US will have the ability to have their medications delivered to their door within hours.”

“is expected to drive a 25% improvement in our cost to serve during peak within this next generation facility.”

“As we scale and optimize this new design, we expect these changes will further improve inventory placement, offer faster delivery time, save transportation costs, and enable us to increase units shipped per box.”

“I actually believe that the rate of growth there has a chance to improve over time as we have bigger and bigger capacity.”

“I continue and the team continues to believe that we have the opportunity to expand the margin in our stores business.”

“we continue to launch same-day delivery of medications to cities. We have them in 8 cities, including Los Angeles and New York today with plans to expand to more than a dozen cities by the end of the year.”

“And lastly, we expect an increase in digital content cost quarter-over-quarter from the return of our NFL Thursday Night Football.”

“The majority of the spend will be to support the growing need for AWS infrastructure as we continue to see strong demand in both generative AI and our non-generative AI workloads.”

“Looking ahead to the rest of 2024, we expect capital investments to be higher in the second half of the year.”

“As we've long said, we expect AWS operating margins to fluctuate over time, driven in part by the level of investments we're making at any point in time.”

“We expect to start shipping production satellites late this year and continue to believe this could be a very large business for us.”

“With more optimal inbound inventory placement, we expect to enable faster speeds, consolidate more orders in one box, and reduce inventory transfers once items reach a fulfillment center.”

“with Trainium coming later this year, are very compelling in price performance. We're seeing significant demand for these chips.”

“it's not going to happen in one quarter, it's not going to happen in one fell swoop, it's going to take work over a long period of time.”

“As Andy said earlier, we are seeing strong demand signals from our customers and longer deals and larger commitments, many with generative AI components. So those signals are giving us confidence in our expansion of capital in this area.”

“We do see, though, on the CapEx side that we will be meaningfully stepping up our CapEx and the majority of that will be in our -- to support AWS infrastructure and specifically generative AI efforts.”

“It is not something that we anticipate being a giant capital expense driver for us. We have to build a lot of those capabilities anyway to handle our stores business, and we think we can -- it will be a modest increase on top of that to accommodate third-party sellers.”

“And those models consume an incredible amount of data with a lot of tokens, and they're significant to actually go train. And a lot of those are being built on top of AWS, and I expect an increasing amount of those to be built on AWS over time because our operational performance and security and as well as our chips”

“And we continue to see strong CapEx performance in our stores business. Most of that will be related to modest capital or capacity increases, in addition to our same-day fulfillment network and some Amazon Logistics upgrades to the fleet.”

“Right now, in Q1, we had $14 billion of CapEx. We expect that to be the low quarter for the year.”

“So I would expect that, that will increase -- it will increase depreciation, definitely in that segment.”

“We anticipate our overall capital expenditures to meaningfully increase year-over-year in 2024, primarily driven by higher infrastructure CapEx to support growth in AWS, including generative AI.”

“As we've said in the past, over time, we expect the AWS operating margins to fluctuate, driven in part by the level of investments we are making in the business.”

“While there always be a level of ongoing optimization, we think the majority of the recent cycle is behind us, and we're likely closer to a steady state of these optimization efforts.”

“Looking ahead, we see several opportunities to further lower cost to serve and improved profitability in our worldwide stores business while still investing to improve the customer experience.”

“with plans to expand to more than a dozen cities by the end of the year”

“But as you've seen over the last several years, we make that up in operating margin and free cash flow down the road as demand steadies out.”

“We expect the combination of AWS' reaccelerating growth and high demand for gen AI to meaningfully increase year-over-year capital expenditures in 2024, which given the way the AWS business model works is a positive sign of the future growth.”

“we really believe we're going to drive tens of billions of dollars of revenue over the next several years.”

“we expect it will allow us to have a healthy business to continue to invest in content and to continue to grow that.”

“So all of those trends we expect to continue, and we're going to work hard to make sure they continue.”

“It's not a material impact into the -- it estimated in our guidance in Q1.”

“So not totally out of the woods there, but coming down, and we still see some more upside.”

“the trend for most of the large percentage of the spend will be in infrastructure is going to continue into 2024.”

“we do expect CapEx to rise as we add capacity in AWS for region expansions, but primarily the work we're doing with generative AI projects.”

“We anticipate those trends continuing into 2024. CapEx will go up in 2024.”

“We expect accelerating trends to continue into 2024.”

“We will have this anticipated benefit to our operating income of approximately $900 million in Q1, which is included in our operating income guidance.”

“As we look forward to 2024, we anticipate CapEx to increase year-over-year, primarily driven by increased infrastructure CapEx, support growth of our AWS business, including additional investments in generative AI and large language models.”

“And with the ads in Prime Video, we'll be able to continue investing meaningfully in content over time.”

“As we look toward 2024 and beyond, we're not done lowering our cost to serve.”

“Our inbound fulfillment architecture and resulting inventory placement are areas of focus in 2024, and we have optimism there's more upside for us.”

“We remain on pace to deliver the fastest delivery speeds for Prime customers in our 29-year history.”

“And then you look at the very substantial gigantic new generative AI opportunity which I believe will be tens of billions of dollars of revenue for AWS over the next several years, I think we have a unique and broad approach that's really resonating with customers.”

“We continue -- we're going to continue to invest internationally in things like Prime and expanding Prime benefits and we're going to continue to build out the fulfillment and transportation networks to better serve customers.”

“But I think you'll continue to see the attenuation continue and we're already seeing more and more companies that are turning their attention to newer initiatives.”

“We have a very substantial investment of additional robotics initiatives, I would say many of which are coming to fruition in 2024 and 2025 that we think will make a further additional impact on the cost and productivity and safety and our fulfillment service.”

“We expect fulfillment and transportation CapEx to be down year-over-year, partially offset by increased infrastructure CapEx to support growth of our AWS business, including additional investments related to generative AI and large language model efforts.”

“If customers prefer and add free option, we plan to offer that for an additional $2.99 per month for U.S. members.”

“But we're seeing the pace and volume of closed deals pick up and we're encouraged by the strong last couple of months of new deals signed.”

“I continue to believe what I said last quarter, Brian, which is I do believe that we'll get back to margins like what we had pre COVID. And I don't think that's the end of what's possible for us there.”

“The experience has been so positive for customers in our business that we're planning to double the number of these facilities.”

“But what I would add is that we saw Q2 trends continue into July. So generally feel the business has stabilized, and we're looking forward to the back end of the year in the future because, as Andy said, there's a lot of new functionality coming out with -- and there's a lot of spend that will be in this area for all the great solutions that are out there for generative AI and large language models as well as machine learning solutions that we've always had for customers.”

“And while we are pleased with the progress we have made, we see more opportunity to drive improved cost efficiencies going forward.”

“We've also reevaluated virtually every part of our fulfillment network this past year and see additional structural changes we can make that provide future upside.”

“We still see several ways in which we can be more efficient in this structure and we believe will improve productivity further.”

“So we think that a lot of that machine learning training, inference will run on AWS.”

“So, I think we would describe ourselves as like along on the journey and making solid progress on recovering our cost structure and getting it back to pre-pandemic levels.”

“We are seeing these optimizations continue into the second quarter with April revenue growth rates about 500 basis points lower than what we saw in Q1.”

“We're pretty optimistic that we have something that may very well work. And we're hopeful over this next year we find that.”

“That said, stepping back, our new customer pipeline remains healthy and robust, and there are many customers continuing to put plans in place to migrate to the cloud and commit to AWS over the long term.”

“We're optimistic that we're going to find that in 2023. We're working hard at it. We see some encouraging signs. And when we do find that equation, we will expand it more expansively.”

“We're going to be working on this definitely through 2023 and beyond. But we hope to make and expect to make big improvements in 2023.”

“Those challenges will be there through the end of the year, and we'll be working on them definitely in the first half of next year as well.”

“And we expect, as we see a recovery in income generation, normalization of the inventory versus accounts payable cycle and efficiency in our CapEx spend, we intend to flip those numbers around.”

“That's been flipping the last year, and we expect that to normalize as we move into 2023.”

“I would say that although we had a 28% growth rate for the quarter for AWS, the back end of the quarter, we were more in the mid-20% growth rate. So we've carried that forecast through to the fourth quarter.”

“As the third quarter progressed, we saw moderating sales growth across many of our businesses as well as the increased foreign currency headwinds, I mentioned earlier, and we expect these impacts to persist throughout the fourth quarter.”

“And this is offset by an approximately $10 billion year-over-year increase in technology infrastructure, primarily to support the rapid growth, innovation and continued expansion of our AWS footprint.”

“This represents an estimated reduction in fulfillment and transportation capital investments of approximately $10 billion compared to last year, as we've continued to moderate our build expectations to better align with demand.”

“For the full year 2022, we expect to incur approximately $60 billion in capital investments, which is broadly in line with what we spent in 2021.”

“Right now the program is available, as you mentioned, invitation-only for merchants that are already using FBA. And it'll expand throughout this year as we'll extend more merchants to invite and participate in the program.”

“we've got to work our way out of the condition we are in and we are making good progress in Q2 and expect to keep pressing on that in the second half of the year”

“In our emerging locations, there's a healthy amount of investment we've done to drive expansion. And we expect to continue to do that, given the strong competition across many of these markets”

“And if you look again, where our investments been over the last few years and the growth of our sales force and our sales support, it's starting to – it is showing benefits, and we expect that to continue.”

“We expect the fulfillment and transportation dollars spent on capital projects to be lower in 2022 versus the prior year.”

“We expect infrastructure to represent a bit more than half of our total capital investments in 2022.”

“We expect technology infrastructure spend to grow year-over-year, primarily to support the rapid growth in innovation we are seeing with AWS.”

“For full-year 2022, we do expect to spend slightly more on capital investments than last year, but the proportion of capital spending shifts among our businesses.”

“We've also taken steps to slow future network capacity additions.”

“On the second point, we expect fixed cost leverage to improve in the second half of the year as we continue to grow into our capacity.”

“On the first point, we expect this challenging year-over-year comp will have ended in Q2.”

“We are encouraged by the progress during the quarter and see opportunity to further improve in the second half of the year.”

“These include pressures from higher fuel, trucking, air and ocean shipping rates, which we expect will continue into Q3.”

“This rollout is the start of what we expect to be thousands of EDVs in more than 100 cities by the end of the year and 100,000 vehicles across the U.S. by the year 2030.”

“Right now, we see a stabilization in the workforce, maybe we see good hiring rates.”

“And we've made good strides in the last month, and we're -- we see a line of sight to getting back, not all the way to prepandemic rates in the next quarter or two, but a good bit of the way.”

“So, we expect the year-over-year revenue comps to improve in the second half of the year because, again, we're passing this year of super high growth that I mentioned before from May of 2020 to May of 2021.”

“But what we see is that the fixed cost deleverage will narrow as we go through the year, and we'll be really glad we have this capacity in Q3 when Prime Day hits because that's always a big surge of both, inventory and orders, and then definitely in the holiday season.”

“So, that will be at some lower levels as we aim to and kind of expect to see some improvement in productivity, some of those other areas.”

“Customer demand does remain strong.”

“This year, we expect to see stock-based compensation expense of approximately $6 billion, up from $3.3 billion in Q1, largely reflecting wage inflation as we continue to hire and retain employees in high-demand areas, including engineers and other tech workers.”

“That said, we expect fulfillment dollars spent on capital projects to be lower in 2022 versus the prior year.”

“For full year 2022, we do expect infrastructure spend to grow year-over-year, in large part, to support the rapid growth in innovation we're seeing within AWS.”

“But we're hopeful and expecting that that will add to good elasticity, the same elasticity is that we start to see prepandemic?”

“We think it worked for our customers in Q4 as challenges remain in '20, I wouldn't say we've totally passed that, but we don't expect it to be a big issue in Q1.”

“We still see additional levels of investment in that in 2022.”

“We see the CapEx for infrastructure going up.”

“But, we do see the sun coming out and getting better here over the next number of quarters, and that's going to be where we're going to put a lot of our effort.”

“We expect the quarterly impact of this change to decrease throughout the year.”

“Although we're preparing to serve people throughout the whole quarter, we feel we've done a good job of lining up inventory commitments that are larger than normal.”

“We expect that to increase in 2022, and we're going to plan accordingly.”

“For the year, we expect our 2021 footprint additions to exceed last year's buildout, which was also significant.”

“In addition, we have a nearly $1 billion year-over-year increase in Q4 for spend to support our digital media content efforts, including video, music, and games.”

“We're going to have to see. I think it's going to adjust -- we are going to have to adjust and work to lower our costs going forward, especially on things that we procure that may have gone up in price in the last few months.”

“And we are hoping that that rectifies itself through Q4 and into early 2022.”