To put it simply, the results crashed expectations.
Net sales came in at $23.18 billion in the second quarter, 20% higher compared to the same quarter last year. Under a constant currency basis, net sales would show a 27% increase year-over-year.
The bottom line was the biggest surprise. The company’s guidance in the previous earnings report expected the range to be between a loss of $500 million and a profit of $50.0 million. What was the actual result? A net income of $92.0 million!
Earnings per share (EPS) was $0.19, a huge improvement compared to the per share loss of $0.27 in Q2 2014, easily beating analysts’ expectation of a loss of $0.16 per share.
The stock market loved the surprise. In early trading, shares of Amazon were trading at $584.60 apiece, 21.2% higher than Thursday’s closing price.
Jeff Bezos, the company’s founder and CEO, was very pleased with the results: “We unveiled Amazon Business, opened Amazon Mexico, launched Prime free same-day, rolled out our ninth Prime Now city, broke our Black Friday record with the first-ever Prime Day, received 11 Emmy nominations for Transparent, debuted six new kids pilots, brought Echo to general availability, introduced the Alexa Skills Kit and Alexa Voice Service, opened FBA Small and Light, continued to double down on our fastest growing geography—India, launched 350 significant AWS features and services so far this year (ahead of last year’s pace), introduced AWS Educate, and entered into agreements for new solar and wind farms—enough to exceed our 2016 goal of 40% renewable energy.”
Amazon Web Service (AWS), the company’s cloud computing service, continued to be the fastest growing segment. In the second quarter of 2015, net sales from AWS totaled $1.8 billion, an 81.5% increase year-over-year. Operating income from AWS was $391 million, a more than 400% increase compared to the $77.0 million in the same quarter last year.
Amazon also managed to grow its business internationally. In the reporting quarter, international net sales increased 3.1% to $7.6 billion. However, the segment is yet to be profitable, with net loss widening from $2.0 million to $19.0 million.
India continued to be the fastest-growing region for the company, with Amazon India being the largest online store in the country. Amazon recently announced its Global Selling Program for merchants in India, and also introduced Sunday delivery for 100 cities in the country.
The company’s outlook was cheerful as well. For the third quarter of 2015, Amazon expects net sales to be between $23.3 billion and $25.5 billion, with operating income (loss) in the range of $480 million and $70.0 million.