Earnings Call Deliverable restrictions and the return to the workplace Analyst Information: Cole Boester and TMT SaaS Analysts Covid-Response ● Consumers fled to Amazon when the Overview pandemic hit to stock up on household Ticker: AMZN products and groceries, etc. This Revenue, Net: $386 Billion movement tremendously improved CEO: Jeff Bezos sales. Sector: TMT-SaaS ● This surge in demand led to a delay in Price: $3,400 delivery time, with some prime shoppers Market Cap: 1.53T facing 4+ days delivery time. Return on Equity: 27.07% ● Amazon hired more than 175,000 Return on Assets: 7.88% employees PE Ratio (TTM): 79.74 ● Bezos promised to spend $4 billion on coronavirus-fighting measures (PPE for Earnings Update workers, enhanced cleaning of facilities, Key Results employee benefits & COVID testing ● EPS beat guidance by almost 100%, at sites). $14.09 vs. $7.23, and revenue was $125B vs. the expected $119.7B. Growth ● Revenue was up tremendously, Near Term Growth: smashing the $100m mark, and analysts ● A newly expanded relationship with described it as a “blowout quarter.” Cargojet is expected to increase ● Jeff Bezos is stepping down as the eCommerce revenue in Canada. long-time CEO, and Andy Jassy, cloud ● AWS is looking to rebound in Q2 as business maker, is taking over the reins. digital cloud demand could rebound. ● However, Amazon expects volumes to drop 25% from Q4 to Q1. Long Term Growth: ● E-Commerce business is still growing at Analysis of Key Results a rapid rate, which presents a great ● Amazon’s explosion in revenue can be opportunity for even further revenue largely attributed to COVID-19, the growth. accelerated move to online sales. ● Digital advertising business is still in its ● Amazon is continually diversifying its infancy. Currently has only about a 10% business model, and although volume market share, far behind Google and will take a hit in the coming quarters, Facebook, but their revenue from digital management hopes to offset this with advertising is expected to grow to $30 new business lines. billion (currently at $15 billion) by ● AWS has continued their cloud 2023. customer outreach increase to businesses over the past year, a revenue driver to keep in mind in the next quarter with eased COVID-19 infrastructure close to users in US Breakdown of Revenue metropolitan areas. ● AWS Trianium is the newest machine learning training chip that will lead to Amazon increasing productivity in the machine learning sector. ● New Amazon Alexa features include languages and shopping list share. ● In financing, AWS, shopping, and ● Revenue streams: online stores (50.6%), investing in employees Amazon plans to Amazon Web Services (12.4%), third increase market share in a broad range party selling services (19.7%), of areas, creating a large moat. subscription services (6.8%), physical stores, Amazon owns Whole Foods, and Catalyst Watch four other name brand stores (5.3%), ● Garmin integrating Amazon Alexa into and other, including ad revenue and their in-car systems. co-branded credit cards (5.3%). ● Recently expanded relationship with Cargojet (Canadian aircraft provider), Competitive Positioning supporting the rapid growth of ● Amazon’s main competitors are eBay eCommerce in Canada. and Walmart in the US Market ○ Amazon’s EV/EBITDA is 31.1 whereas EBay’s is 11.9 and Walmart’s is 12.2. ○ Amazon’s P/E ratio is 80 whereas EBay’s is 8 and Walmart’s is 29 ○ Additionally, Amazon’s Debt-to-Equity ratio is 2.44 whereas EBay’s is 4.42 and Walmart’s is 2.04. ○ However, Amazon’s revenue Q/Q is 43.60% compared to EBay’s 1.67% and Walmart’s 7.35%, meaning that Amazon is growing much faster than its competitors. ● Amazon holds a 37% market share in e-commerce retail. Strategy ● AWS plans to increase infrastructure around the world, and increase .