Even as the Coronavirus pandemic has forced most companies to accept losses or turn less than expected profits, Amazon seems to be the exception to that rule. The online retailer has posted its biggest ever profit in 26 years. As a result, the company’s shares also rose by 5 percent after hours.
In its Q2 2020 earnings call, the ecommerce giant said that it hired 175,000 employees in recent months due to surging demand for its services as people turned to online shopping more than ever during the pandemic. Amazon also said that it saw revenue increase by 40% year over year, to $88.9 billion.
Amazon itself had forecast that it might lose money in Q2 because it will spend close to $4 billion on purchasing protective equipment for its staff, and in expenses related to the Coronavirus. However, the company still managed to double its income year over year to $5.2 billion.
The company saw an increase across all of its services. The company reports that online store sales jumped 48 percent to $45.9 billion in Q2 2020. There was a 52 percent increase in seller services revenue and 41 percent jump in revenue from ads. AWS also saw its revenue jump by 29 percent to $10.81 billion.
For Q3 2020, Amazon is forecasting net sales somewhere between $87 billion to $93 billion. That’s higher than analyst estimates of $86.34 billion. This is likely based on multiple factors, including the fact that Prime Day sales should bring in big numbers for Amazon. While the company has pushed Prime Day to Q4 in other countries, the sale is still being held in India in August, which should add to Amazon’s revenue for Q3. Moreover, Amazon says that “What we saw in Q2 was not only did the mix start to shift back to a more normal mix” and “we also were able to ship a lot more than we had originally thought.” Clearly, the company expects that trend to continue going into Q3, which should also help increase its revenue margins this quarter.