Amazon's Prime Day Surpassed Expectations 'by Any Metric,' Says CFO
Amazon was “thrilled with the results of Prime Day,” Chief Financial Officer Brian Olsavsky said on the company’s earnings call Thursday, referring to its Black Friday-like sales event earlier this month (see 1507060032) to build the ranks of $99-per-year Prime members. Prime Day “surpassed all of our expectations” by “any metric,” said Olsavsky, saying customers saved “millions” and Amazon signed new Prime members “in higher rates than we’ve ever seen.” Olsavsky didn’t say how many of those who signed up canceled memberships after scoring Prime Day deals. In Q&A, Olsavsky said Prime Instant Video customers look like “normal Prime customers” but have a higher pickup in retention rates and free trial conversions. “So we're very happy with the linkage between our digital offerings in the Prime customer base,” said Olsavsky. On Prime Day, customers “bought more devices than on any other day,” he said, saying it was a “bigger day than Black Friday” for Amazon, with orders up 266 percent year over year. He said worldwide Fulfillment by Amazon unit growth approached 300 percent, “so not only was it a great day for Amazon, it was also a great day for our sellers.” Olsavsky didn’t break out the impact of Prime Day but said it was incorporated into Amazon’s Q3 sales guidance of $23.3 billion to $25.5 billion, which would be 13-24 percent growth over Q3 2014. Amazon shares closed 9.8 percent higher Friday at $529.42. Wedbush Securities expects Prime Day and Amazon Web Services profitability to drive Q3 results “to at least the high-end of the guided ranges,” said analyst Michael Pachter. Amazon's Q2 sales grew 20 percent $23.18 billion, it said. “Unexpected profits well above the high end of guidance and consensus clearly reflect the tremendous leverage in Amazon's model,” Pachter said. Olsavsky cited investments Amazon has in place to bolster the Prime platform including Amazon Originals video content, Prime Music and Prime Now. On the device side, he called out the latest Kindle Paperwhite, Fire TV and Echo as Prime drivers.