Amazon late Thursday wowed investors with its report of $92 million in profit on $23.18 billion in revenue.
The 19 cent per share was well above the 14 cent per share loss analysts were expecting and the 27 cent per share loss from the same quarter last year.
Amazon was able to significantly trim operating costs in part, the company said, by employing robots and algorithms to make decisions, rather than people. And its cloud services unit saw a $391 million profit on $1.82 billion in revenue.
There may be less scoffing at Amazon for last week's Prime Day this Friday morning, considering that its Q2 results have pushed the e-retail giant's market share past Wal-Mart Stores Inc. to some $264 billion in after-hours trading. This switch up has many people saying that e-commerce has become an even more formidable threat in retail, and is on its way to play a more central part in the economy and the retail space itself.
The company experimented with “Prime Day” last Wednesday, a day with numerous discounts designed to celebrate the company’s 20th anniversary and attract even more Prime members. The e-retailer in Q2 made more in sales than was expected, and trimmed costs enough to turn a healthy profit.
It’s those Prime members that are likely helping stabilize the company, which has long been known to plow its revenues back into the company, at the expense of profit. Q2 operating expenses increased 17.4% compared to revenue growth of 19.9%, the most daylight between those two numbers in three years.
The company has yet to declare how many Prime members it has exactly, although recent research puts that at 44 million, or nearly half its U.S. customer base. Those Prime members and AWS, the company’s web services company, are the major sources of this healthy quarter. The company warned that Q3 could see anywhere from a loss of $480 million and a profit of $70 million.
Still, yet another quarter in the black for Amazon, even if just barely so, could mean a new normal for the retailer. But take note of investors’ patience with Amazon—an example of how sometimes Wall Street is highly tolerant of companies that take the long view over short-term gain. That has allowed Amazon to stay in disruption mode, and maintain a willingness to operate on vision and creativity, without fear of failure.