Thank you for standing by. Good day, everyone, and welcome to the Amazon dotcom Third Quarter 2013 Financial Results Teleconference. And answer session. Today's call is being recorded. For opening remarks, I will be turning the call over to the Vice President of Investor Relations, Mr.
Sean Boyle. Please go ahead,
sir. Hello, and welcome to our Q3, 2013 financial results conference call. Joining us today is Tom Szkutak, our CFO. We will be available for questions after our prepared remarks. The following discussion and responses to your questions reflect management's views as of today, October 24, 2013 only, and will include forward looking statements.
Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and our filings with the SEC, including our most recent Annual Report on Form 10 ks. As you listen today's conference call, we encourage you to have our press release in front of you, which includes our financial results as well as our metrics and commentary on the quarter. During this call, we will discuss certain non GAAP financial measures. In our press release, slides accompanying this webcast and our filings with the SEC, each of which is posted on our IR website, you will find additional disclosures regarding these non GAAP measures, including reconciliations of these measures with comparable GAAP measures.
Finally, unless otherwise stated, 2012. Now I'll turn the call over to Tom. Thanks, Sean. I'll begin with comments on our Q3 financial results. Trailing 12 month free cash flow decreased 63 percent to $388,000,000 Trailing 12 month capital expenditures were 4.59 $1,000,000,000 This amount includes $1,400,000,000 in purchases of our previously leased corporate office space as well as property for our development of additional corporate office space located in Seattle, Washington, which we purchased in the Q4 of 2012.
The increase in capital expenditures reflects additional investments in support of our continued business growth, consisting of investments in technology infrastructure, including Amazon Web Services and additional capacity to support fulfillment operations. Return on invested capital was 3%, down from 10%. ROIC is TTM free cash flow divided by average total assets minus current liabilities excluding the current portion of long term debt over 5 quarter ends. The combination of common stock and stock based awards outstanding was 475,000,000 shares compared with 469,000,000 shares. Worldwide revenue grew 24% to 17,090,000,000 dollars or 26% excluding the $332,000,000 unfavorable impact from year over year changes in foreign exchange rates.
We're grateful to our customers who continue to take advantage of our low prices, fast selection and shipping offers. Media revenue increased to $5,030,000,000 up 9% or 13% excluding foreign exchange. EGM revenue increased to $11,050,000,000 up 29% or 31% excluding foreign exchange. Worldwide EGM increased to 65% of worldwide sales, up from 62%. Worldwide paid unit growth was 29%.
Active customer accounts exceeded 224,000,000 Worldwide active seller accounts were more than 2,000,000 Seller units represented 40% of paid units. Now I'll discuss operating expenses excluding stock based compensation. Cost of sales was 12 point $37,000,000,000 or 72.3 percent of revenue compared with 74.7%. Fulfillment, marketing, technology and content and G and A combined was $4,460,000,000 or 20 6.1 percent of sales, up approximately 250 basis points year over year. Fulfillment was $1,960,000,000 or 1.5 percent of revenue compared with 10.5%.
Tech and content was $1,580,000,000 or 9.2 percent of revenue compared with 7.8%. Marketing was $671,000,000 or 3.9 percent of revenue compared with 3.8%. Now, I'll talk about our segment results. And consistent with prior periods, we did not allocate to segments our stock based compensation or other operating expense line item. In the North America segment, revenue grew 31 percent to $10,300,000,000 Media revenue grew 18 percent to 2,610,000,000 dollars EGM revenue grew 33 percent to $6,730,000,000 representing 65% of North America revenues, up from 64%.
North America segment operating income increased 1% to $295,000,000 a 2.9 percent operating margin. In the international segment, revenue grew 15 percent to $6,790,000,000 adjusting for the 3.27 $1,000,000 year over year unfavorable foreign exchange impact, revenue growth was 20%. Media revenue increased 2% to $2,420,000,000 or 9% excluding foreign exchange. And EGM revenue grew 23% to $4,320,000,000 or 28% excluding foreign exchange. EGM now represents 64% of international revenues, up from 59%.
International segment operating loss was $28,000,000 compared to a $59,000,000 loss in the prior period. Consolidated segment operating income increased 15% to $267,000,000 or 1.6 percent of revenue, down approximately 10 basis points year over year. Excluding the unfavorable impact from foreign exchange, CSOI increased 18%. Unlike CSOI, our GAAP operating income or loss includes stock based compensation expense and other operating expense. GAAP operating loss was $25,000,000 compared to a $28,000,000 loss in the prior year period.
Our income tax benefit was $12,000,000 GAAP net loss was $41,000,000 or $0.09 per diluted share compared with net loss of $274,000,000 or 0 point 6 zero dollars per diluted share. The Q3 2012 included a loss of $169,000,000 or $0.37 per diluted share related to our equity method share of losses reported by LivingSocial, primarily attributable to its impairment charge of certain assets, including goodwill. Turning to the balance sheet, cash and marketable securities increased $2,440,000,000 year over year to 7,690,000,000 dollars Inventory increased 20 percent to $6,070,000,000 and inventory turns were 9.2, down from 9.7 turns a year ago, as we expanded selection, improved in stock levels and introduced new product categories. Accounts payable increased 20% to $10,040,000,000 and accounts payable days were 75 consistent with the prior year. I'll conclude my portion of today's call with guidance.
Incorporated into our guidance are the order trends that we've seen to date and we believe today to be appropriately conservative assumptions. Our results are inherently unpredictable and may be materially affected by many factors, including a high level of uncertainty surrounding exchange rate fluctuations as well as the global economy and consumer It's not possible to accurately predict demand and therefore our actual results could differ materially from our guidance. As we describe in more detail in our public filings, issues such as settling intercompany balances from foreign currencies amongst our subsidiaries, unfavorable resolution of legal matters and changes to our effective tax rates can all have a material effect on guidance. Our guidance further assumes that we don't conclude any additional business acquisitions, investments, restructurings or legal settlements, record any further revisions to stock based compensation estimates and that foreign exchange rates remain approximately where they've been recently. For Q4, twenty thirteen, we expect net sales of between 23 $500,000,000 $26,500,000,000 a growth between 10% 25%.
This guidance anticipates approximately 125 basis points of unfavorable impact from foreign exchange rates. GAAP operating income or loss to be between a $500,000,000 loss $500,000,000 in income compared to $405,000,000 income in the Q4 of 2012. This includes approximately $350,000,000 for stock based compensation and amortization of intangible assets. We anticipate consolidated segment offering income or loss, which excludes stock based compensation and other expense to be between a $150,000,000 loss $850,000,000 income compared to $678,000,000 income in Q4 2012. We remain head customer experience through price selection and convenience.
We believe putting customers first is the only reliable way to create lasting value for shareholders. Thanks. And with that, Sean, let's move to questions. Great. Thanks, Tom.
Let's move on to the Q and A portion of the call. Operator, will you please remind our listeners how to initiate a question?
At this time, we will now open the call up for questions. In the interest of time, we ask that you limit yourself to one We'll go first to Ben Schachter with Macquarie.
Hey, Tom. On the press release, it says that you signed up millions of new Prime members.
And I believe if you read
it, it that happened in the last 90 days. I was wondering if you ever commented on a time period like that before? And is that a normal run rate to add millions of Prime users in 90 days? Or is there something special in this quarter that drove Prime? Thanks.
I don't recall if we've actually given a 90 day period before. I don't believe that we have. And in terms of beyond that, there's not a lot more that I can add to that. But we are very excited. Prime is growing very fast, very excited for the service that we offer customers, both in terms of physical and digital goods.
So it's exciting and certainly that's why we put it in there today in the release.
We'll go next to Scott DeVitt with Morgan Stanley.
Hi, Tom. 2 if I could. First on the Kindle family, it seems like the timing of device launches, the e book library size and local language content could be drivers of different levels of penetration of digital media in the U. S. Relative to what you've been able to attain outside the U.
S. To date. And I was wondering if there's anything else notable that you would highlight that helps explain the different dynamic that seems to be playing out within the media revenue line domestically versus international? And whether you think any of those issues are structural or they just work themselves out with the a prime customer and what the intended outcome may be as it relates to the increase in Super Saver pricing in the U. S.
Market? Thanks.
In terms of the first question, certainly, we've been launched devices in the U. S. Earlier. In terms of content both you're really referring to mostly e book content and both are growing very fast. The base is different as you mentioned.
We have a higher base in the U. S. Just based on when we launched. So you're absolutely right. It's a you do see that difference in the media line between North America and international.
And so it's just again both are growing very nicely right now in terms of digital Kindle books in this case as you referenced, but it's just different base. And so we're excited about the opportunity that we have in both segments there, but we're further ahead right now in North America. And then could you I'm sorry, could you repeat the second part of your question again?
Just how you think about lifetime value of those that are not prime subs versus prime subs given the increase that you recently did with super saver shipping in the U. S. From $25 to $35 threshold? Sure.
In terms of customers, we've seen not only a very strong increase in Prime membership, but we've seen very good retention of Prime members. And so certainly when you look at that in terms of lifetime value, we have a customer base that's certainly staying with us longer. They're doing more cross shopping and they're getting the benefits of prime that we're offering that we continue to add to. And then we still have a very good customer base that's non prime. You mentioned the threshold change.
We did change. We have different thresholds in various geographies around the world for Super Saver shipping or Super Saver delivery in those geographies. And in the case of the U. S, we've had the $25 threshold over 10 years and we changed $35 And during this time frame, we've certainly increased our selection that's eligible for that by millions of items. And certainly as you would know during this rather lengthy timeframe transportation costs and fuel prices have changed significantly over that time period.
So we hadn't changed it. So we just thought that was the right thing to do.
And we'll go next to Mark Mahaney with RBC Capital Markets. Thanks.
I want to ask about the North American EGM line. I guess it's the 2nd quarter in a row you've had acceleration. I want to ask you about it last quarter. I think you singled out fashion apparel and consumer staples. But the growth is the acceleration really seems to be in line with easing comps.
Is there something in there that to you indicates that you're getting real critical mass with your customers in those two particular categories? And then just real quickly on the Kiva robots, is there a reason you would call that out? Is there should that have some sort of immaterial impact
AGM, you highlighted a couple of categories that are growing very nicely that we mentioned last quarter as well. What you're seeing there and actually the growth is very broad. We've added a lot of unique selection in both our hardlines and softlines categories, including consumables and apparel as you mentioned. The experience has gotten better on the site. Unique selection has increased dramatically over the past few years.
So there's just a number of things that are coming together in those categories. So when I look at it, it just seems very broad, which we like. And there's just a lot of new selection with great category expansion too over the last several years. So that's really what you're seeing there. In terms of Vakiva, we have launched in a few FCs.
We think it's an interesting opportunity. I think as I mentioned last quarter at this time, we're ahead of the schedule that we had set forth at the the time that we joined with Kiva. And we're excited what we see. It certainly will still be adding associates certainly over time in those FCs, but there certainly will be productivity with Kiva. And we'll have to stay tuned to see what that looks like, but we're certainly excited about that opportunity in the rollout.
And we'll go next to Victor Anthony with Deepika Capital Markets.
Thanks for putting me on. So ROC is a metric you've highlighted each quarter. It's hovered around 20%, 30%, 40% range throughout the quarters of 2010, 2011. It's obviously been depressed over the past several year and a half due to investments. Maybe you could help us with the timing of when you expect ROIC to return the levels we saw in 2011?
And second, you are investing a lot in video content for Prime Instant Video. Are there any hard numbers you can share in terms of conversions from the Kindle devices? And there in the past, you've been talk about converting converting Primus and Video into standalone products. Maybe you could share your thoughts there. Thanks.
Sure. Keep in mind when the as you mentioned, we're investing very heavily in the business. We think that's the right thing to do. We have a lot of good long term opportunities, which is why we're doing it. It is depressing ROIC.
Just keep in mind that from a pure metric standpoint, just as a reminder, the way we measure ROIC is free cash flow divided by average invested capital. So, total assets minus current liabilities and that's over 5 point average. And so when you do that first in the numerator, we do have keep in mind it's about $1,400,000,000 in our free cash flow number that relates to the purchase. It goes back to Q4 last year, but it's in our TTM free cash flow that relates to the purchase of our campus here in Seattle and some nearby lands. There's $1,400,000,000 of that.
So that's bringing the free cash flow down. Also keep in mind in the invested capital, we do include cash and marketable securities, which is certainly the largest piece of our invested capital. We think that's the right thing to do until we deploy that capital or return in some way. But just keep in mind that that's included in the metric. So in terms of Primates and Video, we're getting great usage from a broad set of customers on Kindle as well as other devices.
And the adoption is going very well. I apologize, I can't share any specific metrics today, but we like what we see. It's certainly we think it's certainly helping the Prime numbers, the Prime the Prime numbers, the Prime membership increases that you're seeing. And it's we think it's interesting and we are investing there. We included in both our Q3 results as well as the Q4 guidance our assumptions around additional content that we'll be acquiring, including original content.
So very excited about that opportunity.
We'll go next to Mark May with Citi.
Thanks for taking my question. The seasonal hiring is growing I think last year grew about in line with growth rate in U. S. Revenue growth. But this year, it looks like it's you're growing at about 10 percentage points above the midpoint of your range.
Is there anything that's different this year that is driving that? And then second question on pricing. There have been numerous reports recently and I think for a while now that the multichannel competitors are competing more fiercely with Amazon in terms of price parity, etcetera. What impact are you seeing or do you think you could see from that and sort of how are you addressing it? Thanks.
In terms of the seasonal employees, unfortunately, there's not a lot I can add to that. We're getting ready for an exciting holiday season and that includes having making sure that we have the right amount of employees as well as seasonal help during that period. It also includes making sure we have the right capacity in place, making sure we have the we've had a lot of selection over the past couple of years and particularly over the past 12 months and making sure that we have good in stock levels related to that selection. We're making sure that we have people to help us with not only serving customers with our retail inventory, but also Fulfilled by Amazon has grown certainly very strongly over the past year. And that impacts the capacity and the number of employees that you see there.
So that's really what you're seeing in that number. In terms of pricing, we operate at a very competitive arena. That's not something that's new. That's something that we've been doing since our inception. We have many, many different competitors.
You will pass those competitors on your way to work and on your way home. They're offline, they're offline. It's a very They're offline, they're offline. It's a very competitive marketplace. It's something pricing is something we worked very hard at over the years.
We want to make sure we have great values for customers and it's something that we spend a lot of time on and work very hard to make sure that we can offer that to customers. So I wouldn't say that it's anything new. It's something that we've been dealing with since our inception, but it is a very competitive environment.
We'll go next to Carlos Kirchner with Sanford Bernstein.
Hi, thank you. Two quick questions. First, how do you see your competitive position versus Alibaba in China? And what gives you confidence that you have a chance of being a relevant player there even in the long term? And secondly, in the U.
S, you have a service similar to subscription video demand that's a feature of Prime, which is Amazon Prime Video, While in Europe you have a full blown standalone service with raw film. Why is your strategy in Europe so different from the strategy in the U. S. When it comes to video on demand? Thank you.
In terms of China, it's very early there. There's certainly room for many winners. It's a very large segment. And we've seen we have a good business there in terms of top line that's growing and we continue to look for ways to supply customer demand. We work on a lot of the same inputs that we work on in our other geographies, making sure we have great prices, good selection, speed of delivery.
We've worked very hard in terms of putting in a lot of capacity close to customers. And so those are the things that we're working on to try to ensure our success there. In terms of individual competitors, we have a long standing practice of not talking about other companies. But again, there's room for a lot of winners. And in terms of video content, there's not a lot I add to that question.
I apologize. But certainly, we have been ramping up our content in the U. S. On Amazon dotcom as part of Amazon Prime. It's something that we've been looking at very carefully.
We like what we see so far. We think it's interesting. But beyond that, I can't speculate what we might do or might not do another location.
We'll go next to Mark Miller with William Blair.
Hi, good afternoon. On Amazon Fresh, can you comment on what you're seeing in L. A. Versus the Seattle test? How important is the attachment rate with general merchandise?
And then as you're making more frequent deliveries, are you finding that that is driving higher sales of general merchandise? It's very, very early in LA. So there's but what we see so far we like. It's we're adding a lot of selection there on behalf of our customers. It is a great opportunity for customers to get both a number of different items through Amazon Fresh.
And so we're excited. We like the trials that we've done have been very good. The conversion has been good. We look forward to even proving that experience even more over time for customers. But it's very early.
But we'd like what you see, but you have to stay tuned on that one. And With general merchandise? I'm sorry? Well, just are you selling more general merchandise as a result of more frequent deliveries in that market?
Yes. We'll go next to Carey Rice with Needham and Company.
Just wanted to ask a question on your acquisition of 10 Marks, which is really diving a little bit deeper into the EdTech market. I know you sell and rent the textbooks. Can you talk a little bit maybe what your strategy is there? We just thought it was it's a company that's doing some interesting things about helping students and children learn math. We thought it was an interesting fit for us.
And we look forward to exploring what opportunities we can do together there. And you have to stay tuned on that one. But we think it's they're doing a very nice job and we're interested we're very excited to have them as part of the Amazon
business. We'll go next to Scott Tilton with B. Riley.
Thanks. Good afternoon. Just wanted to touch on the North American segment margins for a little bit. We've seen some pretty good progress there in terms of year over year improvement, a little bit of a back step last quarter, but not too much. And the category fell back this quarter.
Wondering if there's anything unusual in there in terms of timing or investments that maybe weren't called out and how we should think about that over the next few quarters? Sure. In terms of Q3 specifically, Q3 just because of the as I would call it the Q4 readiness, the seasonal readiness, you see this often in Q3 where both our total and our segment operating profit is lower than other quarters. And that's certainly what you're seeing in Q3 in North America. So that's in terms of the investments we're making to get ready for the season.
We talked about, you saw in JustQuote, the capacity that we're adding certainly in multiple geographies, but certainly in North America is impacting that as well. You can see it in our fulfillment line item as a percentage of revenue being up. You can see it in our tech and content. So we're certainly investing. The other part too that I mentioned earlier is we're investing in video content for prime in the U.
S. And you see that certainly in those results as well.
We'll go next to Tom Forte with Telsey.
Great. Thanks for taking my question. Wanted to know where you stand. Last year, I think you added 20 fulfillment centers on a full year basis. And the last time you gave us an update, I think this year, it was 5 U.
S. And a handful international. Wanted to know where you stood on that and why the change versus last year? And then also very quickly, I wanted to see where you stood or how you felt about your Amazon Locker Locker initiative? Thank you.
Sure. In terms of fulfillment centers, it's the number is 7, but it's a net number. And so included in that are several consolidations. We are building generally larger FCs and we're consolidating some of those. So that's a net 7%.
And so what that means is, you were to take that as a percentage of our total fulfillment centers, you certainly get a number that's less than the square footage that we're actually adding. So we're adding square footage that would be significantly higher than that. In terms of lockers, it's early. It's another way to get closer right now. And but it is limited.
We don't have it broadly across our full network. And so something that we're learning and it's an interesting experience and it's certainly something that over time we'll continue to take a closer look at and certainly expand if it makes sense to do so on behalf of customers.
We'll go next to Douglas Anmuth with JPMorgan.
Great. Thanks for taking the question. I just want to ask 2 things. First, Tom, can you give us some color on where you are in the shift from 3rd party to 1st party e books? And how much of a factor that's been in reaccelerating media revenue?
We've seen reacceleration in media the last three quarters, I think, in North America. And then secondly, it looks like there's 6 fewer shopping days this holiday season between Black Friday and Christmas. I'm just curious what you do if anything differently to prepare for that? And do you think that could actually even drive more holiday shopping online? Thanks.
Sure.
In terms of your second one, second question, there are fewer days. There's not a lot that we do different. We certainly see when that happens, there is some behavioral differences on behalf of customers just because of the shorter time period that we have certainly some more sizable days during that period. But there's not a lot to add to that. In terms of the transition for e books, in terms of our total growth across Amazon, both North America total or global total, it's not a significant or meaningful impact to the overall growth rate.
And certainly this transition has been going on for some number of quarters now. So there's not a lot I can help you with there.
We'll go next to Greg Melich with ISI Group.
Hi, thanks. I wanted to dig into the inventory a little bit. It looks like the growth slowed to 20% if the sales accelerated. Tom, would you give us some insight as to why that is and maybe which categories outperformed in the quarter? Sure.
I would look at it more from a turns perspective. And if you look at it more over an average turns basis, it has gone down. And the reason is unique selection. We keep adding growth in unique selection. It certainly has increased over the past year.
And stock levels have gotten better. And so those are the things that are really driving it. In terms of endpoints for any particular quarter, they can be a little bit lumpy, but I would look to the turns.
We'll go next to John Blackledge with Cowen and Company.
Great. Thank you. Two questions. First, is it a
priority to offer one day or same day delivery at some point that some competitors are offering same day delivery in large markets for certain brick and mortar retailers? And then secondly, can you talk about the prospects for the login and pay program? How many online merchants are signed up for it? And what is Amazon getting out of it either economically and or from getting maybe getting data on the purchases? Thank you.
In terms of speed of delivery, whether it be one day or same day, What's happened certainly over the past 10 plus years is we've added a lot of selection. We've added a lot of fulfillment centers. As a result of that, we have selection that's by default increased amount of selection that's closer and closer to customers. As a result of that, our speed of delivery has improved. And certainly for prime customers, depending upon the geography, in the case of the U.
S, we have express 2 day shipping for free and then for small fees, it certainly can get it faster than that. That's something that so you've seen that improvement gradually over the past 10 plus years. You've seen it certainly gotten even better the last few years as we've rapidly increased the number of fulfillment centers. So that's something that we think is important and we'll continue to work on behalf of customers to give them those options and to make sure that they get product when they want it. In terms of login and pay, it's something that we think is interesting because of our large customer base and the credentials that we have and secure payments that we have.
We think it's an interesting opportunity. And we think that there's certainly interesting ways to monetize that over time. And but again, we think an interesting opportunity.
We'll go next to Ron Josey with JMP Securities.
Great. Thanks for taking my question. So I wanted to talk about new international markets. And specifically, I think Amazon India was called out given 10 new category launches in the past 120 days or so. So my question is related to really the infrastructure in India and how good is it and so that Amazon can continue to grow there?
And then specifically, if other countries can follow a model like this and Brazil comes to mind? Thank you.
Sure. We have a few different models in India and we from a marketplace model, which we offer fulfilled by Amazon, which as you mentioned, certainly the infrastructure is not as advanced as some geographies, but we also view that as an opportunity. And we're happy to help sellers with sold by Amazon. So it's an interesting opportunity. It's very, very early.
We're in investment mode there. It's a long term opportunity, but it's a very exciting opportunity. We have a very strong team that's working on that
Pitts with Jefferies.
Great. Thanks. Maybe you could comment on what you're seeing domestically and internationally in terms of e commerce trends in the current quarter. Anything stand out, especially in North America, given some of the mix commentary we've heard from some of your competitors? And then just some additional comments if you could on growth in the other revenue category specifically on AWS and or on your advertising business?
Thanks.
Sure. I'll take the second one first. In terms of AWS, it's growing very, very strong. It's an area that's very early for us. It's growing very, very strong.
We have a great team that's working on servicing customers and we're very excited about the long term opportunity. In terms of you mentioned the trends in North America. What you've seen is really a nice steady acceleration of growth since Q4 last year. So if you look back to Q4 Q4 last year for North America specifically and you just trace that back over the past 4 quarters, you see a really nice sequential increase from quarter to quarter. And again, that gets back to it went from 23% in Q4 last year to 26 percent to 30% 31%.
Those are the year over year increases by quarter for North America revenue. And so and a lot of it is what we talked about earlier. It's focused on a lot of the retail basics as well as also improving seller performance as well. And so those are the things that are driving it.
We'll go next to Jordan Rohan with Stifel Nicolaus.
Thanks so much. A follow-up to
the last question on U. S. In particular, did you see any weakness or any discernible trends around the government shutdown and all the politics going on in Washington in September and early October? And what
you're learning from being an investor in
what you're learning from being an investor in LivingSocial? With the accounting charges aside, can you talk about your own local business? How they may compete with other players in the space? And all the various initiatives you have with what can be learned from what you know at this point? You're no longer a new investor in that company.
Thank you.
In terms of North America growth, other than what I mentioned on the quarterly growth, Q3 was strong. It was 31% growth. Again, we've seen a nice steady increase over the past 4 quarters. That's overlapping quarter from Q3 of last year that was 33%. So again, we like what we see from a growth perspective in Q3 for North America.
In terms of total growth, giving a wide range for Q4 and that reflects our view for Q4. But we're excited about the quarter and about getting ready for customers during this heavy seasonal quarter. So we're excited about what we see there. In terms of living social, there's really not a lot I can add to your question. I apologize.
They're doing a good job in terms of local. We also have a local offering on Amazon. The team is very dedicated to make that work. And it's an interesting area. We're learning, but it's early.
Our final question will come from Heath Terry with Goldman Sachs.
Great. Thank you. Jeff, when you look at the deceleration
in growth in North America and other revenue, obviously, it's still at a very high level. But when we're thinking about the major components of that line, AWS, advertising, credit card relationship, is there anything relevant to the relative growth rates between those components that we should be thinking about?
I'm not sure how to answer your question. It is the only part I would call out, you mentioned there's a number of different items that are that's in there. Certainly, the largest and fastest growing largest area by far is AWS and it's growing very nicely. And that's certainly reflected in that line item. Great.
Thank you for joining us on the call today and for your questions. A replay will be available on our Investor Relations website at least through the end of the quarter. We appreciate your interest in amazon.com and look forward to talking with you again next quarter.
Thank you. That does conclude our conference. You may now disconnect.