Earlier last week, Amazon (NASDAQ: AMZN) announced its fourth-quarter results that surpassed market expectations. With Amazon’s recently launched product upgrades and services, growth in revenue and earnings is expected to continue.

Amazon’s Financials

Amazon’s fourth quarter revenues grew 9% to $149.2 billion, ahead of the market’s forecast of $145.42 billion. Net income of $0.21 per share was significantly higher than the Street’s forecast of $0.15 per share. By segment, net product sales fell 1.2% to $70.53 billion and net service sales increased 19.2% to $78.67 billion.

North American sales grew 13.4% to $93.36 billion, while international sales fell 34.4% to $34.46 billion.

Amazon’s annual revenue grew 9% to $514 billion and loss was $0.27 per share.

Amazon expects its first quarter revenues in the range of $121-$126 billion, compared with market estimate of $125.1 billion.

Amazon’s Buy with Prime and Other New Offerings

Amazon continues to build its prowess in the retail sector and recently announced a new service, Buy with Prime. Buy with Prime is an upgraded version of the Amazon Pay program that makes all purchases appear as if the user is making an Amazon Prime purchase, irrespective of whose website they are really on. By tying up with merchants, Amazon has made it possible for online shoppers to experience the streamlined Amazon shopping service on these merchant websites.

Buy with Prime appears as a button on individual product pages that takes the buyer to their Amazon account. Purchases are completed from the user’s Amazon account using the payment and shipping information that is already available on their account. Once complete, Amazon’s fulfillment network takes over, and the product is shipped to the buyer.

The Buy with Prime service helps the merchants as they are able to leverage Amazon’s fulfillment network without having to sell on Amazon.com. It is also expected to help address the problems of fake reviews on Amazon’s own retail site.

According to a Morgan Stanley report, the Buy with Prime service could be a big business for Amazon. For every 2% market from the ~14 billion US packages delivered outside of Amazon’s network that Amazon attracts into Buy with Prime, Amazon could earn $1 billion to its EBIT and $5.9 billion to its revenue. In fact, Buy with Prime could add $3.5 billion to Amazon’s EBIT in the next 2-3 years.

Recently, Amazon introduced its robotic system, Sparrow, into the first fulfillment center. Sparrow has the ability to detect, select, and handle individual products within Amazon’s warehouses, allowing employees to utilize their time and energy to do other tasks. It also improves the health and safety of employees by reducing the number of repetitive tasks done.

Amazon has been looking to get into the healthcare space for a while. Last quarter, it announced the launch of Amazon Clinic, its message-based virtual health service that delivers convenient, personalized, and affordable care for over 20 common conditions. Customers have the ability to choose from a collection of telehealth providers based on their preferences. Adding onto this focus for accessible healthcare, Amazon also announced the launch of RxPass, a Prime membership benefit from Amazon Pharmacy that provides access to unlimited eligible prescription medications for $5 a month.

Within the cloud, Amazon’s new service, Amazon Security Lake, automatically centralizes security data from both the cloud and on-premises sources into a purpose-built data lake in a customer’s AWS account, allowing customers to act on security data faster. New AWS Nitro Cards were launched, providing the highest network bandwidth, packet rate performance, and best price performance for network-intensive workloads.

Its new data management service, Amazon DataZone unlocks customer data across organizational boundaries, including the cloud, on-premises infrastructure, and third-party SaaS applications, allowing customers to catalog, discover, and share data with governance and access controls.

It is also helping improve customers’ ability to build, operate, and run large-scale spatial simulations with AWS SimSpace Weaver. The new offering allows businesses to deploy spatial simulation to model dynamic systems with multiple data points and to use these simulations to visualize physical spaces, perform immersive training, and garner insights on different scenarios to make informed decisions.

Its stock is trading at $98.21 with a market capitalization of $1.01 trillion. It touched a 52-week high of $170.83 in March last year. It hit a 52-week low of $81.43 in December last year.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company.

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