Amazon.com, Inc. (AMZN) Earnings Call Transcript & Summary

Thank you for standing by. Good day, everyone, and welcome to the Amazon.com Q3 2026 Financial Results Teleconference. [Operator Instructions] Today's call is being recorded. For opening remarks, I'll be turning the call over to the Vice President of Investor Relations, Mr. Dave Fildes. Thank you, sir. Please go ahead.

Hello, and welcome to our Q3 2026 financial results conference call. Joining us today to answer your questions is Andy Jassy, our CEO; and Brian Olsavsky, our CFO. As you listen to today's conference call, we encourage you to have our press release in front of you, which includes our financial results as well as metrics and commentary on the quarter. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2025. Our comments and responses to your questions reflect management's views as of today, October 29, 2026, 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-K and subsequent filings. During this call, we may 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. Our guidance incorporates the order trends that we've seen to date and what we believe today to be appropriate assumptions. Our results are inherently unpredictable and may be materially affected by many factors, including fluctuations in foreign exchange rates and energy prices, changes in global economic and geopolitical conditions, tariff and trade policies, resource and supply volatility, including for memory chips and customer demand and spending, including the impact of recessionary fears, inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce cloud services and new and emerging technologies and the various factors detailed in our filings with the SEC. Our guidance assumes, among other things, that we don't conclude any additional business acquisitions, restructurings or legal settlements. It's not possible to accurately predict demand for our goods and services, and therefore, our actual results could differ materially from our guidance. And now I'll turn the call over to Andy.

Thanks, Dave. We're reporting $201.9 billion in revenue, up 12% year-over-year. Operating income was $28.1 billion, up 61% year-over-year. Q3 was another strong quarter for Amazon. In AWS, our plan is working. Despite lapping a comparable year-over-year period where we added all of our capacity, AWS grew 39.3% year-over-year, accelerating for the sixth straight quarter, our fastest growth in nearly 5 years. Backlog is $578 billion, growing triple digits year-over-year and well diversified. We're installing an AI accelerator about every 14 seconds and almost as fast as we install capacity, customers are gobbling it up. Our core compute and storage revenue grew at their fastest rates in several years. Our operating margins have long been strong on our core offering, but rapidly improving on the AI side, too, well ahead of where they were on core at a similar time of evolution. Even with heightened component costs like memory, the significant depreciation from the CapEx we're investing. We continue to accelerate our CapEx payback and have even more conviction than we already had that the investment we're making in AWS will yield a much larger revenue and free cash flow generating business than we would have imagined a couple of years ago with strong return on invested capital. We have a compelling flywheel spinning in AWS. Borrowing from Jim Collins [indiscernible] definition and good to great, where if you do a, you almost can't help with if you do B, if you do B, you almost can't help with do C and so on. In AWS, having the leading functionality securing and operational performance, can't help but drive customers to run their apps and store their data in AWS, which can't help but drive AWS AI demand because customers prefer their production inference to be near the rest of their data and apps, which can't help but drive core AWS demand because AI uses core for work like reinforcement learning, post-trading tool usage, which can't help, but drive reinvestment back into our broader AWS functionality. This is a different model in primarily hosting GPUs or renting short-term data center capacity. This is a long-term platform strategy that broadly helps customers advent and evolve their customer experiences, operate stably and build a reliable partnership they can grow for many years. And it also yields very attractive long-term economics for us regardless of supply scarcity. There are many examples that illustrate our progress in AWS, but I'll share a few. On the core side, it's important to remember that the vast majority of global IT spend, about 85% is still on premises, and we're in a 10- to 20-year cycle where that equation will flip to the cloud. Conventional wisdom has been that lynchpin workloads like mainframes or storage array networks would never move to the cloud. But these workloads are moving as AWS has built unique cloud substitutes and AI-driven migration capabilities to make this transition much easier. And enterprises get the benefits of less CapEx, lower operating costs, faster innovation, better developer productivity and data accessibility to more easily leverage AI. Our core business has attractive margins because we've garnered very efficiently over the last 20 years. As our core business grows, we keep reinvesting in our core AI functionality. For example, as customers generate increasingly more data and seek to get value from an analytics and AI the complexity of moving data between data stores and analytics engines is onerous and expense. With our acquisition of DuckLabs, DuckDB will become the universal Sequel dialect of AWS storage analytics, simplifying data processing with a modern analytics engine that is fast, simple to use and ubiquitous and where customers will be able to write SQL queries once and then execute using any AWS analytics service. For the first time in analytics, customers will have 0 migration or portability costs between query engines. This is a big deal. And you can imagine how it will also help agents do efficient querying as well. On the AI side, we continue to expand the capabilities of our inference service, Amazon Bedrock, and it's leading to remarkable growth with Fortune 500 companies spending nearly 7x more on Bedrock year-over-year and total Bedrock token volume growing nearly 17x year-over-year. Bedrock is the fastest growing multibillion-dollar service in AWS' history. We recently added open AI models to Bedrock and usage is growing quickly. We also just added Bedrock managed versions of Kimi, GLM and SpaceX models. You can't have a conversation about AI today without talking about security. It's another reason customers keep choosing Bedrock. We've designed Bedrock for customers' data remains secure and private. Inputs and outputs are never shared with model providers or used to train based models. When customers tune a foundation model, we create a private copy specifically for their use, and data is fully encrypted both in transit and arrest. As frontier models get more powerful, they're servicing software vulnerabilities previously not found and at unprecedented rates. We built AWS continuum to discover, prioritize, validate and remediate code vulnerabilities and machine speed. It's already being used by customers like Capital One, IBM, Infor, Luminate and Robinhood. In Q3, we announced that we'll integrate it into the tools where codes being written in Anthropic's Claude Code, OpenAI's Codex, and AWS's Kiro. The interest from customers exceed anything we've ever seen for a new security service. Agents continue to be deployed at accelerating rates, many of which are being built on Bedrock agent core building blocks. Tens of thousands of customers currently use AgentCorp, deploying 2x more agents within Q3 and than the prior 3 quarters combined. In addition to building their own purpose-built agents, most companies will also use turnkey agentic services, and we offer several of the customers love. Kiro for coding, Amazon Connect for contact center agents and Amazon Transform for migration. They're all iterating quickly in picking up customer momentum. As our intelligent AI work companion, which is growing very rapidly as large enterprises like Mondelez, EchoStar, 3M, Southwest Airlines and DXC are choosing Quick because it's purpose-built for work with no compromises on customer data. Finally, our chips business continues to grow triple-digit percentages year-over-year and revenue commitments for Graviton and Trainium have each increased more than 20x year-over-year. AI continues to be a tailwind for Graviton because post trading reinforcement learning and agent tool use is mostly done on CPUs versus AI accelerators and Graviton is the strongest CPU chip, offering up to 30% to 40% better price performance than alternatives. Customers using our custom silicon saved more than $2 billion in Q3 alone, and we just opened source torch neurons as developers can run existing pie torch code, which most already use on Trainium without rewriting a thing. As we launch new generations of chips, demand for prior generations remained strong. After our launch of Graviton 5, backlog for prior generation Graviton instances still more than doubled quarter-over-quarter. And short-term capacity for prior generation training instances sell at a premium compared to the first half of the year. With training demand so strong, customers continue encouraging us to make it available outside of AWS we intend to do so late in 2027. Overall demand for AWS capacity remains exceptionally strong. Enterprises are still very early in using inference of scale, and yet inference already accounts for well over half of AWS' AI revenue and growing. And we have a lot of training revenue as well. We still expect 2026 cash CapEx of approximately $220 billion, the majority for AWS and expect to spend meaningfully more in 2027, with a clear line of sight to attractive financial returns, as I laid out on our last call. AWS is a $184 billion annualized revenue run rate business, and yet the opportunity remains extraordinary. With our continued pace of innovation, new core and AI functionality, enterprises wanting to run their core and AI workloads in AWS and the amount of capacity that we're adding each year. We believe that AWS can grow north of 40% in each of 2027 and in 2028, and be a $1 trillion revenue business in the next 5 to 10 years. We're in the very early days of this inflection our strategy is working, and I expect it will for the foreseeable future. In stores, I think some folks are sleeping a bit on how much progress that business has made and what has become in the last few years. I'm not aware of another retail business approaching Amazon's revenue size, hundreds of billions of dollars, with double-digit operating margins inclusive of [indiscernible] is growing at this pace. Year-to-date, units have grown nearly 15% year-over-year, and that's on an enormous base having sold more than 30 billion items last year. In absolute dollar terms, we've added more than $90 billion in gross sales in the trailing 12 months. And we're growing meaningfully faster than other retail competitors, adding about double the gross sales per quarter than our next largest competitor in the U.S. and consistently taking retail market segment share. Over the past few years, our North America and international segments have each expanded operating margins by nearly 10 percentage points, which enables us to reinvest in making the customer experience even better. Remember, it's still early. The significant majority of retail, nearly 80% currently occurs in physical stores. That will eventually flip to e-commerce over time. We're helping enable this shift by rapidly building out our efficient and speedy fulfillment network, providing delightful customer experiences while driving significant free cash flow and return on invested capital. Each of our priorities from faster delivery, to cost to serve, to groceries and pharmacy, to AI shopping are force multipliers, and we're firing on all cylinders. Our delivery speeds keep getting faster as we invest in our same-day network as well as our Amazon Now and Amazon Prime Air ultrafast services. We had our fastest Q3 ever globally, and we delivered more than 1.5 billion items to prime customers same-day or overnight in Q3. We're energized by the customer response to our rapid rollout of AmazonNow around the world, is now available in over 450 towns and cities, and the number of items ordered through AmazonNow is up 10x year-over-year. We're on track to reduce cost to serve per unit for the fourth consecutive year, which enables us to continue meeting or beating competitors' prices and cost effectively deliver a broad selection of fresh groceries and everyday essentials. Increasing speed is fueling our grocery business, including perishables and everyday essentials and gross sales grew to nearly $250 billion in the trailing 12 months. In Q3, fresh groceries and everyday essentials grew about 3x faster than the rest of our store, representing about half of all units sold. Customers who shop perishables with same-day delivery by nearly 7x more everyday essential units than those who don't. An active grocery customers shop nearly 4x more non-grocery categories like home and apparel and spend over 2x more on those categories compared to nongrocery customers. Amazon Pharmacy is also growing fast. The number of customers using it is up over 60% year-over-year with growth accelerating each quarter through 2026, and repeat customers grew more than 50% year-over-year. J.D. Power recently ranked Amazon Pharmacy, the top mail-order pharmacy for the third year in a row, and we keep making it even better, now offering 3-hour prescription delivery more than 350 cities. Over 400 million customers have used Alexa for shopping, our agentic shopping system in the last 12 months with customer interactions up 50% year-over-year. U.S. customers using Alexa for shopping are spending 50% more per order than those who don't. It researches products compares options, checks a full year of price history, get personalized gift recommendations, and tracks deals and price drops on customers' behalf. Though we anticipate working with horizontal agents, we believe Alexa for shopping is going to be the primary shopping agent customers use to shop Amazon. [indiscernible] shopping assistant constantly by your side as you browse, get inspired, have questions on product detail pages and that you can simply ask to buy something based on your prior purchases that already has your history, your shipping address and payment info is uniquely helpful and convenient for customers. Moving to Amazon Ads. We generated $19.6 billion of revenue in Q3, up 12% year-over-year. Though there were some timing anomalies in this past quarter, we continue to be pleased with the overall momentum across our ad offerings. I'll mention 3 items impacting the growth rates. First, we shifted Prime Day into Q2 for most countries, moving significant sales and ad revenue that were in Q3 '25 into Q2 '26, a tailwind to our Q2 2026 rate and a headwind to Q3 2026. For advertising, that was 850 basis points sequential impact to Q3 year-over-year growth. Second, Q2 '26 included the first season of NBA on prime, which last year's Q2 didn't have, while Q3 does not include any NBA it starts in Q4. And third, in Q3 2025, we changed our search engine marketing programs to drive more traffic to search pages on Amazon. It's a better experience for customers, and we also monetize that traffic at a higher rate and helped accelerate advertising revenue growth starting a year ago, and we started lapping that in Q3. We expect year-over-year growth will return to the high teens in Q4. A natural question is whether agentic shopping from external horizontal agents is meaningfully impacting Amazon Ads. And the answer is no. Few customers are doing much shopping this way yet as the experience is still not great nor more convenient than coming to a retailer directly to research or 1 click order there. Q3 was chockful of innovation from our ads team that we expect to have impact in the coming months, have valued by Amazon Ads Agent, which brings together our full advertising offering under a single AI-first platform, backed by trillions of shopping, browsing and streaming signals, it supports advertisers at every step with insights, answers and the ability to optimize and act on their behalf. We also launched full funnel campaigns in Amazon Ads Agent, bringing sponsored ads, display, video and streaming TV into a single campaign. Advertisers provide initial inputs, including budget and duration and Amazon's AI plans, executes and continually optimizes the rest. We're continuing to see momentum in several other areas. I'll mention just a few. Prime Video has emerged as a significant business with a revenue run rate in the tens of billions of dollars now profitable in its own right. We have momentum with hit shows like Carrie, The Summer I turn Pretty, The Boys, Off-Campus, Reacher and Fallout. And breakout movies like Project Hail Mary, along with compelling live sports, including Thursday night football off to its best start ever in 2026, NBA on Prime, NASCAR, The Masters and UEFA Champions League soccer. We recently launched our most powerful devices lineup yet with 34 new products across Echo, Kendall, Alexa tablets, Fire TV, Ring and B. It's early, but we're off to a very strong start and excited for more customers to get their hands on these as we head into the holidays. And finally, Amazon Leo remains on track to begin initial service this year. We're heading into 1 of our most exciting stretches of the year with both reinvent and the holidays, and I want to thank our teammates for their hard work and invention to make customers' lives better and easier every day. What we're building at Amazon is unlike anything that's ever been seen before. There has never been a business with $1 trillion of annual revenue. Amazon is on a path to have 2 of them in AWS and stores. It's rare, and we're energized by what's ahead. Over to you, Brian.

Thank you, Andy. Let's start with our top line financial results. Worldwide revenue was $201.9 billion, a 12% increase year-over-year and 13% increase year-over-year, excluding the impact of foreign exchange. Worldwide operating income was $28.1 billion, with an operating margin of 13.9%, which is our highest operating margin ever. Starting with our North American International segment results. First, let me remind you that Prime base shifted this year with the sales event occurring in Q2 for most of our largest countries, including the United States. In 2025, Prime Day was entirely in Q3. Excluding the impact of this Prime Day time change, third quarter 2026 year-over-year growth would be approximately 400 basis points higher. In Q3 on customer engagement and a continuation of trends from the first half of the year. In the North America segment, third quarter revenue was $112.9 billion, an increase of 6% year-over-year. International segment revenue was $43.1 billion, an increase of 8% year-over-year, excluding the impact of foreign exchange. Worldwide paid units grew 12% year-over-year. Prime remains a key pillar of our business. Hundreds of millions of Prime members are responding to our combination of vast selection, low prices and record delivery speeds. Over the past year, monthly orders of fresh groceries placed by our Prime members for 3 same-day delivery have more than tripled. Let's shift to profitability. North America segment operating income was $8.7 billion, with an operating margin of 7.7%. International segment operating income was $1.6 billion with an operating margin of 3.7%. In our fulfillment network, the team navigated higher transportation costs from fuel inflation and higher linehaul rates. Even with these headwinds, we still lowered our overall cost to serve in Q3 through better inventory placement, shorter shipping distances and package consolidation. Shipping costs increased 11% year-over-year versus a 12% increase in units. Excluding fuel and line haul inflation, shipping costs grew 8% or approximately 400 basis points slower than unit growth. Robotics and AI are delivering measurable gains through productivity and employee safety, which we'll expect to compound in the future. In 2026, we doubled our fleet of robotic arms like Cardinal and Sparrow. We're also developing robotics foundation models that enable faster programming and teach robots increasingly complex physical tasks with the goal of delivering useful robotics at scale. Looking ahead, we see meaningful opportunities to improve productivity across our global fulfillment network and lower our cost to serve while continuing to get products to customers faster. Our operating margin fluctuate quarter-to-quarter, but we're focused on sustained long-term improvement in our cost to serve per unit. Moving to our AWS segment. Revenue was $4 million and grew 39.3% year-over-year driven by both core and AI services. We added $3.8 billion in quarter-over-quarter revenue. AWS now has an annualized revenue run rate of $184 billion. Customers continue to move to the cloud and scale their use of AWS for services. And increasingly, customers who want the full benefits of AI are accelerating their transition to the cloud. We see a strong linkage between AI spend and growth in our revenue for core services. As customers invest in AI we see a corresponding increase in core consumption, and we expect that relationship to strengthen as more AI workloads move into production and drive additional demand for compute, storage and networking. AWS operating income was $17.8 billion with an operating margin of 38.7%, reflecting strong growth and our focus on driving efficiencies. Our investments in custom chips and custom networking along with software and process improvements are helping us optimize capacity and build a more cost-efficient infrastructure. As we've long said, we expect AWS operating margins to fluctuate driven in part by the level of investment we're making at any point in time. Our AI offerings are gaining traction with customers with AI revenue growing triple digits year-over-year. Bedrock has been a significant growth driver. Now turning to our cash CapEx, which was $75.9 billion in Q3. This primarily relates to AWS and AI as we invest to support strong customer demand. We continue to make significant investments, especially in as we believe it to be a massive opportunity with the potential to drive long-term revenue and free cash flow as well as return on invested capital. I'll finish with our financial guidance for Q4. Q4 net sales were expected to be between $240 billion and $247 billion. We estimate the year-over-year impact of changes in foreign exchange rates based on current rates, which we expect to be a headwind of approximately 60 basis points in the quarter. Q4 operating income is expected to be between $28.5 billion and $33.5 billion. I'll mention 1 factor impacting our Q4 guidance. Amazon Leo's commercial service is on track to begin initial service this year, and we expect to begin capitalizing certain costs in Q1 of next year, including production and launch costs. This is later than I've been predicting in earlier earnings calls. As a result, we will continue to expense the majority of Leo related costs in Q4. We're ready to serve customers this holiday season and to support the millions of customers building with AWS. I want to thank our teams across Amazon for their hard work and focus on customers. Our commitment to elevating the customer experience remains the only reliable way to create lasting value for our shareholders. With that, let's move on to your questions.

[Operator Instructions] And our first question comes from the line of Justin Post with Bank of America.

Andy, continue to see the cloud business accelerate, which is really nice. But the quarter-over-quarter growth slowed, and I'm just wondering if there's any callouts there on the customer side or token costs or anything that kind of drove that? And how you're thinking about the capacity adds in Q4? And then, Brian, maybe just any impact of fuel costs on your guidance in Q4?

Yes. I'll start with the growth question. We're really pleased with the growth, 39.3% on a business, it's got $184 billion annual revenue run rate is quite unusual. Our fastest growth in about 5 years or 6 quarter consecutively of acceleration. And we're adding quite a bit of capacity. I think if you look at what's driving the growth right now, it's a combination of a few things. First, on the AI side, the unusual top-to-bottom stack functionality we have, whether you're building your own model with SageMaker AI, which is the easiest way to build your own model, where do you want to leverage 1 of the leading frontier models with high security and very strong price performance, people can use Bedrock. Whether you are building your own agents where we have capabilities like strands and agent core to build and to run those securely and scalably, or are you going to use turnkey agents, which most companies do, if you just look across Kiro for coding and Connect for call center and transform for migrations and Quick, which is growing incredibly fast as an AI companion work. People are adopting those very quickly. And then we add a lot of capacity every quarter. Now the amount that we add every quarter is not equal. And we're adding different amounts each quarter. But if I look at how much we've added this year and what we have planned over the next, call it, 8 quarters or so, which is about as far out as we get 8 to 10 quarters, we have a lot of capacity coming as well. And then I layer on top of that, too, just the impact of chips. We're very well positioned for what's happening in AI because increasingly, what you're finding right now is most customers, every customer that runs that uses AI at scale. But particularly enterprises now as they're starting to deploy more inference into production, they are very eager to save on price performance and training them with a meaningful advantage it has in price performance versus other alternatives is very compelling to people. And then as more and more people are using AI in a very broad way, it drives a lot of the core in capabilities like reinforcement learning and post-trading and tool calling and we have the leading CPU chip in Graviton which is about 30% to 40% more price performance than the other x86 providers. So it's -- those things are really driving very significant growth. The amount of capacity we add each quarter will vary, but we're -- I mean, at this scale, to be projecting growing over 40% year-over-year in each of 2027 and 2028 is pretty significant and the fact that we believe that this can be a $1 trillion revenue business in 5 to 10 years, it's an extraordinary, unusual opportunity that we're very excited to be pursuing.

And Justin, on your question about fuel and linehaul inflation, I would say -- I'm not going to -- I don't have an exact number for you, but it is higher in Q4 than it was in Q3. If you remember, we instituted a fuel surcharge at the beginning of the year for FBA sellers that recovers some, but not all of the costs that we're seeing on fuel for those shipments and then the remaining partners on the retail inbound shipments and outbound shipments. So it's in there. It's a little bit higher than Q3.

Our next question comes from the line of Brian Nowak with Morgan Stanley.

I have 2. Andy, your excitement about AWS is coming through the line. It's pretty rare you would make comments about $1 trillion of revenue 5 to 10 years from now. It's more than you get. So can you just maybe walk us through how you get to that $1 trillion of dollars? Is it top down? Is it bottoms up? So what gives you confidence that you're going to be able to put up that type of revenue growth and to get to that type of number in the next 5 to 10 years? Then the second one is for either of you on the robotics side. As we look into '27, what are the key milestones you're both focused on the robotics side for the retail business?

Yes. On the AWS side, if you just look at the growth rates, Brian, look at the growth rates on the run rate and then look at what we're projecting in '27 and '28. And as I've said a few times, we will always -- despite how much capacity we're providing -- we -- the big chunks of capacity that people take, the hundreds of megawatts or sometimes up to 1 gigawatt of capacity, those big chunks are reserved well in advance because you can't leave a gigawatt of capacity hanging around. And so we have very good visibility into '27 and '28 and some of '29 too with respect to what customers want in those really big chunks of capacity. We will always leave a fair bit of capacity available for on-demand on EC2 or in Bedrock, and we're working closely with our customers and they'll have plenty of capacity to be able to use in AWS. But we have very good visibility into the next few years and what AWS looks like, those types of growth rates when you do the math on the revenue and the revenue run rate we have get you pretty quickly to escalating numbers. And then I'd say that on top of not believing that a lot of the usage we see today is going to attenuate any time soon. We're still really early. Enterprises using inference in their production applications in a pervasive way. It just -- it is just really early. And some of that is enterprise is having enough people who know how to operate in AI and post trade and fine-tune models for the right applications. Some of it is the cost of inference. I think if we all want enterprises to be able to use inference the way we all believe they will, we have to keep working on taking the cost of infants down. That is a huge mission for AWS. It's one of the significant reasons why we're building our own custom [indiscernible] that we just really believe it's incredibly important for customers to be able to use inference in a much more cost-effective way. That has come down a lot, the cost of inference over the last couple of years, and I think it will come down meaningfully more. And so -- and then you just think about what you're seeing. If you think about security, as an example, just by itself, the models today are so advanced that the vulnerabilities that they're finding humans just haven't felt. And if you've had access to these models, it leads to -- you're using these models to both find them and ultimately to help with patching them and deploying. And there are some people who think that the amount -- the total amount of tokens used over the next year or 2, 20% of it, if some significant percent of it may end up being just security, and that's a relatively new use case on top of what we're seeing with coding and how that continues to grow on top of what we're seeing with the various, I'll call it, AI companions, both in the consumer space and in the workspace, like with Quick. And these are just the initial big use cases. And you layer on top of that, what you're going to see with enterprises where I believe virtually every enterprise -- modern enterprise production application will be rewritten to be agentically capable because that's the way you're going to have to deploy if you want to move quickly or you want to actually garden the right way against some of the security risk there is just so much AI coming. And so that's -- you can't predict with any certainty 5 to 10 years from now, especially these types of growth rates, but it's not a stretch for us to imagine that this could be over a $1 trillion business. On the robotics side, what I would say is that it's pretty remarkable what's happening in robotics right now. I'll say in general, but particularly at Amazon. We have over 1 million robots now in our fulfillment network. And while they're having very significant impact on our cost structure and on our productivity and on safety, if you look at our safety numbers and our fulfillment network, there are record low numbers. We've made huge progress over the last 4 to 5 years, and robotics has been a big piece of that. And yet I would tell you, we're still early with respect to both what we have deployed -- built and deployed and what we're working on. And I think that you'll see, we will always have a lot of teammates in our fulfillment centers. But I think a lot of the jobs that we have that are more repetitive that we have humans doing will be done by robots. I think we will -- we're investing in all sorts of additional robotics of all different form factors. I think we have the opportunity to also assist on some of the delivering of the last 100 yards to customer stores. We have a lot coming. And so -- for us, the way we measure robotics are, does it lead to comparable or better safety, cost structure and time to delivery. And when we like that combination of economics, we will deploy it at scale in our fulfillment network. And if I look at the new designs that we have coming in our fulfillment network, they -- including our expansion of same-day facilities, they are very heavy on robotics. So we think it had a big impact, and we think it's small compared to what it's going to be in the next 5 years.

Our next question comes from the line of Mark Mahaney with Evercore ISI.

Two things, one. First, thanks a lot for the forward comments on AWS growth. Could I ask you to draw out margins, too. I know that margins can move up and down quarter-to-quarter, but over the next 2 years, do you think the current margin structure is relatively stable. We kind of hold at these kind of high 30s, 40% operating margins for AWS. And then on perishable checkout, I'm super excited about this opportunity just watching how it's rolled out in my neighborhood and in other areas. How much coverage do you have for perishable checkout and others, how many time households do you think you've covered with perishable checkout? And for those that have used it, how much of a boost do you think that is per prime household? Like is this something that increases spend per prime household by 20%, 50%, 100%? Just given how large the fresh grocery category is?