Thanks for joining us.

Amazon's call has ended. Shares are up 10.9% after hours to $2074.16, making new highs after the company beat Q4 estimates while reporting better-than-expected revenue for all three of its segments, and seeing particular strength in its seller services business.

Amazon also issued Q1 revenue guidance that was in-line consensus estimates and might be conservative in light of how Amazon has been topping its sales guidance in recent quarters.

A couple of questions about margins.

Fildes: Strong third-party seller and AWS sales provided a margin boost. Transportation costs related to 1-day are a headwind, but 1-day expenses were a little less than expected.

Olsavsky: The historical trend of Q4 being the strongest quarter of operating income has been broken up some. We're facing a tough comp for op. income in Q1, since Q1 2019 was the most profitable quarter in our history.

Question about Amazon's efforts to provide free grocery delivery services (subject to a minimum).

Olsavsky: Early results are good. Grocery delivery orders for Amazon Fresh/Whole Foods more than doubled Y/Y. We're still in the testing phase.

Olsavsky notes a Japanese consumption tax hike and a change in the timing of India's Diwali holiday had about a 3-percentage-point impact on International segment growth in Q4.

Question about an AWS accounting change that will lower depreciation expenses for servers by $800M in Q1.

Olsavsky: We've kept an eye on how servers depreciate. Have seen enough to feel that servers should depreciate over 4 years rather than 3. This isn't just an accounting change, we've put in work to make our servers last longer. This also reduces our capex needs.

Olsavsky and Fildes also note that the impact of the change on depreciation expenses will be less than $800M in the quarters following Q1.

Another question about 1-day expenses. Is the geographic expansion of 1-day finished? Also one about the brand advertising business.

Olsavsky: We continue expanding 1-day's availability. You'll see a lot of international expansion in 2020.

Fildes: We want to create better solutions for brands to promote themselves, such as supporting multi-page stores. Have a lot of opportunities given our retail footprint.

Question about expenses related to 1-day, and opportunities to become more efficient in 2020. Also one about segments where 1-day boosted sales growth.

Olsavsky: Q4 expenses related to 1-day were slightly below prior guidance of $1.5B. Expect about $1B worth of expenses in Q1 (a seasonally weaker quarter). Will start lapping the start of 1-day expenses in Q2.

Regarding efficiency, he suggests there's room to make both transportation and fulfillment spending more efficient, as inventory is moved closer to customers. And notably, he suggests that Amazon will see "a step up" in its warehouse capacity growth rate from the ~15% clip seen during the last two years.

Question about recently-announced efforts to get SMBs to join Amazon's Indian marketplace, and what the SMBs are selling.

Fildes: We're continuing to improve the experience we provide in India. Want to bring more than 10M Indian micro, small and medium-sized online by 2025. Also want to directly and indirectly create another 1M Indian jobs by 2025.

Adds that Amazon is developing some unique services for marketplace sellers in India, and hopes it can bring some of them to other markets in time.

Question about AWS' competitive environment (amid heightened concerns about Microsoft Azure's growth).

Olsavsky: AWS performed strongly in Q4. Saw very good revenue growth. We think AWS has a very big lead thanks to our giant investments in services/features. Customers are at different stages of their cloud adoption curve, which can impact a given quarter's results. But things are going well.

Question about Q4's top-line strength, and one about planned AWS spending/margins.

Olsavsky: We had a very strong holiday performance. Also a strong reception for the 1-day shipping efforts. More people joined Prime in Q4 than in any prior quarter.

Regarding AWS, he says Amazon continues investing in infrastructure. Also notes that "on the margins," sales/marketing investments and price cuts are impacting AWS' bottom line a bit.

Question about seller services growth, which was strong in Q4.

Olsavsky: Seller services was strong on a unit basis. But there was also some additional strength in FBA services. Seller involvement in 1-day Prime shipping helped.

First question is about AWS. As you look at Q4's strength, is there anything that stood out (workloads, regions, etc.)?

Olsavsky: I wouldn't isolate it to any particular customers/products. Strength was broad-based. Sales/marketing investments helped. We feel our product set is market-leading, and we add to it at a quicker pace than rivals.

Adds that there's a real network effect for AWS due to its extensive customer base/ecosystem.

The Q&A session is starting.

Amazon going over its safe-harbor statement.

Amazon's call is starting.

Amazon is up 11.2% to $2080 heading into the call.

Typically, Amazon's call doesn't feature any prepared remarks outside of the safe-harbor statement. Rather, CFO Brian Olsavsky and IR chief Dave Fildes dive right into a Q&A session.

Here's the webcast link, for those wanting to tune in.

Hi. I'm back to cover Amazon's Q4 call, which should be starting in a few minutes.

I'm taking a short break, but will be back to cover Amazon's earnings call, which starts at 5:30 PM ET.

Shares are currently up 11.9% to $2093.78 after Amazon topped Q4 estimates on the back of strong growth for a number of services businesses, and issued in-line (and possibly conservative) Q1 revenue guidance.

Much like many other U.S. multinationals, Amazon is now seeing reduced forex headwinds.

Forex had just a $120M negative impact on revenue in Q4, after having a $500M impact in Q3. And Amazon's Q1 guidance actually assumes that forex will be a very slight tailwind (5 bps) for revenue growth.

Against that backdrop, a solid revenue/EPS beat for Amazon's seasonally biggest quarter, with strong seller services growth and better-than-feared numbers for AWS, is naturally going over well.

Amazon keeps adding to its gains: It's now up 12.3%. As noted previously, expectations were relatively low for Amazon going into earnings, with its stock trading about $150 below its mid-2018 and mid-2019 highs.

Amazon ended 2019 with $55.1B in cash/marketable securities and $23.4B in long-term debt.

The unearned revenue balance, which covers payments that Amazon has received but not yet recognized as revenue, was up 25% to $8.19B. Annual Prime membership fees account for much of this total.

Amazon's share count (stock outstanding + underlying stock awards) rose by 5M Y/Y to 512M. Unlike many other tech giants, the company doesn't have a buyback program.

Operating income by segment:

North America -16% to $1.9B
International (pressured by large Indian investments) negative $617M vs. negative $642M
AWS +19% to $2.6B

Total paid unit sales (boosted by the 1-day Prime effort) rose 22% Y/Y, even with Q3 but higher than the growth rates recorded in the prior several quarters.

Amazon ended its seasonally biggest quarter with 798K full-time and part-time employees, up 23% Y/Y.

This follows 22% growth in Q3, and a relatively modest 13% increase for Q2.

Amazon is now up 11.9% after hours to $2092.94, and has made new highs.

In spite of aggressive spending, Amazon trailing 12-month free cash flow minus lease and financing expenses came in at $12.5B.

That's up from $10.5B at the end of Q3 and $8.4B at the end of 2018.

Amazon also continued investing heavily in capex in Q4.

Direct purchases of property and equipment (driven by warehouse/logistics investments) rose 42% Y/Y to $5.31B. Spending on property and equipment via finance leases (driven by AWS) rose 14% to $4.18B.

Q4's operating expense growth:

Fulfillment +22% to $12.19B
Tech/content +27% to $9.74B
Marketing +26% to $6.17B
G&A +26% to $1.12B

This earnings release's Jeff Bezos quote makes a point of talking up Prime adoption.

"We’ve made Prime delivery faster — the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year. Members now have free two-hour grocery delivery from Amazon Fresh and Whole Foods Market in more than 2,000 U.S. cities and towns. Prime members watched double the hours of original movies and TV shows on Prime Video this quarter compared to last year, and Amazon Originals received a record 88 nominations and 26 wins at major awards shows."

Here's the earnings release, for those interested.

Shipping expenses (lifted by the Prime 1-day effort and Amazon's large investments in its own delivery operations) rose 43% Y/Y to $12.88B, after growing 46% in Q3 and 36% in Q2.

Strong growth for seller services and other services business gave a boost to Amazon's gross margin, which has been pressured recently by heavy shipping expense growth.

Q4 GM was 38.3%, close to the year-ago period's 38.2% but above a 37.7% consensus.

Q1 sales guidance (possibly conservative) implies 16%-22% growth.

Overall, Amazon's revenue rose 21% Y/Y. That's slower than Q3's 24% growth, but a faster rate than what was seen in the prior 3 quarters.

Subscription services revenue rose 32% to $5.24B, slightly beating a $5.18B consensus.

"Other" revenue, which is dominated by ad sales, rose 41% to $4.78B, beating a $4.62B consensus.

Amazon is holding onto its gains: Shares are up 9.6% after hours.

Online Stores (direct e-commerce) revenue rose 15% Y/Y to $45.66B (slightly below consensus).

Third-party seller services revenue (carries higher margins) rose 30% to $17.45B (well above a $16.58B consensus).

Amazon also discloses that it now has over 150M paid Prime subscribers. It previously reported having over 100M in April 2018.

AWS revenue +34% to $9.95B, beating a $9.82B consensus.

International revenue +14% to $23.81B, beating a $23.45B consensus.

North American revenue +22% to $53.67B, beating a $52.67B consensus.

Amazon is up 9% after hours to $2038.

Q1 guidance is for revenue of $69B-$73B and op. income of $3B-$4.2B vs. a consensus of $71.63B and $4.04B.

Results are out. Revenue of $87.44B beats an $86.04B consensus. EPS of $6.47 beats a $4.04 consensus.

The Q4 report should be out within a few minutes.

Three months ago, Amazon issued below-consensus Q4 revenue guidance. However, many viewed the guidance as conservative in light of how Amazon's e-commerce growth accelerated in Q3.

As a result, the current Q4 revenue consensus ($86.03B) is near the high end of Amazon's sales guidance range of $80B to $86.5B.