Q1 2020 Earnings Call
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Thank you for standing by good day, everyone and welcome to the Amazon Dot Com Q1, 2020 financial results teleconference. At this time all participants are name listen only mode. After the presentation, we will conduct a question and in it and answer session today's call is being run.
Accordingly for opening remarks, I will be turning the call over to director of Investor Relations.
Shelley Cape Piper. Please go ahead.
Hello, and welcome to our Q1 2020 financial results Conference call.
Joining us today you have to your question, our bridal saw <unk>, our CFO, Dave Pahl director of Investor Relations.
Are you listening to today's conference call. We encourage you to have our press release in front of deal, which includes our financial results as well metrics some commentary on the quarter.
Please note unless otherwise stated all comparisons in this call will be against our results for the comparable period 2019.
Our comments then responses to your question reflect management's views as of today April Thirtyth 2020, only and war 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 FCC, 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 in our filings with the FCC each of which is posted on our IR website, you will find additional disclosures regarding non-GAAP measures, including reconciliations of these measures with comparable GAAP measures.
Our guidance incorporates the order trends that we've seen today, what we believe today to be appropriate assumption.
Our results are inherently unpredictable maybe materially affected by many factors, including fluctuations in foreign exchange rates.
Ranges of global economic conditions, and customer spending all of them the rate of growth of the Internet online commerce and cloud services.
And the various factors detailed in our filings with the FCC.
This guidance also reflects our estimates today regarding the impact of the coated 19 pandemic on our operation, including those discussed in our filings with the FTC and is highly dependent on numerous factors that we may not be able to predict or control, including.
The duration spread is a pandemic actions taken by governments businesses and individuals in response to the pandemic.
The impact of the pandemic on global and regional economies and economic activity workforce staffing and productivity and are significant and continuing spending on employee safety measures.
Our ability to continue operations and affected areas.
In consumer demand in consumer spending patterns as well the effect from suppliers creditors and third party sellers all of which are uncertain.
Our guidance also assumes among other things that we don't conclude any additional does this acquisition investments 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 Brian.
Before we move on to the Q and I'd like to lead off with a few comments.
Well, we've all seen transpire in the past two months has been gut wrenching and unprecedented.
But there's also been it's on the her oak action by healthcare workers government officials police in emergency personnel and all the essential workers in our communities.
This includes frontline amazonians, putting our whole foods team and our partners around the world.
They provided a lifeline of groceries and other critical supplies to the doorsteps of all of US at this critical time.
But to give you some insight into what we have seen at Amazon and how we are responding to this crisis.
Beginning in early March we experienced a major surgeon customer demand.
Typically for household staples and other essential products across categories, such as health and personal care groceries, and even home office supplies.
The same time with a lower demand for discretionary items, such as apparel shoes and wireless products.
This large demand spike create a major challenges in our operations network.
And with our seller community and our suppliers.
What we generally have experiencing getting ready for spikes in demand for known events like the holiday season in Prime day, we also generally spend months ramping up for these periods.
The Kobin crisis allowed for no such preparation, we took action to react to the higher order levels, while continuing to provide for the safety of our workforce.
Established rigorous safety and cleaning protocols, including maintaining six foot social distancing procuring 100 million masks tens of millions of gloves, and wipes and other cleaning supplies.
We began requiring temperature checks across our operations network and our whole foods stores, we added plexiglass barriers between cashiers and customers and reserve special hours for senior customers to shop.
We temporarily raise wages and overtime premiums.
We funded the new Amazon relief fund.
And we allowed poised to take on paid time off at their discretion.
To deal with the unprecedented demand we hired an additional 175000, new employees, many of whom were displaced from other jobs in the economy.
We took steps to dampened demand for non essential products, including reducing our marketing spend.
Our network pivoted to shipping priority of products within one to four days and extending promises a non priority items.
Our independent third party sellers, most of whom are small and medium sized businesses were tremendously hard to serve our customers and we are grateful for their efforts.
Third party sellers continue to see strong growth in our stores as more than half for units sold or from third party sellers.
We increased grocery delivery capacity by more than 60% and expanded in store pickup at whole foods stores from over from 80 stores to more than 150 stores.
And other Amazon teams shifted their focus to directly helping customers and the overall effort to fight the covert virus.
Cws has created data lake to assist healthcare workers researchers scientist and have public health officials were working to understand and fight the current a virus.
Many of our eight of those products are helping in the government response to the crisis and are there for customers who are seeing their own demand spikes companies, enabling video conferencing remote learning and online health surfaces for example.
Amazon Flex the supporting food banks by donating delivery services of groceries to serve 6 million meals in Los Angeles, Miami, Nashville, Orlando, San Francisco, Seattle in Washington DC.
With plans to ramp this up to 25 cities across the us.
Intellects is helping customers excess important CDC guidance and help them evaluate their own covert 19 risk levels I was all this impacting our business for customer demand remains high the incremental revenue we're seeing on many of the lower ASP essential products is basically coming at cost.
We have invested more than $600 million encoded related costs in Q1, and expect these costs could grow to $4 billion or more in Q2.
These include productivity headwinds in our facilities as we provide for social distancing and allow for the ramp up of new employees.
Investments in personal protective equipment for employees.
Enhance cleaning of our facilities.
Our wages for our hourly teams in hundreds of millions of dollars to develop cobot 19 testing capabilities.
Q1, we also had another $400 million of costs related to increased reserves for doubtful accounts.
On the flip side, we did see a drop in travel entertainment and meeting costs as well as lower market is weighted dampened our demand for non essential items.
Well, we can have great certainty about what the next few quarters will look like I'm humbled by the efforts of my fellow amazonians in delivering essential goods and services to so many people.
We take this responsibility seriously and we're proud of the work our teams are doing to help customers through this difficult time.
With that let's open up for questions.
At this time, we will open the call up to your question, we as each caller. Please limit yourself to one question. If you like to ask your question. Please press star one on your keypad, we ask that when you pose your question you pick up your handset to provide optimum the sound quality once again to initiate a question. Please.
Yes Star then one on your touched on telephone at this time, please hold while we poll for questions.
Your first question comes from line of Doug and most with JP Morgan. Please proceed with your question.
Great. Thanks for taking the question.
Okay, just wanted to ask within the $4 billion, each cobiz related incremental costs into Q.
You talked about spending hundreds of millions on your own testing capabilities. You just talk about the strategic thinking there underlying trying to build this the in house versus sourcing from elsewhere.
Ended this potentially take you into new business path overtime.
And then how do you think about the spending here in Twoq and weather overtime does that change your margin structure for an extended period of time beyond just the next quarter. Thanks.
Yes, sure Doug first on testing so we.
We estimate that testing will be about $300 million in Q2 for successful we put some of our best people on it I think everyone is trying to get testing.
Thanks, not readily available on the scale that we needed for to test.
Our scale of employees. So we are working to do that ourselves into bill protocols and too.
Again, we'll see we'll see how we do that differently and I don't know again about.
Future business opportunities. Our main concern is is.
Getting testing in the hands of our employees and then potentially as we have excess capacity, perhaps we can help in other areas on the spending.
You know the a lot of the costs that were seeing are tied to this cove it.
Response.
Most of it is hitting in people cost flows both in productivity and also in wages and really funds at all so can't really tell how long that will laugh.
It's probably good that I'm only giving early giving guidance for Q2 at this point, we're going to probably learned a lot more in the next few weeks next few months and we'll continue to update us but for now.
So what we see our.
Yes.
Temporary caution a wall in the scheme of things, but certainly very expensive temporary costs and also one set.
We're not sure how long the last.
Great. Thanks, Brent.
Your next question comes from the line of Brian Nowak with Morgan Stanley. Please proceed with your question.
Thanks for taking my question I have to Brian. The first one is the current situation is sort of I think in many ways through showcased the ability of your network to provide goods for people in the the value of prime and Amazon to customers. So I guess in light of that can you talk to us at all but the impact you've seen on the prime customer account.
From the current situation and any color on I've been able to expand primes reach into new customers are demographics from this.
Then the second one theres a lot of changes going on and logistics and things, but Amazon is always a learning company. So any learnings you've had so far in logistics side about how you actually maybe able to learn some new best practices to run more efficiently postcode bid from the current fired or even going through.
Well I think we've learned that.
It's easier to get ready for holiday or for a prime day that is to get ready for something like this when everything hits at launch.
Hi demand and then also need to restock automatically enough prepared for it. So that's not something one that we want to keep learning, but I will join our best to too.
Maintain and and provide key services for.
Essential items for our prime customers at all in all our Amazon customers.
On the.
Yes.
Prime Ics Sydney Prime program.
What we're seeing is again.
You are seeing a lot of pickup and.
Prime shopping benefits, we see our prime customers your shopping more often they have larger fat basket sizes were also seeing a lot more use of our video benefits and our digital benefits. So in March as the first time viewers nearly doubled.
Which is I think a good time for people to come to.
And when there a lot of them are staying at home to stay entertain didnt and.
CRB video collection, it's also beyond kind of Prime video, it's also our channels and.
Video rentals also went up as I'm sure other than the entertainment business saw that as well.
People are finding more benefit from Alexa when they're calm they're listening to nor music asking questions, particularly questions related to covered in issues.
Round it they're using it in education with their children.
And I think we're seeing a lot more of the communication side using people using.
Thanks for calling and drop in so I think the.
The Prime story is that shopping is.
You know really important for people now, especially when they.
Those people can't leave their houses I think the digital benefits are.
Scaling well I think there handling the additional demand.
And it gives it gives people a good.
Chime in reason to use all of their Frank benefits that maybe the heading views as much in the past.
Great. Thanks, Brent.
Your next question comes from line of Mark Mahaney with RBC. Please proceed with your question.
Thanks to please first could you talk about where you are in terms of fulfillment efficiencies at the way you track it.
Pre covert Amazon was able to.
I had some sort of level of standard of meeting.
Demand with within a certain period of time, how low that got given the surge in demand and where you are in terms of the recovery.
When are you can be when will how long will it take for Amazon They get back to a point where.
At the same sort of service efficiency levels that you on the retail side that you had pre cobot, how far you away from that and then the second is good talking about the ADW Es business and I guess I would've expected maybe.
Growth rates really robust, but maybe even a kick up in the growth rate is what are you seeing there in terms of I assume there was much greater usage of Vws now is that something that would show up in at PNM, maybe on a delayed basis, just talk about what's happening to that side of the business in this crisis. Thank you.
Sure well, we're happy with the growth in Q1.
On such a large base again we're.
Now, it's $41 billion run rate.
Thats, 33% year over year, so what we're seeing kind of post cobot is.
It varies by industry I think we think.
What is probably where were.
The bit well positioned is that we have such a breadth of customer share. There's millions of active customers from startups enterprises, the public sector. So theres a lot of variance and.
Again.
Individual industries are seeing right now things like video conferencing gaming remote learning entertainment all are seeing see a much higher growth.
And usage and things like hospitality and travel certainly that's contracted very severely very quickly. So I think there's going to be a mixed bag on the on industries and of course this is.
The the tied to general economic conditions for the country in the world's quite frankly so.
Right now, we're where we want to be there for our customers, we want to be able to scale up when they need us.
Let it be there is support them regionally around the world and.
Yeah, we've been doing a good job with that I believe on the fulfillment efficiency I think you're talking about one day, probably is hard to your question when will we get back to what we've seen and.
Levels of one day, so little bit on that so again as I mentioned in my introductory comments, we had to.
To.
Kind of absorb this.
Shock of topline demand and also.
Ability that.
Stabilize our operations. So we had to take a step to focus on a central items extend this the shipping period from 140 days and then she further on non essential items.
Restrict things that were coming into the warehouses and focus on essential products. So we think that is still the was the right course of action and.
As we add capacity, we're trying to.
Resume more normal operations as far as.
Shifting of non essential items and the speeding up of of one day shipments.
I will explain a bit on the one day shipping cost because it's aligned with this so we had originally thought we would spend a billion dollars roughly on one day shipping in Q1.
And what we're seeing is.
We pretty much spent about that same amount because it's in the old days, we would have perhaps.
Hi, the option to ship things.
Today, three four day in and seen a break on rates for the actual shipments, but most of our one day costs are really what we've done to our logistics networks networks to allow for one day shipping things like putting inventory closer to the customer things like.
Building up our Mcl network and delivery network and also having multiple pull times and shipping windows. During the day. So those are actually coming in all those things are coming in.
Very handy to us to help get more capacity of what we currently have been work that we've made that investment, but we don't actually see a savings.
Because we're still shipping things once they're available very quickly to customers. So it's really a combination of how long it takes to get things in stock pick pack and shift the shipping is still pretty fast and is.
Still coming quickly, it's just it's taking longer to get things.
Into our warehouse and out of our warehouse. So that's really the challenge right now is to speed that up and.
Hi.
That will.
When we do that we'll see a resumption of more one day service, but.
Right now, yes things are still so up in the air that I can't really project when that they will be here.
What point in Q2 or Q3 or beyond.
Okay. Thank you Brian.
Your next question comes from the line of Heath, Terry with Goldman Sachs. Please proceed with your question.
Great. Thanks.
Want to dig just a little bit deeper into into your comments on on eight of you asked.
Yesterday during Microsoft's call, Dave Dave mentioned that they had seen two years' worth of digital transformation in the cloud in two months.
Curious if you how you would characterize sort of what you have seen as we've gone into into August or its April in terms of in terms of cloud adoption and what this is what this is meant for Kws and.
The adoption of the rate of adoption or acceleration in that in that business, maybe more more broadly.
Then as we look at the guidance the $4 billion or expenses in the in the second quarter.
If we adjust for that that imply implies a pretty material increase and profitability quarter over quarter.
Any sense of or any sense, even sort of share with us is just what the drivers behind that profitability is how much of that is annualizing. The one day investments in the efficiencies that you're seeing there versus anything else in particular that you would you would call out.
Yeah. So first on ADW S. I mean I don't have.
Comments.
They have hurdles are about digital transformation I think what I would say is.
Weve continue to see a healthy.
Adoption of our business and healthy usage NOL in United States, but globally.
Our backlog.
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Of.
You know future contracts continues to build.
And yes, I still think the basic value proposition of eight of the U.S.
We've always pointed to.
Things like having the largest.
This functionality largest and most vibrant community of customers and partners.
Having really proven operational and security experience and building.
Yes, what customers need in the areas and machine learning artificial intelligence and other really key areas is.
Has not been impeded by this.
Kogut crisis, yes, and yes, we're seeing.
In different performance in different industries.
Our salesforce is still there to help help not only with current capacity, but also the transition to new and.
As people make that journey on the cloud.
And then expand their their use of the class.
On the 4 billion or series on the Q2 guidance I think the question is perhaps if this.
How do we have a range this above zero, if we have $4 billion of cost is that pretty much the essentially the.
The essence of your question I think there's.
Our some efficiencies that would leverage that we get on fixed costs on higher volumes, even if they are.
Our somewhat breakeven on a contribution profit basis theres.
There are some.
Improvement in.
Our cost structure when we have high volumes. There's also been a resumption of sheller volumes, especially from third parties using direct shipments to customers.
As companies are you get more capability both in this country and other countries. How we will continue to moderate or marketing in the time period. When we have again pretty much. The demand we are trying to fulfill its there and there's some products that are still out of stocks. So it doesn't make.
Sense.
Two.
Always do marketing, especially variable marketing those situations.
We continue to we believe we'll say it will be saving travel and entertainment costs through the quarter. That's you know in Ah I would say in a couple of hundred million dollar.
Size ranges on the cost so there's a lot of moving parts here, but certainly the investment we're making in that.
Hi in the.
Covert responses pretty significant.
The one day I would remind you that to one day started.
There are Ernest Q2 of last year. So we're starting to lap that investment it's not as large on a year over year basis as it's been in the past four quarters.
And then the other thing that I would just point out yet is the.
Remedy impact very a change in useful life of our servers.
Mostly hitting in the ADW us business that was a at 800 million dollar benefit year over year in Q1 and that will continue into the rest of the year.
And that that again is the benefit we're seeing from being able to.
Use or are a server infrastructure assets for longer time period, we've been working on the.
Ability to.
Run them longer and yeah. So that's the hardware and software challenge.
And as we have.
Have success there operating at scale for over 13 years now we've been able to extend our useful life for assets are recognized that we have been extending the life. So that that's a benefit that we've seen in Q1 and we'll see the for me from here on out.
Yeah, I mean, just to add to that to us it takes about $800 million of nearly $800 million benefit in the first quarter, we do expect the.
Change to decrease at the year progresses.
Keep in mind.
Right. Thank you Brian.
Our next question comes from line of Eric Sheridan with Yes. Please proceed with your question.
Thanks, so much for taking my questions, maybe two if I can one on demand of the revenue side any difference in behavior you saw in various shelter increase geographies across the world whether it be Europe versus the us for these using us for India in terms of consumer behavior for certain elements. So.
The option of certain product categories as we went through the than what the market because what differences you saw on a global scale, including on Prime adoption in response to cope with 19 and one quick one of the cost side of the equation. The the cost of energy and oil have come down dramatically wondering if there was any when would be able to.
Called that out or an element of that in your overall cost structure as you do more of your own logistics over time. Thanks, so much.
Sure.
Sorry arc I don't have much for you on the second point.
Certainly we would.
Look to see lower shipping costs.
Although I would.
A lot of I mean is certainly things that we do long haul there's things that we reposition their claims there's things that we do on long haul truck long haul trucking and that's where probably the fuel component would be larger.
And we've said that we haven't quantified that are not for.
It's in our guidance, but I can't break it out for you right now on the.
Had this may have played out differently in different geographies.
We're actually seeing a lot of consistency I would say.
Types of products that people are buying and to stay at home restrictions and the.
Yeah, So it's been pretty consistent.
There's obviously timing differences on.
Between countries on one's hitting certain countries and when it's.
Maybe when or where they are in their curve and flattening the curve and all that I think the biggest impact internationally has been in India where of course we.
Similar to the all companies in India. We were we're now only fulfilling are essential goods such as grocery so thats cut back a lot on our offering.
And we will further.
Expand when the Indian government announces that would be allowed to resume operations, so quite a bit of a holding pattern except for grocery in India.
And in France, you know there's been restrictions placed on us for the French courts are they did not impact Q1.
Business, because essentially that to the closure of our fresh fulfillment centers in the middle of April.
French customers are still able to order many millions of products from the selling partners, we have who can ship directly to customers and through our global summit.
And we're continuing to Peel This court decision, but.
Thats it Thats also in different.
Experience than the other countries internationally.
Thanks, so much.
Our next question comes from line of Justin Post with Bank of America. Please proceed with your question.
Great. It a couple just wondering if you're seeing any sustainable changes in consumer habits, you could call out such as people converting to prime at a more rapid rate, adding more products in the consumable categories to their subscribe and save anything you see that could really signal a longer term changing consumer habits.
Faster adoption of certain categories and the second thing for the for the revenue guidance for two Q does that assume a slowdown in growth in May and June.
Related to that crisis. Thank you.
Hi, gentlemen, David I think on some of the consumer behavior I'd certainly point to grocery.
If you look at a reminder, the online grocery is up in our online sales.
So it's that's if not isolated like you can see for physical stores, but we have.
Seen an increased demand in online grocery shopping and we have the number of ways for customers to do that prime now fresh and then of course whole foods online.
For delivery or pick up and really beginning in March and continuing now through April.
Seeing that increased demand so that's continued and.
A lot of our focus is on.
Working around the clock and offering as much delivery as possible. We've we've increased delivery order capacity more than 60%.
In our stores have gone up.
It would stores that offer pickup capability has gone from roughly 80 stores before the the events to more than 150. So a lot of work being done there on the physical stores, which you can see the growth there it increased year over year at about 8%.
That is predominantly whole foods, but if the whole foods in store shopping experience rather than the online order.
So that's up quite a bit from the run rate you've seen in some recent quarters. It's.
Again, similar similar that.
So a lot of folks that were you know a stay at home measures were not yet in place for shopping in large volumes and stocking up at our stores.
Since that time, you know more recently, we have seen some of those growth rates for the in store shopping moderate some.
So a lot of work being done there both in you know for the workers that are doing to delivery in the workers that are in the stores a lot of focus on our part to make sure that they're they're safe and healthy unable to accommodate customers makes your customers are comfortable however, they choose to shop.
And I I'd add to that Justin.
I think the changes we've seen in the digital offerings will.
Yes make people custom to those benefits and maybe a advance their knowledge of what's available through.
A music video Alexa certainly communication features on our devices.
Yes, we launched a prime video cinema in a.
You asked UK and Germany, where in movies are going direct to pay per view.
Because of lack of theaters and that was a good move by the team and that's up and very well received and we've also made a lot of kids and family content available free to watch a prime video. So I think people are getting a better luck.
Yeah at what's available with their prime memberships.
Great and then and then second half a quarter or are you, assuming assuming kind of we go back to normalized quarter for grasses and some deceleration.
Well, we are heavily constrained again, it's always an odd quarter because generally the biggest.
[noise] uncertainty we have is customer.
Demand and what the order and how much of it the order.
Demand has been strong and you know the bigger the biggest questions. We have in Q2 or more about ability is.
Service that demand in that or is that products that people are ordering.
On a full way you know not.
Uh huh.
The walking or or making it hard to find a a sad not essential items, a increasing marketing and everything else. So I think the.
Challenge is really on everything besides the topline topline certainly not to be taken for granted there's always.
The importance of having attractive offerings in stock for customers, but.
Usually things you.
Can count on the cost structure, the ability to get products.
Yes, your capacity for shipping and delivering those are usually things you can take for granted and.
In this quarter you can't that's that's really where the uncertainty is driven.
Your next question comes from Stephen Ju with Credit Suisse. Please proceed with your question.
Okay. Thanks, guys. So Brian I think the third party unit mix de indexed a little bit as a percentage of total this quarter I know that number jumps around a little bit but is this primarily a matter of the constraint delivery resources and I guess the heightened demand.
And any sort of ongoing supply chain concern is that remain worrisome for you from either a first party perspective or from what the third party sellers, maybe calling out thanks.
Sure I think there's still supply chain concerns on a lot of p. not only that we used could also that we sell to customers things like masks. There is there's general availability, but I'm still outages or things like cleaning wipes.
Masks.
Talk about testing, but that's not something that we sell but so there's there are a lot of supply chain concerns are mostly in those areas right now.
I'm, sorry, I forgot the other part of your question can you remind me what he just a fraud waste and just the fifth third party unit mix de indexing, a little bit or as a percentage of total this quarter I'm. Just wondering if that's just normal fluctuations or are you just prioritizing the first party deliberately I guess, what's probably you're limited due to every resources on the heightened.
Good.
Yes, Thanks, Steven I would say that yes, it's a little.
Just so off of this.
During this period because it sounds much worse deck restricting favoring one p. or anything. It's we're we're prioritizing essential items and a lot of those tend to be especially in the consumable area tend to be retail supplied items from vendors. So.
I would say that is the reason that Sta would.
I have not been as high as it normally would be MFS is picking up a lot of the opportunity, though CIS and sellers are taking that opportunity ship direct.
Because then it doesn't have to come into our warehouse. Obviously, so it's a it's a it's a bit of a different type of Threepi mix right. Now. We're just we're trying to minimize the impact on the sellers as we opened up our warehouses well many of them are also and my friend or direct shippers to our customers.
So it's.
The ability to.
Satisfy demand of our customers from our seller community has never been never been more important.
And we're very grateful to our charter party sellers.
Good day through a lot as well.
Thank you.
Our final question comes from the line of John Blackledge with Cowen. Please proceed with your question.
Great. Thanks.
Advertising, you'll be other revenue growth line accelerate it could you just discussed how the advertising business performed in the first quarter and any color on how it's trending in the second quarter possible and then in the release you indicated more hot potentially more hiring above the 175000 I'd kind of dish.
Tons anyway to quantify and does this hiring replace kind of the seasonal hiring that you typically that you typically do.
At the end of the third quarter. Thanks.
Yes, sure let me start that second one I don't have more for you on that I think we'll announce as as we change any thresholds on hiring one outside.
At the time right now we are fully hired the 175000.
People that we had discussed prior.
80000 of them we're in.
Place at the end of the quarter. So the other 95000 have been hired in April on advertising.
Hi, what we've seen as.
No it's been a very strong quarter in every AD revenue and your comment about other revenue accelerating there's there's some other things going on in that other revenue account. The majority is revenue, but theres other or some other things, but I can tell you underneath it is that no advertising growth rate is has stayed consistent with last quarter and.
Yeah, we're very happy with the progression of that that offering for not only yes sellers authors vendors city and that in fact, it's positive in fact, it's Adam customer selection, but we did start to see some impact yeah in March some pullback.
From advertisers.
In some downward pressure on price.
And how it but advertise will continue to.
Advertise it at a high Cliff. It was in is no schools, maybe with some others are seeing.
It's as probably offset a bit by the continued strong traffic we have to the site. So it's a bit of a mixed bag we have.
Yeah again, as I said downward pressure bid on pricing, but I think we have a.
As a large portion of our advertising relates to Amazon sales not things like travel and auto, which offsite, which may have been disproportionately impacted at least early on here in the in the covert crisis.
I think our advertising will prove to be very efficient as well and can be directly measured so even as people are cutting back perhaps on advertising for their costs. I think this will be one area that.
We will prove its value.
It has in the past.
Great. Thank you thanks for joining us today on the call and for your questions. A replay will be available on our Investor Relations web site at least through the into the quarter.
We appreciate your interest in Amazon and look forward to talking with you again next quarter.
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