Amazon's (AMZN) message to investors on Thursday was simple: spend, spend, spend.
Wall Street wasn't happy about it. Shares of Amazon are poised to open down 3% on Friday, after the company missed big on the bottom line for the second quarter.
In an earnings call following the report, Amazon CFO Brian Olsavsky gave a glimpse into what exactly the company is investing in. Olsavsky said Amazon is plowing profits into fulfillment (sorting facilities, fulfillment centers and its Fulfillment By Amazon service), video content, overseas expansion (mostly India), Amazon Web Services infrastructure and marketing, where its been building out its AWS sales team and advertising sales team.
Despite the selloff after-hours, some analysts said these kinds of investments are par for the course for Amazon. The company itself said investors should expect more of the same, forecasting it could lose up to $400 million in the current quarter.
"Those margins, as we say frequently, are going to fluctuate quarter to quarter and always going to be in net of investments, price reductions and cost efficiencies that we drive," Olsavsky said. "So we have really stepped up the [AWS] infrastructure to match the large usage growth and also the geographic expansion. And that is showing up in tech and content."
Outside of AWS spending, Olsavsky said Amazon stepped up its investments in Prime benefits both in the U.S. and internationally. Amazon continues to add more features to its Prime subscription service, such as Prime Video and its Prime Now same-day delivery service, which it just launched in Singapore on Wednesday, furthering its investments in Asia.
