Last week Amazon (NASDAQ: AMZN) posted its second quarter financials, reporting huge gains in net income, net sales and revenue from Amazon Web Services (AWS). Second quarter highlights include:

• Net income was $857 million, compared to $92 million for the same period last year.
• Net sales totaled $30.4 billion, a 31 percent increase for the same period last year. According to Yahoo Finance, analysts estimated $29.54 billion in revenue.
• Operating income was $1.3 billion, compared to $464 million year-over-year.
• Operating cash flow increased 42 percent to $12.7 billion, compared to $9.0 year-over-year.
• Diluted earnings per share of $1.78, compared to $0.19 year-over-year and well above the analysts’ average estimate of $1.11 per share, according to Thompson Reuters I/B/E/S.

“It’s been a busy few months for Amazon around the world, and particularly in India – where we launched a new AWS Region, introduced Prime with unlimited free shipping, and announced that Prime Video is coming soon, offering Prime members in India exclusive access to Amazon Original Series and Movies – including original content featuring top Indian creators and talent,” said Jeff Bezos, founder and CEO of Amazon in a press release.

In addition to the record financials, Amazon had many company highlights to brag about in the second quarter:

• The second annual Prime Day was the biggest day ever for Amazon with worldwide orders growing by 60 percent, orders from third-party sellers with Prime Day deals nearly tripled and Prime members saved more than double on deals compared to Prime Day 2015.
• Amazon Studios received 16 Emmy nominations for several of its original series including Transparent, The Man in the High Castle, Mozart in the Jungle and Catastrophe.
• Amazon launched Amazon Video Direct, a self-service program for video creators to make their work available to Amazon customers through various distribution options including Prime Video, one-time purchase, rental or ad-supported viewing.

• 

  Amazon Web Services was selected as Salesforce’s preferred public cloud infrastructure provider.

• AWS added 422 new significant services and features during the first half of 2016.

The quarter ended June 30, 2016 was Amazon’s fifth straight profitable quarter, according to Yahoo Finance. Guidance for the third quarter of 2016 shows anticipated drops in profitability as well as increases in expenses as the Seattle-based retail giant gears up for the holiday shopping season.

“We’re adding warehouses. We’re adding workers,” said chief financial officer and senior vice president Brian Olsavsky in an earnings call. This includes 18 new fulfillment centers.

Olsavsky said Amazon will double its investment rate in Prime Video offerings in the second half of 2016.

“…on Prime Video, again we’re very happy with the customer adoption of Prime Video, and we know the customers love it,” Olsavsky said. “We like the results that we see, particularly with the free trial conversion, the renewal rates for subscriptions. So it’s clearly working.”

Olsavsky would not disclose subscription numbers for Amazon Prime. In January, Fast Company estimated Prime subscribers in the 40 million range.

“What I can tell you there is we still think there’s a lot of room in Prime. We’ve tailored programs to students. We’ve tailored video programs. We’ve rolled out monthly plans. We have plans with grocery delivery. So there’s a lot of different flavors of Prime and we are aggressively looking for a perfect Prime for everybody,” Olsavsky said in a conference call about the earnings report. “We know that, again, when customers try Prime, they like it. So it’s really just about getting them to try Prime and continuing to deliver great Prime benefits and great low prices and selection.”

Insider Take:

Amazon is on a roll with a record June earnings report, and exciting news for Prime Video and AWS customers. We are particularly interested in the changes coming to Prime subscriptions, and while Olsavsky didn’t share a lot of new, concrete info. about Prime on the earnings call, he did say there’s a lot of room for growth and he hinted at a “perfect Prime for everybody.”

We’ve seen some of that this year with Amazon making deals with wireless carriers to offer Amazon Prime as a special promotion, Amazon offering monthly payment plans, and now adding India to the mix. We’re eager to see what Bezos and company have in store for subscribers next, but so far, we like what we’re seeing. Amazon is never content to be just good or good enough; it wants to be the best, and that’s good news for subscribers.