A river of revenue

Long before COVID-19, millions already relied on Amazon.com (Nasdaq: AMZN) to deliver things they needed. As of January, the company reported 150 million Prime members — who not only pay a subscription fee, but also shop on Amazon more than non-prime members do.

The surge in orders resulting from COVID-19 boosted net revenue by 40 percent to $89 billion in the company’s second quarter, demonstrating that Amazon can still grow briskly despite its massive size. Earnings doubled year over year to $5.2 billion. Fueling that earnings growth was the Amazon Web Services (AWS) business. Even though AWS accounted for just 12 percent of Amazon’s revenue in its most recent quarter, it made up 58 percent of operating income. The good news for investors is that this unit is thriving, with revenue increasing 29 percent year over year.

In its most recent quarter, Amazon more than doubled grocery delivery capacity and tripled grocery pickup locations. Millions of people will be trying Amazon’s services for the first time, and some will stick around and remain customers for the long term.

Costs remain high, but while the pandemic is causing surges in both revenue and expenses, the former is likely to last longer than the latter. When COVID-19 has run its course, Amazon will have attracted more customers, and will have fewer pandemic-related costs. (The Motley Fool owns shares of Amazon.com and has recommended its stock and options on it.)