Andy Jassy
Chief Executive Officer at Amazon.com
Thanks, Dave. Today, we're reporting $158.9 billion in revenue, up 11% year-over-year, excluding the impact from foreign-exchange rates. Operating income was $17.4 billion, up 56% year-over-year and trailing 12-month free-cash flow adjusted for equipment finance leases was $46.1 billion, up 128% or $25.9 billion year-over-year. As always, we're focused on making our customers' lives better and easier and thinking long-term with respect to how we can keep helping customers and build a successful business that outlasts all of us.
In our stores business, we saw sales growth of 9% year-over-year in the North-America segment and 12% year-over-year in the International segment. Our team continues to focus on the inputs that matter most to customers, really broad selection, low prices, fast and free delivery and a range of compelling Prime member benefits, including our recent additions of unlimited grocery delivery from Whole Foods Market, Amazon Fresh and local third-party grocery partners for $9.99 a month and fuel savings of $0.10 a gallon at BP, AMECO and AMPM stations in the US. At a time when consumers are being careful about how much they spend, we're continuing to lower prices and ship even more quickly and we can see this resonating with customers as our unit growth continues to be strong and outpace even our revenue growth.
In the last few months, we've hosted our largest and most successful Prime Day and Prime big deal days ever and helped customers save over $5 billion across more than 50 million deals. And for the second year in a row, we are on track to deliver at our fastest speeds ever for Prime members globally. We also continue to focus on lowering our cost-to-serve and are pursuing several initiatives that we believe will have meaningful long-term impact in this area.
First, we continue to believe there are more gains on top of what we've captured thus far in outbound regionalization and getting more items closer to end consumers. As such, we're in the process of significantly changing the way we inbound items into our fulfillment network and subsequently spread them to our regional fulfillment nodes. In the last few months, we've made hundreds of changes to our US inbound network and opened more than 15 inbound buildings. While it's still relatively early in this rearchitecture, we've already improved our ability to spread inventory across our fulfillment centers by 25% year-over-year, allowing us to have more of the requisite items in fulfillment centers closest to the customer, so we can compile shipments and ship to customers even more quickly.
As we scale and optimize this new design, we expect these changes will further improve inventory placement, offer faster delivery time, save transportation costs and enable us to increase units shipped per box. Second, we continue to roll out same-day delivery facilities, which is not only the fastest way to get products to customers, but also one of our lowest-cost ways to deliver. Over 40 million customers this past quarter had their orders delivered for free with same-day delivery, an increase of more than 25% year-over-year.
And third, we continue to innovate in robotics to speed delivery, lower-cost to serve and further improve safety in our fulfillment network. We recently launched our 12th generation fulfillment center design with the first building launching in Shreveport, Louisiana. This is the first facility that incorporates our newest robotics inventions that simplify stowing, picking, packing and shipping processes. Thus far, this new design reduces fulfillment processing time by up to 25%, increases the number of items we can offer for same day or next day delivery and is expected to drive a 25% improvement in our cost-to-serve during peak within this next-generation facility.
Though we believe we have more expansive automation and robotics than other retail peers, it's still early days in how much automation we expect in our fulfillment network. In advertising, we remain pleased with our progress, generating $14.3 billion of revenue in the quarter, 18.8% year-over-year growth. Our expansive reach, ability to surface relevant offers to our customers, opportunity to engage customers from the top of the funnel to point-of-purchase and leading capabilities around measuring outcomes at every touch point provide all types of brands with full funnel advertising at scale.
With sponsored products, we're seeing meaningful growth on a very large base and we see further opportunity in driving even better performance for advertisers by further improving the relevancy of the ads we show and by providing additional optimization controls. At the same time, some of our newer offerings are in their very early days. We're just entering our first broadcast season for prime video advertising following a very strong showing at upfronts and we're continuing to support brands of all sizes with our generative AI-powered creative tools across display, video and audio, including our video generator that uses a single-product image to curate custom AI-generated videos.
While we're generating a lot of advertising revenue today, there remains considerable upside. AWS grew 19.1% year-over-year and now stands at a $110 billion annualized run rate. We've seen significant reacceleration of AWS growth for the last four quarters. With the broadest functionality, the strongest security and operational performance and the deepest partner community, AWS continues to be customers' partner of choice. There are signs of this in every part of AWS's business. We see more enterprises growing their footprint in the cloud, evidenced in part by recent customer deals with the AMZ Banking Group, booking.com, Capital One, Fast Retailing, Itau, Unabanco, National Australia Bank, Sony, T-Mobile and Toyota.
You can look at our partnership with NVIDIA called Project Ceiba where NVIDIA has chosen AWS's infrastructure for its R&D supercomputer due in part to AWS's leading operational performance and security. And you can see how AWS continues to innovate in its infrastructure capabilities with deliveries like Aurora Limitless Database, which extends AWS's very successful relational database to support millions of database rights per second and manage petabytes of data, whilst maintaining the simplicity of operating a single database.
We're with our custom Graviton 4 CPU instances, which provide up to nearly 40% better price performance versus other leading X86 processors. Companies are focused on new efforts again, spending energy on modernizing their infrastructure from on-premises to the cloud. This modernization enables companies to save money, innovate more quickly and get more productivity from their scarce engineering resources. However, it also allows them to organize their data in the right architecture and environment to do generative AI at scale. It's much harder to be successful and competitive in generative AI if your data is not in the cloud.
The AWS team continues to make rapid progress in delivering AI capabilities for customers and building a substantial AI business. In the last 18 months, AWS has released nearly twice as many machine-learning and Gen AI features as the other leading cloud providers combined. AWS's AI business is a multi-billion dollar revenue run-rate business that continues to grow at a triple-digit year-over-year percentage and is growing more than three times faster at this stage of its evolution as AWS itself grew. We felt like AWS grew pretty quickly. We talk about our AI offering as three macro layers of the stack with each layer being a giant opportunity and each is progressing rapidly.
The bottom layer, which is for model builders, we were the first major cloud provider to offer NVIDIA's H200 GPUs through our EC2 P5E instances. And thanks to our networking innovations like elastic fabric adapter and Nitro, we continue to offer advantaged networking performance. And while we have a deep partnership with NVIDIA, we've also heard from customers that they want better price performance on their AI workloads. As customers approach higher scale in their implementations, they realize quickly that AI can get costly. It's why we've invested in our own custom silicon in training and for training and inferentia for inference.
The second version of Tranium, Trainium 2 is starting to ramp-up the next few weeks and will be very compelling for customers and price performance. We're seeing significant interest in these chips and we've gone back to our manufacturing partners multiple times to produce much more than we'd originally planned. We also continue to see increasingly more model builders standardized on Amazon SageMaker, our service that makes it much easier to manage your AI data, build models, experiment and deploy to production. This team continues to add features at a rapid clip punctuated by SageMaker's unique capability, which automatically splits training workloads across more than 1,000 AI accelerators prevents interruptions by periodically saving checkpoints and automatically repairing faulty instances from their last save checkpoint and saving training time by up to 40%.
At the middle layer, where teams want to leverage an existing foundation model customized with their data and then have features to deploy high-quality generative AI applications, Amazon Bedrock has the broadest selection of leading foundation models and most compelling modules for key capabilities like model evaluation, guardrails, rag and agents. Recently, we've added Anthropics Claude 3.5 Sonnet model, Meta Llama 3.2 models, Mistral's large two models and multiple stability AI models. We also continue to see teams use multiple model types from different model providers and multiple model sizes in the same application.
There's muck and orchestration required to make this happen and part of what makes Bedrock so appealing to customers and why it has so much traction is that Bedrock makes this much easier. Customers have many other requests, access to even more models, making prompt management easier, further optimizing inference costs and our Bedrock team is hard at-work making this happen. At the application or top layer, we're continuing to see strong adoption of Amazon Q, the most capable generative AI-powered assistant for software development and to leverage your own data.
As the Q has the highest reported code acceptance rates in the industry for multi-blind code suggestions. The team has added all sorts of capabilities in the last few months, but the very practical use-case recently shared where Acue Transform saved Amazon's team's $260 million in 4,500 developer years in migrating over 30,000 applications to new versions of the Java JDK has excited developers and prompted them to ask how else we could help them with tedious and painful transformations. Spend a few minutes reading developer forums about what they wish they could move away from and you'll get an idea of what they want. Expect more practical AI game-changers from Q.
We're also using generative AI pervasively across Amazon's other businesses with hundreds of apps in development or launched. For consumers, we've expanded Rufus, our generative AI-powered expert shopping assistant to the UK, India, Germany, France, Italy, Spain and Canada. And in the US, we've added more personalization, the ability to better narrow customer intent and real-time pricing and deal information. We've recently debuted AI shopping guides for consumers, which simplifies product research by using generative AI to pair key factors to consider in a product category with Amazon's wide selection, making it easier for customers to find the right product for their needs.
For sellers, we've recently launched Project Amelia, an AI assistant that offers tailored business insights to boost productivity and drive seller growth. We continue to rearchitect the brain of Alexa with a new set of foundation models that we'll share with customers in the near-future and we're increasingly adding more AI into all of our devices. Take the new Kindle Scribe we just announced. The note-taking experience is much more powerful with the new built-in AI-powered notebook, which enables you to quickly summarize pages of notes into concise bullets in a script font that can easily be shared.
Speaking of Kindle products, we just launched a completely new Kindle lineup, the first time we've done a portfolio refresh of this size. Apart from the scribe, it includes the first-ever color Kindle, the fastest Kindle ever and new pocket sized Kindle. The early sales for these devices have significantly outperformed our expectations and Kindle is having an excellent year with customers reading more than ever. We now have over 20 billion average monthly pages read on Kindle devices worldwide. There are so many things we're energized by right now, but we'll quickly mention one more, the progress we're making in improving customers' pharmacy experience.
Brick-and-mortar pharmacies account for just over 90% of prescriptions dispensed in the US, but require customers to make trips to forlorn physical venues with much of the selection behind lock shelves, waiting lines for meds and only find out about pricing at the point-of-purchase. The largest mail-order pharmacies offer delivering five to 10 business days. We think customers deserve better. Today, we can deliver to 95% of first-time Amazon pharmacy customers in the US within two business days and to 20% of US Prime members within 24 hours.
Next year, we plan to launch operations in 20 new cities, so nearly half the US will have the ability to have their medications delivered to their door within hours. We believe making it easier for customers to get their medications will improve medication adherence, which we know can directly improve health outcomes. Across Amazon, we have a lot coming in the next few months. We eagerly look-forward to sharing these with customers and a big thank you to my Amazon teammates around the world for all their hard work. And with that, I'll turn it over to Brian for a financial update.
