Amazon (AMZN 1.21%) has been one of the most influential companies of the last 20 years, and its dominance of industries ranging from e-commerce to cloud computing makes it unique even among FAANG stocks.
That singular "Day One" mentality Amazon management operates under was on display once again when the company reported third-quarter earnings last week. Its headline numbers of 37% revenue growth to $96.1 billion and a near doubling in operating income grabbed most of the attention. But two financial metrics hidden deeper in Amazon's earnings show what makes the company so special and why it remains a growth juggernaut even as it's now the second-biggest company by revenue in the U.S., and could soon be the biggest in the world.
Keep reading to see two stunning numbers from Amazon's latest report.
1. It added 350,000 employees in just four months
Amazon has been ramping up hiring throughout the coronavirus pandemic, adding 175,000 employees early on, and in the third quarter it grew its workforce by a whopping 250,000. In the first month of the fourth quarter, it hired another 100,000 new employees as it hosted Prime Day in October and prepared for the holiday season, its busiest time of year.
Amazon hired across multiple divisions, adding jobs in its warehouses, logistics operations, Amazon Air, and other frontline divisions, as well as 17,000 white-collar corporate and tech jobs. To put the hiring blitz in perspective, that rate would equal more than 1 million new employees in a year were it to be sustained. The total of 350,000 employees is also more than all but a handful of American companies have in total employees in their operations. In other words, Amazon added an employee base roughly the size of Berkshire Hathaway in just four months. Over the last four quarters, it's grown its headcount by 50%.
That shows how big the company's future ambitions are, and the surge in demand it's experienced from the COVID-19 crisis.
2. 50,000 COVID-19 tests a day
Amazon announced in its first-quarter earnings report that it was embarking on an experiment to develop its own COVID-19 test, spending hundreds of millions of dollars so that it would have adequate capacity to test its own workforce. The company assembled a team including research scientists, procurement specialists, program managers, and software engineers. At the time, CEO Jeff Bezos said, "We are not sure how far we will get in the relevant timeframe, but we think it's worth trying, and we stand ready to share anything we learn."
Today, Amazon is on track to administer 50,000 COVID-19 tests daily to employees across 650 sites by November. The U.S. right now is doing about 1.2 million daily tests, meaning Amazon is responsible for about 4% of all COVID-19 tests done in the U.S., though it's unclear if some of its tests are being deployed to other countries.
Amazon is not a medical laboratory or even a healthcare company. For the company to pivot and ramp up to 50,000 tests a day in a little more than six months after conceiving of the idea is a testament to its ability to come up with quick solutions and its culture of a "bias toward action," in the words of Bezos.
It's still Day One
Bezos has made Day One something of a mantra at his company, instilling it in the culture. Day One means that Amazon still thinks and acts like a start-up even though it is now one of the biggest companies in the world. That approach is clear in more ways than the two points above. For example, Amazon is taking steps into healthcare with its launch of Amazon Care, its partnership with Crossover Health, and its acquisition of Pillpack. The company is pioneering tools that eliminate the need for a cashier with its Amazon Go stores and the "Just Walk Out" technology, and it's pushing the envelope with a new grocery-store brand, improvements in its Alexa voice-activated technology, and many more innovations.
Though its soaring e-commerce growth may be getting all the attention during COVID-19, investors shouldn't ignore its ability to add 350,000 employees in four months, or the swift ramp-up in COVID-19 testing. Those are qualities that make Amazon special, and they are why the company has been one of the best investments of the last generation.