Wall Street was quite pleased with retailing giant Amazon.com’s second quarter earnings report. It was a blow out report by almost any standard, and the street is loving it, with the share price soaring almost 20% in early trading Friday.

Equity research firm Cannaccord Genuity published a report on Amazon on Friday after the earnings report, and was very positive on the fast-growing Internet retailer. Analyst Michael Graham and team upped their price target on Amazon to $525, but maintained their Hold rating given the share price will certainly move well above their target in trading Friday.

Amazon

They note: “Amazon’s Q2 results were strong, with CSOI margin reaching the highest point in 4 years (4.6%) and CSOI dollars hitting the highest point ever ($1.1B). Revenue also exceeded expectations on nearly every line, with a notable 16% beat on AWS revenue. The CSOI margin beat vs. consensus was driven 56% by North America, 13% by International, and 30% by AWS. Management called out AWS usage, Prime membership expansion, and FBA growth as notable top-line drivers.”

Amazon

Three key takeaways from Amazon’s Q2 report

AWS usage ramping up fast

Amazon’s margin topped the 20% mark for the quarter. Management also highlighted that usage growth outpaced revenue growth, and commented on plans launch another regional hub in India in 2016. Amazon also saw improved cost efficiencies in the second quarter. Of note, management also commented that customer discounts were not the highest priority right now.

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The global top-line accelerating

Graham et al. point out that global CSOI margin experienced only moderate improvement to breakeven, but year over year FX-neutral revenue growth did move up by 800 bps. Around 400 bps had to do with tax treatment of the Japanese consumption tax increase in 2014, with the other half came from rapid international Prime membership growth. As well as a new AWS region, India is the fastest growing area for Amazon, and also an area where the firm is making a significantlly larger capital investment.

Expense productivity

Also of interest, the mega-retailer provided somewhat more positive comments regarding expenses. Even though CSOI for for the third quarter is projected to be the same as the second quarter ($100-650M), execs highlighted several areas of increased productivity including process improvements, algorithmic decision-making, AWS efficiencies, fixed asset leverage and keeping inventory closer to customers.