The moment everyone has been waiting for has finally arrived, by which of course, we mean the moment when the market cap of AMZN would finally surpass Wal-mart (WMT).

Just after 4pm Jeff Bezos' Amazon reported number that were quite impressive at first blush. And at second blush as well. Among these: a whopping blow out beat on the topline of $23.2 billion in revenue, an increase of 27% from a year ago, and far above the $22.4 billion expected, which in turn resulted in Net income of $92 million, or EPS of $0.19. The street was expecting a loss of $0.14 per share.

In terms of where the bulk of the growth and profitability came from, one word, or rather three letters: AWS (Amazon Web Services), also known as the “cloud”, whose net sales soared by 81% Y/Y to $1.8 billion generating a 21.4% operating margin and net income of $391 million up from $77 million a year ago.

And while the quarter was good especially for AMZN the “web services” company, it was AMZN's forecast for the future that was even more impressive: 

The company now expects net sales to be between $23.3 billion and $25.5 billion, or to grow between 13% and 24% compared with third quarter 2014.  It also expects operating income (loss) is expected to be between $(480) million and $70 million, compared to $(544) million in third quarter 2014, although if the current quarter is any indicatiton this is some rather serious sandbagging.

But words aside: here, in three charts is what happened, with the company that now employs a record 183,000 people:

Worldwide net sales vs total Employees:

Q2 operating and net income in context. Clearly the quarter was an outlier – the only question is why and how?

And finally LTM Free Cash Flow. It appears Bezos does indeed have quite a bit FCF leverage if and when he wants it.

Again our question: why convert AMZN from a growth to a free cash flow model now: the last time the company tried this it ended up being quite disappointed.