Amazon reports Q1 revenue up 7% YoY to $116.4B, $3.8B net loss vs. $8.1B net income in Q1 2021, and AWS revenue up 37% YoY; stock down 10%+ on weak Q2 guidance
Business Wire
Context & Ripple Effects
Amazon entered this quarter after a stronger prior-year comparison: its earlier Q2 2021 results paired 27% sales growth with $7.8B in net income, while AWS sales also grew 37%. The new report preserves AWS's growth rate but sharply lowers the company-wide growth and profit baseline.
The weak outlook became the reference point for the next reports: Amazon later posted another loss in its Q2 2022 results, before returning to profit in Q1 2023. That makes this quarter an inflection point in a longer reset of expectations around growth and earnings.
First-order effects
Amazon shareholders immediately repriced the company after weak Q2 guidance, sending shares down more than 10% despite 37% AWS revenue growth.
Amazon's $3.8B quarterly loss replaced the $8.1B profit recorded a year earlier, putting the gap between revenue growth and company-wide earnings at the center of its next-quarter outlook.
Second-order effects
Amazon's subsequent Q2 report—7% revenue growth and a $2B loss—gave investors a second quarter against which to judge whether the weaker guidance reflected a temporary earnings setback or a more persistent slowdown.
AWS's 37% growth became a counterweight in Amazon's results, but later reported AWS growth of 33% in Q2 and 27% in Q3 shifted attention toward the durability of that segment's expansion.
Third-order effects
If the sequence holds, Amazon's valuation story shifts from rapid top-line expansion to the balance between AWS growth and restored company-wide profitability; by Q1 2023, the company had returned to $3.2B in net income while AWS growth had slowed to 16%.
The reported progression points to a more demanding investor benchmark for large platforms: cloud growth can support the narrative, but guidance and consolidated earnings determine the immediate market response.
The trend: Amazon's results mark a shift from pandemic-era growth comparisons toward an earnings-and-guidance test, with AWS growth remaining important but decelerating across later reports.
“Free cash flow decreased to an outflow of $18.6 billion for the trailing twelve months, compared with an inflow of $26.4 billion for the trailing twelve months ended March 31, 2021.” https://www.businesswire.com/ ... For Amazon of all companies, famously FCF-focused, this seems.…
$AMZN was obviously in a great place to take advantage of slack labor markets in 2010-2020. And then the 2020-2021 goods boom suited them as well. But now what? End of slack labor plus unionization momentum. Plus higher inflation, potential disruptions out of China etc.
This might be the most important (and easy-to-grok) entry in Amazon's Q1 earnings statement. Huge slowdown in North American growth, actual retraction internationally (after an explosion last year), AWS continues to accelerate growth and has a bigger share in overall net sales ht…
Amazon delivers disappointing Q2 results citing higher expenses and operational costs. I wonder how that squeeze is going to impact how they run Twitch? A stronger profit focus on the top will bleed down to all viewers and creators. https://www.reuters.com/...
🤔 “This was a tough quarter for Amazon with trends across every key area of the business heading in the wrong direction and a weak outlook for Q2” [...] “The AWS division increased revenue 37% to $18.4 billion, slightly ahead of analysts' estimates.” https://www.reuters.com/...
“Today, as we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network...” https://ir.aboutamazon.com/...
@plantmath1 That's true yes. $AMZN just finished a capex cycle for their core biz. And will now reap the benefits. $FB is saying they will investment outside their core biz more or less depending on how their core biz does.
$AMZN and $FB one day apart: “we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies” - $AMZN “planning to slow the pace of our investments” - $FB
Anecdotal empiricism, but I have an old Amazon Associates program email address at which I still get notices. I have never seen such aggressive promotion from Amazon as I have of late as it tries to drive revenue. It's arguably a tell, it seems. https://twitter.com/... https://tw…
Amazon CEO @AndyJassy says in earnings release that the company doubled its entire warehouse fulfillment network in just two years during the pandemic. “Today...are teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network.”
Amazon posts loss of $3.8 billion for the quarter. Incuding: “First quarter 2022 net loss includes a pre-tax valuation loss of *$7.6 billion* included in non-operating expense from our common stock investment in Rivian” Oof.
$AMZN -8% AH after cutting 2Q rev growth guidance to +5% (from +11% est) and 2Q operating profit of -$1B to +$3B (Street +$6.8B). AWS 1Q rev on track. Mgmt commentary about growing too fast and this taking some time to fix is concerning.
Amazon's earnings for Q1 are out (down year-over-year in every category except revenue). Here is its projection for Q2: https://ir.aboutamazon.com/... https://twitter.com/...
$AMZN Q1 2022: - Revenue up 7% to $116.4 billion - Net loss of $3.8 billion - AWS up 37% - Subscriptions up 11% - Advertising services up 23% - North American sales up 8% - International sales down 6% - Employees up 28%