Amazon reports Q2 revenue up 11% YoY to $134.4B, a $6.7B net income, vs. a $2B net loss in Q2 2022, AWS segment sales up 12% YoY to $22.1B; AMZN jumps 9%+
now 60% of units sold are from third parties. Likely explains the wildly varying quality of what customers receive @thetranscript_ : $AMZN segments net sales Q2 23 YoY growth rates: —North America: +11% —International: +10% —AWS: +12% In constant currency: —North America: +11% —International: +10% —AWS: +12% [image] Jordan Novet / @jordannovet : for three quarters now AWS operating income has declined year over year. AWS is still profitable, don't get me wrong, but we have never seen this happen https://www.cnbc.com/... Matt Rosoff / @mattrosoff : AMZN good, AWS sales +12%, Ads over $10B. Stock up 7% AH https://www.cnbc.com/... https://www.cnbc.com/... Stephen Geiger / @stephen_geiger : $AMZN is a blowout🚀 Q2 EPS: $0.65 vs $0.35 exp Q2 OPER INCOME: $7.68B vs $4.72B exp Q2 OPER MARGIN: 5.7% vs 3.46% exp Expectations were so low they basically doubled. The bar was literally on the floor. Jennifer Ablan / @jennablan : Amazon reports sales growth of 11% and issues optimistic guidance @CNBC https://www.cnbc.com/... @techau : Damn mega beat by Amazon.
Amazon
Context & Ripple Effects
Amazon’s Q2 recovery contrasts with its earlier cloud trajectory: AWS sales grew 37% year over year in Q2 2021, versus 12% in this report. The company is again profitable, but AWS operating income has now declined year over year for three consecutive quarters.
The result also shows Amazon’s retail engine and AWS growing at the same 11%–12% rate, while third-party sellers account for 60% of units sold. Subsequent coverage records a later reacceleration in AWS revenue and operating income, making this quarter a useful marker of the intervening slowdown rather than a standalone cloud result.
First-order effects
Amazon’s return to $6.7B in quarterly net income and 11% revenue growth materially improves its near-term earnings position, helping drive the reported share-price gain.
AWS remains a major growth contributor at $22.1B in sales, but its three-quarter run of year-over-year operating-income declines puts immediate focus on cloud profitability as well as revenue growth.
Second-order effects
AWS customers and rivals gain evidence that cloud demand growth has moderated from Amazon’s earlier pace, increasing pressure on providers to compete on workload value and operating efficiency rather than growth alone.
With third-party sellers supplying most units sold, Amazon’s marketplace growth is increasingly tied to seller participation; changes in seller economics or assortment can have an outsized effect on the retail business.
Third-order effects
If cloud revenue growth and cloud operating leverage diverge for an extended period, hyperscale competition may be judged more on sustainable margins and capacity utilization than on headline sales expansion.
Amazon’s results point to a more diversified earnings model in which retail, marketplace participation, advertising noted in the report, and cloud services each matter; that can reduce reliance on any single segment, while making execution across them more consequential.
The trend: This is one data point in the shift from growth-led cloud and e-commerce narratives toward scrutiny of profitable, multi-engine platform operations.
Are you even a CEO if you aren't bragging about how everyone is hard at work sprinkling generative AI in every product? It's almost as dizzying as when everyone was exploring some application of...
$AMZN 2Q'23 This was perhaps the best Amazon earnings call from my recent memory, especially on Amazon Retail. Not surprising that the stock was +8% in after hours. Here are my highlights from tonight's call.
Amazon monster quarter and will be front and center for the tech sector. AWS impressive and speaks to overall cloud tailwinds seen by Microsoft & Google. Apple: iPhone and Services guide looks solid and the Mac and iPad decline noise to Street; Overall A- night for Big Tech 🏆🍎
Very meaningful commentary about AWS cost optimizations during the Amazon earnings call. Everyone looking for when the optimization headwinds will abate. AWS suggesting that time is now! Last quarter AWS grew 16%, but they called out April growth of 11%. In Q2, AWS grew 12% (an..…
A live $AMZN thread for the Q2 23 earnings calls: 1. A bird's eye view of the quarter: “Today, we are reporting a $134 4 billion in revenue and $7.7 billion and operating income both of which exceeded the top end of our guidance ranges” - $AMZN CEO @ajassy [image]
Oh, right; it's Amazon Earnings Day. @awscloud revenue growth basically collapsed to 12% because you all finally listened to me about how expensive those Managed NAT Gateways are. Let's dig in.
The key takeaway from this Amazon earnings call on AWS is that things are stabilizing: “What we've seen in the quarter is stabilization” - $AMZN CFO [image]
Amazon with a double beat. CEO: “Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases” $AMZN: +7.7% AH [imag…
14. $AMZN CEO gives a detailed response to their challenges with grocery: “We're hopeful that we will find that format & that it gives us the type of results that give us confidence to want to expand more broadly. But we won't expand unless we see that type of resonance” [image]
I fix AWS bills for a living. Amazon reports that the slowdown is due to “customers focusing on cost reduction.” Let's just say “citation is very much needed on this point,” as the story AWS tells does not match what I'm seeing in my subset of their customers.
No big surprises on $AMZN's call. A few things that stood out: - They said Q2 AWS trends (less cost optimization, more new workloads, etc.) have continued in Q3, albeit without giving a revenue growth number. - A lot of time was spent talking up improved retail efficiencies due..…
@awscloud The last four quarters' growth percentages went from 33 to 20 to 16 and now to 12. That said, law of large numbers is in play here. It's surprisingly hard to find $20+ billion in new annualized revenue every 90 days, y'know? https://twitter.com/...
Almost every sentence in their press release that touches on @awscloud also mentions “Generative AI.” Remember, this is for the Q2. Everything in this screenshot was released in Q3. Their insecurity about being late to market with AI is palpable. [image]
Amazon has ceded it website to outside interests — now 60% of units sold are from third parties. Likely explains the wildly varying quality of what customers receive
for three quarters now AWS operating income has declined year over year. AWS is still profitable, don't get me wrong, but we have never seen this happen https://www.cnbc.com/...
$AMZN is a blowout🚀 Q2 EPS: $0.65 vs $0.35 exp Q2 OPER INCOME: $7.68B vs $4.72B exp Q2 OPER MARGIN: 5.7% vs 3.46% exp Expectations were so low they basically doubled. The bar was literally on the floor.