Amazon reports Q3 advertising services revenue grew 25% YoY to $9.55B, vs. $9.48B est., and subscription services revenue grew 9% YoY to $8.9B
- Amazon reported third-quarter results on Thursday that missed analysts' estimates. — It also gave a disappointing sales forecast for the fourth quarter.
CNBCAnnie Palmer
Context & Ripple Effects
Amazon entered Q3 after advertising growth slowed from 23% in Q1 to 18% in Q2, while subscription-services growth stepped down from 11% to 10%. Q3 reverses the advertising deceleration but extends the subscription slowdown.
The split matters because Amazon's ad business had already become a sizable revenue line in the prior quarter's $8.76B ad business, even as the company’s overall results and fourth-quarter sales outlook disappointed.
First-order effects
Amazon's advertising unit outperformed the consensus revenue estimate, giving the company a stronger growth pocket within a quarter whose total results missed expectations.
Amazon's subscription-services growth slowed again to 9%, while the weak fourth-quarter sales outlook puts greater attention on the relative resilience of advertising revenue.
Second-order effects
Amazon's subsequent Q4 ad revenue of $11.56B shows the ad business continued expanding even as its year-over-year growth rate moderated, reinforcing advertising as a distinct operating metric alongside subscriptions.
The widening growth gap between advertising and subscription services increases the importance of Amazon's ability to monetize its existing user and shopping activity rather than relying on subscription growth alone.
Third-order effects
If this reporting pattern persists, Amazon's revenue mix becomes less defined by retail sales cycles and more by recurring monetization layers—advertising and subscriptions—with advertising carrying the faster growth rate.
Quarterly disclosure of both lines makes revenue per active customer or device a more useful lens for judging Amazon's ecosystem economics than aggregate sales alone.
The trend: Amazon is increasingly pairing subscription access with higher-growth advertising monetization across its existing consumer ecosystem.
$AMZN Q3 ok in retail, with modest slowdown on 3-year stack to +86% vs +92% in Q2. All about Q4, which even at high end of guide implies slowing to 76%. $AMZN cites consumer slowing since July esp. in international. Trouble is that slowing isn't evident at peers.
For all the flaws about outlook, that $AMZN was still able to grow 20% in its home market after so many years & despite its size tells you this is no busted flush. That sales number implies phenomenal share gains. $WMT $TGT $XLY https://t.co/TsRRfnw5gQ
We are very overbought so take this is a grain of salt: Amazon simply was not as bad as people were making it out to be and Apple, ex currency, was quite good. They are worth standing behind. Honorable good people
With a decline of almost 21% after-hours, this would be the 3rd worst day *ever* for Amazon shares if it was during the normal trading session https://t.co/lynUpzllpY
$AMZN Q3 2022: - Revenue up 15% to $127.1 billion - Net income down 9% to $2.9 billion - AWS up 27% - Subscriptions up 9% - Advertising services up 25% - North American sales up 20% - International sales down 5% - Employees up 5% to 1,544,000
Amazon's Q3 numbers aren't so bad (some of them are good, or at least they would be for another company), but the projections are scary https://www.cnbc.com/...