[HN Gopher] Amazon Q3/2022 [pdf]
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Amazon Q3/2022 [pdf]
Author : ckastner
Score : 44 points
Date : 2022-10-27 20:05 UTC (2 hours ago)
(HTM) web link (ir.aboutamazon.com)
(TXT) w3m dump (ir.aboutamazon.com)
| [deleted]
| adam_arthur wrote:
| People are coming to realize that billions in revenue means
| nothing without any kind of margin.
|
| And Amazon will never have high margins on retail. Their stock
| has coasted for decades on the belief that they would one day be
| able to monetize their e-commerce revenue.
|
| Well here we are with over 100B in revenue. Where is the profit?
| There's a dotcom level come to Jesus moment with the entire tech
| sector right now. The stories driving many of these stocks were
| nothing more than fairytales in the end
|
| Cloud will have better margins, but the e-commerce business has
| been grossly overvalued for a long time.
|
| It doesn't mean they can't be successful, but they will have more
| realistic valuations going forward, with much less excess
| lotsofpulp wrote:
| > People are coming to realize that billions in revenue means
| nothing without any kind of margin.
|
| This is not a new realization. A business without margin is
| called a charity. Everyone from the immigrant family that did
| not go to college and operates a laundromat to Harvard Business
| School graduates know this.
| bushbaba wrote:
| > they would one day be able to monetize their e-commerce
| revenue.
|
| They make more on Amazon Ads than Alphabet makes on Youtube. So
| yes it looks like it's monetized. Even retail has profit. It's
| just being spent on other growth areas (Alexa, Games, Prime
| Air, Healthcare etc)
| adam_arthur wrote:
| No, Amazon had negative margins this and was not profitable
| this quarter ex AWS
|
| I recommend investing on real data, not what you may imagine
| up the company is doing
| newaccount2021 wrote:
| paulpauper wrote:
| crash.
|
| MSFT -8%, goog -10%, meta -22% and now amzn -20%
| khuey wrote:
| AMZN is getting hammered after hours but this looks like it's
| mostly the strength of the dollar that's hurting their business
| abroad rather than insane amounts of spending.
| samspenc wrote:
| Also due to their weak outlook for the next quarter (Q4).
| kgwgk wrote:
| Their domestic business is losing money as well.
| colinmhayes wrote:
| -$20 billion free cash flow can't be good. Not quite meta
| levels of bad but really not too far off. Retail can't figure
| out how to make money, even with billions in ad sales.
| StratusBen wrote:
| "AWS segment sales increased 27% year-over-year to $20.5 billion,
| or increased 28% excluding changes in foreign exchange rates."
|
| Point 1: AWS is over $80B annualized now. Amazing. Growing at 27%
| is still remarkable at that scale.
|
| Point 2: Looks like AWS is slowing a bit [probably tempoarily].
| As someone who focuses on cloud cost optimization for the
| majority of my time, this lines up with some of the data we were
| seeing in Q3 in terms of customers scaling back and making more
| commitments via EDPs, Saving Plans and RIs -- we just published
| some of this data here: https://www.vantage.sh/cloud-cost-
| report/2022-q3
|
| [Disclosure, I'm ex-AWS and founder of a cloud cost company named
| https://www.vantage.sh/]
| chollida1 wrote:
| Numbers:
|
| - Q3 Sales $127b meets est.
|
| - Q3 EPS $0.28, Est $0.22, nice
|
| - Q3 Operating Margin, 2%, that's tight
|
| - Web services sales of $20B, just shy of estimates
|
| - AWS sales still growing like a juggernaut. Man, google ad
| revenue, Microsoft business revenue, aaple iphone revenue and aws
| revenue. You can just always rely on those 4.
|
| - Retail in North America and International both lost money
|
| Interesting:
|
| - amazon head count is 1.5M employees world wide, the new IBM!!
|
| - shares are down but I think its more due to their Q4 guidance
| than anything in Q3,
|
| - due to amazon guidance for Q4 watch walmart, ebay, wayfair,
| etc. These should all fall, this is probably the trade to make
| over trading amazon's earnings
|
| - according to reports a 20% drop, which it is at now, would be
| its largest since 2006. This is crypto currency or META level
| lunacy, 100's of Billions just got vaporized in 15 minutes.
|
| - AMZN, no longer a Trillion $ company, luckily that won't result
| in an ETF outflows:)
|
| Watch for:
|
| - do rising energy costs affect their web services business?
|
| - do rising labour costs affect their retail business?
|
| - do they really want to hire 150,000 people for Christmas like
| they did last year?
|
| - they've reached GOOG, AAPL, and MSFT size now, growth will be
| tough. This normally means cost cutting. Watch what the CFO
| announces around controlling costs.
|
| - now that free money from the FED is truly over, will AMZN focus
| on cost cutting and mergers to drive revenue over organic growth
|
| - also pointing to cost cutting is the new CEO Jassay is like Tim
| Cook at apple, a manager not a growth oriented CEO.
|
| - from the CFO "We're takign actions to tighten our belts", there
| it is. All companies are in full blown cost saving mode now.
|
| - does AWS announce alot more GPU instances now that ETH has
| merged?
|
| - what does hiring look like with all tech giants cost cutting
| and with expectations that their stock price will be flat over
| the next year?
|
| - saw on twitter someone point out that DOGE is up %30 in the
| past few days while AMZN is down %20. Completely meaningless but
| kind of funny in a dark way.
|
| - this market is rough and unforgiving:(
| newaccount2021 wrote:
| [deleted]
| spaceman_2020 wrote:
| > Retail in North America and International both lost money
|
| Is this pretty much proof that anyone even trying to compete
| with Amazon is basically throwing away money? That general-
| purpose online retail will simply never be profitable?
| sgerenser wrote:
| I wonder if "retail" includes Amazon Prime subscription
| revenue? I doubt there's many people signing up for Prime
| just for video or the other random perks Prime gets you, it's
| 98% for the free shipping.
| lotsofpulp wrote:
| I think the fact that Walmart/Target/Best Buy/Costco/etc have
| been earning 2% to 5% profit margins for many decades was
| proof that general purpose online retail will not be very
| profitable.
| microtherion wrote:
| > the new CEO Jassay is like Tim Cook at apple, a manager not a
| growth oriented CEO
|
| Under Tim Cook, annual revenue grew from $76B (2010) to $387B
| (2022). That's rather decent growth, especially considering
| that at Apple's size, growth would presumably become harder and
| harder to attain.
| gffrd wrote:
| > amazon head count is 1.5M employees world wide
|
| In 2012, they had 88,000 ... if scaling were linear--which it's
| not--that averages out to 141,000 people to hire a year.
|
| In a single year, 2019 to 2020, they grew their workforce ~63%,
| from 798k to 1.3m.
|
| Insane.
| throwayyy479087 wrote:
| I drove by a billboard earlier that said "Amazon warehouse
| hiring - no interview required. Show up and get paid!"
| nus07 wrote:
| Didn't short thinking AWS is minting money. Feel stupid about it
| lol.
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