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We’re proud of the investment we’ve made to build tools and products that allow sellers to be successful on our site, and it’s a great partnership, and it’s worked really well. Sellers and vendors are also some of our larger advertising customers as well and helps — that advertising helps them surface new selection to our customer base. So it’s a very strong partnership, and it’s been getting stronger. And I think you’ll see also that they had a very big part in our Prime Day earlier this month. It’s going to be always a factor of new investment and things like the sales force and new regions and infrastructure capacity, offset by infrastructure efficiency gains that we see, pricing issues as we extend contracts. We’ve seen really good progress with our customer base, longer and longer commitments, really committing to the cloud, some of that comes with credits to help them make their conversion to the cloud.
The data on a possible recession doesn’t look great — the economy contracted for the second straight quarter in Q2, data from the Commerce Department showed Thursday. “When companies are looking to optimize or streamline their advertising spend, we think our products compete very well in that regard,” he added. The upbeat results could also help improve the mood around Jassy, who replaced Jeff Bezos as CEO a little over a year ago.
[Amazon Q2 2022 Earnings] Advertising Is Now Amazon’s 4th Largest Revenue Category
That will be opening up and effective in 2023 and beyond. So there’s always a pre-spend to keep the — again, the pipeline moving. So when we make adjustments to the time horizon, the impact is not as great as you might expect in the year 2022. But again, we have move things out and capital is coming down in those areas, as we just mentioned.
- And so really excited about, of course, getting to be able to launch this program over the last few months and dialing it up for more sellers as the year progresses.
- And so I think continuing to focus on building out, building out to customers, working on that pipeline, and building longer commitments, finding customers that are making longer commitments is really important to that.
- And customers have responded and we’re going to keep investing there.
- The remaining 5% was comprised of things like corporate space and physical stores.
- So you’re right, there will be adjustments to that as we move forward into more holiday-level demand.
- In our emerging locations, there’s a healthy amount of investment we’ve done to drive expansion, and we expect to continue to do that given the strong competition across many of these markets.
And when it’s part of FBA, it can also help as being more Prime eligible and available to ship in one, two days or whatever the Prime offer happens to be. So we’re happy with the selection that we’ve added https://g-markets.net/helpful-articles/trading-the-morning-star-candlestick-pattern/ from third-party sellers. And I think that shows in the percentage mix that you see. So I’d challenge the premise a little bit there about incenting mix or I believe is how I interpret your question.
Amazon Q2 2022 quarterly results
Our guidance incorporates the order trends that we’ve seen to date and what we believe today to be appropriate assumptions. This guidance also reflects our estimates to date regarding the impact of the COVID-19 pandemic on our operations, including those discussed in our filings with the SEC. This compares to Q2 operating income of $3.3 billion. For AWS, these quarter-over-quarter increases are primarily driven by higher infrastructure investments to support continued strong customer growth, including larger depreciation on a growing fixed asset base. We also expect increased energy costs as we continue to see volatility in utility prices around the world in operating our AWS data centers. This was a larger foreign exchange headwind than the 200 basis point impact we had incorporated into our Q2 guidance.
Operating income decreased 57% to $3.3 billion this year, compared with $7.7 billion in Q2 2021. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. We’re happy with the results we’re seeing in the Prime program. Prime member membership and retention is still strong. I think that change has been above our expectations positively.
It’s early days in the adoption curve for companies and governments. And customers have responded and we’re going to keep investing there. And your comment on discounting, we’re not seeing some of the pressures that other people are seeing right now. The first one, Brian, I wanted to talk a little bit about the bridge from 2Q to 3Q EBIT guide a little bit. It sounds like you’re going to have revenue up nicely.
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And we have a long history of empowering and helping merchants. We’ve invested a lot in tools and capabilities and, of course, the delivery capabilities and all the things that go along with that. But that’s an opportunity for us to support merchants who may or may not be FBA sellers with the tools and the opportunity just to sell their products online and scale their business and build their brand. And so really excited about, of course, getting to be able to launch this program over the last few months and dialing it up for more sellers as the year progresses. And we’re making good progress in Q2 and expect to keep pressing on that in the second half of the year. But we saw strength in the seller results in Q2, as we mentioned on the percentage mix.
Prime Day also occurred in Q2 last year and contributed about 400 basis points to our Q year-over-year revenue growth rate. This year’s Prime Day sales event occurred on July 12 and 13 and is incorporated into our third-quarter guidance. There’s still significantly a penalty year over year. Other cost pressures are principally on our cost and employees. If you look at our stock-based comp as a percent of revenue, it’s gone up 150 basis points quarter over quarter as we stepped up from Q1 to Q2.
I think it’s important to remember, it’s early in many of our international countries, particularly in some of our emerging or more recent launch countries, places like India, Brazil, the Middle East. We expect infrastructure to represent a bit more than half of our total capital investments in 2022. For the worldwide stores business, we’ve continued to moderate our build expectations to better align with customer demand.
The margin rate is going to fluctuate in this business. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Enter your email address below to receive the latest headlines and analysts’ recommendations for your stocks with our free daily email newsletter.
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We have slowed our 2022 and 2023 operations expansion plans to better align with expected customer demand. While there’s still work to be done, we made good progress in Q2. Some key factors cited are a slowdown in online shopping activities, inflationary pressures, rising labor costs, and major supply chain disruptions throughout the quarter. The ecommerce giant posted a revenue growth of 7% for Q at $121.2 billion compared with $113.1 billion in the second quarter of 2021, consequently beating out Wall Street projections of only $119 billion. From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
- Other cost pressures are principally on our cost and employees.
- Our third-quarter operating income guidance range is $0 to $3.5 billion.
- Eric, I’ll just add a little more on advertising because you’re probably wondering again about softness — potential for softness in that or macroeconomic factors.
- On Wednesday, Facebook-owner Meta Platforms (META) reported its first-ever year-over-year revenue drop and, earlier this week, both Google parent Alphabet (GOOG, GOOGL) and Microsoft (MSFT) reported earnings that didn’t meet Wall Street’s expectations.
As a reminder, our revenue growth accelerated to over 40% growth from the period between May 2020 and May 2021. While demand has remained strong, the lapping of this high-growth period depressed our revenue growth rate for the following 12 months, ending in May of this year. Tech broadly speaking is faring poorly in the current macroeconomic environment.
Although both Microsoft and Google particularly have their bright spots, this round of earnings season has been relatively brutal for the tech sector. And so I think continuing to focus on building out, building out to customers, working on that pipeline, and building longer commitments, finding customers that are making longer commitments is really important to that. And just to that point, I know the backlog figure that we’ve discussed in the past and disclosed on a quarterly basis in our filings, it’s up 65% year over year or about 13% quarter over quarter. And the weighted average remaining life of those long-term commitments that we’re talking about here continues to grow. So it’s about 3.9 years on a weighted average remaining life basis.
On the first point, we expect this challenging year-over-year comp will have ended in Q2. Fears of recession also could threaten AWS’s growth in the medium-term. Nonetheless, North American ecommerce sales increased 10.2% year-over-year from $67.6 billion in Q to $74.4 billion this year, while international sales fell about 12% from $30.7 billion to $20.7 billion. Much of the global reduction was due to foreign exchange rates. Operating income refers to earnings after expenses excepting the cost of debt, taxes and certain one-off items. Net income shows the profit remaining after all costs are subtracted from revenue generated from sales.
AMZN Estimated and Actual Revenue by Quarter
We also provided our third-quarter financial guidance as part of our earnings release. Again, a reminder that this year, our Prime Day sales event occurred on July 12 and 13 and is incorporated into our third quarter guidance. We continue to improve the customer experience in Q2, including quarter-over-quarter improvements in delivery speed and inventory in-stock levels. We have also moved quickly to adjust our staffing levels and improve the efficiency of our significantly expanded operations network.
The company has been grappling with inflationary pressures and logistics issues related to the pandemic. Facebook, meanwhile, recorded its first ever drop in revenue and forecast another decline for the third quarter. At Alphabet, advertising growth slowed to 12%, and YouTube showed a dramatic deceleration to 4.8% from 84% a year earlier. Includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. For the twelve months ended June 30, 2021 and 2022, this amount relates to equipment included in “Property and equipment acquired under finance leases, net of remeasurements and modifications” of $9,976 million and $3,579 million.
Our comments and responses to your questions reflect management’s views as of today, July 28, 2022, only and will include forward-looking statements. Additional information about factors that could potentially impact our financial results is included in today’s press release and our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. During this call, we may discuss certain non-GAAP financial measures. The e-commerce giant also reported better than expected guidance for next quarter of $125 billion to $130 billion versus $126.5 billion. The company acknowledged inflation-induced cost pressures, especially in the supply chain. Additionally, Prime Day was in the second quarter in 2021 but in the third quarter this year, negating a Q2 sales boost.
Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. Read the latest financial and business news from Yahoo Finance. Clint Wheelock, Chief Research Officer at The Futurum Group, takes a look at the recent announcement by Ridecell of the launch of Ridecell Fleet Transformation Cloud, which leverages digital technologies to optimize fleet management.
It is — right now, the program is available, as you mentioned, invitation-only for merchants that are already using FBA, and it will expand throughout this year as we’ll extend more merchants to invite, participate in the program. It’s — we’re interested in learning and working with FBA sellers that we’ve known and had good trust with but also expanding it. And I think as you think about it, merchants, they obviously have a lot of choices on where they’re going to sell products.
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