Thread by @QuinnyPig

And the call is in an hour, but Amazon has just released their Q1 2020 earnings.

I would like to start by pointing out that the title of this PDF document is "Microsoft Word - Amazon Q1 2020 Earnings" because computers are terrible.

s2.q4cdn.com/299287126/file…

AWS marketing has shifted their focus from terrible airport ads (remember airports?) over to three pages in this earnings report focusing on COVID19 response.

Quarterly revenue for @awscloud is now $10.2 billion because despite my nagging, none of you people are turning off your EC2 instances when you're finished with them.

A point: that $10.2 billion is REVENUE. It cost them $7.1 billion to provide the services.

Great margins, sure, but I don't think anyone really "gets" how fantastically expensive building a global cloud provider really is.

Amazon currently has $16.4 billion in goodwill, but there's presumably a refund request pending.

It reports $8.1 in "unearned revenue," which I can only assume refers to "free tier @awscloud accounts that people don't realize they're paying for. "

The operating margin over the past twelve months for @awscloud segment is 26.8% after what I can only assume is some Enron-level accounting trickery to bury their data transfer margins somewhere else. Maybe Alexa?

So here's the single biggest reason they'd not spin @awscloud off:

Before expenses, Amazon had operating income of $3.989 billion. $3.075 billion of that came from AWS.

After expenses, their operating income is $2.535 billion.

"Cloud company with a gift shop" indeed.

Curiously their earnings report doesn't name any significant @awscloud customer deals.

I'd have thought they'd at least mention @3M, since that kind of big company revenue is... sticky.

Who wrote that joke?!

Something to note, @awscloud revenue growth has slowed due to two factors:

1. "Finding ever-more billions of new business every quarter" doesn't last forever.
2. Customers are realizing that passing data between AZs all the time is not what a Storage Area Network is.

I've dialed in to the webcast for the investor call. The hold music isn't identifiable by Shazam, so it's probably @mza with a DeepComposer again. He's really gotten good!

Google wrapped themselves in COVID19 on their earnings call. Microsoft mentioned it in passing, which is way classier.

Which direction will Amazon go? Cynically, I'd suggest they'll do what Google did out of sheer excitement for "a terrible thing in the press" that isn't directly their fault for once.

Oh, one point. @awscloud's revenue growth has slowed to 33%. "Sorry your shitty $40 billion a year business is only growing by a full third every year" is a more honest headline but doesn't get the pessimist clicks.

And now the operator takes the line, presumably hiding in their bathroom judging by the audio quality.

No judgement here at all: an awful lot of people are having serious problems right now. :-(

I just hope Amazon remembers the Golden Rule of Working From Home while their execs are speaking: If we hear the dog, we get to see the dog.

Now their CFO starts with a comment on COVID19. Praises healthcare workers, government personnel, law enforcement, and essential workers, notably their own employees.

I wander off to grab a snack for this portion in order to properly stay in my own lane.

So far their CFO hasn't let his toddler near the microphone.

This stands in contrast to Oracle earnings calls with Larry Ellison on the line.

And now it's analyst question time!

Sadly I've never yet been invited to ask a question on these calls. I can't understand why.

"Why are you building COVID19 testing facilities yourselves instead of buying it elsewhere" asks @jpmorgan analyst Doug Anmuth who apparently hasn't read a single goddamned newspaper article about test availability.

There are indeed apparently stupid questions.

"Talk about the AWS business. I'd have expected a significant boost to growth rate, not a decline given COVID19."

"We have a breadth of customers, so usage is a mixed bag. Some go up, some go down." But the @awscloud billing system always go BRRRRRRR

They're able to make significant cost savings by running their server fleets for far longer than anticipated as they eke better useful life out of the computers.

I THINK WE JUST FOUND OUT WHAT THE BILLING SYSTEM RUNS ON!

"Are there any user behavior changes you see when people start sheltering in place" is the kind of question that proves @UBS's analyst job interview process is basically throwing darts at a board.

You can just hear some of these analysts barely restraining themselves from asking what the $AMZN stock implications would be if significant portions of the population die.

Barely.

And that's it for questions. Most avoided @awscloud because there's not a single analyst on this call who understands cloud computing.

They don't understand retail either, but they don't know that.

And that concludes the $AMZN earnings call.

Expect big revenue growth in @awscloud next quarter just as soon as they can trick another big company into enabling Amazon Macie on the wrong S3 bucket.

And as always, if you enjoy my nonsense you can get more of it at lastweekinaws.com