1/ $AMZN 2Q’21 Update
We have all been whispering about tough comps for Covid beneficiary companies, and the comps were indeed quite tough.
Let’s look at segment by segment and some highlights from the call.
We have all been whispering about tough comps for Covid beneficiary companies, and the comps were indeed quite tough.
Let’s look at segment by segment and some highlights from the call.
2/ First, here’s the breakdown of revenue by segment (both product and geography) 
3/ Given 2Q’20 was the beginning of the massive pandemic tailwind, it is more instructive to see 2-yr and 3-yr CAGR to see the underlying strength of the business.
4/ Although 1P may seem to have slowed down, that doesn’t seem to be the case when you look at 2-yr CAGR.
In any case, the money-making segments (3P, Prime, Ad, AWS) don’t seem to care about any headwind and their faster growth trajectory are helping expand operating margins.
In any case, the money-making segments (3P, Prime, Ad, AWS) don’t seem to care about any headwind and their faster growth trajectory are helping expand operating margins.
5/ Is AMZN purposefully focusing more on higher margin segment?
“…I’d like to say it is”
I wonder whether CEO Jassy has more affinity to margins than Bezos did. I wish he were at least on the first call as CEO.
“…I’d like to say it is”
I wonder whether CEO Jassy has more affinity to margins than Bezos did. I wish he were at least on the first call as CEO.
6/ Prime is now available in 22 countries (was 17 in 2018).
Business Prime now has 1 mn customers since launching in 2017.
Business Prime now has 1 mn customers since launching in 2017.
7/ “Amazon advertising is innovating at a fast clip, launching over 40 new features and self-service capabilities in the quarter”
“Amazon Advertising announced that Amazon Streaming TV ads and Twitch now jointly reach an audience of 120 million monthly viewers across the U.S.”
“Amazon Advertising announced that Amazon Streaming TV ads and Twitch now jointly reach an audience of 120 million monthly viewers across the U.S.”
8/ While we intuitively think about Amazon ads on its e-commerce website, its streaming TV ads and Twitch may eventually become more dominant force in the ad segment in the long-term, especially if ads end up deteriorating consumer experience on the website as some often claim.
9/ Why is AWS margin down ~280 bps YoY?
150 bps FX headwind.
Some pricing pressure, but also sales force expansion as well as addition of new regions which can make margins slightly choppy.
150 bps FX headwind.
Some pricing pressure, but also sales force expansion as well as addition of new regions which can make margins slightly choppy.
10/ Outlook appears to be a bit soft with guidance being 10-16% YoY growth (remember no Prime day in Q3 this year). On 2-yr stack, it’s still 25-30% CAGR range vs ~21% pre-pandemic.
End/ I will cover $ETSY next week.
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