Thread by @QuinnyPig

Analysts expected Amazon to post earnings of $3.61 per share; actual earnings per share is $27.75 because some enterprising @awscloud product manager figured out how to pass network traffic through *TWO* Managed NAT Gateways on its way to the internet.

A thread.

Wild that @awscloud is now a $70 billion annual run rate business. But don't worry, AWS employee friends; the market cares not a whit how well you perform your jobs.

"AWS" isn't even *mentioned* until page 2 of the announcement.

For Financial Year 2021 (which is like calendar year 2021 except boring) @awscloud grew 37% over the previous year. Yes, they've won some giant customers to help grow that, but for god's sake TURN YOUR EC2 INSTANCES OFF WHEN YOU'RE DONE WITH THEM!

In the third quarter all of Amazon saw net income of $7.2 billion, versus $14.3 billion in Q4. *HOWEVER*! They only had net income of $2.5 billion if you remove the $11.8 billion that came from... their Rivian investment paying off in the IPO.

That number is worrying.

Amazon Prime is going up by $20 a year. No word on whether *that* fee can be broken down into installments as well.

I'm practicing an increasingly learned skepticism with regard to @awscloud official statements.

What does "use Graviton2 instances" mean here? "They spun up a single instance as a test or a dev node" or "scaled out a workload?" If the former, what's the deal with the missing 2?

Amazon sold $62 billion in @awscloud services in 2021.

And $31 billion of ads.

Those segments have radically different results on customer trust and delight.

Amazon spent more than @awscloud's annual revenue on CapEx in 2021. (Obviously not just AWS infrastructure; offices, fullfillment centers, custom built sobbing chambers, etc. also qualify.)

https://twitter.com/charlesfitz/status/1489358491282255873

Settling in for the quarterly earnings conference call.

Part of me thinks I should stream this on Twitch at some point; the other realizes how soul-crushingly boring most of it is. I don't tweet those parts.

Earnings call platforms:

Google uses YouTube.
Microsoft uses Teams.
Amazon owns Twitch, Amazon Connect, the Chime SDK, Elemental, and some movie studios, then outsources to @PGi's enterprise webcast thing because it was presumably the least expensive thing that "works."

The hold music isn't recognized by Shazam, meaning it can only be the re:Invent House Band.

I can't decide whether the "slapped together at the last minute" feel of their slide design contributes to or detracts from the disaster of their free cash flow.

I figure we'll get to 40 Amazonian Leadership Principles before "Showing Up" appears, because then @ajassy would have to attend earnings calls like this. Instead he makes the CFO do it.

"If you're having LPs I feel bad for you, son
I've got 16 LPs, but 'Showing Up' ain't one."

Said CFO starts by thanking Amazonian employees. Seems bounded to the retail division, but y'know what? I'll take it. Gratitude matters.

Since Apple fucked up the keyboard and Intel fucked up the roadmap, Amazon is going to hold off on buying new computers for a bit.

Less than 15 minutes of prepared remarks, then right into Q&A. I like this as opposed to a 40 minute Reading of the Prepared Statement.

"Please limit yourself to one question" says the company that refuses to limit itself to 17 ways to run containers.

"The fuck I will not limit myself" says the analyst from @MorganStanley, who remains salty that he doesn't work at @GoldmanSachs, and proceeds to ask two.

The first is about long term profitability of selling underpants, the second is unclear.

Next is @jpmorgan. "You're two years into a pandemic investment cycle. Is that going to slow down?"

CFO Brian lights up. "Let's talk about CAPEX."

@charlesfitz wets himself with excitement.

He carefully avoids talking about AWS data center build-outs, because the analysts on this call would sagely proceed to ask whether they'd considered buying computers on eBay to save money.

A question about labor costs. Of course they're talking about the fulfillment center staff, not the people who make the computers go (EC2) or deny the computers exist (Serverless).

Ooh, @rwbaird asks about @awscloud! "What's driving the growth there?"

"A combination of things. Our Sales and Marketing investment is paying off. COVID taught folks that the cloud could help and accelerated the transformation."

The CIO couldn't, the pandemic could.

He politely declines to mention that the @awscloud bill never, ever gets smaller on its own. If there were a sudden law that they could take on zero new customers, they'd still see growth for the foreseeable future just from organic expansion.

Name checks the @awscloud global infrastructure team. 86 global AZs. 24 more announced, along with 8 new regions over the next couple of years. Massive scale.

Next is @BankofAmerica. "Why did you break out advertising services as its own line item? And also, did Prime Day earlier in the year cause a decline?"

"Above a certain size we feel we should break line items out, so we did. For god's sake please don't ask me about data transfer revenue as the natural follow-on to that statement."

(2020 Prime Day was in Q4, in 2021 it was in Q2.)

"Our advertising business is really about surfacing better recommendations for customers."

On that axis it's a miserable failure. That statement fails to Earn Trust.

Last question is from @BMO has the CFO rushing to self-correct an earlier lack of clarity. "Getting NFL rights is not why we increased the cost for Prime."

I do believe him.

This concludes the $AMZN earnings call. Sure would be swell if there was a live caption / transcript next time.

After hours trading has Amazon stock up 15%, empowering a wave of conversations with staff (it's review season!) that leverages their equity in a now $1.619T company.

Yeah, "so wait a second, in *Q4*, the holiday season, your profit from doing the things you actually do as a business got cut in half from the previous quarter?!" is really a question I would have expected to arise.

https://twitter.com/48509226/status/1489377028071731201