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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.
During the quarter, we saw improvement in many of our key operational metrics, including in-stock levels and delivery speed, and saw a subsequent step-up in consumer demand. Hello, and welcome to our Q financial results conference call. Joining us today to answer your questions is Brian Olsavsky, our CFO. As you listen to today’s conference call, we encourage you to have our press release in front of you, which includes our financial results as well as metrics and commentary on the quarter. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2021.
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.
AMZN Outlook and Stock Performance
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 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.
Amazon jumps on revenue beat and rosy guidance for third quarter
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.
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.
Financial Calendars
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.
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.
- I mean we’ve got — one of our main priorities is building relevant and engaging ad experiences.
- The top line beat market estimates sending the stock soaring over 12% in after-market hours on Thursday.
- This year’s Prime Day sales event occurred on July 12 and 13 and is incorporated into our third-quarter guidance.
- Joining us today to answer your questions is Brian Olsavsky, our CFO.
- 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.
- We just have to keep you posted as we go quarter-to-quarter on what our expectations are.
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 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.
Cheap and Pricey
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 https://g-markets.net/helpful-articles/learn-the-ascending-triangle-pattern-how-to-trade/ 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.
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.
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.
You talked about the efficiencies of the $1.5 billion quarter over quarter and some of the incremental investments in content, etc. We made strides to improve fulfillment network productivity in Q2. Staffing levels were more in line with rising Q2 demand, and we saw better optimization of our fulfillment network. On the transportation side, we continue to improve delivery, route density, and improve package deliveries per hour. We are encouraged by the progress during the quarter and see opportunity to further improve in the second half of the year. Before we get the questions, I’ll make some comments about our Q2 performance and the outlook for Q3.
Amazon.com Earnings History by Quarter
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.