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’s share price rose by as much as 10 percent in after-hours trading with the company projecting net sales of between $125 billion and $130 billion, up double digits from the same quarter a year ago. Among the other top tech companies, Microsoft also reported disappointing results this week. Apple beat on the top and bottom lines, lifting the stock in after-hours trading.
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.
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. 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. So I think sellers are — sellers business remains strong and an integral part of our customer offering. So on the seller fee, again, we added that fee grudgingly in May to compensate for some of the inflationary pressures we’re seeing.
Amazon’s Ecommerce Decline Continues
So those are some of the opportunities and challenges that as you think about kind of where we are in the U.S. versus international that are out there, the network complexities. Of course, there are some regulatory hurdles and other differences out there. 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.
Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. So we’re pretty transparent about the fact that we had hired a lot of people in Q1 for the https://g-markets.net/helpful-articles/candle-signs-and-flame-meanings-for-candle-magic/ coverage of the omicron variant. Luckily, that variant subsided, and we were left with a higher headcount position. We’ve — that has come down through adjusting our hiring levels and normal attrition, and is pretty — was pretty much resolved by the end of April or early part of May.
Results also hurt by investment in electric-vehicle maker Rivian, but cloud-computing growth remains strong
Jassy’s first year on the job has been marred by challenges, including an ongoing labor battle, the market downturn, growing regulatory pressure and an exodus of top talent. 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. The Ridecell Fleet Transformation Cloud platform offers fleet operators a comprehensive solution to manage and optimize their operations through advanced analytics, automation, and integration capabilities. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Includes commissions and any related fulfillment and shipping fees, and other third-party seller services. Stay on top of the latest developments in the ecommerce industry.
In short, expectations are on the rise as we await Q2 results. Get this delivered to your inbox, and more info about our products and services. Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole. Overall, company still has plenty to be optimistic about across its operations.
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. So not to mention a lot of the new content, especially on the video side that will be coming in the fall. So we feel good about the program and the state of the Prime members after a very rough couple of years of pandemic turmoil, and we think it’s a good base to build upon. 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.
Amazon Q2 2022 quarterly results
We expect technology infrastructure spend to grow year over year, primarily to support the rapid growth and innovation we’re seeing with AWS. 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. We have slowed our 2022 and 2023 operations expansion plans to better align with expected customer demand.
So that is dominating the quarter-over-quarter reduction in head count. On the headcount, yes, I think it was more, as we mentioned last quarter, last year in — or excuse me, in Q1, we added — to give you a flavor for it, we added 14,000 workers in Q1. Prior year, we had reduced our net headcount by 27,000. 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.
Operating expenses grew 12% year-over-year, from $105.3 billion in Q to $118 billion this year. Operating income decreased 57% to $3.3 billion this year, compared with $7.7 billion in Q2 2021. Percentage changes may not align exactly with dollar figures due to rounding.
Amazon Quarterly Results Q4 2022
While there’s still work to be done, we made good progress in Q2. The growth in the line is impacted overall also on the step-up by continued head count. And as Brian talked about, hiring and a number of areas of the business, including engineers, other tech workers and there’s some component of the wage inflation as we look to continue to hire and retain employees there. In terms of the — coming in at the five — a little over $5 billion for stock-based comp, the main driver there was primarily driven by fewer employees stock awards vest — could be fewer employee stock awards we’re vesting in Q2 than we expected.
Microsoft reported its slowest revenue growth in five years this week, while Meta shares dropped precipitously on losses from its investments in augmented and virtual reality technologies. Apple beat Wall Street’s estimates but wasn’t immune from the downturn, either, with iPhone sales coming in lower than expected. And, Jason, on your second question related to the international and the profitability there reported.
- As a reminder, our revenue growth accelerated to over 40% growth from the period between May 2020 and May 2021.
- And as we always remind you, employee annual RSU grants do occur in the second quarter.
- And then also, when you think about margins, the 35% for AWS in 1Q going to 29% in 2Q.
- 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.
- It sounds like you’re going to have revenue up nicely.
In 2021, we incurred approximately $60 billion in capital investments. About 40% of that is comprised of technology infrastructure, primarily supporting AWS as well as our worldwide stores business. For revenue, note that our guidance includes an estimated approximately 390 basis points of unfavorable impact from year-over-year change in foreign exchange rates.
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. We see that pattern every year, but we don’t see that magnitude, and that’s where a lot of our wage inflation is for, particularly our technical employees. Our growth rates going forward will no longer require this historical explanation.
We reported an overall net loss of $2 billion in the second quarter. While we primarily focus our comments on operating income, I’d point out that this net loss includes a pre-tax valuation loss of $3.9 billion, which is included in nonoperating expense from our common stock investment in Rivian Automotive. In the U.S., we have started making customer deliveries using the Rivian electric delivery vehicles. This rollout is the start of what we expect to be thousands of EDVs in more than 100 cities by the end of the year and 100,000 vehicles across the U.S. 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. As usual, we will discuss the combination of capex plus equipment finance leases.