Amazon’s Earnings Report: Growth Slows, But Profit Margins Are Up – The Buyer’s Journey 49

All this week we’re focusing on the earnings reports of the platforms we work with the most in our advertising campaigns. That includes Facebook, Instagram, Twitter, Google, Snapchat, Amazon, Spotify, and LinkedIn. We’ll be looking at the numbers and explaining what is most important for your marketing campaign. Today, we’re looking at Amazon’s earnings report and we’ve got a breakdown of everything you need to know.

A B C, Easy As One, Two, Three

Here are a couple quick-hit numbers from Amazon’s earnings report via CNBC.

  • EPS: $7.09 vs. $4.72, according to analysts surveyed by Refinitiv
  • Revenue: $59.7 billion vs. $59.7 billion, according to Refinitiv
  • AWS: $7.7 billion vs. $7.7 billion, according to analysts surveyed by FactSet
  • Amazon’s total revenue grew 16.9% compared Q1 2018, representing the slowest expansion since the first quarter of 2015.
  • North American revenue experienced a 17% increase, compared with last year’s 46% growth.
  • International revenue is down to 9%, down from last year’s 34%.
  • Amazon’s advertising business had only a 34% revenue growth to $2.7 billion, which is slowdown after growing at least 60% in the past five quarters.
  • Amazon Web Services had a 41% sales increase, which is a bit of a slowdown from last year’s 49%, but still fantastic.

Growth Down, Profit Margins Up

If we look at the numbers in Amazon’s earning reports, it’s clear growth is slowing for the company. However, this doesn’t mean that it’s all bad. In fact, Amazon Web Services, where Amazon makes a ton of profit, had a 41% sales increase. That’s still lower than the 49% of last year, but none of these numbers suggest this decrease is a death knell for the company.

According to Eugene Kim on CNBC, Amazon Web Services, advertising, and third-party seller services are experiencing wider margins despite slower growth. That’s because there can be a smaller number of transactions with a greater increase in revenue. Kim also points out that Amazon stock is up 28% in 2018, making it one of the best-performing sticks this year. In addition, Amazon is currently the third most valuable company in the world behind Microsoft and Apple.

As Len points out in today’s show, earnings reports aren’t just a way to keep tabs on what’s happening at a company in regard to marketing. It’s also a good way to see how the company is doing as a whole, which can often boost confidence in stock holders and advertisers. It’s clear that even though growth has slowed, Amazon is certainly still doing very well for itself.

Check out our next episode where we’ll discuss a news article covering the Retention stage of The Buyer’s Journey.

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Matt McGrorty

Videographer / Podcaster

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