Amazon Q1 2022 Earnings Report Recap

AMZN fell far short on earnings, matched on revenue

Key Takeaways

  • Amazon Web Services (AWS) revenue surpassed analyst expectations, reaching $18.4 billion for the quarter.
  • AWS is Amazon's high-margin cloud computing business.
  • Amazon posted losses per share for the first time in at least four years.
Amazon Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Miss -$7.56 $8.55
Revenue Match $116.4B $116.4B
Amazon Web Services Revenue Beat $18.4 $18.3B

Source: Predictions based on analysts' consensus from Visible Alpha

Amazon (AMZN) Financial Results: Analysis, Inc. (AMZN) reported mixed results in its Q1 FY 2022 earnings report. Earnings per share (EPS) were -$7.56, far below analyst predictions. It was the first quarter that the tech giant has posted a net loss in at least four years. Net losses include a pre-tax valuation loss of $7.6 billion included in non-operating expense from the company's investment in Rivian Automotive, Inc. (RIVN). Amazon's revenue matched analyst forecasts. Amazon Web Services (AWS) revenue exceeded consensus estimates.

AMZN AWS Revenue

Revenue of $18.3 billion from AWS, the company's high-margin cloud computing business, marked a 37% year-over-year (YOY) increase and beat analyst predictions. Amazon said that AWS growth was driven by new commitments from customers across industries such as telecommunications, aerospace, sports, technology, and healthcare. AWS was the only one of Amazon's segments to report net operating income for the quarter.

Amazon's AWS business generates much higher margins than its e-commerce business. In FY 2021, Amazon's global retail sales- and subscription-based business segments generated about 87.5% of the company's total revenue, while AWS accounted for a mere 12.5%. However, AWS accounted for 63.3% of total operating income for the year, making it Amazon's main profit generator.

AMZN Outlook and Stock Performance

Amazon said that it expects net sales to be between $116.0 billion and $121.0 billion for Q2 2022, representing growth between 3% and 7%. Operating income is predicted to be between -$1.0 billion and $3.0 billion, as compared with $7.7 billion in Q2 FY 2021.

Amazon stock fell by more than 9% in after-hours trading following the earnings release. The company's stock has significantly underperformed the broader market in the past year, providing one-year trailing total returns of -16.4% compared with 2.5% for the S&P 500.

Amazon's next earnings report (for Q2 FY 2022) is expected to be released on July 28, 2022.

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