Amazon Q1/2022 [pdf]
s2.q4cdn.com
s2.q4cdn.com
- Q1 Operating Income 3.7B est 5.42B, wow, that's a big miss
- Q1 Net Sales 116.4B vs Est of 116.43,
- AWS Net $18.4B EST 18.2B
- subscription sales
- operating margin 3.2% vs 4.7Est, that's another big miss
- loss of 7.56/share vs a profit of 15.79/share a year ago, again highlights the danger of a very low margin business model that makes it up on volume, when all your inputs go up in price.
- their first quarterly loss in 7 years.
- international business was down a fair bit, both in profits and sales, This is something to watch as US sales are probably not a growth area anymore and bulls were watching this areas specifically for growth. Not only fail to grow here but to show a loss is concerning.
- their trailing 12M P/E was 124 and their forward 12M P/E is 55, so everyone expects far less growth in the future
Notes:
- looks like its the sales forcast that algos seem to hate
- reporting a loss for Q1 and projecting another loss for Q2, given that we're long gone from the run at a loss to grow days of Amazon, this is something to watch. Maybe people are finally starting to buy local again?
- starting to bring down other ecommerce companies which helps support the people buying in person thesis some analysts have been pushing
- From Bloomberg, Worldwide shipping costs jumped 14% to $19.6 billion. Meanwhile, revenue from online store sales dropped 3% and revenue from third-party sellers services increased 9%. Inflation is exposing the dangers of Amazon’s low-margin e-commerce model that has conditioned customers to expect low prices and quick delivery.
- price of a prime membership is going up, probably a good idea, i know people who have given up netflix, I know no one who has given up a prime membership. Far more value with prime than netflix.
- retention of employee's could be interesting to watch as a stock that could very likely be worth less in a years time than it is now would be a big paycut for alot of devs.
- shares down 10% at one point. Option implied movement is 7.6% so this is an oversized move.
- Rivian really boosted amazon last year adding 11.8B to their bottom line but the stock forced amazon to take a 7.6B loss on Rivian this quarter, so I guess this isn't something to be concerned with as this was never real anyway.
- interestingly, the CFO just said they have too many people at teh company, though he didn't clarify if it was warehouse or developers, I'm guessing its mostly the former and any developer head count downsizing will come from employees who leave due to a share price that is coming down
I'm sorry i dont know how to read these reports, but do they have numbers for usage of amazon prime? My guess would be people aren't buying local or online, they just aren't buying a lot of things anymore because of inflation.
They would rather be in the AWS/logistics platform/music/video business.
I think the seller filter is hidden though if no other filter option has been selected first.
I found one!
I concur. I believe those comments were around having scaled up in 20-21 to meet (product sales) demand. There was also a comment along the lines of having organically shed ~100K jobs in '22 Q1. There's just no way that volume is dev/services employees. Beyond that the profits (and more and more revenue) are really coming from the services side of teh house, I'm not sure why they'd cut employee count there.
> - retention of employee's could be interesting to watch as a stock that could very likely be worth less in a years time than it is now would be a big paycut for alot of devs.
Two notes. RSU grants for existing employees are usually 1-2 years out, and the grant price is computed in Q1. That means that the `20 grants are currently down from $3,190 to $2,650 AH. Similar for `21 grants with a planning price of $3,011. Every highly compensated Amazon employee (eg devs) is looking to a real ~12-17% pay cut to RSUs over the next two years. And this is entirely ignoring the ~15% per year stock price growth that gets factored in to the "total comp target" value.
> - their trailing 12M P/E was 124 and their forward 12M P/E is 55, so everyone expects far less growth in the future
This is what really scares me. A current P/E of 45-55 still has plenty of room to fall compared to the rest of the services/it/cloud/ad industry. If growth/earnings remain stalled it's entirely plausible for the stock price to go back down to $1,500-2,000. And that could be fair long term for a services heavy company. But what the heck is that going to do employee comp, retention, and hiring?
Disclaimer: principal at AWS. Everything above is my own opinion and based on public information (eg earnings call & filings) or personal compensation information.
Unsurprising as Amazon in the US is basically Alibaba with a better returns policy.
If you don't gain a benefit from the returns policy, you might as well go directly to Alibaba.
I am not an expert in this so please excuse if these questions sound naive.
1. As this was a "valuation loss", as they called it in their report, could they have deferred it?
2. What purpose does this serve because, again, as it's not as if they lost that money. Is it to gain tax benefits?
3. What happens if/when Rivian's share prices increase in, say, Q3 2022? Do they then report $7.8B in profit?
1. Maybe if they wanted to. Accounting at this level is full of grey areas.
2. Accounting.
3. Maybe if they wanted to. Accounting at this level is full of grey areas.
> Growth rates are at their slowest since the dot-com bust in 2001.
> The company recorded a $7.6 billion loss on its investment in electric vehicle maker Rivian.
> Earnings: $7.38 per share, adjusted, vs. $8.36 expected, according to Refinitiv
https://www.cnbc.com/2022/04/28/amazon-amzn-q1-2022-earnings...
This is a terrible report for a company of the size and in the leading retail position that Amazon is. Amazon has never been a company where price to earnings ratios mattered much, but a 12% miss is not small potatoes. It bodes very poorly for earnings reports from second-tier consumer products companies and distributors.
Circa 2017 he owned 20% of AMZN. Presently he owns 10%. Back in 1997 he owed 42%.
https://www.forbes.com/sites/rachelsandler/2021/06/24/heres-...
“These mental health benefits enhance existing benefits, which include 24/7 access to free, one-on-one counseling sessions, suicide prevention resources, and customized support.” And by that they mean those terrible app based counselling services.
The best thing they did do was a free Headspace subscription, but they cancelled it after 2 months.
Edit: I just wanted to add one more thing, since I was working in Canada my salary was half that of an American, but baselined against the same people in Seattle. If I’m working at your high American bar, I want your salary. Salt in the wound.
I work maybe 2 hours a day. Oncall is pretty light when I do have it. Fulfilling team and projects with great career opportunities. I have no meetings Wed-Fri. I have under 3 years of experience and my compensation this year after reviews went from:
164K base -> 218K base Total compensation: 220K for 2021 calendar year -> 305K for 2022 calendar year -> 378K for 2023 calendar year
I'm pretty happy as an employee personally though I realize not everyone is.
Edit: Some commentators seem to be implying that I'm chasing money and bringing down the culture of Amazon by not working more - that seems ironic to me given Amazon has historically been criticized for its sweatshop reputation.
To clarify, I work 2 hours a week because that's all I need to work to deliver my projects on time and I was rated TT this year - so why would I work more?
Jokes aside, ... it's not uncommon in (such) large organizations to be in the lucky team and that's it. With all these people leaving, managers know how much you actually work, but it's a win win. If the guy works 2 hours a day but he is not a troublemaker, keep him. Hiring someone better has become harder.
https://www.teamblind.com/company/Amazon/reviews
Amazon has terrible morale overall, with a 2.7 / 5 Work Life Balance rating while most comparable companies, Google, Microsoft, Apple, Twitter, etc. are averaging like 4 / 5.
Feel free to only visit 2.5 star restaurants on Yelp because clearly that must just be disgruntled people disproportionately for no reason.
I'm not saying I think I'm right in this case but I also am not saying I think websites like blind/ratemyprofessor/etc accurately reflect how the general population actually feels
Going by the Yelp restaurant review example, perhaps the people who rate a restaurant are either very satisfied or dissatisfied. In the case of Amazon ratings on Blind, it seems that no one is willing to advocate for the company.
Aside from that, the toxic work culture of Amazon and their high attrition rate has been well-known for years and years and famously reported in NYTimes etc.
Didn't Bezos say something like if anecdotes and data disagrees, its the anecdotes that are usually right?
I tried to bring up the structural issues of the team, but it took someone from another team to set them straight. I had already left by then.
I realized this is very much the culture in Amazon now. Because they’re the top paying tech company it attracts people who work for money and nothing more. That creates…a certain culture.
Thats most (big) tech companies
but they exact a huge "tax" on items sold on the site, so they can survive incompetence for quite some time.
Are you suggesting that because the pay is high the culture of Amazon is bad ?
Why is working for money a bad thing ? Everyone is selling their time in exchange for money.
The primary reason for Amazon's bad culture is the management, and their insistance on firing 6% of workers each year[1]. This creates a culture where the people who understand this system well will actively sabotage newbies and naive devs to avoid getting canned.
A lucky few with good VPs and directors may have a good experience overall, but at some point the Amazon culture catches up to everyone, except the executives who don't face the same pressures.
[1]https://www.businessinsider.com/amazon-performance-review-6-...
Edit: correction it was two hours per WEEK.
Working 2 hours a day for a fat paycheck sounds like a better way to enable yourself to spend time on your passions than deluding yourself into the belief that the capitalist entity extracting multiples of your TC as value for itself is enabling you to "follow your passion" while you work
Also, many of people actually like their jobs. But a lot of developer jobs especially at big companies are fundamentally boring hence the unstoppable chase of higher TC and the desperate need for hobbies.
Sure, sometimes people lose the plot, what does it have to do with passion?
> many of people actually like their jobs
This is blatantly false. Many people have jobs that are occasionally interesting, I would accept this, but no one "likes" working. In what world is giving all your energy to corporate interests to enrich the top of the corporation something to like?
> But a lot of developer jobs especially at big companies are fundamentally boring hence the unstoppable chase of higher TC and the desperate need for hobbies.
Jesus christ, "the desperate need for hobbies", what is wrong with you? You pan people who don't like working, and criticize them for wanting to have hobbies instead of spending all their time doing activities that are only a value-add to their boss's boss? No wonder you are jealous of people who get paid well and have fun in their free time, you have the worst case of Capitalist Stockholm Syndrome I've ever seen
People change over time, someone might have a family, they might encounter a medical situation, they may have student loan debt. There are millions of scenarios which could cause a person to choose working for a pay bump.
My point is none of these reasons will sour the culture as much as management putting employees through a zero sum, hunger games like scenario.
At the end of the day all of this stems Bezos's belief that employees are all inherently lazy, this trickles down to all the executives.
https://www.businessinsider.com/amazon-polices-based-jeff-be...
By all accounts, it already has.
Do you think this is less prevalent at lower labor prices?
Every person I know who earns well "working" for 2 to ten hours a week spends a good fraction of their "free" time doing things that make those hours hyper productive.
It could be as direct as a developer working on software side projects. More often, it's tangential. Working on demanding problems. Comfort with the unfamiliar. Mind you, none of this is done for that purpose. But when you watch someone who couldn't keep their office plants alive for ten minutes noodle, for a week, through designing and building a smart irrigation and remote soil chemistry monitoring system for a backyard pot farm, it makes sense why, when they look at a problem in a domain they're experts in, decades of parameter space can be searched and resolved in seconds.
Let’s not take it more seriously than we have to.
FTFY.
It's why we don't judge companies, or organisations, or individuals, no their best, but on their worst. It's why we look for groups that look out for each other, which are concerned with how the least among them --- least powerful, least privileged, least protected --- are treated.
Your situation may be a windfall for you. It only further illustrate's what's wrong with Amazon, and rotten to the core.
I can remember sitting in central hallways while working in various factories back in the day whenever tornado warnings / watches were issued.
The Edwardsville, IL, facilty lacked safe rooms.
Amazon workers were prohibited from carrying personal phones on them through which they might have received warnings or summoned help.
Amazon workers requesting permission to leave, or questining whether they should work shifts after the tornado warnings were announced were told that they could not leave or must work under penalty of losing their jobs.
Many workers, all of whom requested anonymity to protect their jobs, said they had never had a tornado or even a fire drill over the course of their careers at Amazon, dating back up to six years. Several expressed that they would be unsure of what to do in an emergency. In one case, an Amazon contractor, fearing Hurricane Ida, asked to go home early but was told that leaving would adversely affect their performance quota.
...
Amazon has not responded to The Intercept’s requests for comment about why employees were not instructed to stay home amid the tornado warnings. The company took an additional step yesterday by encrypting internal help ticket messages about the Illinois facility, making them inaccessible to most workers, according to an employee who provided screenshots before and after the messages were encrypted. Amazon did not respond to a request for comment on why the records had been encrypted.
https://theintercept.com/2021/12/13/amazon-illinois-tornado-...
Felton said most of the 46 people in the warehouse known as a “delivery station” headed to a shelter on the north side, which ended up “nearly undamaged” and a smaller group to the harder-hit south end. The company said those are not separate safe rooms, but generally places away from windows considered safer than other parts of the plant.
https://www.theguardian.com/technology/2021/dec/13/amazon-wa...
“If you decide to return with your packages, it will be viewed as you refusing your route, which will ultimately end with you not having a job come tomorrow morning,” the dispatcher said. “I’m literally stuck in this damn van without a safe place to go with a tornado on the ground,” the driver messaged back before being told to shelter in place.
https://www.engadget.com/amazon-dispatcher-screenshots-edwar...
OSHA report summary/ response:
https://www.theverge.com/2022/4/27/23043685/osha-safety-amaz...
I always assumed those comments were talking about the warehouse/shipping/packing/etc employees @ amazon?
https://thoughtcatalog.com/rania-naim/2016/06/12-subtle-sign...
1. Stuttering & inconsistencies. When someone is lying, they usually have a hard time coming up with coherent answers and their lies will be full of contradictions
Robinhood, Wish, Peloton, Affirm, Opendoor, Roku, etc. etc.