Amazon's Q1 Results Explained In Six Simple Charts

Tyler Durden's picture

Moments ago Amazon reported its latest numbers which, as one would expect, emphasize the future and the profit potential one, two or more decades in the future, instead of highlighting the present and certainly the recent past. Because, neither the present nor the recent past are pretty.

In a nutshell: in Q1 Amazon posted a tiny beat on revenues, with Q1 sales printing at $19.7 billion compared to $19.4 billion estimated, however this is as good as it went. The problem as everyone knows for Amazon, are its margins. And in Q1 operating margins tumbled once again, this time to 0.7% (see chart below) which in turn resulted in operating income of only $146 million, well below the $200 million expected. And the cherry on top: AMZN guided to a Q2 operating loss between $455 million and $55 million, compared to the estimated profit of $210 million. Oh well, any decade now.

Here are Amazon's result in 6 simple charts.

First, total employees and worldwide revenue growth:


Quarterly operating and net income by quarter:


And Amazon LTM operating margin. It just printed at its all time joint low:


Quarterly operating margin:


A historical snapshot of just the first quarter across the past five years:


And the punchline: Q1 margin. No commentary necessary

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Joseph LaVorgna's Meteorologist's picture

The stock will up 10% tomorrow because Bezos rubbed his bald skull counter clockwise which is good luck. 

NotApplicable's picture

Well, at least it looks like a controlled "soft-landing" on zero.

EscapeKey's picture

Valuation - yes, ridiculous.

But it IS impressive that a company generating revenue of $74.5bn/yr STILL grows at above-20% levels.


Hero Protagonist's picture

That reminds me of the company that was loosing money on every sale, but stated that they'd make up the shortfall on increasing volume. :)

James_Cole's picture

That reminds me of the company that was loosing money on every sale, but stated that they'd make up the shortfall on increasing volume. 

The Bezos school of economics?

Nassim's picture

"loosing" is not the same thing as "losing"

Don't they teach you Americans how to spell?

obejoyful's picture

I could be a 200 billion company and grow 100% if I sold gold now at $1000.  After the start up phase, revenue means nothing compared to profits.   This generation has gone insane.


goBackToSleep's picture

yes, its the new wally world..... Just keep my tax free tp coming bitchez!

trader1's picture

commoditization of EVERYTHING.

before you know it, we may even commoditize the human experience.  


Hugh_Jorgan's picture

Hmm, now I understand why Amazon Prime is going up from $79/yr to $99/yr.

Rainman's picture

they'll make it up on volume ... of employees

kchrisc's picture

Funny. as I was reading the article I was wondering how the propaganda media was going to spin it, You provided the answer.

Unicorns everywhere one looks.

max2205's picture

When the fuck do they start selling sex robots...yum


ebworthen's picture

And selling fudge.

Really good chocolate fudge, with nuts.

alien-IQ's picture

must be flying on these "stellar" numbers...

JPM Hater001's picture

<---Winning on thin ice...

<---Winning on wheat thins...

NOTaREALmerican's picture

Looks like a buy to me,  as long as we apply the first law of bullshit:

X (amazon stocks in the this case) + bullshit  = $ ^ bullshit.


slaughterer's picture

Non-GAAP.  For the mother fucking win.  

NotApplicable's picture

Given the amount of usage it gets, at some point they're gonna have to drop the "non" part, as it seems to be more and more accepted, every day.

ParkAveFlasher's picture

Yes, let's dilute accountability even more.  It's only words.

PT's picture


Generally Accepted Non-Accounting Practices?

zyby's picture

GNAAP - Generally Non-Accepted Accounting Practices

fixed that for ya.

PT's picture


Generally Accepted Make It Up As You Go Along Practices.


Generally Accepted Lying Practices?

PT's picture


Fraudster Accepted ...

Conman Accepted ...


holmes's picture


Bernie Madoff Approved Accounting Principles

Dr. Richard Head's picture

Soooooo........this is a sign of the recovery?

ParkAveFlasher's picture

I just tried to return a physical book purchased on Amazon.  They said, no need to return, and here's your refund.  What a country!  I love this company.  I do have Amazon Prime.  It's like an epic stream of free Siht for $99/year!

CrashisOptimistic's picture

Bought a keyboard for a Nexus 7.  They sent one for Nexus 11 or 13 or something.  Didn't fit the case.

I said I need to return and here's what you should have sent.  They sent the correct thing and said trash the old one.  No need to return.

I gave it to a neighborhood kid.  He Ebayed it.

pods's picture

And it is now supporting about $4 billion in Chinese construction loans.


ebworthen's picture

Wow, talk about a slim profit margin!

rosiescenario's picture was due to the weather....

StychoKiller's picture

The shipping costs were more than the product was worth.

EscapeKey's picture

Agreed. I love Amazon. But I wouldn't invest in them.


eucalyptus's picture

I invested right before the crash @ 90. Got spooked and dumped at 60 and never went back in. :(

ParkAveFlasher's picture

Time for you to get Amazon Prime, and seek your revenge.

1stepcloser's picture

Yep like I would bang ur avatar, but wouldn't marry it

williambanzai7's picture

It is easy to fall into the trap of loving Amazon, as I did as well in the very beginning. Wow, everything is cheap!

However, when you consider the broader impact it has has had, not only on the creative industry, but the entire ecosystem of distribution, record shops, local booksellers, etc, a loss has been suffered by society. It may have been technologically inevitable, but Amazon certainly expedited and exacerbated the overall demise.

Once thriving small businesses that many people now miss, were replaced by a giant Wall Street financed behemoth. Most artists, writers and other creative types whose minuscule margins are not subsidized by hedge funds hate it.


AdvancingTime's picture

It is hard to see why Amazon has any fans when you consider how they abuse and exploit the brick and mortar stores that line streets throughout America. These are the stores that employ our family members, support little league teams in the community, and add value to our lives. These stores build or lease space, buy supplies from the other local businesses, and pay both sales and real-estate taxes. While Amazon sends out the signal that their customers are smart, forward thinking, and upscale they exploit America and have an evil side, this is a side we should and must recognize.

Pee Wee's picture

I forget, was the loss the overpriced music from shit musicians or the retail model from top to bottom?

PT's picture

The stupid sheeples will willingly cut their own throats in pursuit of a "bargain".  I try to explain it to them and they simply do not care.

Funny thing.  Land premiums should be collapsing.  Nope.  Not happening.  Gee, I wonder why?

Over here, our govt/media propaganda machine blames the collapse of retailing on a 10% GST that doesn't apply to online purchases.  Well, that explains a 10% discount.  What about the other 50% ?  Good thing the sheeps are crap at maths.

ParkAveFlasher's picture


Now, what happens if you get no returns?  100% sell through, that's what.  And we all know that sell-through is what really counts to probey investors and audited financial statements and sales analyses.  So, just keep it, on us, and here's your money back. 


eucalyptus's picture

Yglesias was right - It's a charity run by investors for the benefit of consumers. I bought an xbox360 from them 2 years ago. They shipped me 2 units by charged me for 1 (300 a piece - only wanted 1). I called in to tell them I wanted to ship one back because they sent me too many. 

They paid for the shipping for me to mail it back - and then gave me a 300 credit for it, effectively giving me an xbox360 for free.

I also have an amazon prime student membership at the stupidly low student rate because all you need ia  .edu address, which my alumni one works. 

Ridiculous company. 

That said, it is damning that FB is worth more (or about the same) by mkt cap as amazon. One is completely useless - amazon provides much more consumer value. 

SmilinJoeFizzion's picture

Starbucks just hit their estimates too, "EX-ITEMS"


I'd be looking pretty good on paper too EX ITEMS


You scratch the mortgage pmt, the food cost, fuel costs, car pmts off the books and I look pretty good too


This is such BULLSHIT

rosiescenario's picture

...those would be the non-recurring, but quarterly, charges?