Amazon's Q2 2018 earnings reveal significant growth across all segments, with a deep dive into the accelerating AWS revenue and the explosive growth of its advertising business. This episode provides crucial insights for ecommerce operators on Amazon's marketplace dominance, the power of its third-party sellers, and the strategic implications of its burgeoning ad platform, which began directly challenging traditional agencies. Operators can learn from Amazon's financial strategies and understand the forces shaping the broader ecommerce landscape.
Key takeaways
Amazon's third-party (3P) marketplace comprised 53% of unit sales and grew at 55% year-over-year (constant currency), highlighting the continued importance of a strong 3P strategy for sellers and the platform.
Amazon's advertising business saw a 129% year-over-year growth to $2.19B, with projections of up to $37B by 2023, indicating a major opportunity for brands to leverage Amazon as a primary advertising channel.
Amazon increasingly bypassed ad agencies to work directly with brands, signaling a shift in the digital advertising landscape and a need for brands to adapt their internal capabilities or direct relationships.
AWS experienced a material acceleration with 48% year-over-year growth and $1.4B in profits, demonstrating the critical role of cloud services in fueling Amazon's overall profitability and technological capabilities.
Despite significant international revenue growth (21% Y/Y to $14.6B), the international segment incurred a $0.494B loss, underscoring the challenges and investment required for global expansion in ecommerce.
EP138 - Amazon Q2 2018 Earnings Hot Take This episode is a hot take on Amazon Q2 2018 earnings Amazon Q2 Earnings Highlights $52.9B, which is a 39% y/y increase $2.98B in operating income $21.8B in Free cash flow, less $11.4B in capex, $6.2B in lease repayments = Net $4.1B Free Cash Flow AWS had a material acceleration up 48% y/y constant currency and profits were $1.4b Amazon Web Services – came in at $6.1b – 49% y/y growth (an acceleration from last quarters 48% growth) North America – $32.2B up 44% Y/Y, operating income of $1.84B International – Revenue increased to $14.6B (+21% Y/Y) for a $0.494B loss Marketplace 53% 3P by Unit sales 3P Growing at 55% (constant currency) Wingo GMV estimate -> 1p – $37.6b/ 3p – $71b = $108.6b GMV Amazon Ad Business – grew 129% y/y to $2.19B Cowen estimates $8.6BN in 2018 rising to ~$37BN in 2023 Amazon increasingly bypassing agencies to go directly to advertisers Increasing likely Amazon becomes first $1 trillion dollar company Jason & Scot will at eTail East in Boston next week. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 138 of the Jason & Scot show was recorded on Monday, July 30th 2018. Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Fo
What does this episode say about amazon & marketplaces?
Amazon's third-party (3P) marketplace comprised 53% of unit sales and grew at 55% year-over-year (constant currency), highlighting the continued importance of a strong 3P strategy for sellers and the platform.
What does this episode say about paid acquisition?
Amazon's advertising business saw a 129% year-over-year growth to $2.19B, with projections of up to $37B by 2023, indicating a major opportunity for brands to leverage Amazon as a primary advertising channel.
What does this episode say about finance & fundraising?
Amazon increasingly bypassed ad agencies to work directly with brands, signaling a shift in the digital advertising landscape and a need for brands to adapt their internal capabilities or direct relationships.
What does this episode say about founder & leadership?
AWS experienced a material acceleration with 48% year-over-year growth and $1.4B in profits, demonstrating the critical role of cloud services in fueling Amazon's overall profitability and technological capabilities.
What does this episode say about amazon & marketplaces?
Despite significant international revenue growth (21% Y/Y to $14.6B), the international segment incurred a $0.494B loss, underscoring the challenges and investment required for global expansion in ecommerce.
