Our guidance incorporates the order trends that we’ve seen to date and what we believe today to be appropriate assumptions. This guidance also reflects our estimates to date regarding the impact of the COVID-19 pandemic on our operations, including those discussed in our filings with the SEC. This compares to Q2 operating income of $3.3 billion. For AWS, these quarter-over-quarter increases Best macd settings for day trading are primarily driven by higher infrastructure investments to support continued strong customer growth, including larger depreciation on a growing fixed asset base. We also expect increased energy costs as we continue to see volatility in utility prices around the world in operating our AWS data centers. Our third quarter operating income guidance range is zero to $3.5 billion.
Our guidance also assumes, among other things, that we don’t conclude any additional business acquisitions, restructurings or legal settlements. It’s not possible to accurately predict demand for our goods and services, and therefore, our actual results could differ materially from our guidance. Another 30% of the $60 billion was fulfillment capacity and a little less than 25% was for transportation. The remaining 5% was comprised of things like corporate space and physical stores.
People are advertising at the point where customers have their credit cards out and are ready to make a purchase. And when people are looking, companies are looking to potentially streamline or optimize their advertising spend, we think our products compete very well in that regard. In addition to maybe longer term things like brand building and brings new selection to bear in front of customers.
What we’re all about, obviously, is price selection and convenience. It’s early days in the adoption curve for companies and governments. And customers have responded and we’re going to keep investing there. And your comment on discounting, we’re not seeing some of the pressures that other people are seeing right now. Get this delivered to your inbox, and more info about our products and services.
For the twelve months ended June 30, 2021 and 2022, this amount relates to equipment included in “Property and equipment acquired under finance leases, net of remeasurements and modifications” of $9,976 million and $3,579 million. The company is facing tough comparables, as it had robust results in the year-ago period. One factor adding to the challenging comparables is the shifting of the annual Prime Day event from the second quarter of last year to the third quarter of this year. In addition, foreign exchange headwinds likely hurt the second-quarter’s revenue because the U.S. dollar has gained strength against other currencies over the last year. I would note that we’re still up 188,000 year-over-year and nearly double the headcount of what we had heading into the pandemic in early 2020. So you’re right, there will be adjustments to that as we move forward into more holiday level demand.
On the bridge to Q2 to Q3, so again, you have the – mentioned three items, ops improvement that we see of a $1.5 billion and offsetting that is increased costs in AWS, as we build out depreciation. We also are adding – continuing to add people in that space; product engineers, salespeople, customer support. Speaking more broadly, we know AWS is a huge opportunity to early days in the adoption curve for companies and governments. And we invest with that – with that confidence in mind and customers have responded and we’re going to keep investing there. While demand has remained strong, the lapping of this high growth period, depressed our revenue growth rate for the following 12 months ending in May of this year. Our growth rates going forward will no longer require this historical explanation.
AWS with an AI Twist and Advertising
And then also when you think about margins, the 35% for AWS in 1Q going to 29% in 2Q, what are some of the puts and takes that we should think about going forward just given decreasing server life benefits and tougher macro environment? So in any particular year when we’re spending capital, a good portion of it, we estimate about 40% this year is being spent in support of warehouses or transportation capacity. That will be opening up and effective in 2023 and beyond.
- If you look at our stock-based comp as a percent of revenue, it’s gone up 150 basis points quarter-over-quarter, as we stepped up from Q1 to Q2.
- It’s a dicey time for tech overall, and earnings season has only continued to bear that out.
- Investors will probably be approaching the e-commerce and technology behemoth’s report feeling somewhat cautious.
- And Stephen on your – just to your question on stock-based comp, as you mentioned, we do utilize restricted stock units or RSU as our primary mode of equity compensation.
- On the headcount, yes, I think it was more, as we mentioned last quarter, last year in — or excuse me, in Q1, we added — to give you a flavor for it, we added 14,000 workers in Q1.
We’re interested in learning and working with FBA sellers that we’ve known and had good trust with, but also expanding. And I think as you think about it, merchants, they obviously have a lot of choices on where they’re going to sell products. And we have a long history of empowering and helping merchants. We’ve invested a lot in tools and capabilities, and of course, the delivery capabilities and all the things that go along with that. But that’s an opportunity for us to support merchants who may or may not be FBA sellers with the tools and the opportunity just to sell their products online and scale their business and build their brand. And so I think I’m really excited about, of course, getting to be able to launch this program over the last few months and dialing it up for more sellers as the year progresses.
The company provides guidance for revenue, but not earnings. However, its operating income outlook usually gives investors a ballpark idea as to what year-over-year percentage change management expects on the bottom line. For the twelve months ended June 30, 2022 and 2023, this amount relates to property included in “Principal repayments of finance leases” of $9,789 million and $5,705 million.
The top line beat market estimates sending the stock soaring over 12% in after-market hours on Thursday. “When companies are looking to optimize or streamline their advertising spend, we think our products compete very well in that regard,” he added. On the company’s earnings call, CFO Brian Olsavsky touted the company’s advertising business, noting that it has grown while others have begun to see slowdowns. So you called out just the 3P mix being a kind of highest level, maybe talk about your focus to increase the mix to 3P and how that fits into plans for improved efficiency? And then secondly, on international, how much of the weakness in the margin sequentially was FX-driven?
They’re still significantly a penalty year-over-year. We made strides to improve fulfillment network productivity in Q2. Staffing levels were more in line with rising Q2 demand, and we saw better optimization of our fulfillment network. On the transportation side, we’ve continued to improve delivery route density and improve package deliveries per hour. We are encouraged by the progress during the quarter and see opportunity to further improve in the second half of the year. And, Stephen, on your — just your question on stock-based comp, as you mentioned, we do utilize restricted stock units, or RSUs, as our primary mode of equity compensation.
We have also taken steps to slow future network capacity additions. We saw another strong quarter of innovation and customer engagement in AWS where net sales were $19.7 billion in Q2, up 33% year over year, and now represent an annualized sales run rate of nearly $79 billion. For the twelve months ended June 30, 2020 and 2021, this amount relates to property included in “Principal repayments of finance leases” Faithful Finance of $10,504 million and $11,435 million. For the twelve months ended June 30, 2020 and 2021, this amount relates to equipment included in “Property and equipment acquired under finance leases” of $13,110 million and $9,976 million. For the twelve months ended September 30, 2021 and 2022, this amount relates to property included in “Principal repayments of finance leases” of $11,271 million and $8,561 million.
Prime Day also occurred in Q2 last year and contributed about 400 basis points to our Q year-over-year revenue growth rate. This year’s Prime Day sales event occurred on July 12 and 13 and is incorporated into our third-quarter guidance. Our comments and responses to your questions reflect management’s views as of today, July 28, 2022, only and will include forward-looking statements. Additional information about factors that could potentially impact our financial results is included in today’s press release and our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. During this call, we may discuss certain non-GAAP financial measures. Investors will probably be approaching the e-commerce and technology behemoth’s report feeling somewhat cautious.
Amazon (AMZN) Q2 2022 earnings results beat revenue expectations
I would say on the geographic split, we haven’t broken that out. The majority of advertising revenue is in North America. The data on a possible recession doesn’t look great — the economy contracted for the second straight quarter in Q2, data from the Commerce Department showed Thursday.
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That compared with net income of $15.79 per share in the year-ago period. This result fell far short of the analyst consensus estimate of net income of $8.48 per share. Here are some other stocks that you may also consider, as our model shows that these too have the right combination of elements to beat on earnings this season.Aspen Technology AZPN has an Earnings ESP of +1.40% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Aspen Technology is set to report best artificial intelligence stocks fourth-quarter fiscal 2022 results on Aug 8. The Zacks Consensus Estimate for AMD’s earnings is pegged at $1.03 per share, suggesting an increase of 63.5% from the prior-year quarter’s reported figure.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. For the twelve months ended June 30, 2022 and 2023, this amount relates to equipment included in “Property and equipment acquired under finance leases, net of remeasurements and modifications” of $3,579 million and $696 million.
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During the quarter, we saw improvement in many of our key operational metrics, including in-stock levels and delivery speed and saw a subsequent step-up in consumer demand. For the quarter, worldwide net sales of $121.2 billion exceeded the top end of our revenue guidance range and represented an increase of 10% year-over-year, excluding approximately 320 basis points of unfavorable impact from changes in foreign exchange rates. Companies like Delta Airlines, Riot Games, British Telecom, and Jefferies Investment Bank to name a few, announced new agreements and service launches supported by AWS. As a reminder, this includes a portion of our seasonal Q2 step-up in stock-based compensation expense. AWS results included a greater mix of these costs, reflecting wage inflation in high-demand areas, including engineers and other tech workers as well as increasing technology infrastructure investment to support long-term growth. And, Jason, on your second question related to the international and the profitability there reported.
Amazon Posts $2B Loss, Still Beats Wall Street Expectations
So those are some of the opportunities and challenges that you think about kind of where we are in the U.S. versus international that are out there. The network complexities, of course, there are some regulatory hurdles and other differences out there. Sellers and vendors are also some of our larger advertising customers as well and helps – that advertising helps them surface new selection to our customer base. So it’s a very strong partnership and it’s been getting stronger. Doug, just to – I mean, just to pile on to that too.