Amazon Q2 Net Revenue Increased 19.89% Over The Same Period, But Net Profit Growth Fell Sharply.

And then to the US stock market.

On July 25th, the US technology giant Nasdaq:AMZN announced its second quarter financial results as of June 30, 2019. Reporters noted that in the fiscal season, Amazon's net revenue (Net sales) was $63 billion 404 million, an increase of 19.89% over the same period last year, and net profit (Net income) 2 billion 625 million US dollars, up 3.59% from the same period last year. However, since the announcement of the upgrading of Prime "one day" in April this year, net profit growth has dropped sharply (in 2019, the net profit of Q1 increased by 118.60% over the same period). Part of the reason for the decline in net profit growth of Amazon is also directly related to the pressure of logistics cost pushed up by "one day".

Bezos, founder and CEO of Amazon, said that users can make positive feedback on Prime's "one day up" so that they can see the acceleration of revenue growth. At the same time, he said, Prime members can now enjoy "one day service" on over ten million items, and this is just the beginning.

Sharp drop in net profit growth

According to the financial report, in terms of net revenue (Net sales), Amazon's Q2 in 2019 was $63 billion 404 million, an increase of 19.89% over the 2018 US $52 billion 886 million of Q2. At the same time, compared with the Q1 of 59 billion 700 million US dollars in 2019, it also achieved a ring growth.

When Amazon released its Q1 earnings in 2019, the daily economic news reporter noticed that the growth of Amazon's business was slowing down. However, this has been slightly improved in Q2. For example, net revenue growth rose slightly from 19% of Q1 to 21%.

In April this year, Amazon announced its second quarter performance forecast -- net revenue will be between $59 billion 500 million to $63 billion 500 million, or 13% to 20% over the second quarter of 2018. As a result, the net revenue of Q2 in 2019 reached US $63 billion 404 million, which is close to the upper limit of previous performance expectations.

Although Amazon has performed well in net revenue in the fiscal season, it has not increased profits.

Financial reports show that in 2019, Q2 Net income was $2 billion 625 million, much lower than that of 2019's Q1 of $3 billion 561 million, a 26.28% decline. Not only that, the net profit of US $2 billion 625 million has also been the lowest since Q3 in 2018.

Prime "one day up" reveals its edge.

For the subdivision sector, the financial report shows that in 2019 Q2, the net revenue (Net sales) of Amazon's North American business was $38 billion 653 million, an increase of 20.16% over the same period last year. This figure is higher than the last two quarters year-on-year growth rate.

In the international business section, Q2's net revenue in 2019 was 16 billion 370 million yuan, excluding foreign exchange, which increased by 17% over the same period last year.

In addition, Amazon's cloud business (AWS) continues to "shine". In 2019, Q2, AWS net revenue was $8 billion 381 million, an increase of 37% over the same period last year. Throughout the 2018 Q1, AWS's year-on-year growth rate remained mostly above 40%. Although Q2's net revenue grew by a year-on-year rate of decline, its annulus ratio increased by 3.58%.

It is worth mentioning that AWS has long dominated the world, but its share in the Asia Pacific region, especially China, is still lower than that of Ali. According to research and analysis of Gartner data, only at IaaS level, in 2018, the share of AWS in the world was 47.8%, ranking first, while Ali cloud was 7.7%. However, in the Asia Pacific market, Ali has a share of 19.6% and AWS accounts for 11%.

On the other hand, in the two quarter, Amazon announced a major measure for Prime members, that is, the delivery of goods will increase from the previous two days to one day.

In this regard, Founder Securities in a research report in April this year, pointed out that Amazon plans to invest $800 million in the second quarter, expanding the scope of the Prime day, and is expected to further improve the overall GMV. On the other hand, one day will undoubtedly increase the pressure of logistics cost, and the proportion of the total logistics cost of the company will continue to increase. The growth of gross profit margin in the future will be under pressure and may slow down.

In response, insiders pointed out that the launch of "one day Da" can partly explain the phenomenon of Q2 "increasing profits without increasing profits". However, in the long run, "one day" will further consolidate Amazon's "moat" in the field of electricity and distribution, and promote ordinary users to become Prime members.

In addition, Amazon also released its 2019 Q3 performance forecast in its earnings report - net revenue is expected to range from $66 billion to $70 billion, an increase of 17% to 24% over 2018 Q3. At the same time, compared with Q3's $3 billion 700 million in 2018, its operating income is expected to be between $2 billion 100 million and $3 billion 100 million.

As of press release, Amazon shares fell 26.99 U.S. dollars, to close at 1973.82 U.S. dollars, or 1.35%.