War and disease have thrown off the year-over-year measurement standard, but the unprofitable quarter was due to a $7.6 billion loss on Amazon’s investment in the electric car manufacturer Rivian, which is down by more than two-thirds since it IPO’d in November.
Unpredictability and heavy outlier payments may just be the way of the future for Amazon, however. Olsavsky warned investors of an added $3 billion in stock-based compensation that will happen to fall in Q2 this year. Amazon’s revenue guidance for next quarter is 3% growth, a very conservative benchmark by the company’s historical standards.
Revenue growth in Q1 2022 was up 60% from Q1 2020, the last quarter before COVID-19 dynamics flipped the system.
“The way to think about it is it went up and stayed up, and now it will resume a more normal growth pattern,” Olsavsky said. “But I wouldn’t be fooled by the revenue growth rates in this difficult comp period.”
The investors and Amazon’s corporate group focused heavily on major macroeconomics: such as labor swings (Amazon has excess capacity now, after “chasing labor” last year), supply-chain logistics, inflation and the Russian invasion of Ukraine.
It wasn’t until the final investor question that advertising came up at all (shout out to Jason Helfstein of Oppenheimer). That’s a big change from recent earnings reports, when the ad segment was a central focus.
“We’re still very pleased with the way the advertising team is performing,” Olsavsky said. “A strong quarter and it continues to roll out new products for sellers to manage their advertising and increase the ability to analyze and calculate the payback on marketing investments with us.”