Amazon Q2 2019 Earnings Reveal Slowing AWS Growth and Rising Ad Revenue
Amazon reports $63.4 billion in Q2 2019 revenue, beating analyst estimates slightly while falling short on earnings per share. AWS growth dips below 40% for the first time, while the company's advertising and subscription services both surge 37%.
Amazon reports $63.4 billion in revenue for the second quarter of 2019, slightly beating analyst expectations of $62.48 billion but falling short on earnings per share. North American sales jump 20% to $38.7 billion, while international sales grow 12% to $14.9 billion. Following the report, the retail giant's stock drops approximately 2% in after-hours trading.
Amazon Web Services (AWS) generates $8.4 billion in sales, marking a 37% growth rate that falls below the 40% threshold for the first time since the company began reporting these figures. Meanwhile, subscription services and the advertising-focused "other" category both experience identical 37% growth, bringing in $4.7 billion and $3 billion respectively. Amazon leverages its massive customer data to rapidly expand its advertising business into a major revenue driver.
CEO Jeff Bezos highlights the successful rollout of free one-day delivery for Prime members on over 10 million items. He also points to Prime Day as a massive triumph, noting that the two-day shopping event generates more sales than the previous Black Friday and Cyber Monday combined. Looking ahead, Amazon provides third-quarter revenue guidance between $66.0 billion and $70.0 billion, aligning closely with the analyst consensus of $67.27 billion.