#股票财报季
Amazon will report its Q3 earnings after the U.S. market closes on October 29.
The market expects revenue of about $202.1 billion and EPS of around $2.01.
My prediction: revenue will come in slightly above expectations, and EPS could also top $2.01, though profit may be less dependable than revenue. There are three reasons:
First, the revenue outlook is relatively reassuring.
The company’s Q3 guidance is $197 billion to $202 billion. Market expectations are already slightly above the high end of that range, but Amazon has often beaten its own guidance. Q2 revenue reached $200.6 billion, up about 19.6% year over year, and AWS growth accelerated again. As long as the consumer business doesn’t weaken significantly, reaching $202 billion to $204 billion in Q3 shouldn’t be difficult.
Second, AWS is the most important thing to watch this time.
Q2 AWS revenue was about $42.2 billion, up nearly 37% year over year, with operating income of about $16.6 billion. The market expects AWS growth in Q3 could approach 40%. If revenue reaches $46 billion to $47 billion, that should be enough to support a revenue beat. Investors are buying Amazon mainly for AWS and the renewed acceleration in demand for AI cloud services.
Third, be cautious about profit.
Q2 capital expenditures reached $54.2 billion, operating cash flow was $45.4 billion, and free cash flow was negative $8.8 billion. In Q1, free cash flow was even more negative, at $18.2 billion. These AI data-center investments won’t all be expensed in the current quarter, but depreciation is already increasing: Q2 depreciation and amortization was about $20 billion, up from about $16.8 billion in the same period last year. So even if revenue grows quickly, operating income may not grow at the same pace.
The good news is that Q3 operating income last year included about $2.5 billion in FTC settlement costs and about $1.8 billion in severance costs, which won’t recur this time. Last year’s Q3 operating income was only $17.4 billion, while the company’s guidance for this quarter is $22.5 billion to $26.5 billion. Even after accounting for AI investment and depreciation, there’s room for a significant year-over-year improvement in profit.
However, Amazon’s EPS will also be affected by changes in the fair value of investments such as Anthropic, so don’t focus on EPS alone.
So, my final prediction is: revenue of $202.5 billion to $204 billion and EPS of $2.05 to $2.15, a slight beat.
Another thing everyone cares about is the share price. Ultimately, three things will determine where it goes:
Whether AWS can sustain growth of around 40%, whether capital expenditure guidance for Q4 is raised again, and when free cash flow will turn positive again.
This is my personal analysis and is not investment advice.
Amazon will report its Q3 earnings after the U.S. market closes on October 29.
The market expects revenue of about $202.1 billion and EPS of around $2.01.
My prediction: revenue will come in slightly above expectations, and EPS could also top $2.01, though profit may be less dependable than revenue. There are three reasons:
First, the revenue outlook is relatively reassuring.
The company’s Q3 guidance is $197 billion to $202 billion. Market expectations are already slightly above the high end of that range, but Amazon has often beaten its own guidance. Q2 revenue reached $200.6 billion, up about 19.6% year over year, and AWS growth accelerated again. As long as the consumer business doesn’t weaken significantly, reaching $202 billion to $204 billion in Q3 shouldn’t be difficult.
Second, AWS is the most important thing to watch this time.
Q2 AWS revenue was about $42.2 billion, up nearly 37% year over year, with operating income of about $16.6 billion. The market expects AWS growth in Q3 could approach 40%. If revenue reaches $46 billion to $47 billion, that should be enough to support a revenue beat. Investors are buying Amazon mainly for AWS and the renewed acceleration in demand for AI cloud services.
Third, be cautious about profit.
Q2 capital expenditures reached $54.2 billion, operating cash flow was $45.4 billion, and free cash flow was negative $8.8 billion. In Q1, free cash flow was even more negative, at $18.2 billion. These AI data-center investments won’t all be expensed in the current quarter, but depreciation is already increasing: Q2 depreciation and amortization was about $20 billion, up from about $16.8 billion in the same period last year. So even if revenue grows quickly, operating income may not grow at the same pace.
The good news is that Q3 operating income last year included about $2.5 billion in FTC settlement costs and about $1.8 billion in severance costs, which won’t recur this time. Last year’s Q3 operating income was only $17.4 billion, while the company’s guidance for this quarter is $22.5 billion to $26.5 billion. Even after accounting for AI investment and depreciation, there’s room for a significant year-over-year improvement in profit.
However, Amazon’s EPS will also be affected by changes in the fair value of investments such as Anthropic, so don’t focus on EPS alone.
So, my final prediction is: revenue of $202.5 billion to $204 billion and EPS of $2.05 to $2.15, a slight beat.
Another thing everyone cares about is the share price. Ultimately, three things will determine where it goes:
Whether AWS can sustain growth of around 40%, whether capital expenditure guidance for Q4 is raised again, and when free cash flow will turn positive again.
This is my personal analysis and is not investment advice.