This evening, July 26, 2012, Amazon announced their Q2 results behind eBay’s strong results.
Big picture view of the Q
Q2 was essentially a repeat of Q1 – Amazon confused Wall St. by being a little light on revenue, which you would think would cause margins to go down, but the opposite keeps happening. Why? The essentially answer is the 3P program. Amazon only counts the revenue (10-12% take rate) vs. total sales as revenue, but it’s much more profitable than like dollar gross sales. In this quarter 3P crossed over to 40% of total paid sales, which is a new high water mark and drove this unusual behaviour. This is great for sellers because it shows that Amazon continues to turn the dial from 1P to 3P.
Here’s our standard results tracker for the Q that compares Wall St’s expectations, Amazon’s guidance and the actual results for the Q: (click to large)
- EGM is now 64% of sales and media is 32%. It seems like just a couple of Q’s ago, we were excited to see that number cross 50% and it’s now half way to 75%!!
- They talked on the call about the Kiva M+A closing and some interesting aspects of that.
- I’ve said it twice now, but it bears one more shout out – 40% of units were from 3P.
Now here’s a view I always like of Amazon’s results that breaks down all 9 segments that I call the Segment Cube:
Here you can see that ex-media, Amazon’s EGM business continues to do very well growing at 42% y/y (pretty balanced between US and non-US). The 3P part of that is growing even faster – if we comp this against e-commerce, Amazon overall is growing 2X e-commerce, EGM is 3X and EGM/3P (where our customers tend to swim) is growing 4-5X e-commerce. Very amazing when you consider the scale of what Amazon is building.
We’ll have some more observations later, but that’s the first take. If you have questions, yell in comments.
SeekingAlpha disclosure – I am long Google and Amazon. eBay is an investor in ChannelAdvisor where I am CEO.