Amazon.com, Inc. Q3 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Worldwide net sales were $127.1 billion, up 19% year-over-year (compared to Q3 2021), excluding a 460 bps FX headwind.
  • FX negatively impacted revenue by approximately $900 million more than anticipated in guidance.
  • Third-party sellers represented 58% of paid units, up from 56% in Q3 2021 — the highest in company history.
  • Prime Day in July added roughly 400 bps to YoY sales growth; more than 300 million items purchased globally.
  • Prime Video saw record engagement with The Lord of the Rings: The Rings of Power and NFL Thursday Night Football, contributing to strong Prime sign-ups.
  • Advertising revenue grew 30% YoY, excluding FX.
  • AWS net sales reached $20.5 billion, up 28% YoY (excluding FX), with an $82 billion annualized run rate.

Profitability and Costs

  • Operating income was $2.5 billion in Q3.
  • Over $1 billion in operational cost improvements were realized, though approximately $0.5 billion short of internal targets.
  • Prime Video content costs increased due to Rings of Power premiere and NFL rights.
  • Non-recurring expenses tied to sunsetting Amazon Care, Fabric.com, and Amazon Explore weighed on results.
  • Stock-based compensation was $5.6 billion, up from $5.2 billion in Q2 due to lower forfeiture rate assumptions.

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Operator: Good day, everyone, and welcome to the Amazon.com Q3 2022 Financial Results Teleconference. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today's call is being recorded. For opening remarks, I will be turning the call over to the Vice President of Investor Relations, Dave Fildes. Thank you, sir. Please go ahead. Dave Fildes: Hello, and welcome to our Q3 2022 financial results conference call. Joining us today to answer your questions is Brian Olsavsky, our CFO. As you listen to today's conference call, we encourage you to have our press release in front of you, which includes our financial results as well as metrics and commentary on the quarter. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2021. Our comments and responses to your questions reflect management's view as of today, October 27, 2022 only and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. During this call, we may discuss certain non-GAAP financial measures in our press release, slides accompanying this webcast, and our filings with the SEC, each of which is posted on our IR website. Y

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