Analyzing Amazon’s Performance

Quarterly Financial Trends

Quarterly revenue reached a new high but operating income continued to decline.
Change in Revenue
Revenue grew 34% or $11B YOY in Q3. More than half came from North America but
AWS had the biggest percentage growth.
Change in Operating Income
The 40% decline in operating income was driven by declines in North America and
International. AWS is only 10% of sales but it delivers most of the profit.
Cost Trends
Margins are declining as SG&A and Technology costs grow faster than revenues.