Observed Signal · Jul 29, 2022 · Earnings Report · Source: Trending Topics · Impact: 4/5 · Sentiment: Positive
Amazon's Rivian Stake Becomes a Billion-Dollar Problem
Amazon's second-quarter 2022 results showed revenue growth of 7% to $121.2 billion, but net income fell sharply from $7.7 billion to $3.3 billion, mainly due to a $3.9 billion writedown on its investment in electric vehicle maker Rivian. Rivian's valuation dropped from almost $130 billion after its November 2021 IPO to about $30 billion, and Amazon's total writedowns related to Rivian reached $11.5 billion in 2022. Despite this, Amazon's advertising business grew 18% to $8.8 billion, while AWS revenue rose 33% to $19.7 billion with operating income up 36% to $5.7 billion. Amazon has ordered 100,000 electric delivery vans from Rivian by 2030 and began deploying the first vehicles in ten US cities. CEO Andy Jassy cited improved fulfillment productivity and new Prime benefits, including NFL Thursday Night Football and The Rings of Power.
Amazon is a major retail media and self-serve advertising platform; its quarterly advertising revenue growth of 18% to $8.8 billion is an important barometer for the AdTech and retail media industry.
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Key Takeaways & Evidence Grounding
- Amazon's Q2 2022 revenue rose 7% to $121.2 billion, but net income fell from $7.7 billion to $3.3 billion due to a $3.9 billion Rivian writedown; total 2022 Rivian writedowns reached $11.5 billion.
- Rivian's valuation fell from nearly $130 billion at its November 2021 IPO to around $30 billion.
- Amazon's advertising business grew 18% year over year to $8.8 billion in Q2 2022.
- AWS revenue grew 33% to $19.7 billion, with operating income up 36% to $5.7 billion.
- Amazon ordered 100,000 electric delivery vans from Rivian by 2030 and began deploying them in ten US cities.
Connected Companies & Entities
5 Entities mapped“The world's largest online store continues to grow, but mainly suffers from an investment....”
“Amazon had to write off large parts of its investment in electric vehicle maker Rivian....”
“The world's largest online store continues to grow, but mainly suffers from an investment....”
“Amazon took the rights to the Tolkien material away from streaming competitor Netflix....”
“Andy Jassy mentioned free one-year Grubhub delivery as a new Prime benefit....”
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