Amazon‘s Q2 2014 earnings announced today made it more apparent than ever that Amazon remains a great business for its customers, but not so much for its shareholders. The stock, after the earnings were reported, was already down by 6% and falling in after-hours trading following Amazon reporting net losses that widened to $126 million in the quarter.
Amazon has been stretching itself even thinner this year, easily living up to its name “the Everything Store.”
In 2014, Amazon launched its first smartphone, a set-top box to rival Apple TV and Roku, a Dropbox and Google Drive competitor, an all-you-can-eat e-book subscription service, a Spotify-like streaming music competitor, an expanded grocery shopping service complete with its own magic wand/barcode scanner for instant access, and more. And it invested heavily in its content businesses including developing its first two children’s series for Amazon Prime Video, as well as its own games made exclusively for Fire Phone.
As CEO Jeff Bezos said in the company announcement out today, Amazon is “working hard on making the Amazon customer experience better and better,” or, if you’re reading between the lines – yes, Amazon is still growing revenues, if not yet its profits.
As per usual, Amazon didn’t reveal too much about how well its various businesses are doing, and it certainly didn’t offer insight into the pre-orders of its newly launched Fire Phone which has been panned by tech pundits and other critics as being “good” but not great. However, there is some small window into how Amazon’s mobile hardware business does with news that its mobile app marketplace has tripled over the past year, and app submissions have “more than doubled” since the Fire Phone’s launch.
Amazon’s Fire TV is reportedly doing better than expected, too, with sales that “significantly exceeded” Amazon’s forecast and a mention that Amazon is working to increase its manufacturing output. Here, Amazon reports that Fire TV app submissions are up, also more than doubling since the device’s launch.
AWS was also called out as being an expanding business with thousands of new employees, 250 significant service and feature releases year-to-date, price reductions for customers starting in the second quarter (28% to 51% depending on the service). Amazon says AWS continues to “grow strongly,” with usage growth close to 90% year-over-year in the second quarter. This heavy growth could have also contributed to this quarter’s losses.