Amazon's Full FY'22 Results - The good, the bad & the ugly

Net sales for Q4'22 were the strongest among all the quarters in FY 2022. Better still, it even managed to chalk up a growth of 9% YoY, 12% if adjusted for FX impact. Due to a relatively stronger USD in the latest reported quarter, earnings and revenue from outside of the US have drawn down the growth of Q4'22.

Yes apart from a great topline, Amazon's latest quarterly results were actually not very good.

Operating income decreased to USD 2.7 billion in the fourth quarter, compared with USD 3.5 billion in the fourth quarter of 2021. Fourth quarter 2022 operating income includes approximately USD 2.7 billion of charges for changes in estimates related to self-insurance liabilities, impairments of property and equipment and operating leases, and estimated severance costs. These charges primarily impacted the North America segment.

This is quite evident if you look at Rivian's share prices ever since it went IPO.

Now onto the ugly part. It is well known that Amazon has pivoted from an e-commerce company to a cloud company. In fact, most if not all of Amazon's operating income is derived from its AWS.

AWS, even though grew its topline by 20% YoY, even saw a slump in its operating income. That is indeed not great!

Amazon's free cash flow is also not in good shape. It used to be the shining star of Amazon's financials. But it slumped into the red since FY 2021. Usually, a negative free cash flow means the company is putting more cash than it brings into capital expenditure

All in all, this does not look good for Amazon!