Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.
What do these four principles do?
- Earns $63.4 Billion in Sales in just three months for its second quarter ended June 30, 2019.
- Operating cash flow increased 65% to $36.0 billion for the trailing twelve months.
After all, Amazon’s long term goal is to optimize Free Cash Flow. And it looks like they are in the right direction.
Where does it come from?
Below is its sales figure from its business segment. Although AWS is tiny in bringing in Net sales, it is the highest contributor to the net profit of Amazon. Currently, its International segment is in the loss.
What else?
- Since launching in 2016, the number of databases migrated to AWS using the AWS Database Migration Service has grown to more than 150,000 databases.
- For the ninth consecutive year, AWS is positioned in the Leader’s quadrant in Gartner’s Magic Quadrant for Cloud Infrastructure as a Service (IaaS), earning the highest placement for “Ability to Execute” and “Completeness of Vision,” and we have widened the gap between AWS and all others in the report.
Operating cash flow increased 65% to $36.0 billion for the trailing twelve months, compared with $21.8 billion for the trailing twelve months ended June 30, 2018. Free cash flow increased to $25.0 billion for the trailing twelve months, compared with $10.4 billion for the trailing twelve months ended June 30, 2018.
Third Quarter 2019 Guidance
- Net sales are expected to be between $66.0 billion and $70.0 billion, or to grow between 17% and 24% compared with third quarter 2018. This guidance anticipates an unfavorable impact of approximately 30 basis points from foreign exchange rates.
- Operating income is expected to be between $2.1 billion and $3.1 billion, compared with $3.7 billion in third quarter 2018.
This is all because of those four principles. Just saying!
With the recent downdraft in the stock market, Amazon is offered at $888 billion. Do you think its worth it?