Weekly readings – 30th May 2020

Source: Economist

How Mongolia is one of the most successful countries against Covid-19. Zero deaths result from smart, decisive and swift actions from the government

A Window Onto an American Nightmare

600+ best startup pitches, including that of Facebook, AirBnb, WeWork, Uber, just to name a few

Facebook Executives Shut Down Efforts to Make the Site Less Divisive. More Congressional investigations and hearings?

Bundesliga partners with AWS to provide real-time data analytics. How can you not be impressed by that?

Why super apps are proliferating across emerging markets

Human cost of food delivery services

Trump’s New Intelligence Chief Spells Trouble

Slack CEO’s conversation on competing with Microsoft, notifications and the future of work

Splendid isolation: a surreal sakura season

On Rafael’s never-fulfilled potential as an architect

Behind the Fall of China’s Luckin Coffee: a Network of Fake Buyers and a Fictitious Employee

What Is the Business Model for DuckDuckGo?

Canadians bike more as they leave cars at home

Weekly readings – 16th May 2020

A scathing critique of AWS from this engineer

Related to the link above, this is quite a blog post from someone who used to work at Amazon and was working at Google at the time of the writing

Content, Cars, and Comparisons in the “Streaming Wars”. Matthew Ball’s essays are always great to read

The secrets behind the runaway success of Apple’s AirPods

How Morning Brew grew to $13m in revenue with 33 employees

Vauban Architecture: The Foundation of Central and Northern Vietnam’s Citadels

The latest memo from Howard Marks

How the most prized degree in India became the most worthless

WeChat Surveillance Explained

If Landlords Get Wiped Out, Wall Street Wins, Not Renters

All applications used at GitLab

Chicago Will Now Require Food Delivery Apps to Disclose Itemized Cost Breakdown. You can protect restaurants or you can protect delivery apps. In this case, I don’t think you can do both. I am glad Chicago went with restaurants

Source: Crunchbase

How Khan Academy Successfully Handled 2.5x Traffic in a Week

The faded beauty of abandoned cars across Europe and the US

“Visa saw an 18% rise in U.S. digital commerce spending during the month of April, excluding the travel category, as face-to-face transactions fell 45%”

From Boston to Saigon: A Coronavirus Quarantine Diary

Lessons From Slovakia—Where Leaders Wear Masks

Senate Votes to Allow FBI to Look at Your Web Browsing History Without a Warrant. I’d argue that this is a bridge too far into user privacy

Next time if you want to support local restaurants by ordering on delivery services like Grubhub or DoorDash, you may want to do a bit of research on how those services treat restaurant partners. Here is an example

A few notable graphs from Amazon and Apple earnings

Tech giants reported their earnings this week and proved how resilient their businesses are amid arguably the most challenging environment ever. In this post, I’d like to demonstrate with visuals how important AWS is to Amazon, and how China, Wearables and Services are to Apple while it has become less of an iPhone company.

Amazon

Apple

Weekly readings – 26th October 2019

AWS Customers Rack Up Hefty Bills for Moving Data. Cloud spending isn’t as cheap as some may think.

The Heart of a Swimmer vs. the Heart of a Runner

Source: DuckDuckGo

Craftmanship in 1930 Vietnam as Seen in Paris Specialized Municipal Libraries. If you want to see a little bit of how Vietnam looked almost 100 years ago, here is a great article

Jeff Bezos’s Master Plan

Is Amazon Unstoppable?

News tab on Facebook

A great post with usrprising details on the spectacular fall of WeWork

Weekly readings – 7th September 2019

An interesting Twitter thread on Sahara dessert

Nearly a quarter of rural hospitals are on the brink of closure

The Restaurant of Mistaken Orders: A Tokyo Restaurant Where All the Servers Are People Living with Dementia

Modern applications at AWS

China’s Spies Are on the Offensive

Amazon’s Next-Day Delivery System Has Brought Chaos And Carnage To America’s Streets — But The World’s Biggest Retailer Has A System To Escape The Blame. A very long but worthwhile read on Amazon’s delivery network

The European Series A landscape — actionable benchmarks & the most active lead VCs

The epic, decades-long battle between Ford and a small-time inventor

Apple Watch sleep tracking revealed: sleep quality, battery management, more

The ‘paradox’ of working in the world’s most equal countries

Climate crisis: Greenland’s ice faces melting ‘death sentence’

Amazon’s Quarterly Earnings

On that FY2019 Q2 earnings by Amazon…

Revenue

In the last 90 days, Amazon recorded $63 billion, meaning that it took the company less than 36 hours to make $1billion. An extraordinary rate. Compared to last year’s Q2, revenue rose by 20% with Services (31%) outperforming Products (12.5%). Nonetheless, gross margin slipped as this quarter’s figure is at 4.8% compared to 5.6% last year.

Source: Amazon

AWS

Among Domestic, International and AWS categories, the latter continues to lead the way in terms of YoY growth. AWS’s revenue in the last 90 days is $8.3 billion, a rough equivalent of about $32 billion annually. It’s pretty impressive for just a segment of a company. Not many standalone companies can generate that much revenue in a quarter. It’s even more telling when we put AWS next to GCP. Google announced last week that GCP’s annual run rate is $8 billion, meaning that AWS is approximately 4 times bigger than its rival from Google.

Despite making up only 13% of Amazon’s revenue, AWS is responsible for about 69% of the company’s operating income.

At 37%, AWS’ YOY growth is the lowest recorded in a long time, but the law of big numbers should be taken in account here as the division is not as small as it used to be. If broken down into more strategic categories, AWS isn’t the segment with the biggest YoY growth (Excluding FX) in the company. It’s Subscriptions. Subscription memberships, especially Prime, play a crucial role in Amazon’s ecosystem. The fact that it notched the biggest growth, ahead of AWS, is very positive for the company.

Advertising

As can be seen above, advertising slowed down significantly after a hot streak just 12-15 months ago. YoY growth decreased noticeably compared to the 3-digit growth just a while ago. Still, it contributed $3 billion to the company’s top line.

Free Cash Flow and Shipping Costs

Amazon’s free cash flow this quarter is truly insane with 65% YoY improvement in Operating Cash Flow and a 3-digit growth in Free Cash Flow.

Source: Amazon

Shipping costs continued to rise with 36% YoY difference compared to previous second quarter’s. It’s worth noting that none of the Online Stores, Physical Stores and 3rd Party Seller Services have the same growth (all grew at a slow pace than shipping costs)

Sometimes, it’s hard to believe that a company founded roughly 25 years ago can be this powerful and big. A segment responsible for only 13% of its revenue is the dream of so many and it continues to deliver at an impressive rate.

Take-away from Amazon’s Financials & Earning Call

Amazon released their quarterly earnings today. I took a stab at trying to derive insights from the numbers. Here is what I learn:

AWS is the driver of their operating margin

AWS’ revenue and operating income grew impressively year over year

Meanwhile, North America operating income grew even more impressively year over year, making up for the International segment

Q1 2019 saw the shipping cost growth slow down and the explosion of growth in free cash flow

Across segments, YoY revenue growth decreased quite a bit, especially in the subscription and advertising. AWS makes up 13% of Amazon’s revenue

Net Income as % of Revenue Increased Sharply

Other take-aways

  • Amazon announced intention to turn a two-day shipping Prime into a one-day shipping Prime, though it admits that the endeavor will take time
  • The company said that they signed up more members for Prime in 2018 than any other year. Except the 100 million figure mentioned in the past, there was no other revelation in the earning call today
  • The company refused to comment on the acceleration or deceleration of advertising business
  • Little was mentioned about groceries. The word appears once in the press release and 4 times in the earning calls