Attached is my latest on why #AMZN will double again over the next few years and what the #Amazon Q2 results suggest about the #retail industry, the #RetailApocalypse, our #economy, and our society.
Bessemer Venture Partners' share their annual “State of the Cloud Report" at SaaStr 2017.
As the definite guide to the biggest trends in the cloud industry, this year’s “State of the Cloud Report” includes:
1. A Look Back at 2016
2. Answers to the 3 Questions Every SaaS CEO Asks
3. BVP’s 7 Predictions for 2017
This report will give you an insight into how these, and much more local factors, have affected salaries and prospects for the future across all the specialisms Badenoch & Clark supports recruitment in. We’ve highlighted some of the most important trends and findings and there’s a wealth of richer and deeper insight into each of the areas in which we operate across our regional bases.
A transcript from the second quarter 2016 earnings call with top management of UMH Properties--a trailer park company with major operations in the Marcellus/Utica Shale region.
Bessemer Venture Partners: The State of the Cloud, 2017-2018 Edition saastr
Byron Deeter, Partner, and Kristina Shen, Vice President present the Bessemer Venture Partners: The State of the Cloud, 2017-2018 Edition. AI and voice are on the rise, NPS is still king, and diversity is even more important than you realize.
The fourth annual State of the Cloud has arrived! As the definitive guide to the biggest trends in the cloud industry, Bessemer Venture Partners’ State of the Cloud 2018 includes:
-A look back at 2017
-A new valuation framework for early-stage investing in private cloud companies
-Bessemer’s eight cloud predictions for 2018
Compass, the self-styled tech-enabled brokerage, recently went public with a valuation of $6.5 billion. If you're in real estate, it's a business worth paying attention to. I'm pleased to offer all of my thoughts, observations, and insights on the recent IPO into a new (free) report!
Commercial real estate market trends Q1 2019 | Massachusetts & New HampshireJeremy Cyrier, CCIM
View the Q1 2019 commercial real estate sales report for Massachusetts and New Hampshire published by the commercial real estate brokerage company MANSARD.
English - 5 - Strategic benchmarking in the supply chain triangle.Bram Desmet
This article is the fifth and last in a series of articles inspired by the book ‘Supply
Chain Metrics That Matter’. In her latest book Lora Cecere introduces ‘which are
the metrics that matter’, ‘how to ensure strength, balance and resilience’, what
are the ‘evolutions in different sectors’, …
In this fifth article, we investigate who are the product leader, the customer
intimacy players and the operational excellence leaders, in our technology
benchmark. We derive targets for Gross Profit, EBIT and Inventory Turns, and
show how they differ by chosen strategy. We hope you enjoy the reading.
Bessemer Venture Partners' share their annual “State of the Cloud Report" at SaaStr 2017.
As the definite guide to the biggest trends in the cloud industry, this year’s “State of the Cloud Report” includes:
1. A Look Back at 2016
2. Answers to the 3 Questions Every SaaS CEO Asks
3. BVP’s 7 Predictions for 2017
This report will give you an insight into how these, and much more local factors, have affected salaries and prospects for the future across all the specialisms Badenoch & Clark supports recruitment in. We’ve highlighted some of the most important trends and findings and there’s a wealth of richer and deeper insight into each of the areas in which we operate across our regional bases.
A transcript from the second quarter 2016 earnings call with top management of UMH Properties--a trailer park company with major operations in the Marcellus/Utica Shale region.
Bessemer Venture Partners: The State of the Cloud, 2017-2018 Edition saastr
Byron Deeter, Partner, and Kristina Shen, Vice President present the Bessemer Venture Partners: The State of the Cloud, 2017-2018 Edition. AI and voice are on the rise, NPS is still king, and diversity is even more important than you realize.
The fourth annual State of the Cloud has arrived! As the definitive guide to the biggest trends in the cloud industry, Bessemer Venture Partners’ State of the Cloud 2018 includes:
-A look back at 2017
-A new valuation framework for early-stage investing in private cloud companies
-Bessemer’s eight cloud predictions for 2018
Compass, the self-styled tech-enabled brokerage, recently went public with a valuation of $6.5 billion. If you're in real estate, it's a business worth paying attention to. I'm pleased to offer all of my thoughts, observations, and insights on the recent IPO into a new (free) report!
Commercial real estate market trends Q1 2019 | Massachusetts & New HampshireJeremy Cyrier, CCIM
View the Q1 2019 commercial real estate sales report for Massachusetts and New Hampshire published by the commercial real estate brokerage company MANSARD.
English - 5 - Strategic benchmarking in the supply chain triangle.Bram Desmet
This article is the fifth and last in a series of articles inspired by the book ‘Supply
Chain Metrics That Matter’. In her latest book Lora Cecere introduces ‘which are
the metrics that matter’, ‘how to ensure strength, balance and resilience’, what
are the ‘evolutions in different sectors’, …
In this fifth article, we investigate who are the product leader, the customer
intimacy players and the operational excellence leaders, in our technology
benchmark. We derive targets for Gross Profit, EBIT and Inventory Turns, and
show how they differ by chosen strategy. We hope you enjoy the reading.
See how Amazon leverages its supply chain as a critical flywheel in its success. Included in the report are value chain analysis, inventory, transportation and fulfillment, cash conversion cycle, and fulfillment space.
Observations from Q1 Retailer Earnings and C19 Durable Changesthomas paulson
We studied the earnings results from the 20 largest US retailers that have reported their Q1'20/C-19 period business results. From this we have distilled out what we believe to be the durable changes in consumer behavior and the retail industry.
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CLC Assignment: COMPANY ANALYSIS
Group 3
Professor Stephen Weiss
ACC. 371
January 31, 2021
Introduction
The GAAP provided new guidelines regarding revenue recognition, in order to simplify the financial statements. The objective of the new guidance is to establish the principles to report useful information to users of financial statements about the nature, timing, and uncertainty of revenue from contracts with customers. This paper will discuss the revenue recognition criteria of various companies and how they comply with rules of FASB codification.
The Analysis
Microsoft Corporation: Microsoft corporation is the largest company that deals with the manufacturing and sale of electronic devices like iPhones, iPads, laptops and other extra devices in the world. It is the leading company in the production of personal computer software. Its financial statements signify a good performance in the investment sector. From the balance sheet, the short-term investments in the financial year 2020 were $136,527, in 2019 the investments were $133,819 and in 2018 the investments totaled to $133,768 this can be estimated to be 2.02%, 0.04% and 0.59% percentage growth of the company from the previous years, (Warren et al,, 2020).
The notes show that the company has invested $150 in the production of more units of the electronic devices supplied. Investing in workforce and in the security exchange in the purchase of share in the stock exchange. An approximate amount of $100 was invested in the purchase of share and reinvestment of dividends in 2019, (Mayes, 2020).
FASB which refers to the financial accounting standards board has laid out new policies that ought to be followed by every company. For instance, Microsoft corporation follows the principle of impracticability in its operations as required by FASB as it believes excessive costs are included in the principle, (Tysiac, 2018, p.105). Additionally, the company follows the exchanges productive assets which states that the accounting of non monetary transactions should be based on fair values of the assets. According to Microsoft corporation when non-monetary transactions lack commercial substance, they are exempted in accordance with FASB standards. Therefore, Microsoft has made investments in the company in both short-term and long-term investments and follows the FASB standards correctly when preparing their financial statements.
Amazon: Amazon is the second most valuable company in the United States trailing Apple. The company is worth over $1.7 trillion and continues to grow. Amazon recognizes revenue when these four criteria are met, evidence of an arrangement or contract exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is assured (sec.gov). From there they determine if they should report the revenue as gross sales and related costs or the net amount as commission sales. When discount offers a ...
1
2
3
CLC Assignment: COMPANY ANALYSIS
Group 3
Professor Stephen Weiss
ACC. 371
January 31, 2021
Introduction
The GAAP provided new guidelines regarding revenue recognition, in order to simplify the financial statements. The objective of the new guidance is to establish the principles to report useful information to users of financial statements about the nature, timing, and uncertainty of revenue from contracts with customers. This paper will discuss the revenue recognition criteria of various companies and how they comply with rules of FASB codification.
The Analysis
Microsoft Corporation: Microsoft corporation is the largest company that deals with the manufacturing and sale of electronic devices like iPhones, iPads, laptops and other extra devices in the world. It is the leading company in the production of personal computer software. Its financial statements signify a good performance in the investment sector. From the balance sheet, the short-term investments in the financial year 2020 were $136,527, in 2019 the investments were $133,819 and in 2018 the investments totaled to $133,768 this can be estimated to be 2.02%, 0.04% and 0.59% percentage growth of the company from the previous years, (Warren et al,, 2020).
The notes show that the company has invested $150 in the production of more units of the electronic devices supplied. Investing in workforce and in the security exchange in the purchase of share in the stock exchange. An approximate amount of $100 was invested in the purchase of share and reinvestment of dividends in 2019, (Mayes, 2020).
FASB which refers to the financial accounting standards board has laid out new policies that ought to be followed by every company. For instance, Microsoft corporation follows the principle of impracticability in its operations as required by FASB as it believes excessive costs are included in the principle, (Tysiac, 2018, p.105). Additionally, the company follows the exchanges productive assets which states that the accounting of non monetary transactions should be based on fair values of the assets. According to Microsoft corporation when non-monetary transactions lack commercial substance, they are exempted in accordance with FASB standards. Therefore, Microsoft has made investments in the company in both short-term and long-term investments and follows the FASB standards correctly when preparing their financial statements.
Amazon: Amazon is the second most valuable company in the United States trailing Apple. The company is worth over $1.7 trillion and continues to grow. Amazon recognizes revenue when these four criteria are met, evidence of an arrangement or contract exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is assured (sec.gov). From there they determine if they should report the revenue as gross sales and related costs or the net amount as commission sales. When discount offers a ...
This document brings together a set
of latest data points and publicly
available information relevant for
Retail & Consumer Goods Industry.
We are very excited to share this
content and believe that readers will
benefit from this periodic publication immensely.
The industry is moving slowly, but it's never moved this fast. Everything is the same, yet everything is changing.
We’re living in a world of contradictions. The real estate industry is in the midst of massive change, yet the fundamentals are barely changing at all.
This report clearly unpacks the changes of 2023—the fast movers, the themes driving change, and the insights needed to make well-informed decisions going forward.
Gafanomics - The Quarterly - Episode 2 (Q2FY19)Fabernovel
Financial analysis of some of the most disruptive Tech companies in the world. This document aims to provide you with some major insights concerning the financial markets and the most disruptive innovations for the second quarter of the financial year 2019.
#COVID19's #Digitization of the #Economy and How C19 Winners Lap the Period. #eCommerce forecasts for '20 - '23 and how those influence digital advertising growth.
Attached is my pitch deck for this deal:
30% Premium offered to PINS shareholders for this 1:1 all stock deal. PINS shareholders get 12% of the combined company.
60% EPS-non-GAAP earnings year-3 accretion to PYPL.
Synergies come from bringing PayPal merchants to Pinterest to significantly improve ad coverage, using PayPal user data to improve Pinterest's ad relevance, Pinterest merchants defaulting to PayPal for their customers, new ad formats, and significantly more GMV and TPV as a result of these improvements.
No significant regulatory opposition expected.
PayPal would need to set-up a Chinese-Wall and prohibit Pinterest from using PayPal consumer data to attract consumers to Pinterest. PayPal needs to maintain its merchant independence.
Amzn q2 20 learnings and the outlook for its business, retail, and our economy
1. Amazon: The Path to a $3.3T Market Cap and $6200/share
All rights reserved, Inflection Capital Management, LLC
AMZN's Current
Market Cap
and Its
Components
$ billions
2. AM ZN SOTP YE-2023 2024 Valuation
EBITDA M ultiple Value Comparable
m illions billions
North America $75,879 20.0 X $1,518 Costco
& M icrosoft
International $10,530 15.0 X $158
AWS $59,032 25.0 X $1,476 Salesforce
New M arkets (Healthcare & Travel) $50
Subtotal $3,201
Plus Accrued Cash (FCFtill Valuation Date) $83
Less Net Debt incl leases $8
Market Cap / Equity Value $3,276
Shares outstanding at year-period 525
Per Share $6,240
Current Price $3,112
Compounded Return 19% 8.3.2020
Current SOTP YE-2020 2021 Valuation
Consensus Estimates EBITDA M ultiple Value Comparable
per FactSet m illions billions
North America $22,000 28.5 X $627
International $100
AWS $33,000 25.0 X $825 Salesforce
New M arkets Optionality $20
Subtotal $1,572
Plus Accrued Cash (FCFtill Valuation Date) $0
Less Net Debt incl leases $8
Market Cap / Equity Value $1,564
Shares outstanding at year-period 503
Per Share $3,109 8.3.2020
Decomposition of Amazon's Current Valuation
In the table to the left, we break down AMZN's current $1.6T market cap into its various components via a sum-of-the-parts (SOTP)
valuation. We then project these onto our divisional estimates for 2024 and arrive at a year-end-2023 value of $3.3T.
The $3.3T projected value also includes all of the accumulated cash during the interim as well as value created (per our estimates) from
Amazon's nascent healthcare business and synergies from acquiring Expedia.
1
Additional Comments:
1) In terms of comparables, for North America we use Costco and Microsoft given their subscription and services business models. Both currently trade at ~20X
NTM EV/EBITDA. Amazon North America is currently growing faster than both; however, by 2024 its growth will likely to be similar to these comparables.
Salesforce and other SAS company's typically trade at 6X sales and 25X EV/EBITDA; while, Salesforce and AWS have similar revenue growth, AWS converts
more revenue into free cash flow (FCF).
2) As we have shown earlier work, there is business progress and value in Amazon's International developed market businesses. However, given abysmal
disclosure and heavy losses in India, Brazil, and other new market, it's hard to render a high-confidence opinion about the segment's valuation. Our forecast
assumes that these issues are ameliorated by 2023 and that profitability shows through as the result of higher Prime and advertising revenue, and that fixed
costs leverage in the developing market.
3) We believe that Amazon International will never develop a competitive position similar to what it enjoys in North America; however, given the progress and
management's comments we increased the "value of optionality" for the International business and increased the multiple to 15X from 10X.
4) Wall Street places some "optionality value" on AMZN for future new businesses and markets. We questimate $20B currently. However, we expect that option
value to significantly increase over the next four years based upon travel and healthcare, and questimate that value will increase to $50B by YE-23.
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Allrightsreserved,InflectionCapitalManagement,LLC
2
3. Key Questions and Take-Aways from AMZN Q2 Results:
1) What are the key learnings from Q2?
Improvements in Prime gross additions in the US strongly suggest that it is expanding into new, previously elusive
consumer segments. Those are likely moderate-income households and with older Americans.
Management also noted more activity and accelerating membership growth overseas as well.
NA GMV growth of $30B YoY was 2X Q1's sales volume growth. Guidance suggests around $24B in Q3. For
comparison, Amazon's peer set (Walmart-US, Target, Costco, Dicks, Hobby Lobby, etc.) grew volume by $30B in Q1
and $38B in Q2. Walmart-US, Target, and Costco-US combined are expected to grow volume by ~$11B in Q2.
Guidance is for robust growth in Q3 of ~29% w/ an implied NA GMV growth rate of +40%. However, watch "what
Amazon does, not what is says". Guidance is also for an increase of 50% for FC/shipping capacity by the end of Q3.
Said differently, management is planning for up to 50% growth in Q4. Why might that happen? A: another round of
fiscal stimulus + continued COVID-restrictions + massive brick & mortar closures.
Q2 lease-adjusted-FCF increased $7B YoY to $11B and is 12.6% of revenue (vs. 6.6% in Q2'19) due to getting greater
leverage on fixed expenses (improved incremental margins), a significant work-down of inventories, and lower
advertising and T&E spend. For example, marketing expense was roughly flat YoY. Moreover, the $7B also included
$4B in 1-off Covid-19 costs and substantial other inefficiencies for 1D, at the FCs, etc.
2) Do these results and our outlook of the new Post-C19-World suggest a different free-cash-flow outlook for Amazon?
A: Yes. We now think that Amazon will be able to:
o Gain more market share in the US and overseas than our previous forecasts and at higher merchandise margins
due to fewer brick & mortar competitors and a larger number of loyal Prime members,
o Remove some expense from their business such as office space (permanent WFH for some employees),
o Turn inventory faster than we previously had forecasted.
--> As such we are increasing our FCF estimates and but maintaining the medium-term price objective for the stock
as the variability for out-year is wide and 2X upside is adequately interesting for anyone holding the stock.
All rights reserved, Inflection Capital Management, LLC
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4. Key Questions and Take-Aways from AMZN Q2 Results:
3) What are the learnings from the results in terms of the overall industry and our economy as a whole?
A: Amazon's capture of increased share certainly "sucks more air out of the room" (or to twist this expression into a COVID
allusion, "sucks the air out of the ECMO machine") for non-well capitalized, structurally disadvantaged retail dealing with
the industry's structural changes and COVID. Moreover, the expansion of Prime households (HHs) indicates increased
competition for certain retailers previously loyal consumer base such as the >65-age cohort and the moderate-income
consumer. Walmart would certainly be in this set. Clearly Walmart is moving much faster these days in making decision
and executing better. This quarter we have seen a quickening of the role-out of healthcare services, solid results from
curbside and its 3P marketplace, the rumors of Walmart+, etc.--all of which also sucks-the-air-out from competitors. Thus,
the competitive bar is higher for all and the gap between winners and losers has massively widened.
All of this means that more SMB merchants are going to drift more towards using Shopify and 3P marketplaces. It means
that more brick & mortar locations will fall and more online locations will rise. As such, owner and employee skill sets will
need to change and the dislocations and unfairness will be severe. Where does one transition after selling men's suits at
JC Penney after 20 years? Or selling furniture at Macy's for 30 years? Yes, perhaps to Target, Walmart, or Kroger but there
is likely going to be a large mismatch; the redistribution of labor is going to leave many underemployed or never-
employed again. Hopefully, national policy makers are cognizant of this and willing to increase unemployment and worker
support programs for an "extended medium-term."
Additionally, all of this also makes it likely that a lot of PE-owned retail with excessive leverage is also going to enter
bankruptcy (hopefully the judges are wise to zero-out the debt as well), which we are seeing daily. Moreover, the "value of
the dirt" will materially decline, i.e. real estate values and rent. As this last happens, it will allow for space to be re-
imagined and re-crafted. Consumer offerings that previously couldn't produce attractive economics due to the high price
of rent, will now find a sustainable business model. Space that previously demanded high sales densities to pay high debt
servicing costs may be "liberated" from such debt-servitude and be allowed to "open up" with more green space, park
features, expanded-out food halls, etc. Not only do such spaces better fit with on-going consumer trends (that have been
reinforced by COVID), they are also potentially more inclusive of a broader set of household incomes because they are
not "forced" to demand such a high "entrance" price for participation.
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All rights reserved, Inflection Capital Management, LLC
5.
6. Key Questions and Take-Aways from AMZN Q1 Results:
4) Amazon's largest internal risk is hiring and employee retention. Does the medium-term still look benign?
A: Despite all the C-19 hiring challenges, Amazon was able to onboard a net 36K employees in the quarter vs. 23K in
Q2'19; moreover, of the >125K temporary workers that are not included in their total 877K head count, Amazon
announced that they were going to transition 125K of these into FTE. Moreover, their release comments "we've
created over 175K new jobs since March." As such, of these 175K, 36K of were FTE and 89K were contractors. While
we don't know the typical use of contractors by Amazon, the sizable 89K figure indicates that it is a material
component of their staffing practices. To conclude, their ability to hire appears un-diminished and the risk of not
being able to attract a sufficient number of workers to meet consumer demands appears significantly more benign
given the nation's high unemployment rate and the large number of disrupted service industries.
5) What medium-term changes will Amazon make to its portfolio?
A: We continue to believe that Amazon will spin AWS during 2021 (see prior reports) as the spin allows Amazon to
lower its political profile and segment the value creation. North America is now cash generative and no longer
dependent upon AWS' cash generation. Previously, we believed that Amazon would acquire Expedia. However,
given all that is happening around Amazon and with C19, we don't see that in the near-term; longer-term, it still is
still a compelling combination from a strategic perspective and very financially accretive. See here.
6) Any changes in our outlook for AWS?
A: COVID-disrupted industries now have significantly lower workloads which has resulted in an industry-wide slowdown.
In the medium-term, distributed computing, digitization, agility, spin-up -down have all become more critical, and
thus, the S-curve of adoption just became materially steeper and likely higher. Thus, AWS' value materially increased.
7) Any change in the outlook for Prime?
A: Prime additions and consumption were robust. In terms of video, we do not know if their pipeline is full for the near-
term. Management did not address how it is adjusting for the production stoppages. Content costs for Digital Video
and Music Content increased by $1B YoY to $2.8B, which are larger than NFLX's $400m YoY to $2.6B!
Allrightsreserved,InflectionCapitalManagement,LLC
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7. Perspective on Amazon's Total Revenue & Guidance
7All rights reserved, Inflection Capital Management, LLC
Growth driven by higher frequency of
buying and more Prime members.
Orders / Prime, categories / Prime, and
basket size all up.
Q1 19 Q2 '19 Q3 '19 Q4 '19 2019 Q1 '20 Q2 '20 Q3 '20
Online Stores $29,498 $31,053 $35,039 $45,657 $141,247 $36,652 $45,896 $49,055
fx Neutral Growth 12% 16% 22% 15% 25% 50% 40%
Rpt Growth 14% 21% 15% 24% 49% 40%
Physical Stores $4,307 $4,330 $4,192 $4,363 $17,192 $4,640 $3,774 $4,192
fx Neutral Growth 1%
Rpt Growth 0% -1% -1% 8% -13% 0%
3rd Party Services $11,141 $11,962 $13,212 $17,446 $53,761 $14,479 $18,195 $18,497
% of non-AWSrevenue
fx Neutral Growth 23% 25% 28% 31% 31% 53% 40%
Rpt Growth 23% 27% 30% 30% 52% 40%
fx Neutral $Growth $2,131 $2,426 $2,911 $4,149 $3,454 $6,317 $5,311
Growth Factor 0.8 x 1.0 x 1.1 x 1.4 x 1.6 x 2.6 x 1.8 x
Subscription Services $4,342 $4,676 $4,957 $5,235 $19,210 $5,556 $6,018 $6,593
fx Neutral Growth 42% 39% 35% 32% 29% 30% 33%
Rpt Growth 37% 34% 32% 28% 29% 33%
fx Neutral $Growth $1,303 $1,329 $1,294 $1,267 $1,259 $1,403 $1,636
Growth Factor 1.2 x 1.1 x 1.0 x 1.1 x 1.0 x 1.1 x 1.3 x
Other $2,716 $3,002 $3,586 $4,782 $14,086 $3,906 $4,221 $4,821
QoQ $ Adjusted -$672 $286 $584 $1,196 -$876 $315 $915
fx Neutral Growth 37% 45% 41% 44% 41% 35%
Adjusted Growth (ACS606)36% 37% 44% 41% 44% 41% 34%
fx Neutral $Growth $685 $808 $1,091 $1,394 $1,190 $1,219 $1,235
Growth Factor 0.9 x 1.1 x 1.5 x 2.0 x 1.7 x 1.5 x 1.1 x
AWS $7,696 $8,381 $8,995 $9,954 $35,940 $10,219 $10,808 $11,604
fx Neutral Growth 42% 37% 35% 34% 46% 33% 29% 29%
Rpt Growth 37% 35% 34% 33% 29% 29%
QoQ % Ch 4% 9% 7% 11%
fx Neutral $Growth $2,286 $2,259 $2,338 $2,524 $10,284 $2,523 $2,427 $2,609
Growth Factor 1.3 x 1.1 x 1.1 x 1.1 x 1.3 x 1.1 x 1.1 x 1.1 x
Total Reported $59,700 $63,404 $69,981 $87,437 $75,452 $88,912 $94,761
Organic 21.0% 24.6% 21.6% 27.0% 40.9% 35.6%
Guidance
High $60,000 $63,500 $70,000 $86,500 $73,000 $81,000 $93,000
Low $56,000 $59,500 $66,000 $80,000 $69,000 $75,000 $87,000
% of Range 92.5% 97.6% 99.5% 114.4% 161.3% 231.9% 129.3%
Unit Growth 10% 18% 22% 22% 32% 57%
1P Unit Growth 19% 35% 60%
3P Unit Growth 24% 31% 56%
3P Unit M ix 53% 54% 53% 53% 52% 53%
Growth driven by a higher
frequency of buying and
more Prime members.
Seller growth also accelerating
Prime growth up on lower
churn and more gross adds;
Q3 should show a further
acceleration in revenue
COVID impacted industries are dropping /
slowing workloads due to declines in their own
business activity. Getting more business
development opportunity from slower adopters.
Given Prime trends, revenue should again
beat guidance; however, the beat should
be of a lower magnitude. Management is
planning for revenue growth to near 50%
by the holiday. It likely will not reach that
level, but they aren't sure and want to be
prepared.
8. Q1'20 Q2'20 Q3'20e Q4'20e
Shopify
USGM V $11,832 $20,468 $19,756 $24,748
YoY$ Ch $3,728 $11,084 $9,692 $10,740
YoY% Ch 46% 118% 96% 77%
QoQ % Ch 73% -3% 25%
eBay
USGM V $7,631 $10,489 $8,727 $9,164
YoY$ Ch -$294 $2,700 $1,393 $1,470
YoY% Ch -4% 35% 19% 19%
QoQ % Ch 37% -17% 5%
Amazon
USGM V $66,353 $85,360 $85,523 $106,904
YoY$ Ch $15,492 $30,039 $24,435 $25,396
YoY% Ch 30% 54% 40% 31%
QoQ % Ch 29% 0% 25%
Retail Sales in Peer Set $389,332 $427,677
YoY$ Ch $30,279 $37,973
YoY% Ch 8% 10%
QoQ % Ch 10%
Addressible Retail Sales $662,098 $694,598
YoY$ Ch $26,871 -$8,896
YoY% Ch 4% -1%
QoQ % Ch 5%
Walmart-US, Target,
& Costco-US $140,486
YoY$ Ch $11,231
YoY% Ch 9%
References:
Retail Sales in Peer Set is NAICS c ategories of Sporting Goods, General Merc handise Stores, Misc . Stores, Nonstore Retailers, Minus Amazon NA 1P rev enue.
from the CB's June MRTS report, or the ADVANCEMONTHLY SALES FORRETAIL AND FOOD SERVICES, JUNE2020.
Addressable Retail Sales is the abov e, plus the NAICS c atories for Furniture, Elec tronic s & Applianc es, Building Materials, and Clothing & Ac c essories Stores,
eBay c omes from the c ompany's reports, Amazon and Shopify are our estimates
Note the numbers from Target, Walmart, and Costc o are 1-month off being part of the retail c alender, thus, Q2 for them is May, June, & July---
a more robust period in Cov id-19 time. Moreov er, other apples-&-oranges is that roughly half Costc o and Walmart sales are groc ery.
Perspective on US Retail
8
Allrightsreserved,InflectionCapitalManagement,LLC
Amazon's numbers are flattered by
consumables; whereas, Shopify and eBay
are mostly discretionary items.
Amazon's growth in Q2 doubled, whereas,
it's peer set experienced a boost of 27%.
Amazon's QoQ of 29% was 3X peer set
Shopify's merchants grew GMV by a
similar to the combined amount of
Walmart, Target, and Costco
eBay's gains were terrific; however, these gains were also the result of
folks shopping as entertainment and for scarce goods like fitness
equipment. Thus, as our world begin to normalize, it is unclear how
sustained the gains are and how much loyalty eBay won.
10. North America ($ m illion) 2018 2019 2020e 2021e 2022e 2023e 2024e
Subscription Fees 38% 35% 32% 15% 23% 23% 10%
Advertising 45% 40% 33% 25% 20% 16%
1P Sales 13% 17% 40% 23% 19% 16% 14%
3P Fees 36% 29% 48% 25% 15% 10% 7%
Est. Total GM V $198,886 $247,276 $346,187 $425,809 $497,470 $561,965 $620,010
% Growth 26% 24% 40% 23% 17% 13% 10%
Total Revenue $141,926 $170,773 $235,624 $287,686 $337,276 $385,625 $429,605
% Change 25% 23% 42% 24% 18% 15% 12%
EBITBreakdown
1P & 3P $13,311 $10,847 $12,388 $20,856 $30,871 $38,795 $43,054
% of GM V 6.7% 4.4% 3.6% 4.9% 6.2% 6.9% 6.9%
% of 1P/3P Rev 12.5% 8.5% 6.8% 9.2% 11.6% 12.8% 12.7%
% Change -19% 14% NA 48% 26% 11%
Prime $4,480 $6,715 $7,847 $9,197 $11,479 $14,323 $15,755
Advertising $9,559 $13,850 $19,390 $25,761 $32,132 $38,503 $44,555
Whole Foods $1,158 $1,157 $1,157 $1,157 $1,157 $1,157 $1,157
Other Expense $21,318 $25,536 $32,987 $29,487 $33,487 $37,487 $41,487
Subtotal $7,190 $7,033 $7,795 $27,484 $42,152 $55,291 $63,034
Depreciation $4,415 $5,106 $7,045 $8,602 $10,084 $11,530 $12,845
EBITDA $11,605 $12,139 $14,840 $36,086 $52,237 $66,821 $75,879
NTM Valuation 20.0 X 20.0 X 20.0 X 20.0 X
Value (Billions) $1,045 $1,336 $1,518 $1,699
Forecasts for Amazon North America
2021 likely to be the year of significant profit growth
10All rights reserved, Inflection Capital Management, LLC
A substantial downshift in profits
began in 2019, our forecast of a
longer-term expansion is due to
improving efficiency in FC and
shipping costs, higher merch pricing
and favorable mix, cycling COVID-1-
timers & 1D and pulling $1.5B out of
office space expense
Expecting a price
increase in June '22
Longer-term, the Amazon
flywheel is fueled by Prime fees
and advertising revenue.
Zero evidence of the
Law-of-Large Numbers
The $42B in "other expense" is
Amazon's marketing and R&D.
We have not assigned any
return (value) from this
investment. That is "upside"
$1.3T in enterprise value
appreciating to $2.7T solely
from the North American
segment
11. Perspective on AWS and International (this is capture in our prior deck)
11All rights reserved, Inflection Capital Management, LLC
https://www.slideshare.net/thomaspaulson1/amazon-post-q1-2020-results