Revenue and profit growth are slowing for major technology companies. For the January to March period, the three major technology companies – Amazon, Alphabet and Apple all saw slowing revenue growth. And the growth slowdown was quite significant.
For Amazon, total revenue was $59.7 billion, growing at just 16.9% compared to a year ago. North American revenue grew 17% (vs 46% growth last year) and international revenue growth was just 9% (vs 34% growth last year) despite expansion in new markets like Australia and Turkey and huge investment in India. We wrote way back in October 2018 that core Amazon Online sales growth were slowing at an unprecedented pace despite stellar overall results.
Physical stores revenue, which mainly consists of sales at Whole Foods, grew just 1% over the previous year. The only unit growing well was AWS (Amazon’s cloud unit – Amazon Web Services) growing revenue at 41%.
Amazon’s profit margin was 7.4% against 3.8% a year ago. Amazon used to chase revenue at the cost of profits, it is now chasing profits at the cost of revenue growth.
Alphabet (the parent company of Google) had total revenue of $36.34 billion during the quarter, growing just 17% against a year ago (vs 28% growth in the same period a year ago). Ad sales grew 15% (vs 24% growth in the same period a year ago).
Meanwhile Apple revenues were $58.02 billion for the quarter, down 5% against a year ago. iPhone revenue was down 17% against a year ago. Services revenue was up 16% against a year ago.
Uber, WeWork IPO’s
Uber announced it is going public with a valuation of $90 billion. Uber is losing a lot of money, the more its revenue grows, bigger its losses. And it has warned that it might never make a profit.
WeWork, the shared office space company plans to list soon too. The company is heavily indebted and made a loss of $1.9 billion on revenues of $1.8 billion last year. The last round of fund raising saw the company valued at $47 billion. WeWork, until we don’t.
Here’s what we wrote about in April,