The sustainability of ever-increasing financial growth was tested by Amazon on Thursday when the company disappointed Wall Street by only posting $113.08 billion in revenue, which failed to surpass analysts’ expectations.
Amazon’s Q2 2021 earnings report disappointed Wall Street and caused the ecommerce company’s stock to fall 6.8 percent in after-hours trading at press time. Analysts expected the company to post $115.2 billion in revenue, according to Refinitiv data obtained by CNBC. The company’s Q2 2021 earnings report marked Amazon’s third straight quarter of posting over $100 billion in revenue; the company first reached that milestone in Q4 2020, making it the second tech company after Apple to post over $100 billion in quarterly revenue.
Amazon enjoyed a surge in growth over the last year due to the coronavirus pandemic, which incentivized many consumers to shop online. Amazon cited difficulties in exceeding the financial growth it saw during the coronavirus pandemic in Q2 2021 during a call with reporters on Thursday. Regardless, growth at Amazon’s subscription services, which includes the Prime Video streaming service, was more positive; revenue was up 32 percent from Q1 2021, according to Amazon.
Amazon’s Q2 report was the company’s first earnings report following Jeff Bezos’ announcement of his decision to step down as CEO. Bezos became executive chairman of Amazon on July 5 and was succeeded by Andy Jassy, the former Amazon Web Services CEO who joined the company in 1997.
Though Amazon’s entertainment divisions are typically not a major in the company’s earnings reports, the company offered several details about Prime Video developments in its latest earnings report. The company noted that it premiered original films such as “Tom Clancy’s Without Remorse” and “The Tomorrow War” during the quarter but did not provide viewership statistics for either film. Amazon also recently announced a multi-year licensing deal with Universal Filmed Entertainment Group, which will bring live-action films such as “Jurassic World: Dominion,” “The 355,” and “Ambulance” to Prime Video after their theatrical releases in 2022. IMDb TV, Amazon’s free, ad-supported streamer, also announced 12 original series during Q2, including a half-hour drama from “Law & Order” creator Dick Wolf and a docuseries with country musician Luke Bryan.
A key factor in Prime Video’s future could be its upcoming sports programming: Amazon noted that Prime Video announced streaming deals with the National Football League and Women’s National Basketball Association during Q2; Prime Video will begin streaming Thursday Night Football in 2022, as well as 16 WNBA games per season and the Commissioner’s Cup Championship Game, among other sporting events.
Live sports programming is a relatively unexplored genre on most major streaming services but Prime Video is among several streamers that are beginning to give sports more mind in an effort to attract potential subscribers. Among the others, NBCUniversal’s Peacock has heavily invested in sports programming and is exclusively streaming a variety of events from the ongoing Tokyo Summer Olympics.