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Amazon Surprising 2Q Earnings

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“A very good cost quarter,” is the way Amazon.com Inc CFO Brian Olsavsky conservatively described Amazon’s Q2 2015 results. Operating cash flow increased 69% to $8.98 billion for the preceding twelve months, compared with $5.33 billion for the same period last year.

Investors reacted less conservatively with shares surging more than 17% to $566 within hours of the announced result. In the past Amazon’s been known for sacrificing short-term profit, preferring to spend its money on long-term investment. Wall Street was bracing for a loss of 14 cents per share with only $22.39 billion in revenue — so results that put the company narrowly in the black understandably surprised the market.

Net sales also increased 20% to $23.18 billion in the second quarter, compared with $19.34 billion in Q2 2014. Net sales increased 27% compared to Q2 2014.

Some factors which impacted the results were Amazon’s increased deployment of automation in its warehouses to reduce costs, the Prime Day online sale (where customers purchased 34.4 million items reportedly at a rate of 398 products per second), and a sales increase of 81% to 1.82 billion of Amazon Web Services (AWS) which supplies cloud computing.

Contrast this to other companies’ recent Q2 reports and the results are even more staggering. Apple posted Q2 revenue of $58 billion and quarterly net profit of $13.6 billion reflecting 27% revenue growth. Microsoft’s Q2 revenue was $26.5 billion and shares dropped 4% mostly due to Windows OEM revenue — the amount of income Microsoft gets from selling software on new retail PCs — being down 13% from last year.

Amazon CEO Jeff Bezos has now taken Amazon to a company that’s bigger (by capitalization) than Walmart. Impressive for a business that only a year ago reported a loss of $126 million and ever shrinking margins. Bezos is well known for taking a long-term view of the market and his attention to business detail, and Amazon has certainly been working on those details. Olsavsky commented that there is “certainly” a connection between Amazon’s past investment, faster delivery times, same-day delivery services (Prime Now), and revenue today.

The impact of growth in AWS cannot be overlooked. Bezos has referred to AWS as a “$5 billion business.” The 2015 Q2 results put AWS with a run rate greater than $7 billion — well ahead of his target. In comparison Microsoft’s run rate for their longer established cloud business reported was $8 billion for the same period.

A good result for Amazon also means a good year for Bezo personally with his net worth increased by $8 billion as the 2Q result came out. By way of contrast Google owner’s Sergy Bin and Larry Page’s net worth surged by $4 billion each last week when their 2Q result came out and market capital increased by $60 billion.

Amazon’s now seen as a growth company. Even the workforce is predicted to increase (Amazon has over 4,600 open positions just in its Seattle headquarters). There are new services on the horizon such as the production of original film, video content for its subscription streaming service Prime. Investors will be eagerly awaiting Q3 results to see if the growth in revenue continues.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Pantami Moves to Tackle $2.16bn Capital Flight from Telecoms Sector

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$2.16bn Leaves Telecommunications Sector Yearly

The Minister of Communications and Digital Economy, Isa Pantami, has put the total capital flight from the telecommunications sector at $2.16 billion per year.

A large part of the total amount comes from those renewing and purchasing software licenses, domain subscriptions and renewals, and cybersecurity.

The minister said to stem the trend, the ministry has developed a policy to promote local content in the sector.

In his speech at the digital day celebration, Pantami said the Indigenous Content Development and Adoption, under Pillar #8 of the National Digital Economy Policy and Strategy (2020 – 2030), would tackle the issue.

Pantami said, “As part of our efforts to promote indigenous content, we have developed a policy for promoting indigenous content in the telecom sector to complement similar efforts that focus on the information technology sector.

“This is important to stem the tide of capital flight, among other things. A report of the Association of Telecommunication Companies of Nigeria suggests that such capital flight in the telecom sector is as high as $2.16bn annually.

“A healthy digital economy requires a robust indigenous content policy to significantly reduce this.”

Pantami stated that there was an urgent need to promote and support the development of indigenous content in all sectors.

He explained that the Indigenous Content Development and Adoption pillar was addressing this for the digital economy.

This pillar aligns with Executive Orders 003 of May 2017 and 005 of February 2018, on ‘Support for Local Content Procurements by Ministries, Department and Agencies of the Federal Government of Nigeria,” he said.

Speaking on broadband, the minister said the Nigerian National Broadband Plan (2020-2025) was created to speed up the growth of broadband connectivity in Nigeria.

Pantami said, “The plan is designed to deliver data download speeds across Nigeria of a minimum 25Mbps in urban areas, and 10Mbps in rural areas, with effective coverage available to at least 90 per cent of the population by 2025.

“This will be at a price not more than N390 per 1GB of data (two per cent of median income or one per cent of minimum wage).

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Nigeria’s Fintech Startups Raised $122 Million in 2019

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Financial Technology Startups in Nigeria Raised $122 Million in 2019

Financial Technology (fintech) startups in Nigeria raised a combined $122 million in 2019, according to the Nigerian Stock Exchange (NSE).

Mr. Olumide Bolumole, the Divisional Head of Listings Business, NSE, disclosed this while speaking on the fintech industry and its growth in recent years.

“The Fintech industry in Nigeria continues to gain increasing popularity after taking the lead in Africa and attracting $122 million in funds in 2019.

“At the exchange, we recognise the opportunity to provide a platform where players in the Fintech landscape can have easier access to right-sized capital to fulfil their organisational objectives.

“The NSE is, therefore, committed to developing multiple solutions to address the needs of the Fintech community in Nigeria such as the provision of the NSE Growth Board.

“The exchange will also prioritise collaborations with organisations such as FinTechNGR to ensure solutions from this webinar are implemented for the benefit of the sector,” he said.

However, with just about 200 fintech companies in Nigeria, the sector is still young and just emerging with room for growth, considering the fact that most Nigerians are still unbanked.

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Fintech Companies Raised $554 Million in Investment Last Week

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Financial Technology Firms Raised $554 Million Investment Capital Last Week

Financial Technology (Fintech) companies raised a combined $554.17 million from investment rounds last week.

A data compiled by Finbold showed the top 25 fintech firms were led by Razorpay and Wealthsimple.

Razorpay, a payment platform, raised $100 million to account for 18.04 percent of the total amount raised during the week. This was followed by Wealthsimple’s $87 million.

Deepwatch came third with $53 million while NYDIG and M1 Finance came fourth and fifth with $50 million and $45 million, respectively.

Other noteable fintechs include Extend $40 million; FOSSA $30.55 million; +Simple $23.75 million; Finexio $23 million; and Sonrai Security $20 million.

On the other hand, Evolve Credit was the last among the 25 companies. It raised $0.025 million while Upside Saving raised the second least fund at $0.42 million. Also, they were the two firms that raised below $1 million in the week under review.

Oliver Scott, a Finbold editor, who spoke on funding in the fintech sector, said “Notably, venture capital is still the primary source of funding for fintech startups. However, new trends indicate a high level of private equity and debt financing. Additionally, more funding activity is concentrated around later funding rounds. The sector is also witnessing a rise in IPOs and acquisitions. Such trends are pointing to a maturing market.”

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