August 11th, 2025: Amazon Reports Earnings, Dogged by AI Questions, Shopify Q2 Earnings Show Its Not Going Anywhere, Klaviyo Delivers Growth But Efficiency Still Lacking, and Auctane’s Delivered Event
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It’s August 11, 2025 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Amazon Reports Earnings, Dogged by AI Questions
Shopify Q2 Earnings Show Its Not Going Anywhere
Klaviyo Delivers Growth, But Efficiency Still Lacking
Recap from Austin: Auctane’s Spicy Innovation Delivered Event
- and finally, The Investor Minute which contains 4 items this week from the world of venture capital, acquisitions, and IPOs.
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To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
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[PAUSE]
BUT FIRST in our shopping cart full of news….
Amazon Q2 Earnings, Calls AI "Biggest Tech Shift in our Lifetime"
Yet the Can't Seem to Shake AWS Questions
Last Thursday evening, Amazon reported earnings and continued setting a pretty high bar. All the while deploying its one-millionth robot.
There was a lot to like here. Not everything, but close.
Good:
* Revenue up 12% y/y ex-currency
* Operating Income up 31% y/y (!!) - holy crow
* Even with all its success, Amazon still mostly talks about 3 things only: wider selection (Nike, Aveda, Away, Saks all added), faster shipping (records), and sharp pricing.
* Everyday essentials outpaced the rest of the business. Interesting UPS reported somewhat opposite - essentials were outpaced by splurges. I would think Amazon itself is the difference there with Amazon volume drawing down from UPS.
* Biggest Prime Day ever: signups, sales, items sold
* Haven't so far seen diminishing demand from tariffs
* Increased share of orders moving from direct lanes by over 40% y/y
* 30% more same-day items than last year in the US
* Amazon Ads up 22& y/y, with a 300M audience across its properties
* AWS now a $123B run-rate business. AWS alone is 20% of Walmart total revenue.
* Q2 3P Seller Mix at 62% y/y Highest ever, up 100bps y/y.
Bad:
* Most noise about tariffs wrong - impossible to know what will happen (WTF economy)
* No one knows what will happen when forward-bought inventory is depleted (is that really true?)
* AWS grew 17.5% y/y (analysts no happy)
* AWS segment margins declined from 39.5% to 32.9% in Q2
Ugly:
* Grocery still a sideshow. Perishables a new pilot to same-day customers.
* "Millions" have access to Alexa+ but... why not everyone? What is the hold-up?
Analysts either seem convinced that Amazon is not quite investing the right way ahead of demand (they have said the last year they are supply-constrained), or that their execution is falling short. Amazon answers that it's growing from a larger base than its nearest competitor is true, but feels ultimately unsatisfying.
Still, investing way too far ahead of demand would likely be punished by investors (and creating excess capacity), so what's a company to do?
On AI:
* "AI is biggest tech shift in our lifetime"
* "Will change every customer experience we know, and how we work."
[References:]
Our Second Story
Shopify Q2 Earnings Says F*&!@ U to your Agentic Platform Replacement Thesis
Let me break it down for you. In an ever-complex world, merchants value simplicity. Shopify is simple.
You know what is even simpler than Shopify? Continuing to do the same thing you do today. Merchants like that too.
Witness it took Harley years and years of conversations with a merchant in his own backyard that he knows personally - Canada Goose - to even verbally commit to move to Shopify. We are not yet speaking about actually moving, just committing to move!
Add up both of these things, and existing eCommerce platforms are going to be just fine.
You know what is more complex? Asking agents to build you a new platform and then asking them to maintain it.
Many are asking you to believe that each merchant will end up maintaining their own unique software. Logic would dictate these would converge on something, well, simpler than millions of merchants asking the same agents to do the same g-ddamn thing.
But, oh the earnings, you say! Here are some key numbers:
* Shop Pay GMV increased by 65%
* European GMV up 49% (can you say European platforms asleep?)
* Merchant solutions revenue up 33%, Subscription Services up around 19%
* GMV and Revenue both up 31% (Q3 predicted mid-to-high 20s)
* Gross Profit grew 25% (!!)
Why did the stock go up so much? Wall St. believes they are sandbagging.
On tariffs: Crickets. No news (yet).
On Agentic:
My feeling is that digital wallets are still relevant in an agentic era - unless that purchase was not likely to be in a digital wallet anyway, and so this still does advantage Shop Pay and Paypal. But hold tight, it is highly likely that OpenAI will also have a wallet. And when they do, just like Amazon Buy With Prime, they will be forced to reckon with Shopify. Who will be there arms open.
Let's not forget, in the "everything is just a wrapper" world, Shopify is still a payments company masquerading as a platform (Don't believe me? Look at the platform limitations that spring up when you don't choose native Stripe Shop Pay).
Which even if you believe your agentic platform disruption thesis (shorthand for "not gonna need a platform"), you have to:
* eat and tear down all existing digital commerce into agents (gonna be a while)
* and not just any agents, but ones that buy without intervention (gonna be longer)
* and that's before you have to reckon with - oh yeah - pesky physical retail (not gonna happen - shopping is communal not just technical)
Still, agentic commerce is coming, but history will likely show us most of the spoils will go to the big AI powered incumbents who are not sleeping (Google, Amazon, Meta) and one new native entrant (in this case, OpenAI). Each decade seems to produce only one new scaled company - in this case, that name is OpenAI.
Everyone else beware - nichify yourselves.
[References:]
https://www.linkedin.com/feed/update/urn:li:activity:7359190668163915776/
Our Third Story
Klaviyo Delivers Growth, But Efficiency Still Lacking
Klaviyo just reported Q2 earnings and it looks like
Here is a summary:
* The company reported 32% revenue growth, and now reports over 176,000 customers.
* The cohort of customers paying it over $50,000 per year grew even faster at 38% highlighting Klaviyo’s ability to expand its account base. Still, that number is only about 3200 customers. Overall, this does seem to be a key metric as its Net Revenue Retention is at 108% - which is quite good, but not fantastic. You can imagine that some kind of Service Cloud offering from Klaviyo could truly accelerate this number.
The company also has expansion plans:
The company has identified that so many service conversations are actually marketing and sales conversations, and so the company feels like it has a future there. As a result, the company is in a Private beta of a Helpdesk and Conversational Agent. The CEO Andrew Bialecki indicates that the total addressable market for the Service offering could be
That said, Klaviyo does has some issues. While it’s still early stage, the company does not seem to be built very efficiently. The core of the business is designed for SMB. Yet they need to win up-market in Enterprise to take share from Salesforce. And they are expanding aggressively internationally.
And now they have started building a service offering.
All this to say, while revenue grew 32% year over year, operational expenses grew 38% year over year - faster than revenue - and . In the age of efficiency, any company whose profit margin is not keeping pace with its revenue could be called into question.
The particular worrying point is how General and Administrative expenses grew around 50% year over year? In the age of AI how is this possible? I was told the humans were not necessary any longer.
While the company is much newer in the public markets than other SaaS providers like Shopify, it doesn’t mean it can spend indiscriminately.
Still, the company has a big opportunity ahead of it and raised its full year guidance to 27-28% revenue growth.
[References:]
[PAUSE]
And Our Last Story
Recap from Austin: Auctane’s Spicy Innovation Delivered Event
We were hosted by Chris Worley and the entire Auctane team in Austin last week at their Innovation Delivered event. The theme was spicy shipping takes. Well, I’m not sure if our takes were spicy but the wings at the event were definitely spicy. For anyone who’s seen Conan O’Brien on the Hot Ones podcast, we definitely weren’t on that level, but we were something! In the shipping world we were something.
If you didn’t see our event, the link is in the show notes. One topic we talked quite a bit about is the difference between companies who treat shipping as part of their customer experience versus those who treat it as a cost center. Any guess which brands are succeeding and which are not?
[References:]
It’s That Time Friends, for our Investor Minute. We have 4 items on the menu today.
First
Resale Marketplace Gone.com Raises $6.3M in Seed Funding
Seattle-based resale marketplace Gone.com has emerged from stealth and has raised $6.3 million in seed funding. The company offers free pickup of reusable goods, logistics to collect goods, and sell them via multiple platforms, including its own website.
Second
The Ferrero Group Acquires WK Kellogg for $3.1B
The Ferrero Group announced that it will acquire the WK Kellogg Company for $23.00 per share in cash, representing a total enterprise value of $3.1 billion. A European confectionery company expands into a new category and a new region, sounds like a PE transaction, right?
Link: https://www.ferrero.com/int/en/news-stories/news/ferrero-to-acquire-wk-kellogg-co
Third
B2B Car Auction Platform CarOnSale Raises $82M in Series C Funding
Berlin-based B2B car auction platform CarOnSale raised $82 million in Series C funding that will be used to grow the team, invest in product development, and expand further in Europe.
Link: https://www.finsmes.com/2025/07/caronsale-raises-e70m-in-series-c-funding.html
Fourth
The Acacia Group Backs Common Thread Collective
Private equity investment firm The Acacia Group announced that it made an undisclosed investment in e-commerce growth agency, Common Thread Collective.
Link: https://acaciagroup.com/the-acacia-group-backs-common-thread-collective/
[PAUSE]
Did you know that RMW Commerce has another podcast? Check out The Watson Weekend for an unfiltered and lively eCommerce chat each week with me, Rick Watson, my co-host Jess Lesesky, and an array of interesting guests and topics. All focused on eCommerce. You can find the Watson Weekend by searching for it on iTunes, Spotify, or Youtube.
That’s all for this week! Till next time Watsonians.....
[PAUSE]
Hi, I’m Rick Watson, CEO and Founder of RMW Commerce Consulting and host of the Watson Weekly podcast - your essential eCommerce Digest.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
