Amazon’s third-quarter revenue haul of $158.9 billion topped analysts’ projected estimate of $157 billion, thanks to its growing ads, cloud and e-commerce businesses, the company revealed Thursday.
The first two divisions, its advertising unit and Amazon Web Services, showed a 19 percent for the quarter ending in September, with revenue of $14.3 billion and $27.4 billion respectively. Sales from its online store, at $61.4 billion, marked an 8 percent increase over the same three-month period in 2023.
The results fueled an overall revenue jump of 11 percent year-over-year. Earnings per share of $1.43 sailed over expectations, with analysts projecting $1.14, while operating income of $17.4 billion eclipsed the $11.2 billion figure this time last year.
Its North America segment reported $95.5 billion in sales, showing growth of 9 percent. The international segment grew 12 percent, reaching $35.9 billion.
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Wall Street rewarded the company in after-hours trading by boosting shares 6 percent.
Third-party sellers, which pump more than 60 percent of Amazon’s unit sales, notched $37.8 billion representing a 10 percent increase, likely due to the swath of AI-driven seller tools offered by the company.
In a statement, Andy Jassy, Amazon’s president and chief executive officer, promised much more to come, “from tens of millions of deals, to our NFL Black Friday game and Election Day coverage with Brian Williams on Prime Video, to over 100 new cloud infrastructure and AI capabilities that we’ll share at AWS re:Invent the week after Thanksgiving.”
The mention of the election might surprise some critics, given the controversial move by the other company of Amazon’s founder, Jeff Bezos. The Washington Post found itself at the center of controversy when it blocked an editorial endorsing Vice President and Democratic presidential candidate Kamala Harris.
Anger over the paper’s decision routed to Amazon, with more than 250,000 Prime customers cancelling their memberships. Whatever impact that may have on Amazon’s bottom line won’t be apparent for months, when the company discloses its fourth quarter earnings results.
For now, in the just-wrapped third quarter, Prime and other subscription services zipped up $11.2 billion in revenue, for a year-over-year increase of 11 percent.
Amazon’s workforce of 1.55 million employees is 3 percent larger than last year’s, not including seasonal or contract workers.
One major takeaway for the tech sector — and for its clients in retail and other sectors — may be that the cloud business is thriving. It’s only logical, as their core machine learning and artificial intelligence offerings take center stage in the AI era.
AWS may not see the same business surge as Microsoft’s Azure and Google Cloud, which swelled with 33 percent and 35 percent growth. But AWS’ 19 percent increase nailed analyst projections and shows a faster growth velocity than last year.
Amazon projects net sales to hit somewhere between $181.5 billion and $188.5 billion in the next quarter, with year-over-year growth of 7 to 11 percent. It’s not clear if that takes into account the Prime membership exodus and whether the holiday season will help take some of that sting out.
