Amazon revealed impressive financial results for the summer quarter, driven by increased online sales and a thriving advertising business. With revenues of $143.1 billion, marking a 13% surge from the previous year, and profits of $9.9 billion surpassing analyst projections, Amazon’s stock soared in after-hours trading.
Amazon CEO Andy Jassy attributed their strong quarter to substantial growth in advertising and enhanced delivery speed. Thanks to a more efficient logistics model, the company achieved record-breaking delivery times for US customers.
Chief Financial Officer Brian Olsavsky emphasized Amazon’s readiness for the holiday season, stating their operations and inventory are in the “best position” ever. Despite inflation concerns, consumers maintained their spending resilience, contributing to a 6% growth in Amazon’s retail business during the third quarter. The success was bolstered by the popular Prime Day sales event in July, with strong demand in categories like beauty and health products.
While Amazon’s e-commerce business flourished, attention has also turned to the performance of Amazon Web Services (AWS), the cloud computing division. AWS, which grew by 12%, demonstrated stability, though it fell slightly short of analyst expectations. The competitive landscape saw mixed results, with Microsoft reporting strong revenue for Azure and Google’s Cloud division underperforming.
Investors remain optimistic about AWS, seeing opportunities in the growing AI sector. Amazon has been introducing generative AI tools for AWS customers and invested $4 billion in AI startup Anthropic. Additionally, Amazon enhanced its voice assistant, Alexa, with new AI features and introduced generative AI for product review summaries.
Amazon’s advertising business exhibited a 25% growth, excluding foreign exchange rate impacts.
These financial accomplishments come as Amazon faces regulatory challenges. The company is embroiled in lawsuits alleging anticompetitive practices and deceptive Prime subscription enrollment. Despite these legal hurdles, Amazon projects fourth-quarter earnings between $160 billion and $167 billion.