Amazon.com Announces Fourth Quarter Results

SEATTLE: Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2023.

Fourth Quarter 2023

• Net sales increased 14% to $170.0 billion in the fourth quarter, compared with $149.2 billion in fourth quarter 2022. Excluding the $1.3 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 13% compared with fourth quarter 2022.
  • North America segment sales increased 13% year-over-year to $105.5 billion.
  • International segment sales increased 17% year-over-year to $40.2 billion, or increased 13% excluding changes in foreign exchange rates.
  • AWS segment sales increased 13% year-over-year to $24.2 billion.
• Operating income increased to $13.2 billion in the fourth quarter, compared with $2.7 billion in fourth quarter 2022.
  • North America segment operating income was $6.5 billion, compared with an operating loss of $0.2 billion in fourth quarter 2022.
  • International segment operating loss was $0.4 billion, compared with an operating loss of $2.2 billion in fourth quarter 2022.
  • AWS segment operating income was $7.2 billion, compared with operating income of $5.2 billion in fourth quarter 2022.
• Net income increased to $10.6 billion in the fourth quarter, or $1.00 per diluted share, compared with $0.3 billion, or $0.03 per diluted share, in fourth quarter 2022.
  • Fourth quarter 2023 net income includes a pre-tax valuation loss of $0.1 billion included in non-operating income (expense) from the common stock investment in Rivian Automotive, Inc., compared to a pre-tax valuation loss of $2.3 billion from the investment in fourth quarter 2022.

Full Year 2023

• Net sales increased 12% to $574.8 billion in 2023, compared with $514.0 billion in 2022. Excluding the $0.1 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 12% compared with 2022.
  • North America segment sales increased 12% year-over-year to $352.8 billion.
  • International segment sales increased 11% year-over-year to $131.2 billion.
  • AWS segment sales increased 13% year-over-year to $90.8 billion.
• Operating income increased to $36.9 billion in 2023, compared with $12.2 billion in 2022.
  • North America segment operating income was $14.9 billion, compared with an operating loss of $2.8 billion in 2022.
  • International segment operating loss was $2.7 billion, compared with an operating loss of $7.7 billion in 2022.
  • AWS segment operating income was $24.6 billion, compared with operating income of $22.8 billion in 2022.
• Net income was $30.4 billion in 2023, or $2.90 per diluted share, compared with a net loss of $2.7 billion, or $0.27 per diluted share, in 2022.
  • 2023 net income includes a pre-tax valuation gain of $0.8 billion included in non-operating income (expense) from the common stock investment in Rivian Automotive, Inc., compared to a pre-tax valuation loss of $12.7 billion from the investment in 2022.
• Operating cash flow increased 82% to $84.9 billion for the trailing twelve months, compared with $46.8 billion for the trailing twelve months ended December 31, 2022.
• Free cash flow improved to an inflow of $36.8 billion for the trailing twelve months, compared with an outflow of $11.6 billion for the trailing twelve months ended December 31, 2022.
• Free cash flow less principal repayments of finance leases and financing obligations improved to an inflow of $32.2 billion for the trailing twelve months, compared with an outflow of $19.8 billion for the trailing twelve months ended December 31, 2022.
• Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations improved to an inflow of $35.5 billion for the trailing twelve months, compared with an outflow of $12.8 billion for the trailing twelve months ended December 31, 2022.

“This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon,” said Andy Jassy, Amazon CEO. “While we made meaningful revenue, operating income, and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvements across our businesses. The regionalization of our U.S. fulfillment network led to our fastest-ever delivery speeds for Prime members while also lowering our cost to serve; AWS’s continued long-term focus on customers and feature delivery, coupled with new genAI capabilities like Bedrock, Q, and Trainium have resonated with customers and are starting to be reflected in our overall results; our Advertising services continue to improve and drive positive results; our newer businesses are progressing nicely, and along with our more established businesses, collectively making customers’ lives easier and better every day. As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about.”

Highlights

Obsessing over the customer experience

Amazon obsesses over how to make customers’ lives better and easier every day with new and improved products and services. This is true for consumers, sellers, brands, developers, enterprises, and creators. For example, Amazon:

• Held a record-breaking Black Friday and Cyber Monday holiday shopping event. Customers worldwide purchased more than 1 billion items on Amazon and saved nearly 70% more during the 11 days of deals compared to the same period in 2022. In the U.S., customers ordered more than 500 million items from independent sellers, most of which are small and medium-sized businesses, and millions of customers signed up for a Prime membership. Through the entire holiday season, customers purchased more items on Amazon than during any previous holiday season.
• Continued to delight customers with fast and convenient delivery. In 2023, Amazon delivered to Prime members at the fastest speeds ever globally, with more than 7 billion units arriving the same or next day, including more than 4 billion in the U.S. and more than 2 billion in Europe. Amazon now offers Same-Day Delivery in more than 110 U.S. metro areas and operates more than 55 dedicated Same-Day sites across the U.S. The company increased the number of items delivered through these sites the same day or overnight by more than 65% year-over-year in the fourth quarter and celebrated the delivery of its billionth package from a Same-Day site in December 2023.
• Entered a strategic partnership with Hyundai to bring innovative new experiences to customers. In 2024, Amazon will launch online vehicle sales in the U.S., starting with Hyundai. In addition, Hyundai selected AWS as its preferred cloud provider to accelerate its digital transformation, and starting in 2025, customers who purchase Hyundai’s next-generation vehicles will have access in their vehicles to the same hands-free Alexa experience that they have at home.
• Announced that Prime members in the U.S. can now add health care from One Medical to their Prime membership for $9 per month (or $99 annually) and include up to five additional family members for $6 per month each, making it easier for Prime members to get high-quality primary care in the U.S. This represents savings of up to $100 off the standard One Medical membership fee for individuals and up to $133 for families.
• Expanded Amazon Fresh grocery delivery and free pickup to customers without a Prime membership in the U.S. The company also redesigned multiple Amazon Fresh stores in the UK and U.S. and opened several new Whole Foods Market stores in the U.S. It also expanded third-party grocery delivery with additional Weis Markets supermarkets in the U.S. and ARCS Supermarket in Japan.
• Added three Buy with Prime shopping benefits for Prime members, including the ability for customers to view, track, and manage orders from participating retailers in their Amazon account; access 24/7 to live-chat support managed by Amazon; and access to an expanded number of return locations, as well as box and label-free returns.
• Had approximately 1 billion customer visits to Amazon.in during Amazon India’s month-long Great Indian Festival sales event. During the event, more than 4 million customers made a purchase on Amazon.in for the first time.
• Announced that Prime Air drone deliveries will expand to Italy, the UK, and an additional location in the U.S. in late 2024. Amazon will also integrate drone deliveries into the company’s Same-Day sites, which will provide customers with faster delivery on a greater selection of items. Prime Air uses drones to safely deliver packages weighing up to five pounds in one hour or less.
• Expanded tools and resources for Amazon sellers in China, including announcing an Innovation Center dedicated to sellers, introducing Supply Chain by Amazon for sellers in China, and establishing five regional global selling centers, all with the goal to expand opportunities for sellers to help them grow their businesses.
• Increased total viewership for the second season of Thursday Night Football (TNF) on Prime Video by 24% year over year, and had double-digit growth (14%) for the second consecutive season in the hard-to-reach 18–34-year-old demographic, according to Nielsen. The November 30 Seahawks-Cowboys game attracted 15.3 million viewers, becoming Prime Video’s most watched TNF game ever, according to Nielsen.
• Released 16 films and series from Amazon MGM Studios, including the second season of Reacher, which was the No. 1 title on Nielsen’s Top 10 Originals Streaming chart for the week it debuted and had the highest number of minutes viewed for any Prime Video title during a single week in 2023 according to Nielsen; second season of Invincible, the most-viewed animated series ever on Prime Video globally; holiday comedy Candy Cane Lane, one of the top 10 most-watched worldwide film debuts ever on Prime Video; thriller Saltburn, which had the highest week-over-week audience growth of any film on Prime Video in 2023; dramedy American Fiction; and sports drama The Boys in the Boat. This awards season, Amazon MGM Studios earned 16 Golden Globe nominations, 68 Emmy nominations and nine wins, and 21 Critics Choice Award nominations for content such as American Fiction, Saltburn, Daisy Jones & The Six, The Marvelous Mrs. Maisel, and The Boys. For the upcoming Oscars, the studio earned five nominations for American Fiction, including for Best Picture.
• Grew Prime Video’s international slate of content with more than 60 local Amazon Originals, including Mr. Dressup: The Magic of Make-Believe (Canada), which was winner of the 2023 People’s Choice Award for Documentary at the Toronto International Film Festival; Sayen: La Ruta Seca (Chile), the action-packed sequel to the most watched Latin American Original movie ever on Prime Video; Operación Triunfo (Spain), Prime Video’s first weekly live entertainment show; and 007: Road To A Million (UK), the world’s first James Bond television format, which was No. 1 on Prime Video in 27 countries worldwide on its launch weekend.
• Expanded Prime Video’s global sports programming with the debut of the Amazon Original sports documentaries Kelce, chronicling Philadelphia Eagles captain Jason Kelce’s 2022 season, and Bye Bye Barry, the story of Barry Sanders’ decision to retire at the height of his NFL career. In live sports, Prime Video added new broadcast rights for NASCAR, the National Women’s Soccer League, and Premier Boxing Champions in the U.S.; ICC Cricket in Australia; and Wimbledon tennis in Austria and Germany.
• Announced AWS European Sovereign Cloud, an independent cloud for Europe, to give public sector customers and those in highly regulated industries more choice to meet stringent compliance mandates in the EU and achieve the operational independence they require without compromising on the broadest and deepest cloud services.
• Expanded AWS’s infrastructure footprint by launching the AWS Canada West (Calgary) Region, the second infrastructure Region in Canada. AWS is the first major cloud services provider to have an infrastructure Region in Western Canada. As of the end of 2023, AWS had 105 Availability Zones within 33 geographic Regions globally, with announced plans for 12 more Availability Zones and four more Regions.
• Announced new commitments, partnerships, and expansions to support AWS customers.
  • Amgen expanded its work with AWS to create generative artificial intelligence (generative AI)–based solutions, using Amazon SageMaker to help discover, develop, and accelerate the manufacturing of medicines for patients suffering from serious illnesses. Amgen will also use AWS’s global infrastructure and advanced services to power a new digital data and analytics platform.
  • Salesforce, which runs the vast majority of its cloud computing workloads on AWS, significantly expanded its global partnership with AWS. For the first time, Salesforce products are now available in the AWS Marketplace, giving customers streamlined purchasing options. This expansive partnership makes it easier for customers to bring AWS data into Salesforce products and deepens data and AI integrations between AWS’s and Salesforce’s products. Salesforce will support Amazon Bedrock as part of Salesforce’s open model ecosystem strategy and will expand its use of AWS, including compute, storage, data, and AI technologies.
  • Hospitality company Accor S.A. expanded its relationship with AWS to launch a generative AI Travel Assistant using Amazon Bedrock and Amazon SageMaker. The Travel Assistant aims to reinvent the guest experience by enhancing travel planning and booking, while reducing call volumes at Accor’s contact center.
  • Financial services provider Mitsubishi UFJ Financial Group (MUFG) signed a multiyear global agreement with AWS as its preferred cloud provider to innovate personalized financial services and use Amazon Bedrock to experiment with more than 100 potential generative AI use cases. By moving from on-premises data centers to AWS, MUFG reduced the cost of operating its standard IT infrastructure by 20%. Using Amazon QuickSight, MUFG lowered operational costs by approximately 70% compared to legacy technology.
  • Merck will work with AWS and Accenture to move a substantial portion of Merck’s IT infrastructure to AWS as its preferred cloud services provider. Merck is using services, including high-performance computing on AWS and AWS HealthOmics to speed drug discovery and accelerate therapeutic discovery and Amazon SageMaker for generative AI and machine learning (ML) to improve product manufacturing and availability.
  • Ecommerce retailer The Very Group expanded its collaboration with AWS, which included the launch of a Gen AI Innovation Lab. The lab will trial new generative AI retail solutions built on Amazon Bedrock to deliver interactive and personalized digital shopping experiences.
  • Automaker SAIC MOTOR selected AWS as its strategic cloud provider for its i-SMART connected vehicle platform. SAIC MOTOR is using AWS’s global infrastructure services to enhance the driving experience and build an elastic and agile connected vehicle architecture that can scale globally. SAIC MOTOR will use Amazon Bedrock to personalize the in-vehicle experience and to automatically diagnose vehicle issues.
  • Multinational telecom Axiata Group Berhad selected AWS as its primary cloud provider to accelerate its digital transformation across its operating companies by using AWS’s generative AI and ML capabilities, including Amazon Bedrock and Amazon SageMaker. By the end of 2024, Axiata will migrate more than 650 services spanning customer service, enterprise resource planning, and human resources, along with 80 ML applications.
  • Energy company HD Hyundai Oilbank will transform its refining and petrochemical business into a platform for eco-friendly energy by going all-in on AWS, forecasting to reduce IT cost by 20%. The company will launch an electric vehicle charging business on AWS, optimize the refinery process using ML and generative AI with Amazon Bedrock, deliver data-driven insights such as energy-demand forecasting, and improve operations like inventory management.
  • LG AI Research, the research hub of LG Group, launched an AI image-to-text captioning solution on AWS at 66% lower cost and with 83% faster data processing than on-premises infrastructure. The new captioning solution uses a multimodal foundation model (FM) built using Amazon Elastic Compute Cloud (Amazon EC2) and Amazon SageMaker that creates more accurate content than previous solutions.
  • Travel lifestyle brand Cathay selected AWS as its cloud provider and migrated more than 50% of its legacy and critical enterprise workloads to AWS, reducing IT infrastructure costs by 40%. The new Cathay Machine Learning Innovation Hub will help automate operations, train employees on ML, and enhance air travel experiences. Cathay’s cargo business is using Amazon SageMaker, Amazon OpenSearch Service, and Amazon Redshift to build a revenue management model to increase profitability and customer loyalty.
  • BYD, a manufacturer of new energy vehicles, selected AWS as its preferred cloud provider to support the automaker’s global business, innovate new services to enhance the driving experience, and lower vehicle development costs.

Inventing on behalf of customers

Amazon is driven by a passion for invention across all of its business areas. The company builds new products and services that customers ask for, and also invents new ones that customers didn’t know they wanted but make their lives or businesses better in some meaningful way. For example, Amazon:

• Launched several new AI-powered innovations to help customers shop for fashion with more confidence in Amazon’s store, including personalized size recommendations using AI and ML to help customers find what size fits them best, Fit Review Highlights with personalized feedback from customers who wear the same size, and improved size charts that make it easier for customers to find relevant information in a more visually engaging way. Amazon also developed a Fit Insights Tool to help brands and selling partners better understand customer fit issues and incorporate feedback into future designs and manufacturing.
• Announced Rufus, a new generative AI-powered conversational shopping experience. Rufus is an expert shopping assistant trained on Amazon’s product catalog and information from across the web to answer customer questions on shopping needs, products, and comparisons, make recommendations based on this context, and facilitate product discovery. Customers can simply start typing or speaking their questions into the search bar in the Amazon Shopping app, or choose from a set of pre-populated questions, and Amazon will provide answers via a chat dialog box to help customers make more informed purchase decisions. Rufus launched in beta to a small subset of customers and will progressively roll out to the rest of Amazon’s U.S. customers in the coming weeks.
• Introduced new advertising tools to help brands connect with customers and grow their businesses, including:
  • A generative AI solution to help brands produce lifestyle imagery that can improve the performance of their ads while also making them more engaging.
  • A sponsored TV offering to enable brands that sell in Amazon’s U.S. store to run streaming TV ad campaigns with no minimum spend on Amazon Freevee, Twitch, and third-party streaming services through Fire TV apps.
  • More than 15 new advertising capabilities, including enhanced audience insights and advanced campaign planning, activation, and optimization controls that help advertisers more efficiently reach relevant audiences and drive meaningful business outcomes.
  • Amazon Publisher Cloud, a tool built on AWS Clean Rooms’ secure data collaboration environment, that enables publishers to analyze first-party data together with Amazon Ads insights and offer custom media buys for advertisers that improve campaign performance.
• Achieved a 100% success rate for Project Kuiper’s Protoflight mission. The mission validated key technologies that underpin the satellite broadband network, allowing Project Kuiper to scale satellite production ahead of full-scale deployment beginning this year. Project Kuiper also announced a private connectivity service with AWS, which will allow customers to send data from remote locations directly to the cloud without relying on public internet, as well as a collaboration with Japan’s leading mobile network provider, Nippon Telegraph and Telephone Corporation, and Asia’s largest satellite operator, SKY Perfect JSAT Corporation.
• Held the 12th AWS re:Invent conference, which welcomed over 50,000 in-person attendees and more than 300,000 virtually, where AWS announced new technologies and capabilities that help customers of all sizes take advantage of generative AI, improve productivity, and enhance their security posture. These include:
  • Amazon Q, the coding companion from AWS. Q is an expert on AWS—it writes code, debugs code, tests code, and does translations, such as moving from an old version of Java to a new one. It can also query AWS customers’ various data repositories (e.g. intranets, wikis, and from over 40 different popular connectors to data stored using Salesforce, Amazon S3, ServiceNow, Slack, Atlassian, or Zendesk) to answer questions, summarize data, carry on a conversation, and take action. Like all AWS services, Q was designed with security and privacy in mind from the start, making it easier for organizations to use generative AI safely. Q is the most capable work assistant available and keeps getting better.
  • Expanded model choice and added new capabilities for Amazon Bedrock, AWS’s fully-managed service for leveraging existing large language models (LLMs) and customizing them with their own data—all without sacrificing the leading security, reliability, and operational performance that is synonymous with AWS. AWS is continuing to rapidly iterate on Bedrock, recently delivering capabilities including Guardrails to safeguard what questions applications will answer, Knowledge Bases to expand models’ knowledge base with Retrieval Augmented Generation, Agents to complete multi-step tasks, and Fine-Tuning to keep teaching and refining models, all to help customers’ applications be higher quality and offer better customer experiences. With Bedrock, AWS offers a choice of high-performing FMs from leading AI companies and added the latest new models from Anthropic, Cohere, Meta, Stability AI, and its own Amazon Titan family of FMs, expanding customers’ choice of industry-leading models to support a variety of use cases. Customers want a service that makes this experimenting and iterating simple, and this is what Bedrock does, which is why customers are so excited about it.
  • New capabilities in Amazon SageMaker to accelerate building, training, and deploying LLMs and other FMs. Amazon SageMaker HyperPod reduces time to train FMs by up to 40% by providing purpose-built infrastructure for distributed training at scale. Amazon SageMaker Inference reduces FM deployment costs by 50% on average and latency by 20% on average by optimizing the use of accelerators.
  • The next generation of AWS chips optimized for the cloud, which deliver advancements in price performance with each successive generation. AWS Graviton4 chips provide up to 30% better compute performance, 50% more cores, and 75% more memory bandwidth than current generation AWS Graviton3 processors for a broad range of customer workloads running in Amazon EC2.
  • AWS Trainium2 chips, which are designed to deliver up to four times faster ML training for generative AI applications and three times more memory capacity compared to first generation AWS Trainium chips.

Fonte: Business Wire