US-based ecommerce and technology firm Amazon has posted an operating profit of $13.2 billion in the fourth quarter of 2023, up by a whopping 388% from $2.7 billion in the same period in the previous year.
This is the company’s highest-ever quarterly operating profit, bolstered by a better-than-expected holiday season coupled with efficiency improvements in the ecommerce business, said Amazon.
The California-based company’s net profit rose to $10.6 billion in the quarter ended December 31, up from $0.3 billion in Q4 of 2022. The firm’s total income increased 14% year over year to $170 billion compared with $149.2 billion in the year-ago period.
“This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” said Andy Jassy, Chief Executive Officer of Amazon.
Shopping events such as Prime Big Deals Day, Cyber Monday, and Black Friday in the United States helped attract new Prime customers, said the firm. Moreover, the company was able to make strides in faster deliveries, leading to increased purchase frequency across all major geographies, it added.
Ecommerce—Amazon’s largest business by revenue—saw modest growth in its international segment with a 17% year-on-year increase in total income to $40.2 billion. Its operating loss improved by $1.8 billion compared to the previous year, driven by efficiencies in the supply chain, including lower transportation costs and increased units per box, noted the firm.
Amazon said its emerging markets made “good progress” as the teams invested wisely in expanding customer offerings. The company did not list the emerging markets.
Amazon’s international segment represents more than 20 countries of varying degrees of growth, including its largest established countries such as the United Kingdom, Germany, and Japan.
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Meanwhile, Amazon India’s month-long Great Indian Festival held in October last year saw over 1 billion customer visits, while more than 4 million customers purchased on Amazon.in for the first time, the firm said.
Amazon’s worldwide advertising revenue rose 26% year over year by leveraging machine learning to enhance the relevancy of ads, Brian Olsavsky, Chief Financial Officer of Amazon, told investors during a conference call.
“Advertising only works if the ads are helpful to customers and there’s a lot of value in tailoring sponsored products, so they are relevant to what a customer is actually searching for. We’re also continually focused on improving our measurement capabilities, which allow brands to see the payback of their advertising spend,” said Olsavsky.
AWS—the technology company’s cloud business—recorded a 13% YoY increase in revenue to $24.2 billion. On a quarterly basis, nearly $1.1 billion of revenue was added to the segment, as customers continued to shift their focus toward driving innovation and bringing new workloads to the cloud.
The firm expects to earn a total revenue of $138 million-$143.5 billion in the first quarter of 2024 while operating income is expected to range between $8 billion and $12 billion.
Edited by Swetha Kannan
