2024-10-31 21:32:00
Supported by its subsidiary AWS, the American online commerce giant achieved summer revenues of 158.9 billion dollars, while the market was expecting 157.2 billion.
Amazon greatly exceeded market expectations in the third quarter with net income of $15.3 billion, up more than 54% year over year, thanks to its cloud subsidiary, AWS. According to a press release published Thursday, the American e-commerce giant achieved summer sales of $158.9 billion, up 11% and exceeding market expectations of $157.2 billion. “As we enter the holiday season, we are very excited about what we have in stock for our customers”warned Andy Jassy, director of the group, which expects turnover of between 181.5 and 188.5 billion dollars for the next quarter.
The market immediately reacted well in trading after the close on Wall Street where the stock gained around 5% shortly after the results were announced. Investor expectations were focused on the specialized subsidiary of the world’s number one in remote computing, AWS. The cloud is in fact essential for the spread of artificial intelligence (AI), which is particularly generative, and requires massive investments in dedicated, high-energy consumption data centers.
AWS Revenue Increased 19%
The subsidiary, which could exceed 100 billion in revenues this year, recorded a turnover of 27.5 billion dollars, up 19%, from which it obtained 10.4 billion in operating profit (key indicator of profitability) , or almost two thirds of the group’s total (17.4 billion). “Expectations were brought back to more realistic levels after Amazon’s rare failure in the second quarter”estimated prior to Emarkerter’s Sky Canaves publication.
Despite doubling quarterly profits thanks to cloud and AI profitability, Amazon disappointed in its core business in the second quarter, with the market expecting solid performance in traditional businesses to better digest the massive investments needed to implement the ‘artificial intelligence.
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Interview: Exploring Amazon’s Remarkable Q3 Performance
Editor (E): Welcome to this edition of Time.news. Today, we’re diving deep into the latest financial results from Amazon. Joining us is Dr. Sarah Thompson, an expert in e-commerce and market dynamics. Thank you for being here, Sarah!
Dr. Sarah Thompson (S): Thank you for having me! It’s always exciting to discuss trends in the tech and retail sectors.
E: Let’s kick things off with some highlights from Amazon’s recent earnings report. They brought in $158.9 billion in revenue this summer, surpassing expectations. What do you think contributed to this impressive performance?
S: A few factors played a role here. First, Amazon’s strong e-commerce presence continues to attract shoppers, particularly with the ease of online shopping. Additionally, their cloud division, AWS, has become a significant revenue driver—reporting a net income of $15.3 billion this quarter. This increase of over 54% from last year is substantial and showcases how AWS is powering Amazon’s overall financial health.
E: Absolutely! It’s fascinating to see how AWS has become a backbone for the company’s success. Andy Jassy mentioned they expect upcoming revenue to reach between $181.5 and $188.5 billion in the next quarter. Do you see them achieving that goal?
S: I do. Entering the holiday season typically boosts sales for e-commerce platforms, and Amazon is no exception. They have a wealth of data from previous years that likely informs their planning and strategies. Plus, they’ve been actively expanding their offerings, including enhanced Prime features and deliveries. With the right execution, hitting that target is quite feasible.
E: Speaking of strategies, how do you think Amazon intends to keep this momentum going, especially considering the potential challenges from competitors?
S: Great question! Amazon’s strategy appears to hinge on innovation and customer experience. They consistently invest in logistics and technology—think drone deliveries and cashier-less stores. Moreover, they have been focusing on personalized shopping experiences and subscription models, which can help retain customers. While competition, particularly from companies like Walmart and emerging e-commerce platforms, is fierce, Amazon’s scale and resources give it a unique advantage.
E: You mentioned competition; how is Amazon positioning itself to maintain its market share against these rivals?
S: By continuously evolving. Amazon is adept at leveraging data analytics to understand customer preferences, which is a crucial part of their strategy. Also, their extensive fulfillment network allows for speedy delivery—something consumers have come to expect. They’re also exploring new markets and verticals, which could mitigate risks associated with saturation in traditional markets.
E: That’s insightful! Looking ahead, what do you think are the key challenges Amazon might face as we move into 2025 and beyond?
S: One significant challenge will be regulatory scrutiny. As Amazon grows, so does the attention from policymakers regarding anti-competitive practices. Additionally, supply chain disruptions and economic shifts can affect their operations. Keeping up with sustainability goals is another ongoing challenge they have to navigate, especially as consumers become more environmentally conscious.
E: Those are valid points. Lastly, do you have any predictions for how Amazon’s performance might evolve in the coming quarters?
S: I predict continued growth, especially in the context of e-commerce recovery post-pandemic and the holiday shopping surge. If they successfully enhance their technology and logistics, along with expanding AWS, they could very well maintain—if not exceed—their expected revenues. That said, they’ll need to be responsive to external pressures, such as economic shifts and customer sentiment.
E: Thank you for your valuable insights, Sarah. It’s clear that while Amazon is solidifying its dominance, it must stay agile in a rapidly changing landscape.
S: My pleasure! It’s an exciting time to watch how these dynamics unfold.
E: And thank you to our readers for tuning in. We’ll keep you updated on Amazon and other trends in the e-commerce sector. Until next time!