Cross-border sellers must read! Interpretation of Amazon's Q4 2023 financial report highlights

Time: 2024-02-06 15:17

On February 2,2024, Amazon released its fourth quarter (Q4 2023) financial report, which showed amazing numbers and performance, demonstrating Amazon's strong strength.

IAN will take everyone to analyze this report in depth and explore the secrets behind this feast.

 

Net Profit and Net Sales Surpassed Expectations

Q4 net sales were $169.96 billion, up 14% YoY, exceeding market consensus expectations; operating profit was $13.21 billion, up 382% YoY; and Net Profit significantly exceeded expectations, reaching $10.62 billion, up 3433% YoY.

By business, retail business continued to accelerate growth, with online store revenue reaching $70.50 billion, up 8% year-on-year; brick and mortar store revenue was $5.20 billion, up 4% year-on-year; third-party seller service revenue was $43.60 billion, up 19% year-on-year.

Subscription service revenue was $10.50 billion, up 13% year-over-year; advertising service revenue was $14.70 billion, up 26% year-over-year. In terms of cloud business, AWS revenue was $24.20 billion, up 13% year-over-year, with AI services being the main driver of growth.

AWS business revenue rebounds

AWS, as one of Amazon's key business areas, has shown a steady growth trend. AWS revenue in Q4 was $24.20 billion, a year-on-year increase of 13.2%, slightly recovering from 2023. Operating profit was $7.17 billion, a year-on-year increase of 37.7%, accounting for 54.3% of the company's total operating profit.

In terms of business expansion, Amazon has expanded its AWS infrastructure to Western Canada and collaborated with multiple partners. It has also launched multiple artificial intelligence products with multiple partners, including collaborating with AccorHotels to launch a travel assistant based on AIGC, strengthening product and data interoperability with Salesforce, and collaborating with Amgen to launch AI drug development solutions.

Open-source and cost-saving to help Amazon return to its peak

In order to improve overall business efficiency, Amazon has taken a series of cost control measures.

In 2023, the company implemented measures such as layoffs, project cuts, and store closures. The number of layoffs exceeded 27,000, and the improved profit margin of the AWS sector reflected the impact of layoffs and slowing down recruitment.

Amazon shut down its subsidiary fabric.com and several unprofitable projects, including remote medical services, delivery robots, etc.

Amazon has also delayed the construction of multiple warehouses and distribution centers, and closed physical chain stores with poor feedback. This series of measures has achieved significant results in cost control.

Betting on the AI field

Amazon has a wide layout in the field of artificial intelligence. The computing power side has launched the Trainium2 chip, which provides four times faster training performance and three times more memory capacity than the first generation chip.

On the model side, AWS has launched the Bedrock hosting service and added multiple new models. On the application side, AmazonQ has been launched, which can write, debug, test code, and perform code version conversion.

Overall, Amazon's financial performance is outstanding, showing the company's strong profitability, business expansion strength, and strategic foresight in the field of artificial intelligence. Amazon's story is worth our continued anticipation.

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