Amazon's fourth-quarter sales and profitability exceeded expectations on Thursday due to robust Christmas purchasing. The Seattle-based e-commerce business exceeded FactSet analysts' estimates with $170 billion in revenue and $10.6 billion in earnings in the fourth quarter of 2023.
Amazon CEO Andy Jassy termed the holiday shopping season a “record-breaking” one, with revenue up 14% from 2022. After a drop in October after six straight months of growth, U.S. consumer spending rose in November and December despite rising credit card debt and delinquencies, prices, and borrowing rates.
Like other retailers, Amazon offered speedy delivery and discounts to attract holiday buyers, including a major Prime member sales event in October. The company's online retail sector earned $70.5 billion in the quarter, up 9% from $64.53 billion in 2022.
Amazon's Chief Financial Officer Brian Olsavsky told reporters on Thursday that Prime members are buying more online shopping due to faster delivery times. Third-party seller fees and the company's advertising division, which will increase when Amazon adds adverts to Prime Video, are also driving income.
There’s a lot of enthusiasm from advertisers,” Olsavsky said, adding that clients may pay $2.99 per month to skip commercials. AWS earned $24.2 billion last quarter. Revenue rose 13% from 2022, but growth has stalled. Olsavsky also predicts AWS to accelerate this year since businesses using the cloud service are cutting expenses less and are increasingly interested in Amazon's generative AI products like chatbot Q
The corporation has prioritized generative artificial intelligence after appearing to be sliding behind the AI arms race launched by San Francisco startup OpenAI's ChatGPT release in late 2022. Since then, it has invested in new AI technologies to leverage on public and commercial interest.
Amazon introduced Rufus, a generative AI-powered shopping assistant, one hour before its results report on Thursday. The startup, which has integrated AI-generated product review summaries into its online shopping site, claims Rufus will answer client inquiries and help them discover new products.
Federal regulators worried about tech corporations' relationships with AI startups are also investigating Amazon's $4 billion investment in Anthropic, an artificial intelligence company. U.S. and international regulators have closely monitored the company's influence. Amazon and iRobot canceled an acquisition agreement last week after European regulators objected. Amazon is also being sued by the FTC for overcharging vendors and inflating internet pricing.
After losing $2.7 billion in 2022, the corporation made $30.4 billion last year. Amazon fired almost 27,000 corporate workers between late 2022 and early last year to boost profits and minimize costs. Last month, the firm and companies like Twitch and Audible slashed hundreds of positions. Amazon shares climbed 8% after-hours.
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