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Amazon's Q2 Sales Beat Expectations

Amazon packaging 2 - Kay Roxby - shutterstock_361754777 725 x 500

Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its second quarter ended June 30, 2023.

  • Net sales increased 11% to $134.4 billion in the second quarter, compared with $121.2 billion in second quarter 2022. Excluding the $0.3 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 11% compared with second quarter 2022.
    • North America segment sales increased 11% year-over-year to $82.5 billion.
    • International segment sales increased 10% year-over-year to $29.7 billion.
    • AWS segment sales increased 12% year-over-year to $22.1 billion.

  • Operating income increased to $7.7 billion in the second quarter, compared with $3.3 billion in second quarter 2022.
    • North America segment operating income was $3.2 billion, compared with an operating loss of $0.6 billion in second quarter 2022.
    • International segment operating loss was $0.9 billion, compared with an operating loss of $1.8 billion in second quarter 2022.
    • AWS segment operating income was $5.4 billion, compared with operating income of $5.7 billion in second quarter 2022.

  • Net income was $6.7 billion in the second quarter, or $0.65 per diluted share, compared with a net loss of $2.0 billion, or $0.20 per diluted share, in second quarter 2022.
    • Second quarter 2023 net income includes a pre-tax valuation gain of $0.2 billion included in non-operating expense from the common stock investment in Rivian Automotive, Inc., compared to a pre-tax valuation loss of $3.9 billion from the investment in second quarter 2022.

  • Operating cash flow increased 74% to $61.8 billion for the trailing twelve months, compared with $35.6 billion for the trailing twelve months ended June 30, 2022.

  • Free cash flow improved to an inflow of $7.9 billion for the trailing twelve months, compared with an outflow of $23.5 billion for the trailing twelve months ended June 30, 2022.

  • Free cash flow less principal repayments of finance leases and financing obligations improved to an inflow of $1.9 billion for the trailing twelve months, compared with an outflow of $33.5 billion for the trailing twelve months ended June 30, 2022.

  • Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations improved to an inflow of $6.7 billion for the trailing twelve months, compared with an outflow of $26.1 billion for the trailing twelve months ended June 30, 2022.

“It was another strong quarter of progress for Amazon,” said Andy Jassy, Amazon CEO. “We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded.

"Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases that make it much easier and more cost-effective for companies to train and run models (Trainium and Inferentia chips), customize Large Language Models to build generative AI applications and agents (Bedrock), and write code much more efficiently with CodeWhisperer.

"We’re also continuing to see strong demand for our advertising services as the team keeps innovating for brands, including the ramp up for Thursday Night Football with the ability for advertisers to tailor their spots by audience and create interactive experiences for consumers. We remain excited about what lies ahead for customers and the company.”

Highlights

Obsessing over the customer experience

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

  • Delivered its largest selection of products to U.S. Prime members at the fastest speeds ever in the quarter. The company now offers U.S. Prime members free Same-Day or One-Day Delivery on tens of millions of the most popular items. Across the top 60 largest U.S. metro areas, more than half of Prime member orders arrived the same or next day in the quarter. So far this year, Amazon has delivered more than 1.8 billion units to U.S. Prime members the same or next day—nearly four times the number of units delivered at those speeds by this point in 2019.

  • Held the biggest Prime Day event ever on July 11-12, in the third quarter, as Prime members worldwide purchased more than 375 million items and saved more than $2.5 billion. This year, Amazon offered more deals than any past Prime Day, with Home, Fashion, and Beauty among the top-selling deal categories. This was the largest Prime Day ever for Amazon’s independent sellers, most of which are small and medium-sized businesses, and the first where U.S.-based Prime members could shop deals directly from merchant sites using Buy with Prime.

  • Announced Amazon Business is one of our fastest growing offerings, with a $35 billion annualized gross sales run rate and serving more than 6 million customers. Amazon Business allows businesses, municipalities, and organizations to procure products like office supplies and other bulk items easily and at discounted prices.

  • Enabled customers worldwide to save more than $1 billion in the last 12 months through Subscribe & Save, a program that helps customers save time and money on regularly scheduled deliveries. Customers select their preferred delivery frequency for eligible products and can cancel or change their subscription at any time. The program has tens of millions of global subscribers with hundreds of millions of subscriptions.

  • Announced that Amazon Day deliveries, which give Prime members the ability to choose a designated day of the week that makes sense for them to receive their orders, saved 136 million boxes in 2022. On top of making deliveries work for customers’ personal schedules, this free Prime benefit uses 30% fewer boxes on average. 
  • Released Amazon’s annual U.S. Small Business Empowerment Report for 2022, which detailed that more than 60% of sales in Amazon’s store came from independent sellers, most of which are small and medium-sized businesses. U.S.-based independent sellers sold more than 4.1 billion products and averaged more than $230,000 in sales. Amazon also announced a Small Business Search filter, which helps customers easily discover and shop for products from small businesses and artisans while shopping in Amazon’s store.

  • Marked the 10th anniversary of Amazon.in and announced that Amazon India has enabled cumulative ecommerce exports of over $7 billion. By 2025, Amazon India has a goal to enable cumulative ecommerce exports of $20 billion, digitize 10 million small businesses, and create 2 million jobs in India.

  • Partnered with Pinterest to display ads on its website for products sold in Amazon’s store, where over 463 million people go each month to find recipes, home, and style inspiration. As Pinterest’s first partner for third-party ads, Amazon will make it easier for customers to discover and buy relevant products on Amazon and provide value for brands and advertisers.

Source : Amazon

Image : Kay Roxby / shutterstock.com (361754777)

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04 August 2023

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