Amazon.com Inc (AMZN) delivered impressive Q4 2024 results, reporting revenue of $187.8 billion, a 10% increase from the previous year, which suggests strong consumer demand notwithstanding foreign exchange challenges. Notably, the company's operating income surged to $21.2 billion, reflecting a 61% year-over-year growth and showcasing significant operational efficiencies across segments. Key highlights include the exceptional growth in AWS revenue, which increased by 19%, and the successful extension of Prime delivery services, adding momentum to both retail and membership segments. Looking ahead, Amazon remains committed to enhancing customer experiences and driving innovations that position it strongly in the competitive landscape.
Key Performance Indicators
Revenue
187.79B
QoQ: 18.20% | YoY:10.49%
Gross Profit
84.51B
45.00% margin
QoQ: 8.48% | YoY:9.17%
Operating Income
21.20B
QoQ: 21.78% | YoY:60.52%
Net Income
20.00B
QoQ: 30.51% | YoY:88.29%
EPS
1.90
QoQ: 30.14% | YoY:84.47%
Revenue Trend
Margin Analysis
Key Insights
**Operating Margin:** 11.2%
**Net Profit Margin:** 10.7%
**ROE:** 7.00%
**Current Ratio:** 1.064
Financial Highlights
Revenue Analysis: Q4 2024 revenue reached $187.8 billion, driven by a 10% year-over-year increase, though it faced a $900 million foreign exchange headwind. Excluding this, year-over-year growth was effectively 11%. Q4 saw total operating income rise to $21.2 billion, with a notable increase of 61% from Q4 2023.
Key Ratios:
- Operating Margin: 11.2%
- Net Profit Margin: 10.7%
- ROE: 7.00%
- Current Ratio: 1.064
Profitability Trends: Net income significantly increased by 88.29% year over year to reach $20 billion, with EPS at $1.90, reflecting a robust demand and effective cost management strategies.
Cash Flow: Trailing twelve-month free cash flow adjusted for equipment finance leases was reported at $36.2 billion, indicating healthy cash generation capabilities.
Quarter-over-Quarter Performance: Compared to Q3 2024, total revenue increased by 18.20% and net income by 30.51%, demonstrating consistent upward momentum.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
187.79B
10.49%
18.20%
Gross Profit
84.51B
9.17%
8.48%
Operating Income
21.20B
60.52%
21.78%
Net Income
20.00B
88.29%
30.51%
EPS
1.90
84.47%
30.14%
Key Financial Ratios
currentRatio
1.06
grossProfitMargin
45%
operatingProfitMargin
11.3%
netProfitMargin
10.7%
returnOnAssets
3.2%
returnOnEquity
7%
debtEquityRatio
0.46
operatingCashFlowPerShare
$4.32
freeCashFlowPerShare
$1.69
priceToBookRatio
8.1
priceEarningsRatio
28.93
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Customer Demand and Pricing: Andy Jassy, CEO, noted, "Given the way the dollar strengthened throughout the quarter, we had $700 million more foreign exchange headwind than we anticipated at guidance. Without that headwind, revenue would have been 11% year over year and exceeded the top end of our guidance."
Operational Efficiencies: He also highlighted efficiency gains, stating, "Overall, we've reduced our global cost to serve on a per-unit basis for the second year in a row.”
Investment in Future Growth: Management indicated, "We expect AWS operating margins to fluctuate,” reflecting ongoing investment in innovative technologies, particularly in generative AI and cloud services.
"We welcomed notable brands to our store throughout 2024, including Clinique, Estee Lauder, Aura Rings, and Armani Beauty."
— Andy Jassy
"...we see opportunities to reduce costs again as we further refine inventory placement, grow our same-day delivery network, and accelerate robotics and automation throughout the network."
— Andy Jassy
Forward Guidance
Looking forward, management provided Q1 2025 revenue guidance of $151 billion to $155.5 billion, incorporating foreign exchange headwinds estimated at $2.1 billion year over year. Notably, there is a focus on keeping operational costs down through improved inventory management and automation efforts across warehouses, with continued investment slated for AWS infrastructure to capitalize on future AI demands.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
AMZN Focus
45.00%
11.30%
7.00%
28.93%
JD
14.10%
2.09%
1.46%
24.16%
PDD
60.50%
25.20%
12.40%
16.31%
SE
44.60%
6.18%
2.83%
68.01%
MELI
45.40%
13.50%
14.70%
33.73%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Amazon maintains a strong investment outlook driven by its consistent revenue growth, strategic expansion in AWS, and innovative retail solutions that enhance their competitive edge. Investors should monitor the execution of cost management strategies, continued innovations in AI capabilities, and the resilience of customer demand amidst economic challenges. The combination of operational efficiency and strong market positioning suggests stable long-term investment prospects, although potential risks from macroeconomic factors should be acknowledged.
Key Investment Factors
Growth Potential
Amazon's diversified revenue streams, especially in AWS and retail segments, provide significant growth potential, particularly as demand for generative AI expands.
Profitability Risk
Potential risks include foreign exchange volatility, competition in e-commerce, and regulatory scrutiny affecting major operations.
Financial Position
With a current ratio of 1.064 and solid free cash flow generation, Amazon maintains a strong financial position to navigate short-term liabilities and invest in growth.