EPS of $0.98 increased by 222.6% from previous year
Gross margin of 49.3%
Net income of 10.43B
"We expect the combination of AWS' reaccelerating growth and high demand for gen AI to meaningfully increase year-over-year capital expenditures in 2024." - Andy Jassy (CEO)
Amazoncom Inc (AMZN) reported a strong performance in Q1 2024, with revenues reaching $143.3 billion, a 13% increase year-over-year, reflecting the ongoing recovery in consumer spending. Notably, operating income doubled year-over-year to $15.3 billion, achieving an unprecedented 221% growth. These results were bolstered by significant advancements in operational efficiency and customer engagement strategies. Management remains optimistic, emphasizing a focus on selection, pricing strategy, and delivery speed to meet customer expectations in a volatile economic environment. CEO Andy Jassy characterized the results as a reinforcement of Amazon's commitment to enhancing customer experience while executing efficiency improvements across its multiple business segments.
Key Performance Indicators
Revenue
143.31B
QoQ: -15.68% | YoY:12.53%
Gross Profit
70.68B
49.30% margin
QoQ: -8.69% | YoY:18.66%
Operating Income
15.31B
QoQ: 15.88% | YoY:220.63%
Net Income
10.43B
QoQ: -1.82% | YoY:228.85%
EPS
1.00
QoQ: -2.91% | YoY:222.58%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** $143.3 billion, up 13% YoY (vs. $127.4 billion in Q1 2023)
**Operating Income:** $15.3 billion, significantly up 221% YoY (vs. $4.8 billion in Q1 2023)
**Operating Margin:** 10.7%, up from 3.8% YoY
**Net Income:** $10.4 billion, a 229% increase YoY (vs. $3.2 billion in Q1 2023)
**EPS:** $1.00, compared to $0.31 in Q1 2023
**Comparative Analysis**
Financial Highlights
Financial Performance Highlights
- Revenue: $143.3 billion, up 13% YoY (vs. $127.4 billion in Q1 2023)
- Operating Income: $15.3 billion, significantly up 221% YoY (vs. $4.8 billion in Q1 2023)
- Operating Margin: 10.7%, up from 3.8% YoY
- Net Income: $10.4 billion, a 229% increase YoY (vs. $3.2 billion in Q1 2023)
- EPS: $1.00, compared to $0.31 in Q1 2023 Comparative Analysis
- AWS Revenue: $25 billion, growing 17.2% YoY, indicating recovery in cloud service utilization
- Advertising Revenue: Up 24% YoY, reflecting strong demand for sponsored products Balance Sheet Metrics
- Total Assets: $530.97 billion, total liabilities at $314.31 billion; total equity at $216.66 billion, highlighting strong capital structure.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
143.31B
12.53%
-15.68%
Gross Profit
70.68B
18.66%
-8.69%
Operating Income
15.31B
220.63%
15.88%
Net Income
10.43B
228.85%
-1.82%
EPS
1.00
222.58%
-2.91%
Key Financial Ratios
currentRatio
1.07
grossProfitMargin
49.3%
operatingProfitMargin
10.7%
netProfitMargin
7.28%
returnOnAssets
1.96%
returnOnEquity
4.81%
debtEquityRatio
0.71
operatingCashFlowPerShare
$1.83
freeCashFlowPerShare
$0.39
priceToBookRatio
8.68
priceEarningsRatio
45.08
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Insights
- CEO Andy Jassy stated: "We remain focused on driving better experiences for our customers while also delivering efficiency improvements. Our financial results are an encouraging reminder of the progress we're making."
- CFO Brian Olsavsky highlighted successful operational leverage: "...Worldwide operating income was $15.3 billion, which was our highest quarterly income ever..."
- On cloud services, Jassy emphasized continuing momentum: "AWS continues to be their strong partner of choice...Our AWS customers are also quite excited about leveraging gen AI to change the customer experiences.", showcasing Amazon's focus on integrated technology solutions.
We expect the combination of AWS' reaccelerating growth and high demand for gen AI to meaningfully increase year-over-year capital expenditures in 2024.
— Andy Jassy (CEO)
We're seeing a few trends right now. First, companies have largely completed the lion's share of their cost optimization and turned their attention to newer initiatives.
— Brian Olsavsky (CFO)
Forward Guidance
Management provided optimistic guidance for Q2, projecting net sales between $144 billion and $149 billion, reflecting growth in the range of 7% to 11%. They highlighted an anticipated seasonal increase in operating income, expecting it to fall between $10 billion and $14 billion. Baker pointed out anticipated headwinds related to foreign exchange fluctuations, emphasizing their commitment to maintaining profitability despite macroeconomic challenges. Risks associated with consumer spending patterns, particularly in Europe, will be closely monitored as management prioritizes operational agility and careful investment strategies.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
AMZN Focus
49.30%
10.70%
4.81%
45.08%
JD
15.30%
2.96%
3.21%
11.01%
PDD
62.30%
29.90%
12.80%
10.60%
SE
41.60%
0.73%
-0.35%
-320.52%
MELI
46.70%
12.20%
10.10%
56.33%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Amazon's ability to deliver solid growth in revenue and profitability while actively investing in the future, particularly in cloud and advertising, positions it favorably against industry benchmarks such as JD.com and Alibaba. Despite existing risks, Amazon's strategy to enhance customer experience through operational efficiency aligns with long-term growth goals. Investors should remain vigilant of macroeconomic indicators and competitive movements while recognizing the significant growth potential that emerged from Amazon's strategic initiatives over the past quarter. Overall, Amazon presents a compelling investment thesis based on robust financial health and proactive management.
Key Investment Factors
Growth Potential
Amazon's continued investment in AWS and advertising segments signifies substantial growth potential. The significant year-over-year improvement in operating income indicates an ability to enhance profitability even alongside increased capital expenditures.
Profitability Risk
Risks include macroeconomic volatility affecting consumer spending, unfavorable foreign currency exchange rates, and intense competition in both retail and cloud services which may pressure margins.
Financial Position
The company maintains a robust balance sheet with total assets of $530.97 billion and equity of over $216 billion, providing a strong foundation for continued growth and investment.
SWOT Analysis
Strengths
Robust infrastructure supporting diverse business segments like AWS and advertising.
Strong revenue growth reflecting successful customer engagement and retention strategies.
Operational improvements leading to significant gains in income and margins.
Weaknesses
Dependence on consumer discretionary spending which may vary based on economic conditions.
Challenges related to maintaining profitability across international segments.
Opportunities
Growth potential in the generative AI space through AWS services and partnerships.
Expansion of advertising capabilities, particularly in streaming video services.
Threats
Intense competition from other e-commerce and cloud service providers may impact market share.
Economic downturns could disproportionately affect consumer spending in e-commerce.