Executive Summary
In Q2 2024, Amazon.com Inc (AMZN) delivered a strong financial performance, reporting $148 billion in revenue, marking an 11% increase year-over-year when excluding foreign exchange impacts. Notably, operating income surged to $14.7 billion, nearly doubling from the previous year, driven primarily by robust growth in AWS and retail segments. Management emphasized ongoing improvements in operational efficiencies and cost management, paving the way for sustainable long-term growth despite prevailing economic pressures, including inflation and shifting consumer behaviors. Overall, the company shows strong unit growth across segments, particularly in e-commerce and cloud services, indicating resilience amid market headwinds.
Key Performance Indicators
Key Insights
**Revenue Performance**: $148 billion, 11% YoY growth (adjusted for FX losses).
**Operating Income**: $14.7 billion, an impressive 91% increase YoY.
**Net Income**: $13.485 billion, a 99% rise YoY.
**EPS**: Diluted EPS of $1.26, a 95.4% increase YoY.
**Cost Management**: Gross margin held steady at 50.1% indicating effective cost control. Operating margin improved to roughly 10% despite challenges in retail pricing and operational investments in AWS and Project Kuiper.
**Cash Flow**: Free c...
Financial Highlights
Revenue Performance: $148 billion, 11% YoY growth (adjusted for FX losses).
Operating Income: $14.7 billion, an impressive 91% increase YoY.
Net Income: $13.485 billion, a 99% rise YoY.
EPS: Diluted EPS of $1.26, a 95.4% increase YoY.
Cost Management: Gross margin held steady at 50.1% indicating effective cost control. Operating margin improved to roughly 10% despite challenges in retail pricing and operational investments in AWS and Project Kuiper.
Cash Flow: Free cash flow at $7.661 billion reflects strong operational cash flow performance amid capital investments driven by cloud growth.
Balance Sheet Health: With total assets of $554.8 billion against liabilities of $318.4 billion, Amazon maintains a healthy debt-to-equity ratio of 0.637 and has cash reserves of $71.673 billion, supporting liquidity and operational flexibility.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
147.98B |
10.12% |
3.25% |
| Gross Profit |
74.19B |
14.12% |
4.97% |
| Operating Income |
14.67B |
91.02% |
-4.15% |
| Net Income |
13.49B |
99.78% |
29.28% |
| EPS |
1.29 |
95.45% |
29.00% |
Key Financial Ratios
operatingProfitMargin
9.92%
operatingCashFlowPerShare
$2.42
freeCashFlowPerShare
$0.73
Management Commentary
AWS Growth: CEO Andy Jassy noted, "AWS revenue growth accelerated again from 17.2% in Q1 to 18.8% in Q2," reflecting strong demand for cloud services.
Retail Strategy: Management observed unit growth outpacing revenue growth, stating, "While consumers are being careful on price, our North America unit growth is meaningfully outpacing our sales growth."
Cost Efficiency: Jassy emphasized ongoing investments in automation and robotics to lower cost-to-serve, commenting that "these cost improvements won't happen in one quarter but require sustained execution over time."
"We're continuing to see three macro trends drive AWS growth, including companies focusing on modernizing their infrastructure and moving to cloud solutions." - Andy Jassy, CEO
— Andy Jassy
"We aim to have meaningfully fewer ads than linear TV and other streaming TV providers, helping to enhance the customer experience while maximizing ad revenue potential." - Andy Jassy, CEO
— Andy Jassy
Forward Guidance
Looking ahead, management’s guidance indicates cautious optimism amid economic uncertainty. They expect the strong growth trajectory to continue in AWS due in part to the ongoing shift of workloads to the cloud and increasing AI adoption. Investors should monitor developments in retail pricing strategies and examine the effectiveness of new initiatives like Project Kuiper and enhancements in the pharmacy segment. Given the potential for ongoing market shifts, the focus will remain on balancing operational investment with profitability.