EPS of $1.43 increased by 52.1% from previous year
Gross margin of 49.0%
Net income of 15.33B
""Our team continues to focus on the inputs that matter most to customers, really broad selection, low prices, fast and free delivery..." - Andy Jassy" - Andy Jassy
In Q3 2024, Amazon.com Inc (AMZN) delivered impressive financial results with revenue reaching $158.9 billion, marking an 11% increase year-over-year, adjusted for foreign exchange impacts. This growth is attributed to strong performance across the North America and International segments, with 9% and 12% revenue growth respectively. Operating income soared to $17.4 billion, up an impressive 56% year-over-year, reflecting the company's focus on operational efficiencies despite ongoing economic challenges. CEO Andy Jassy highlighted the $14.3 billion revenue generated from advertising, driven by robust customer engagement and innovative advertising solutions. Additionally, Amazon's commitment to enhancing its supply chain and reducing costs has yielded significant advantages, placing the company in a favorable position as it heads into the holiday shopping season.
Operational Efficiency:
- Operating Margin: 10.9% (an improvement fueled by better cost control and higher sales volumes)
- Advertising Revenue: $14.3 billion (YoY growth of 18.8%).
- AWS Revenue: $27.5 billion (YoY: +19.1%, demonstrating AWS's ongoing strength).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
158.88B
11.04%
7.37%
Gross Profit
77.90B
14.46%
5.00%
Operating Income
17.41B
55.62%
18.67%
Net Income
15.33B
55.16%
13.67%
EPS
1.46
52.08%
13.18%
Key Financial Ratios
currentRatio
1.09
grossProfitMargin
49%
operatingProfitMargin
11%
netProfitMargin
9.65%
returnOnAssets
2.62%
returnOnEquity
5.91%
debtEquityRatio
0.52
operatingCashFlowPerShare
$2.47
freeCashFlowPerShare
$0.32
priceToBookRatio
7.55
priceEarningsRatio
31.91
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Growth Strategy and Insights from Management:
- Andy Jassy, CEO: "In our stores business, we saw sales growth of 9% year-over-year in the North America segment and 12% year-over-year in the international segment, reflecting customers' increasing preference for low prices and fast delivery."
- Brian Olsavsky, CFO: “Operating income increased 56% year-over-year to $17.4 billion, our highest quarterly operating income ever. We are focused on managing costs while inventing for customers.”
--- Investment in Robotics and Delivery: The new fulfillment center design in Shreveport, which incorporates robotics for enhanced efficiency, aims to reduce processing times while delivering faster to customers.
--- Advertising Growth: The ongoing refinement in advertising services is expected to continue delivering significant returns, with CEO Jassy emphasizing opportunities for growth through new advertising technologies and increasing customer engagement with brands.
"Our team continues to focus on the inputs that matter most to customers, really broad selection, low prices, fast and free delivery..." - Andy Jassy
— Andy Jassy
"We remain focused on streamlining and managing costs in a way that allows us to continue inventing for customers in a cost-effective way." - Brian Olsavsky
— Brian Olsavsky
Forward Guidance
Looking ahead, Amazon anticipates continued revenue growth propelled by improvements in operational efficiencies and expansions in its AWS segment. The company expects to maintain robust sales momentum through the holiday season, supported by strategic investments in customer experience, logistics, and technology infrastructure. CEO Jassy stated, "We are prepared for a strong holiday season, aided by our Prime events and enhanced delivery capabilities. Investors should monitor growth in AWS and advertising segments, which are critical to future profitability."
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
AMZN Focus
49.00%
11.00%
5.91%
31.91%
JD
11.00%
4.63%
5.13%
9.37%
PDD
60.00%
24.50%
8.97%
13.12%
SE
43.00%
4.68%
1.94%
90.65%
MELI
45.90%
10.50%
9.92%
65.51%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Amazon.com Inc presents a compelling investment opportunity due to its robust financial performance and strategic initiatives. The strong growth in revenue and operating income, coupled with management's focus on efficiency and customer satisfaction, position the company well for future growth. However, investors should remain cognizant of potential risks including macroeconomic factors and competition. As AWS and advertising contribute significantly to profitability, these segments should be closely monitored, highlighting a strong investment thesis.
Key Investment Factors
Growth Potential
Amazon's growth potential remains strong, supported by a diverse range of offerings, including robust growth in AWS and advertising revenues, as well as continued expansion in both established and emerging markets.
Profitability Risk
Potential risks include economic uncertainties impacting consumer spending, competitive pressures from both traditional and online retailers, and challenges in sustaining higher operating margins amidst increasing costs.
Financial Position
Amazon maintains a strong balance sheet with cash and cash equivalents totaling $75 billion, and total assets amounting to $584.6 billion. However, total liabilities stand at $325.5 billion, indicating a careful watch on leverage and debt management.
SWOT Analysis
Strengths
Strong brand recognition and customer loyalty due to vast product selection and excellent delivery times.
Diverse revenue streams from retail, AWS, and advertising, reducing dependency on any single segment.
Innovative technology, particularly in AI and logistics optimization, enhancing operational efficiency.
Weaknesses
Thin operating margins in the retail segment compared to competitors due to high cost structure and competitive pricing.
Exposure to global economic fluctuations that may affect consumer spending behavior.
Opportunities
Expansion of AWS services, specifically in AI and machine learning.
Investment in new technologies to improve fulfillment and customer service.
Growth potential in international markets, particularly in Asia and developing regions.
Threats
Intense competition from both traditional retailers and tech-savvy startups in e-commerce.
Regulatory challenges and scrutiny regarding data privacy and market dominance in various geographies.