Executive Summary
In Q4 2023, Amazon.com Inc (AMZN) reported a robust performance with revenues reaching $170 billion, reflecting a year-over-year growth of 13%. A significant factor in this growth was the strong demand for its diverse product offerings amidst economic uncertainties. The company achieved operating income of $13.2 billion, a remarkable increase of 383% year-over-year, underscoring the effectiveness of its cost reduction strategies and operational efficiencies. CEO Andy Jassy emphasized the improvements in customer experience and operational execution, which contributed positively to both revenue and profitability. Investor focus will be crucial moving forward as Amazon faces a competitive landscape marked by economic fluctuations and increasing operational costs.
Key Performance Indicators
QoQ: 18.06% | YoY:382.61%
QoQ: 7.54% | YoY:3 721.58%
QoQ: 7.29% | YoY:3 686.76%
Key Insights
**Revenue Performance:** Amazon’s Q4 2023 revenue surged to $170 billion, a 13% increase from the previous year, with North America generating $105.5 billion and international revenues at $40.2 billion. For the full year, total revenues were approximately $574.8 billion, reflecting a 12% increase YoY.
**Profitability:** Operating income soared to $13.2 billion, a substantial jump compared to $3.4 billion last year, demonstrating a solid operating margin improvement from 1.8% to 7.8%.
**Net I...
Financial Highlights
Revenue Performance: Amazon’s Q4 2023 revenue surged to $170 billion, a 13% increase from the previous year, with North America generating $105.5 billion and international revenues at $40.2 billion. For the full year, total revenues were approximately $574.8 billion, reflecting a 12% increase YoY.
Profitability: Operating income soared to $13.2 billion, a substantial jump compared to $3.4 billion last year, demonstrating a solid operating margin improvement from 1.8% to 7.8%.
Net Income: Achieving $10.6 billion in net income represented a staggering growth of 3,721% YoY, primarily attributed to cost control initiatives and higher sales volume.
Cash Flow: The company reported trailing 12-month free cash flow of $35.5 billion, an increase of $48.3 billion year-over-year, highlighting operational efficiencies and improved capital management.
Balance Sheet Health: With cash and short-term investments totaling $86.8 billion, Amazon showcases a comfortable liquidity position, supporting its strategic investments in growth initiatives.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
169.96B |
13.91% |
18.78% |
| Gross Profit |
77.41B |
21.78% |
13.73% |
| Operating Income |
13.21B |
382.61% |
18.06% |
| Net Income |
10.62B |
3 721.58% |
7.54% |
| EPS |
1.03 |
3 686.76% |
7.29% |
Key Financial Ratios
operatingProfitMargin
7.77%
operatingCashFlowPerShare
$4.1
freeCashFlowPerShare
$2.69
Management Commentary
1. Operational Efficiency: Jassy highlighted Amazon's efforts to reduce the cost-to-serve, stating, 'In 2023, for the first time since 2018, we've reduced our cost-to-serve on a per unit basis globally.' This was achieved through enhanced regionalization and delivery speed improvements.
2. Customer Focus: Jassy emphasized the importance of selection and convenience, noting, 'We continue to have the broadest retail selection with hundreds and millions of products available.' The success of key promotional events, like Black Friday, reinforced customer engagement.
3. Investment in Technology: On AWS, Jassy stated, 'Revenue in the quarter grew 13% year-over-year, and we’re now approaching an annualized revenue run rate of $100 billion.' The push into generative AI capabilities, particularly through products like Bedrock, shows Amazon’s commitment to innovation and market leadership in cloud services.
Jassy noted, 'We made meaningful progress on delivery speeds in the United States and globally, which helped strong sales throughout the quarter.' This highlights the operational efficiencies gained in logistics.
— Andy Jassy
Olsavsky remarked, 'Worldwide revenue was $170 billion, representing an increase of 13% year-over-year,' indicating strong overall business growth and resilience.
— Brian Olsavsky
Forward Guidance
Management’s outlook for 2024 is cautiously optimistic. They anticipate continued revenue growth bolstered by ongoing improvements in AWS and retail segments. The emphasis on lowering costs while enhancing customer experience hints at a strategic pivot toward sustainable profitability. Jassy stated, 'As we look toward 2024 and beyond, we're not done lowering our cost to serve.' Investors should monitor developments in generative AI and ongoing investments into infrastructure, particularly concerning the growth of AWS.