Amazoncom Inc (AMZN) Q4 2024 Earnings Report

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.

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.

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.