首页 News 正文

Amazon's Q3 2024 financial report: E-commerce business mixed, stock price rise attributed to AWS

寒江雪176
1196 0 0

On October 31st local time, Amazon released its Q3 2024 financial report, which showed that both revenue and profit increased during the reporting period, exceeding market expectations.
Fundamentally speaking, revenue and profit growth are the biggest highlights of Amazon's Q3 2024 performance. The financial report shows that as of September 30, 2024, Amazon's operating revenue reached $158.9 billion, an 11% increase from $143.1 billion in the same period last year. Its net profit reached $15.3 billion, a 55% increase from $9.9 billion in the same period last year.
Amazon's quarterly revenue performance, data from Futu Niu Niu

Amazon's quarterly profit performance, data from Futu Niu Niu

Based on Amazon's previous performance, the increase in revenue and net profit this time is not significant, but it is clear that investors are satisfied with the new report card submitted by Amazon. In after hours trading, Amazon's stock price rose by more than 5%.
Amazon also gave a more optimistic outlook for the next quarter, stating that it expects revenue to be between $181.5 billion and $1885 billion in Q4 2024, a year-on-year increase of 7% to 11%. Operating profit is expected to be between $16 billion and $20 billion, indicating that performance will continue to improve in the next quarter.
The performance of e-commerce business is mixed: growth rate increases, market competition intensifies
From the perspective of business composition, retail remains the main driver of Amazon's revenue, with e-commerce still being Amazon's "cash cow" business, and showing better growth during the reporting period than before. Data shows that in Q3 2024, the net sales of online stores reached 61.41 billion US dollars, exceeding the expected 59.64 billion US dollars, a year-on-year increase of 7.2%, which is an improvement compared to the 4.58% growth rate in the second quarter of 2024 and the 6.99% growth rate in the first quarter of 2024.
However, the growth rate of Amazon's e-commerce business in 2024 is significantly lower than the overall market growth rate. According to a survey report on the global e-commerce market value and future growth trends released by Stocklytics, the e-commerce market value is expected to reach $4.11 trillion in 2024, with a year-on-year increase of 15% compared to 2023.
Behind the slow growth, Amazon is facing significant challenges from its competitors. Especially from emerging cross-border e-commerce platforms such as Temu and SHEIN, Amazon's market position is being threatened. In 2023, Temu's unique visitor count has reached 467 million, ranking second in the global e-commerce platform traffic, only behind Amazon.
In order to cope with new challenges, Amazon is gradually implementing a low price strategy in 2024, competing with Temu and SHEIN in the "ultimate cost-effectiveness". According to foreign media reports, Amazon is currently testing a low price mall project, directly benchmarking Temu, mainly selling white label products, and directly shipping from Chinese warehouses to the US market.
Another noteworthy data is the advertising and third-party merchant service revenue related to e-commerce, which have been important sources of growth in the past. During the reporting period, both growth rates slowed down. The financial report shows that in Q3 2024, the net sales of the advertising business increased by 19% year-on-year to $14.3 billion, compared to 19.5% in the previous quarter and 24% in the first quarter, indicating a decrease in growth rate.
In addition, the net sales of third-party merchant services were $37.86 billion, a year-on-year increase of 10%, lower than the expected $38.22 billion, and the growth rate was lower than the previous two quarters.
Amazon's attitude towards competition is relatively optimistic. During the earnings conference, executives stated, "We only account for 1% of the global retail market, and 80% to 85% of the market share exists in offline entities. The future changes in this proportion will present opportunities for both us and our competitors, and there is no one size fits all situation
But this also cannot avoid the significant pressure that Amazon's retail business is facing from competitors and the market. Some Wall Street analysts are concerned about the uncertainty of Amazon's core retail business, while others say that the slowdown in retail profit margins will affect the overall increase in the company's profit margins.
AWS's strong growth supports expectations for Amazon's stock price to rise
Unlike the complex situation currently faced by Amazon's retail business, generative AI is playing a positive role in Amazon's cloud business revenue. In Q3 2024, Amazon Web Services (AWS) cloud business revenue and profit margins have achieved rapid growth.
Specifically, in terms of revenue, the year-on-year growth rate of AWS cloud business revenue has been continuously increasing for five consecutive quarters. The report shows that in Q3 2024, AWS net sales increased by 19% year-on-year to $27.45 billion, an increase from 18.7% (Q2 2024) and 17.25% (Q1 2024) in the previous two quarters, and higher than the full year growth rate in 2023. This also means that AWS is expected to exceed $100 billion in revenue for the full year of 2024.
In terms of profit performance, AWS not only contributed 60% of the company's overall operating profit, but also created a new high in operating profit margin since 2014. The report shows that in Q3 2024, AWS cloud business's operating profit reached 10.4 billion US dollars, exceeding analysts' expectations of 9.12 billion US dollars, accounting for nearly 60% of the company's operating profit, an increase of nearly 48.6% compared to the same period last year's 7 billion US dollars; Its operating profit margin rose from 35.5% to 38.1%, creating a new high.
Amazon stated that the reasons for AWS's profit margin growth are mainly reflected in three aspects: accelerated revenue growth and cost efficiency improvement, extended server lifespan, and optimization of human resources and infrastructure cost management. Amazon President and CEO Andy Jassy also announced during the earnings call that he will share over 100 new cloud infrastructure and AI features at the AWS re: Invent event one week after Thanksgiving.
Generative AI is becoming an important weight for AWS to solidify its position at present. However, Amazon did not disclose the revenue generated by this generative AI. Andy Jassy only revealed a vague set of numbers during the conference call, stating that "generative AI has already generated billions of dollars in revenue and is growing at a double-digit year-on-year growth rate.
The cost investment behind the impressive growth is also worth paying attention to. As is well known, the growth of large models comes at a huge cost, with increased server capital expenditures required to handle artificial intelligence services. Amazon stated that it expects capital expenditures to reach $75 billion in 2024, an increase of approximately 55% from $48.4 billion in 2023. Andy Jassy stated that the company expects expenditures to "exceed this number" by 2025.
Andy Jassy is also optimistic about the impact of large-scale investment in AI on profit margins, stating, "As the market matures, the field of general artificial intelligence will also see very healthy profit margins
CandyLake.com 系信息发布平台,仅提供信息存储空间服务。
声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
您需要登录后才可以回帖 登录 | 立即注册

本版积分规则

  •   苹果知名分析师郭明錤周四(10月31日)在社交媒体上发文表示,苹果明年可能会减少对芯片制造商博通Wi-Fi芯片的依赖,并推出自己的处理器。   郭明錤在社交媒体平台X上写道,“在2025年下半年的新产品(例如iPh ...
    uturn
    昨天 14:42
    支持
    反对
    回复
    收藏
  •   10月30日,小鹏汽车生态企业小鹏汇天宣布,旗下分体式飞行汽车“陆地航母”即将亮相2024中国航展,11月12日将在中国航展第二展区(斗门莲洲)进行全球首次公开飞行,同时“陆地航母”也将在珠海国际航展中心8号 ...
    yxtianyouyou
    前天 11:43
    支持
    反对
    回复
    收藏
  •   交易所监管文件显示,当地时间11月1日,亚马逊创始人杰夫·贝索斯拟出售约1635万股亚马逊股票,预计套现约30.5亿美元。今年7月,贝索斯已申请额外出售约2500万股亚马逊股票,按当时股价计算可套现约50亿美元。 ...
    blueskybb
    5 小时前
    支持
    反对
    回复
    收藏
  •   近日,凯撒海湾目的地(山东)运营管理有限责任公司(简称“凯撒海湾”)与携程旅悦集团签署战略合作协议,双方将围绕“海上目的地运营”、“旅游产品与服务创新”、“研学旅行”、“日韩及海外旅游市场开拓”等 ...
    llyyy2008
    3 小时前
    支持
    反对
    回复
    收藏
寒江雪176 新手上路
  • 粉丝

    0

  • 关注

    0

  • 主题

    3