Amazon Q4 Financial Report: Net Profit Increases 37-fold, Third-party Seller Services Revenue Grows by 20%

[Ebrun Original] Recently, Amazon released its Q4 and full-year financial reports for 2023. The data shows that in the fourth quarter, Amazon's net sales reached $169.961 billion, a 14% increase year-on-year; net profit reached $10.624 billion, a significant increase of over 37 times compared to $2.78 billion in the same period last year.

By geographical segment, Amazon's North American segment (the United States and Canada) reported a net sales of $105.51 billion in the fourth quarter, a 13% increase compared to $93.363 billion in the same period last year; operating profit was $6.461 billion, compared to an operating loss of $0.24 billion in the same period last year, turning from loss to profit year-on-year; operating margin was 6.1%, while the operating loss rate in the same period last year was 0.3%.

Amazon's international segment (the United Kingdom, Germany, France, Japan, and China) reported a net sales of $40.243 billion in the fourth quarter, a 17% increase compared to $34.463 billion in the same period last year; operating loss was $0.419 billion, an 81% reduction year-on-year (operating loss was $2.228 billion in the same period last year); the operating loss margin was 1.0%, while the operating loss rate in the same period last year was 6.5%.

The sales from Amazon's North American segment accounted for 62% of the total sales in the fourth quarter, a decrease from 63% in the same period last year; sales from the international segment accounted for 24% of the total sales, an increase from 23% in the same period last year.

Amazon Web Services (AWS) reported a 13% increase in revenue in the fourth quarter, reaching $24.2 billion, showing an improvement compared to a 12% growth rate in the third quarter; operating profit was $7.167 billion, a 38% increase year-on-year; the operating profit margin was 29.6%, while it was 24.3% in the same period last year. Sales from AWS in the fourth quarter accounted for 14% of the total sales, basically unchanged from 13% in the same period last year.

By service and business type, Amazon's net sales from online stores in the fourth quarter were $70.543 billion, a 9% increase year-on-year; net sales from physical stores were $5.152 billion, a 4% increase year-on-year; net sales from third-party seller services were $43.559 billion, a 20% increase year-on-year; net sales from advertising services were $14.654 billion, a 27% increase year-on-year; net sales from subscription services were $10.488 billion, a 14% increase year-on-year; net sales from AWS were $24.204 billion, a 13% increase year-on-year; net sales from other businesses were $1.361 billion, a 9% increase year-on-year.

For the entire 2023 financial year, Amazon's net sales were $574.8 billion, a 12% increase year-on-year. Among these, sales from the North American segment were at $352.8 billion, a 12% increase year-on-year; sales from the international segment were at $131.2 billion, an 11% increase year-on-year; and AWS business sales amounted to $90.8 billion, a 13% increase year-on-year.

For the full year, Amazon's operating profit was $36.9 billion, a substantial increase from $12.2 billion in the 2022 financial year. Among these, the operating profit from the North American segment was $14.9 billion, a turnaround from a loss to profit (operating loss of $2.8 billion in the 2022 financial year); the operating loss from the international segment was $2.7 billion, a slight narrowing from the $7.7 billion in the 2022 financial year; and the operating profit from AWS business was $24.6 billion, an increase from the $22.8 billion in the 2022 financial year.

In terms of net profit, Amazon reported a net profit of $30.4 billion and a diluted earnings per share of $2.90 in the 2023 financial year, while it reported a net loss of $2.7 billion and a diluted loss per share of $0.27 in the 2022 financial year. The net profit in the 2023 financial year included a pre-tax valuation income of $800 million from the ordinary stock investment in Rivian Automotive, while the pre-tax valuation loss from this investment in the 2022 financial year was $12.7 billion.