Want to dig deeper on Amazon.com Inc and thousands of companies?
Rapidly search an extensive universe of public and private content — earnings transcripts, company filings, equity research, trade journals, and more.
Request a Free TrialCompanies by industry
Aerospace & DefenseAutomobile ComponentsAutomobilesBanksBeveragesBiotechnologyBroadline RetailCapital MarketsChemicalsCommunications EquipmentConsumer FinanceConsumer Staples Distribution & RetailContainers & PackagingElectric UtilitiesElectronic Equipment, Instruments & ComponentsEnergy Equipment & ServicesEntertainmentFinancial ServicesFood ProductsGround TransportationHealth Care Equipment & SuppliesHealth Care Providers & ServicesHotels, Restaurants & LeisureHousehold DurablesHousehold ProductsIT ServicesIndustrial ConglomeratesIndustrial REITsInsuranceInteractive Media & ServicesLife Sciences Tools & ServicesMachineryMediaMetals & MiningMulti-UtilitiesOil, Gas & Consumable FuelsPersonal Care ProductsPharmaceuticalsSemiconductors & Semiconductor EquipmentSoftwareSpecialized REITsSpecialty RetailTechnology Hardware, Storage & PeripheralsTextiles, Apparel & Luxury GoodsTobaccoWireless Telecommunication Services
Amazon.com Inc Earnings - Analysis & Highlights for Q4 2024
Overview
PositivesNegativesOutlook
- International segment revenue was $43.4 billion, up by 9% YoY excluding FX impact.
- Worldwide paid units grew 11% YoY as the company's focus on low prices, broad selection, and fast shipping continues to resonate with customers.
- Worldwide operating income was $21.2 billion, the largest operating income quarter ever, and was $1.2 billion above the high end of the guidance range.
- The company has spent considerable time optimizing the number of items it sends customers in the same package, which reduces packaging, is more convenient for customers, and less expensive for the company to fulfill.
- The company has built outstanding performant chips that deliver leading price performance, starting with its Nitro and Graviton chips in its core business and now extending to Trainium and AI, and something unique to AWS relative to other competing cloud providers.
- The company expects a headwind of approximately $2.1 billion in Q1 YoY or 150 bps due to changes in FX rates.
- The company saw a $700 million FX headwind in Q4, more than anticipated in guidance.
- The company expects growth to be lumpy over the next few years due to enterprise adoption cycles, capacity considerations, and technology advancements impacting timing.
- The company expects a headwind on margins in the short term.
- The company's results are unpredictable and may be materially affected by various factors, including fluctuations in FX rates, changes in global economic and geopolitical conditions, and customer demand and spending.
- The company expects AWS operating margins to fluctuate over time, driven in part by the level of investments the company is making.
- The company expects a headwind of approximately $2.1 billion in Q1 YoY or 150 bps due to changes in FX rates.
- The company expects margins to be comparable in non-AI business over the long term.
Q&A Highlights from Amazon.com Inc Earnings Call Q4 2024
- Analyst asked about AWS growth and supply chain constraints.
- AWS growth is not moderated down by supply chain constraints, and the company is growing at a pretty good clip. However, there are some constraints on capacity, such as chips from third-party partners, power constraints, and components in the supply chain. The company predicts that these constraints will relax in the second half of 2025, and they could be growing faster if they were unconstrained.
- AWS growth is not moderated down by supply chain constraints, and the company is growing at a pretty good clip. However, there are some constraints on capacity, such as chips from third-party partners, power constraints, and components in the supply chain. The company predicts that these constraints will relax in the second half of 2025, and they could be growing faster if they were unconstrained.
- Analyst asked about bending the cost curve lower with AI and the move towards open source, elements of custom silicon, and higher returns on capital.
- The company is impressed with what DeepSeek has done, and they are working on similar technologies. They believe that the cost of inference will substantially come down, making it easier for companies to infuse their applications with inference and Generative AI. They also believe that the cost of inference coming down will be positive for customers and their business.
- The company is impressed with what DeepSeek has done, and they are working on similar technologies. They believe that the cost of inference will substantially come down, making it easier for companies to infuse their applications with inference and Generative AI. They also believe that the cost of inference coming down will be positive for customers and their business.
- Analyst asked about the impact of less volume going through Amazon's shipping partner, UPS, on the company's margins.
- Brian Olsavsky, CFO of Amazon, explained that the company has been investing heavily in Generative AI, which has led to lower margins in the short term but is expected to lead to comparable margins in the long term. He also mentioned that the company has been able to handle the increased volume through its own logistics network, reducing its reliance on UPS.
- Brian Olsavsky, CFO of Amazon, explained that the company has been investing heavily in Generative AI, which has led to lower margins in the short term but is expected to lead to comparable margins in the long term. He also mentioned that the company has been able to handle the increased volume through its own logistics network, reducing its reliance on UPS.
- Analyst asked about the company's approach to robotics acceleration and how it plans to scale its savings and profitability from robotics.
- Andrew Jassy, CEO of Amazon, explained that the company has been integrating robotics into its fulfillment network for many years and has seen cost savings, productivity improvements, and safety improvements. He mentioned that the company has recently started to see the next tranche of robotics initiatives hitting production and has plans to expand this to other facilities. He also mentioned that the company has a number of Generative AI applications in its retail business, including productivity and cost savings efforts, as well as altogether new experiences.
- Andrew Jassy, CEO of Amazon, explained that the company has been integrating robotics into its fulfillment network for many years and has seen cost savings, productivity improvements, and safety improvements. He mentioned that the company has recently started to see the next tranche of robotics initiatives hitting production and has plans to expand this to other facilities. He also mentioned that the company has a number of Generative AI applications in its retail business, including productivity and cost savings efforts, as well as altogether new experiences.
- Analyst asked about the speed of delivery and how it's impacting the everyday essentials business.
- The company measures the speed of delivery carefully, and they have not yet seen diminishing returns. They have a program where customers can choose to combine their shipments and have them delivered on a specific day to be more sustainable and environmentally friendly. The company has seen that customers choose to buy from them more frequently and are able to deliver to their homes or wherever they are much more quickly. The promise of Prime Air, which is to deliver items to customers inside an hour, has had a big impact on the everyday essentials business, especially for items that are needed more quickly. The company has made a significant architectural change in their inbound network, and they expect to see additional efficiencies throughout the year.
- The company measures the speed of delivery carefully, and they have not yet seen diminishing returns. They have a program where customers can choose to combine their shipments and have them delivered on a specific day to be more sustainable and environmentally friendly. The company has seen that customers choose to buy from them more frequently and are able to deliver to their homes or wherever they are much more quickly. The promise of Prime Air, which is to deliver items to customers inside an hour, has had a big impact on the everyday essentials business, especially for items that are needed more quickly. The company has made a significant architectural change in their inbound network, and they expect to see additional efficiencies throughout the year.
- Analyst asked about Rufus, a virtual assistant that helps customers find information on product detail pages.
- The company believes that retailers, including themselves, will have their own way of interacting with agents. Rufus continues to get better and better, and it impacts the customer experience positively. It provides quick facts about products, summarizes customer reviews, and helps customers find information on product detail pages. The company expects the personalization features of Rufus to continue to improve, and they believe that the number of occasions where customers use Rufus for help will increase in 2025.
- The company believes that retailers, including themselves, will have their own way of interacting with agents. Rufus continues to get better and better, and it impacts the customer experience positively. It provides quick facts about products, summarizes customer reviews, and helps customers find information on product detail pages. The company expects the personalization features of Rufus to continue to improve, and they believe that the number of occasions where customers use Rufus for help will increase in 2025.
Related Companies:
