Amazon late yesterday released its Q4 and 2023 annual financial numbers, saying that for the just-completed fiscal year, net sales increased 12% to $574.8 billion in 2023, compared with $514.0 billion in 2022, while net income was $30.4 billion compared with a net loss of $2.7 billion in 2022.
For Q4, Amazon reported that net sales increased 14% to $170.0 billion, compared with $149.2 billion in fourth quarter 2022. Net income increased to $10.6 billion, compared with $0.3 billion during the year-ago period.
“This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon,” said Andy Jassy, Amazon CEO, in a prepared statement. “While we made meaningful revenue, operating income, and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvements across our businesses. The regionalization of our U.S. fulfillment network led to our fastest-ever delivery speeds for Prime members while also lowering our cost to serve; AWS’s continued long-term focus on customers and feature delivery, coupled with new genAI capabilities like Bedrock, Q, and Trainium have resonated with customers and are starting to be reflected in our overall results; our Advertising services continue to improve and drive positive results; our newer businesses are progressing nicely, and along with our more established businesses, collectively making customers’ lives easier and better every day. As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about.”
- KC's View:
There's no question that the year-over-year numbers are remarkable, reflecting, as Tom Furphy says, lots of investments and cost rationalization paying off.
I would expect that we'll see continued growth along these lines, especially as Amazon ramps up its efforts to drive new revenue streams, like adding commercials to Prime Video offerings.
But I'd also argue that while Amazon has improved its customer service in many areas, it is at the cost of some parts of its customer experience. The question is whether this diminution of the experience will catch up with Amazon, or if it will be able to strike a balance that does not annoy too many shoppers too much.
At the moment, it appears that the big and strong - Walmart and Amazon - are getting bigger and stronger.