Amazon’s Profit Triples

Amazon.com said profit tripled to nearly $10 billion from July to September as strong sales in its cloud-computing, advertising and retail units helped the company continue its rebound from postpandemic lows.

The Wall Street Journal reports Chief Executive Andy Jassy said the company would reap tens of billions of dollars in revenue in the next several years as customers turn to generative AI opportunities available within its cloud-computing business, known as Amazon Web Services, or AWS. Business customers are likely to be less cautious with their spending, he said. 

The company’s revenue increased by 13% to $143.1 billion for its third quarter, beating Wall Street expectations. Profit was $9.9 billion, more than triple the result from the same period last year. Amazon signaled net sales would be between $160 billion to $167 billion in its fourth quarter. Its shares rose by more than 5% in after-hours trading Thursday.

Andy Jassy

mazon has been trying to engineer a rebound in its core e-commerce business following a slowdown after pandemic-induced heights. The company has reined in costs across its North America unit, slashing roughly 27,000 corporate jobs and streamlining its operations following a cost-cutting review led by Jassy. It has also said it saved costs through an overhaul of its delivery operations meant to place packages closer to customers. 

While Amazon has tried to boost growth on its retail side, its cloud-computing business has seen less demand in the past year as corporate clients have looked to curtail their spending because of economic uncertainty. The unit has historically accounted for a large portion of Amazon’s profit. Sales in Amazon’s cloud business rose 12% to about $23 billion in the third quarter. Revenue in Amazon’s advertising segment, which has become a major business at the company, increased by 26% to about $12 billion, beating expectations..

The company’s third quarter was helped by its annual Prime Day event, which happened in July. The event is estimated to bring billions of dollars of revenue. Amazon held a second Prime Day-like event this month called “Prime Big Deal Days” that it said outpaced a similar event last year, signaling a strong start to its end-of-year sales. As the company prepares for the holiday season, its most important period of the year, it plans to hire 250,000 people for its warehouses in full-time, part-time and seasonal roles in preparation for the holidays.

Amazon’s online advertising business continues to boom amid growing investor concerns that the Israel-Hamas war could negatively impact the world economy. Amazon says that its advertising business continues to be a major revenue driver, topping $12 billion in the quarter, up 26% from a year ago. Amazon’s ad business includes Freevee and Thursday Night Football, among other programming, and it will be bringing ads to the core Prime Video service early next year.