Amazon exceeded expectations with revenue of $134.4 billion in Q2
Amazon reported net income of $6.7 billion and 65 cents per share in the second quarter. AWS generated $22.1 billion in revenue, while advertising revenues reached $10.7 billion.
Tech giant Amazon has announced its second quarter earnings report. While the report exceeded the expectations of analysts, the company pointed out that the increase in revenue would accelerate. Amazon shares rose above 8 percent after the second-quarter results were announced.
After posting a loss of $2 billion and 20 cents per share the previous year, Amazon reported net income of $6.7 billion and 65 cents per share this quarter. The loss was due to the depreciation of the company’s investment in electric vehicle company Rivian.
Earnings per share stood out at 65 cents, versus analysts’ expectations of 35 cents. Revenues of the company, which is expected to be $131.5 billion, were $134.4 billion this quarter.
Amazon Web Services generated $22.1 billion in revenue, beating estimates of $21.8 billion. At this point, it should be noted that AWS sales grew by 12 percent in the second quarter. On the other hand, sales grew 16 percent in the previous quarter. It is possible to describe this metric as the slowest growth recorded since 2015. It is also worth adding that AWS accounts for 70 percent of its operating profit of $7.7 billion.
Advertising revenues reached $10.7 billion. Analysts had expected Amazon Ads to generate $10.4 billion in revenue. The advertising segment saw a 22 percent increase in quarterly revenue. For comparison, Google’s ad revenues increased by 3.2 percent in the second quarter, while Facebook’s ad revenues increased by 12 percent.
Amazon hit its highest earnings level since the fourth quarter of 2020. The company’s high profitability shows that CEO Andy Jassy’s cost-cutting steps are starting to pay off.
The company, which has laid off 27,000 employees since last fall, stopped corporate recruitment. Global headcount fell 4 percent year-over-year, with 1.46 million employees at the end of the second quarter.
Amazon expects sales of $138 billion to $143 billion for the third quarter. Moreover, the company expects growth of 9 percent to 13 percent in the third quarter.
Amazon, which showed single-digit growth in 5 of the last 6 quarters, is returning to double-digit growth rates again. A large part of the company’s current vision is generative artificial intelligence. In particular, it prepares AWS to be the long-term preferred business partner of customers in the generative AI area. Furthermore, the company also pointed out that it has more than one generative AI initiative.
