Amazon’s second-quarter revenue increased 11% to $134.4 billion, turning a profit year-on-year

Morning news on August 4, Beijing time, Amazon today released its second quarter financial report for 2023 as of the end of June. The report shows that Amazon’s net sales in the second quarter were US$134.4 billion (currently approximately 964.992 billion yuan), an increase of 11% compared with US$121.2 billion in the same period last year. Net profit was US$6.750 billion (currently approximately 48.465 billion yuan), compared with a net loss of US$2.028 billion in the same period last year.

By comparison, 37 analysts on average expected Amazon to post second-quarter revenue of $131.5 billion. The financial report showed that Amazon’s second-quarter revenue was US$134.4 billion, higher than analysts’ expectations.

On average, 36 analysts expected Amazon to post diluted earnings of $0.35 per share in the second quarter. The financial report showed that Amazon’s diluted earnings per share in the second quarter were $0.65, which was higher than analysts’ expectations.

Second quarter results:

Net sales were $134.4 billion, an increase of 11% compared to $121.2 billion in the prior year period. Excluding a $3 billion negative impact from currency changes, Amazon's second-quarter net sales increased 11% compared with the same period a year earlier.

By geography, Amazon’s North American division (U.S., Canada) net sales in the second quarter were $82.5 billion, a year-on-year increase of 11%. Net sales for Amazon's international segment (UK, Germany, France, Japan and China) were $29.7 billion in the second quarter, up 10% year over year.

Divided by service and business type, net sales from online stores in the second quarter were US$52.996 billion, an increase of 4% compared with US$50.855 billion in the same period last year. Excluding the impact of exchange rate changes, the year-on-year increase was 5%.

Net sales from physical stores were US$5.024 billion, an increase of 6% compared with US$4.721 billion in the same period last year, and a year-on-year increase of 7% excluding the impact of currency changes.

Net sales from third-party seller services were US$32.332 billion, an increase of 18% compared with US$27.376 billion in the same period last year. Excluding the impact of exchange rate changes, the year-on-year increase was 18%.

Net sales from subscription services were $9.894 billion, an increase of 14% compared to $8.716 billion in the prior year period. Excluding the impact of exchange rate changes, the year-on-year increase was 14%.

Net sales from advertising services were $10.683 billion, an increase of 22% compared with $8.757 billion in the same period last year. Excluding the impact of exchange rate changes, the year-on-year increase was 22%.

Net sales of Amazon’s AWS cloud services were $22.140 billion, an increase of 12% compared with $19.739 billion in the same period last year. Excluding the impact of exchange rate changes, the year-on-year increase was 12%.

Net sales from other businesses were US$1.344 billion, an increase of 26% compared with US$1.070 billion in the same period last year, and excluding the impact of currency changes, a year-on-year increase of 26%.

Total operating expenses were $126.702 billion, compared with $117.917 billion in the same period last year.

Among them, the cost of sales was US$69.373 billion, compared with US$66.424 billion in the same period last year.

Fulfillment expenses were $21.305 billion, compared with $20.342 billion in the year-ago period.

Technology and infrastructure spending was $21.931 billion, compared with $18.072 billion a year earlier.

Sales and marketing expenses were $10.745 billion, compared with $10.086 billion a year earlier.

General and administrative expenses were $3.202 billion, compared with $2.903 billion a year earlier.

Operating profit was $7.681 billion, compared with $3.317 billion a year earlier.

Among them, Amazon’s North American division’s operating profit was US$3.2 billion, compared with an operating loss of US$600 million in the same period last year. Amazon's international unit had an operating loss of $900 million, compared with an operating loss of $1.8 billion a year earlier. AWS cloud services operating profit was $5.4 billion, compared with operating profit of $5.7 billion in the year-earlier period.

Net profit was US$6.750 billion, compared with a net loss of US$2.028 billion in the same period a year earlier.

Amazon’s second-quarter net income included a pre-tax valuation gain of $200 million (included in non-operating expenses resulting from its investment in Rivian Automotive common stock), compared with a pre-tax gain on this investment in the same period last year. The valuation loss was $3.9 billion.

Diluted earnings per share were $0.65, compared with a diluted loss of $0.20 per share in the prior year.

Cash flow

In the 12 months ended June 30, 2023, Amazon’s operating cash flow was US$61.8 billion (currently approximately 443.724 billion yuan), which was the same as the previous year An increase of 74% compared with the same period.

In the 12 months ended June 30, 2023, Amazon's free cash flow was $7.9 billion. And in the 12 months to June 30, 2022, Amazon's free cash flow was $23.5 billion.

Performance Outlook:

Amazon predicts that net sales in the third quarter of 2023 will reach US$138 billion to US$143 billion (currently approximately 990.84 billion to 10,300 billion), a year-on-year increase of 9% to 13%.

Operating profit will be $5.5 billion to $8.5 billion, compared with $2.5 billion in the year-earlier period.

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