Amazon's financial results for the fourth quarter of 2024 – record numbers with an uncertain future

Amazon has published its financial results for the fourth quarter of 2024, which turned out to be better than analysts' expectations. Revenues increased by 10% to $187.8 billion, and net profit reached $20 billion. Despite these impressive results, forecasts for the next quarter are more cautious, which has raised concerns in the market and caused the giant's shares to drop by over 3% in after-hours trading.

What is behind this success?

Strong sales in North America – this segment generated $115.6 billion, which represents a year-on-year increase of 10%.

International sector in the black – sales increased by 8% to $43.4 billion.

AWS drives growth – Amazon Web Services recorded a 19% increase in revenues, reaching $28.8 billion.

Improved profitability – operating profit amounted to $21.2 billion, a significant jump compared to $13.2 billion in the fourth quarter of 2023.

Advertising segment remains at a high level – advertising brought the company $17.3 billion in revenue.

Growth in key business segments

Retail: stable growth across all markets

The retail segment still generates the largest portion of Amazon's revenues. In Q4 2024, revenues from North America increased by 10%, reaching $115.6 billion, while international sales grew by 8% to $43.4 billion. Adjusted for currency fluctuations, the increase was 9%.

Amazon continues to expand thanks to an enhanced shopping experience, efficient logistics, and customer loyalty. The holiday season played a crucial role in the results – Amazon's CEO, Andy Jassy, emphasized that this was the best shopping season in the company's history.

AWS – the engine of Amazon's growth

The Amazon Web Services (AWS) segment recorded the highest growth rate. AWS revenues in Q4 amounted to $28.8 billion, representing a 19% year-on-year increase. Even better is the operating profit from AWS, which rose to $10.6 billion (up from $7.2 billion in Q4 2023).

Amazon is actively developing its cloud service portfolio:

New AI chip Trainium2 – aimed at reducing the costs of processing artificial intelligence models.

Amazon Bedrock – an AI platform enabling the building and customization of AI models to meet customer needs.

Amazon SageMaker – further improvements in data analysis and AI model management.

These innovations may bring benefits in the long term, but for now, competition from Microsoft and Google is intensifying.

Operating income and net profit – a historic leap

Amazon's operating profits in Q4 rose to $21.2 billion (up from $13.2 billion a year earlier), indicating improved operational efficiency across all areas of the business. The international segment, which previously generated losses, reported an operating profit of $1.3 billion – a significant leap from a $0.4 billion loss in 2023.

Through cost optimization and more effective sales management, Amazon doubled its net profit to $20 billion (up from $10.6 billion in Q4 2023). This is the result of both increased revenues and better control over operating expenses.

Full-year results for 2024

Amazon closed 2024 with annual revenues of $638 billion, representing an 11% year-on-year increase. Increases were recorded across all key segments:

Sales in North America grew by 10% to $387.5 billion.

International sales increased by 9% (or 10% when adjusted for currency) to $142.9 billion.

AWS recorded an increase of 19%, reaching $107.6 billion.

Amazon's operating profit grew by 86% to $68.6 billion. This increase is due to better management of operating costs and strong demand for cloud services. The company has also significantly increased cash generation – operating cash flows rose by 36% to $115.9 billion.

Why, despite excellent results, are Amazon's shares declining?

Although the numbers are impressive, investors are concerned about the future. Amazon stated that it expects sales in the first quarter of 2025 to be in the range of $151-155.5 billion, which is lower than the market expectations of $158.5 billion. The main reasons are:

Currency fluctuations – the company estimates that losses due to this will amount to $2.1 billion.

Slowdown in the cloud – although AWS continues to grow, it has not met the results expected by analysts.

Cost pressure – significant investments in AI infrastructure and logistics are beginning to strain the balance sheet.

Will Amazon maintain momentum in 2025?

Despite excellent results in Q4, Amazon provided cautious forecasts for Q1 2025, estimating revenues in the range of $151-155.5 billion – slightly below market expectations.

The challenges Amazon will face in 2025 include:

Competition in the cloud – rivalry with Microsoft and Google in AI and cloud services.

Operating costs – pressure to optimize costs and improve delivery efficiency.

Consumer demand dynamics – changing shopping behaviors and growing caution among customers.

On the other hand, Amazon has strengths that could ensure further growth:

AWS and AI – innovations in cloud computing and artificial intelligence.

Marketplace development – an increasing number of sellers and logistics optimization.

New technologies in retail – automation of shopping and warehouse processes.

Summary

Amazon ended 2024 with impressive results, doubling its net profit and recording solid growth across all areas of the business. AWS remains the engine of the company, and the retail sector – despite the maturation of the market – still brings significant revenues.

Will 2025 bring new records or a slowdown? Amazon is already preparing for new challenges and investing in technologies of the future. One thing is certain – e-commerce and technology giants cannot afford stagnation.