Amazon Q3: revenue up 13% YoY to $143.1B, net income up 244% to $9.9B, operating income up 343% to $11.2B, subscription revenue up 14% to $10.2B; AMZN jumps 6%+

Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its third quarter ended September 30, 2023.

Amazon 2023-10-27

Context & Ripple Effects

Amazon’s Q3 revenue base had expanded from $56.6B in Q3 2018 to $143.1B, while profitability has been uneven: Q3 2019 net income fell year over year despite higher sales. This quarter pairs continued top-line growth with a sharp operating-income rebound.

Subscription revenue grew 14% to $10.2B, slightly ahead of total revenue growth. That makes recurring revenue a meaningful part of the quarter’s growth mix rather than a side metric.

First-order effects

Amazon reports materially higher revenue, operating income and net income, and AMZN rose more than 6% immediately after the release.
Subscription revenue reached $10.2B, increasing the recurring-sales contribution alongside Amazon’s broader business growth.

Second-order effects

The earnings reaction strengthens investor attention on Amazon’s ability to convert moderate revenue growth into operating profit, after prior quarters showed that sales growth alone did not ensure higher net income.
Faster subscription growth increases the importance of retention and value delivery: recurring revenue becomes more consequential to Amazon’s growth profile as the base scales.

Third-order effects

If revenue growth and operating-profit expansion continue together, Amazon’s scale advantage may increasingly be measured by earnings leverage rather than sales growth alone.
The results fit a broader shift in which large digital platforms are judged on the durability and economics of recurring revenue, not simply subscriber or revenue expansion.

The trend: Amazon’s Q3 is one data point in the maturation of platform businesses toward profit-led growth supported by larger recurring-revenue bases.

Discussion

@epro.social Emil Protalinski on bluesky
$AMZN Q3 2023: — Revenue up 13% to $143.1 billion — Net income up 241% to $9.9 billion — AWS up 12% — Subscriptions up 14% — Advertising services up 26% — North American sales up 11% — International sales up 16% — Employees down 3% to 1,500,000 [embedded post]
@quinnypig Corey Quinn on x
Next @ajassy hits on a key truth: the GenAI applications need to hit the market *and then scale* before they drive basically any spend worth writing about. Today they're experiments. 2024 and beyond? The future remains unwritten.
@theo_wayt Theo Wayt on x
Despite efforts like this to boost Amazon's video ad business, Amazon's CFO just told reporters that the company's ad growth is still coming primarily from merchants paying to boost their items in search results. https://www.theinformation.com/ ...
@amazonnews @amazonnews on x
We just announced our Q3 2023 earnings: 🔶Total net sales + 13% to $143.1B, or 11% excl changes in FX. 📦North America sales + 11% to $87.9B. 🌍International sales + 16% to $32.1B, or 11% excl changes in FX. 💻AWS sales + 12% to $23.1B. ⬆️Total operating income increased to...
@stockmarketnerd Brad Freeman on x
And there it is: $AMZN's CEO Andy Jassy called out improving pace of cloud deal flow. Talked about deal elongation easing. Talked up several deals signed in September which will be reflected in Q4. He likes AWS's momentum for new logos heading into next Q. Great news.
@kantrowitz Alex Kantrowitz on x
Called it. Amazon up after hours on a nice earnings beat.
@sarbjeetjohal Sarbjeet Johal on x
.@Amazon is not selling the #AI story well to the market! A good quarter is washed away due to AI sucking the air out of AWS. They better cover AI developments during the call and not keep the thunder (if any) saved for #reInvent Acquisitions and deeper partnerships must be in...…
@retail_guru Rahul Sharma on x
Folks love to dismiss $AMZN US retail biz & focus on AWS. But in Q3 alone, US retail grew sales by $9 billion on huge base of $79 billion. That actually understates growth as 3P (recorded as commissions) is growing 18%. Just an incredible brand! $TGT $WMT
@retail_guru Rahul Sharma on x
On 4-year stack, $AMZN US retail stellar +104% & International +94%. AWS accelerated sequentially to +155%. Most important, adex +25%, subscriptions +13% & 3P +18% all growing faster than other segments have been & will be key to driving margin upside
@thetranscript_ @thetranscript_ on x
Amazon with a double beat CEO: “We had a strong Q3 as our cost to serve & speed of delivery in our Stores business took another step forward, our AWS growth continued to stabilize, our Ad revenue grew robustly & overall operating income & FCF rose significantly” $AMZN: +3.6% AH […
@retail_guru Rahul Sharma on x
Topline is most scrutinised number in each $AMZN Q but margin is THE standout here. Efficiency push combined with growth in high margin services shows what's possible. US retail margin nearly 5%, International at breakeven & even AWS broke long run of margin declines 🔥🔥
@munster_gene Gene Munster on x
Shares of $AMZN rebounded 6% in after hours when CEO Jassy said AWS bookings are accelerating. Reading between the lines growth in December should 15% plus, compared to the Street's 14%. While AWS is still losing share to Azure and Google Cloud, the gap should close this quarter.…
@rihardjarc Rihard Jarc on x
Andy Jassy on the $AMZN call mentioning accelerated deal signing for AWS in recent months. Thats what I love to hear...
@mattrosoff Matt Rosoff on x
Early read on Amazon pretty good, stock up 5% ah https://www.cnbc.com/...
@retail_guru Rahul Sharma on x
Services margin improvement was healthy but is nearly 500bp below the 40% margin peak $GOOGL hit in Q3 '21. Direct consequence of a jump in headcount of 32K (nearly 22%) over 2 years, way ahead of Services revenue growth of 13%.
@quinnypig Corey Quinn on x
AWS cleared over $23 billion in net sales; curious how that reflects a significantly increased pressure on customers to shift spend on other vendors into the AWS Marketplace to boost commits. Customers are largely... unimpressed, by this.
@borrowed_ideas @borrowed_ideas on x
3P revenue grew by almost +20%, ads +25%, subscription mid-teen, and 1P MSD+. AWS, which was the key focus for many, grew by ~12%. More on AWS later; let's start more segment level discussion with Amazon, ex AWS. [image]
@economyapp @economyapp on x
Advertising revenue in Q3'23: 🔴 Google Search: $44.0B (+11% Y/Y). 🔵 Meta: $33.6B (+24% Y/Y). 🟠 Amazon: $12.1B (+26% Y/Y). Amazon is still a distant third but is catching up. $GOOG $META $AMZN [image]
@retail_guru Rahul Sharma on x
Testament to how strong a consumer platform is: in just two years, $AMZN advertising revenue has spiked from $29 billion to $48 billion. Ad revenue is now 45% larger than Youtube. When $AMZN focuses on something it is say good at it... $GOOGL $META
@susanlitv Susan Li on x
Asked #Amazon's CFO Brian Olsavsky if advertising was being affected by the #MiddleEast Crisis after #Meta's warning yesterday 👇 “well on advertising, we're seeing a little different....what we're seeing is... the top of the funnel has been slowing down this year. But further...
@datawithdev Dev on x
Five years from now, Prime will cost $200+, There will be surcharge on returned packages. You will be watching more Ads on Prime. AWS find innovative ways to do customer lock-in via marketplace billing for other vendors. Will Amazon have more revenue and profits? Absolutely yes..…
@glinden.bsky.social Greg Linden on bluesky
Here's an idea, AWS competitors could sell cloud services for a third less. Gain share rapidly, break even while doing so. Price competition in a competitive market, it's possible if someone actually tries. [embedded post]
@munster_gene Gene Munster on x
It's all about AWS. $AMZN shares rebounded 4% when Jassy said on the call that the pace and volume of AWS deals are picking up. Specifically they signed deals in month of September that add more to bookings than the first two months of the quarter.
@zerohedge @zerohedge on x
AMZN margins by segment: AWS was 30.25%, highest since Q1 '22 [image]
@sarbjeetjohal Sarbjeet Johal on x
One of the key takeaways from @amazon earnings call wrt to @awscloud was the deal booking delays and the momentum pick up as of late. “We saw several deals in September with effective date in October that won't show in any GAAP reported number for Q3 but the collection of which..…
@borrowed_ideas @borrowed_ideas on x
$AMZN 3Q'23 Update Imagine opening Amazon's earnings report 5 years from now and what do you think you might hope you paid more attention to? It's very unlikely to be AWS topline growth rate this (or any) quarter.
@munster_gene Gene Munster on x
This means that AWS growth in December should step up to faster than the Street's current 14% yy estimate, compared to 12% reported in September.
@sarbjeetjohal Sarbjeet Johal on x
.@amazon earnings call is under way... Here's the AWS summary: @ajassy says we like the momentum in AWS and implies that customers' cost consciousness is still a factor. GenAI wrt AWS coverage during call: Infrastructure Layer: Jassy then focused on chips, the bottom layer of... …
@quinnypig Corey Quinn on x
“GenAI has three macro layers. Compute, to train LLMs and produce inferences, which we meet with custom silicon. LLMs as a service, which we meet with Bedrock. The third is apparently coding assistants, which we meet with CodeWhisperer.” So the third layer is just that? Really?
@garyblack00 Gary Black on x
$AMZN flat AH after posting strong 3Q results but a light 4Q rev guide. Moreover AMZN was not able to say whether AWS growth had bottomed (+12.3% in 3Q) because of “customer optimization.” With MSFT Azure growing at +27% YoY and AMZN AWS growing at +12% YoY, AWS is losing market.…
@quinnypig Corey Quinn on x
On a call with reporters, Amazon's CFO stated about @awscloud's slowdown: “We have cost optimization work that is starting to slow down, at least” Good job AWS, no notes. Mission Accomplished. [image]
@quinnypig Corey Quinn on x
*DING*" goes the market's closing bell, and *plop* goes this shitpost thread to cover $AMZN's earnings report with a special emphasis on @awscloud. AWS revenues grew 12%, mostly because nobody knows how the hell AWS Config charges, much less how to get it to stop.

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