Amazon reports better-than-expected results as revenue jumps 14%

Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.

David Paul Morris | Bloomberg | Getty Images

Amazon on Thursday reported fourth-quarter results that sailed past analysts' estimates, and gave strong guidance for the current quarter. The stock climbed more than 8% in extended trading.

Here are the results:

Wall Street is also watching several other numbers in the report:

Amazon said first-quarter sales will be between $138 billion and $143.5 billion, representing growth of 8% to 13%. Analysts were expecting revenue of $142.1 billion, according to Refinitiv.

Amazon easily topped Wall Street's expectations for earnings, indicating that CEO Andy Jassy's efforts to rein in costs are paying off. Net income surged to $10.6 billion, or $1.00 per share, compared to $278 million, or 3 cents per share, a year earlier.

The company laid off 27,000 employees between late 2022 and mid-2023, and ended some of its more unproven bets. It has continued to look for ways to trim expenses in other areas, such as its fulfillment business. In January, it announced cuts in Prime Video, MGM Studios and Twitch, among other units.

Amazon CFO Brian Olsavsky told reporters on Thursday that the company will continue to take a careful approach on new investments, but that it doesn't see 2024 "as a year of efficiency type thing."

"We're going to continue to invest in new things and new areas and things that are resonating with customers," Olsavsky said. "Where we can find efficiencies and do more with less, we're going to do that as well."

Revenue jumped 14% to $170 billion in the fourth quarter. The period reflects results from the holiday shopping season and Amazon's October Prime Day event, both of which the company said exceeded its expectations.

"This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon," Jassy said in a statement. "As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about."

Sales at Amazon Web Services climbed 13% in the fourth quarter to $24.2 billion, in line with Wall Street's forecast. That marks a slight uptick from the previous quarter, when sales expanded 12%, but it's a deceleration from the year-ago period, when sales grew 20%.

For the past year, growth in AWS has slowed, as businesses trimmed their cloud spend. But Olsavsky said the company is seeing those cost optimizations diminish, and new workloads are picking up. He said there has been "a lot of interest" in AWS' generative artificial intelligence products, such as "Q," an AI chatbot for businesses.

Jassy said on a conference call with analysts that generative AI services remain a "relatively small" business, but the company believes they could drive "tens of billions of dollars" in revenue within the next several years.

Ahead of its earnings release Thursday, Amazon announced a generative AI shopping assistant, dubbed Rufus, which it's testing among a subset of users in the U.S.

Amazon's profitable advertising unit saw sales grow 27% year over year to $14.7 billion. Last month, the company began showing ads on Prime Video content, in a move analysts project will generate substantial new revenue for the business. Olsavsky said the company has seen "a lot of enthusiasm" from advertisers, but that Amazon plans to keep ad loads low.