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Amazon's Q3FY23 ad revenue hits $12.06 billion, a 26% surge
The company's net income shot up to almost $10 billion, a 3x jump from last year.
Amazon reported strong results for the third quarter, with a 13% increase in revenue to $143.1 billion and a significant rise in net income to $9.88 billion, more than three times higher than the previous year. The company's advertising revenue saw a robust growth of 26%, reaching $12.06 billion for Q3.
Andy Jassy, CEO, Amazon, highlighted the importance of Prime Video within the Prime membership program, emphasising its potential to become a substantial and profitable business on its own. Jassy shared that Prime Video's membership program that is often one of the top two reasons people sign up. He also said Amazon sees Prime Video eventually becoming a “large and profitable business in its own right.”
The company’s online stores generated $57.3 billion, a 7% increase from the period a year earlier.
“We had a strong third quarter as our cost to serve and speed of delivery in our Stores business took another step forward, our AWS growth continued to stabilize, our Advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” he said while announcing the results.
In the advertising sector, Amazon formed partnerships with several entities, including BuzzFeed, Hearst Newspapers, Pinterest, Raptive, and Ziff Davis' Lifehacker and Mashable, to display sponsored product ads on their platforms. Additionally, starting in 2024, Prime Video will introduce ad breaks in its programming, although the number of ads will be significantly fewer than traditional TV networks.
Amazon Web Services (AWS) reported a 12% increase in revenue to $23.06 billion, with operating income rising by 29% compared to the same period last year. Despite a 7% growth in Amazon's core e-commerce business, AWS faced increased competition from Microsoft Azure and Google Cloud, both of which reported higher growth rates in the cloud computing sector in comparison.
Looking ahead, Amazon anticipates fourth-quarter sales between $160 billion and $167 billion, encompassing the crucial holiday period. The company's overall performance reflects its continuing efforts to expand and innovate across various business segments.