Amazon Earnings Summary

Amazon reported its financial results and business developments during the third quarter of 2023 earnings call. Here are the key highlights:

1) Financial performance: Amazon reported revenue of 143.1 billion US dollars, up 11% year on year; operating profit reached 11.2 billion US dollars, up 343% year on year; free cash flow for the past 12 months was adjusted to 20.2 billion US dollars, an increase of 41.7 billion US dollars over the same period last year.

2) Storage business: Amazon achieved a major reform of the fulfillment network by transforming the US's single national fulfillment network into eight separate regions. This reform exceeded the company's initial expectations, shortening transportation distances, reducing service costs, and enabling faster delivery to customers by increasing local inventory levels and optimizing connections between fulfillment centers and distribution stations.

3) AWS and artificial intelligence: Amazon's cloud computing business (AWS) revenue increased 12% year over year to $23.1 billion. AWS is investing heavily in generative artificial intelligence (AI) and has partnered with leading large language model (LLM) manufacturers such as Anthropic. Amazon has also launched services such as Amazon Bedrock to enable customers to access, customize, and deploy third-party and Amazon's own LLM.

4) Advertising business: Amazon's advertising business continues to grow, mainly driven by sponsored products. Thanks to the application of machine learning algorithms, the relevance and effectiveness of advertising has improved.

5) International business: Amazon's international business is close to achieving break-even, thanks to factors such as reducing service costs, increasing productivity, and reducing inflationary pressure.

6) Emerging Businesses and Plans: Amazon is excited about emerging businesses and programs such as Prime Video, Healthcare, Prime Day, and new logistics services. Prime Video, in particular, will introduce limited ads in early 2024 and provide an additional monthly fee option for US members who want an ad-free option.

Amazon's earnings call showcased the company's progress in improving efficiency, expanding cloud computing and AI capabilities, and optimizing advertising and international business. The company remains optimistic about its long-term growth and ability to innovate.