Amazon Inc. ad revenue surges 24% in 2023
The company witnessed close to one billion customer visits to Amazon.in during its month-long Great Indian Festival sales event
Amazon Inc. reported net sales of $170 billion in Q4 2023, compared with $149.2 billion in 2022, which was a 14% increase YoY. Excluding the $1.3 billion favourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 13% compared with the fourth quarter 2022.
The international segment sales increased 17% year-over-year to $40.2 billion, or 13% excluding changes in foreign exchange rates. The company’s shares surged by 50 percent in the past 12 months, as investors applauded its aggressive cost-cutting and an increase in sales.
Operating income increased to $13.2 billion in the fourth quarter, compared to $2.7 billion in the corresponding quarter of 2022.
Amazon’s ad revenue (which includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising) increased from $37.7 billion in 2022 to $46.9 billion in 2023, registering a jump of 24.4% YoY. In the final quarter of 2023, it generated $14.65 billion from its advertising services. This marks a 26.8% increase from the same period in 2022.
"This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon," CEO Andy Jassy said in a statement. The company noted that more than one billion items were purchased worldwide during the company's Black Friday and Cyber Monday holiday shopping events.
Jassy added, “While we made meaningful revenue, operating income, and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvements across our businesses. Our advertising services continue to improve and drive positive results; our newer businesses are progressing nicely, and along with our more established businesses, collectively making customers’ lives easier and better every day.”
Amazon's cloud business AWS, grew 13 percent in the fourth quarter and went from $80 billion in 2022 to $90.7 billion in 2023.
In 2024, Amazon is also set to launch online vehicle sales in the U.S., starting with Hyundai. In addition, Hyundai selected AWS as its preferred cloud provider to accelerate its digital transformation, and starting in 2025, customers who purchase Hyundai’s next-generation vehicles will have access in their vehicles to the same hands-free Alexa experience that they have at home.
Highlighting India specific statistics, the company’s report noted that it had approximately one billion customer visits to Amazon.in during Amazon India’s month-long Great Indian Festival sales event. During the event, more than 4 million customers purchased on Amazon.in for the first time.
The company also announced that it would integrate a shopping assistant, powered by AI named Rufus, into its app prior to the earnings call. Jassy said on the earnings call that Amazon’s AI offerings are “really resonating with customers”, though revenue had yet to make a meaningful contribution to the company’s bottom line.
