Amazon posts profits on the back of growing sales
The US based multinational reported $6.7 billion in net income for Q2 FY 2023. Net sales and AWS growth contributed to the growth in profits.
Bellevue, Washington-headquartered multinationalcost-cutting measures have paid off as the company reported $6.7 billion in net income for the quarter ending June 30, compared to a net loss of $2 billion in the corresponding quarter of FY2022.
The company saw an 11% year-on-year increase in net sales in North America at $82.5 billion for the second quarter and 10% for its international business y-o-y at $29.7 billion. The company’s cloud business, AWS, recorded 12% growth y-o-y in sales. It has also seen an uptick in demand for its advertising services
Amazon said that it held the “biggest Prime Day event ever” on July 11 and 12, where members of its Prime subscription purchased nearly 375 million items worldwide. The results from the sales will reflect in the next quarter.
“We're encouraged by the progress we're making on several key priorities, namely lowering our cost to serve in our stores business, continuing to innovate on and improve our various customer experiences, and building new customer experiences that can meaningfully change what's possible for customers in our business long term,” Andy Jassy, CEO of Amazon said during the earnings call.
The CEO added that the cloud business was also stabilising as customers returned to deploying new workloads on the cloud.
“As the economy has been uncertain over the last year, AWS customers have needed assistance with cost optimising to withstand this challenging time and reallocate spend to newer initiatives that better drive growth. We've proactively helped customers do this. And while customers have continued to optimize during the second quarter, we've started seeing more customers shift their focus toward driving innovation and bringing new workloads to the cloud," he said.
AWS is also betting on generative AI and expects its recent launches to help it maintain leadership in the cloud business. “...AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases that make it much easier and more cost-effective for companies to train and run models (Trainium and Inferentia chips), customize Large Language Models to build generative AI applications and agents (Bedrock), and write code much more efficiently with CodeWhisperer,” said Jassy in the earnings statement.
Amazon has revised its third-quarter guidance with net sales expected to grow between 9% and 13% compared to Q3 FY2022. Operating income is expected to lie between $5.5 billion and $8.5 billion for the upcoming quarter.
Earlier this year, Amazon announced laying off more than 18,000 roles across functions as part of its cost-cutting measures.
Edited by Affirunisa Kankudti