Amazon profits climb driven by cost-cutting measures

In the quarter ending June 2023, Amazon reported a net income of $6.7bn (£5.2bn), as compared with the net loss of $2bn (£1.57bn) the business reported at the same time last year.

Net sales increased by 11% to $134.4 bn (£105.6bn) as compared with $121.2bn (£95.3bn) in the second quarter of 2022.

Sales in North America climbed by 11% year on year to $82.5bn (£64.8bn), whereas international sales increased 10% year on year to $29.7bn (£23.3bn).

Sales for the Amazon Web Services (AWS) segment increased by 12% year on year to $22.1bn (£17.3bn).

The global ecommerce giant said it expects net sales to grow between 9% and 13% and operating income to be between $5.5bn and $8.5bn in the third quarter of this year as it “anticipates a favourable impact of approximately 120 basis points from foreign exchange rate”.

Chief executive Andy Jassy said: “It was another strong quarter of progress for Amazon. We continued lowering our cost to serve in our fulfilment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded.

“Our AWS growth stabilised as customers started shifting from cost optimisation to new workload deployment, and 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), customise large language models to build generative AI applications and agents (Bedrock), and write code much more efficiently with CodeWhisperer.

“We’re also continuing to see strong demand for our advertising services as the team keeps innovating for brands, including the ramp-up for Thursday Night Football with the ability for advertisers to tailor their spots by audience and create interactive experiences for consumers. We remain excited about what lies ahead for customers and the company.”