Late last week, Amazon released its Q3 2024 earnings report. Below you will find some of the highlights.
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We’ll start here: The year-over-year growth in Amazon’s on-line store sales was 7%in Q2 versus 2023. That is was up versus the 5.0% year-over-year growth seen in Q2, as ecommerce’s days of rapid growth are long gone. However, 7% is at the upper end of this metric for Amazeon over the past couple of years.
Overall, and working off a very large number, net sales increased 11% to $158.9 billion.
As a note, Amazon’s on-line stores sales of $61.4 billion in Q3 were 38.6% of the total, up from 37% in Q2, as Amazon continues to adapt its business model.
It was also a modestly profitable quarter, with Amazon’s net income increasing to $15.3 billion compared with $9.9 billion the prior year, for a rise of 54%.
Operating income was also way up, reaching $17.4 billion in Q3 versus $11.2 billion in 2023.
Fulfillment costs increased 10.3% to $24.6 billion in Q3. Those include the cost of workers needed to run its fulfillment centers, sortation centers and other logistics facilities. Also under fulfillment costs are any lease payments for these building, or depreciation costs if Amazon owns the facility. Some inbound logistics costs are also included.
It’s worth noting that the 10.3% gain in fulfillment costs in the quarter was 3.3 percentage points above the 7% growth in on-line store sales, and with fulfillment costs not including shipping costs.
Those were a whopping $23.5 billion in the quarter, up 8.0% versus previous year. For a change, this 8% increase was not much above the 7% rise in ecommerce revenue. Note this is not net expense, meaning it is not offset by Prime membership fees or any paid shipping, which the company used to provide.
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Fulfillment costs were thus 42% of on-line store sales, while shipping costs represented 40.0%. Together, fulfillment and shipping were 78.3% of ecommerce revenue, again excluding shipping revenue.
Also worth noting is the fact that services revenue, such as its Marketplace, Fulfillment by Amazon, and AWS businesses, increasingly exceed product sales.
In Q3, services were 57.% of total Amazon sales, a number than continues to increase, though with a slight dip in the share in Q3.
Amazon’s AWS web services segment sales increased 19% year-over-year to $27.4 billion.
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