01—Abstract
Summary
Summary of the 10-K filed February 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Amazon.com, Inc. reported a strong financial performance for the fiscal year ending December 31, 2023.
The company demonstrated significant growth in net sales, which increased by 12% year-over-year to $574.8 billiona. This growth was observed across its key segments, with North America sales up 12%, International sales up 11%, and AWS sales increasing by 13%, indicating broad-based demand for its diverse offerings. The company also showed a substantial improvement in profitability, with operating income more than tripling to $36.9 billion, driven by improved performance in the North America segment and continued strength in AWS.
Looking ahead, Amazon provided guidance for the first quarter of 2024, expecting net sales to grow between 8% and 13% and operating income to be between $8.0 billionb and $12.0 billion. The company continues to invest in technology and infrastructure, particularly in AWS, and its fulfillment network to support future growth. Despite facing intense competition and various risk factors inherent in its global operations, Amazon's financial results and forward-looking guidance suggest a positive outlook for continued expansion and profitability.
02—Key points
Key Highlights
- Net sales grew 12% year-over-year to $574.8 billion, driven by solid performance across North America, International, and AWS segments.
- Operating income significantly increased to $36.9 billion, more than tripling from the previous year, reflecting improved profitability, particularly in the North America segment.
- AWS segment revenue grew 13% year-over-year to $90.8 billion, demonstrating continued demand for cloud services.
- The North America segment returned to strong operating income ($14.9 billion) after an operating loss in the prior year, driven by increased unit sales and advertising.
- Free cash flow turned positive, reaching $36.8 billion for the year, a significant improvement from the negative free cash flow in the prior year.
- Amazon provided optimistic guidance for Q1 2024, expecting net sales growth of 8-13% and operating income between $8.0 billion and $12.0 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Amazon.com Inc kept $0.05.
- Revenue$574.78B100.0%
- Cost of revenue−$304.74B53.0%
- Gross profit$270.05B47.0%
- Operating costs−$233.19B40.6%
- Operating income$36.85B6.4%
- Interest, other & tax−$6.43B1.1%
- Net income$30.43B5.3%
Where FY2023 revenue went
$574.78B- Cost of revenue: $304.74B, 53% of revenue
- Operating costs: $233.19B, 41% of revenue
- Net income: $30.43B, 5.3% of revenue
- Interest, other & tax: $6.43B, 1.1% of revenue
Kept 5.3% as net incomeNet income $30.43B · 5.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 2, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $574.78B$513.98B | +11.8% |
| Cost of Revenue | $304.74B$288.83B | +5.5% |
| Gross Profit | $270.05B$225.15B | +19.9% |
| Operating Expenses | $537.93B$501.74B | +7.2% |
| Operating Income | $36.85B$12.25B | +200.9% |
| Interest Expense | $3.18B$2.37B | +34.4% |
| Net Income | $30.43B-$2.72B | +1217.7% |
| EPS (Basic) | $2.95$-0.27 | +1192.6% |
| EPS (Diluted) | $2.90$-0.27 | +1174.1% |
| Shares Outstanding (Basic) | 10.30B10.19B | +1.1% |
| Shares Outstanding (Diluted) | 10.49B10.19B | +3.0% |
05—Questions
Frequently Asked Questions
What was Amazon's overall financial performance in 2023?
Amazon reported strong financial results for 2023, with net sales increasing by 12% to $574.8 billion and operating income surging to $36.9 billion, more than tripling from the prior year. The company also saw a significant improvement in free cash flow, turning positive at $36.8 billion.
How did the different business segments perform?
All three segments showed growth. North America net sales increased by 12%, International net sales grew by 11%, and AWS net sales rose by 13%. Notably, the North America segment returned to profitability with a strong operating income of $14.9 billion, while AWS continued its robust performance with $24.6 billion in operating income.
What are the key risks and challenges facing Amazon mentioned in the filing?
Amazon highlighted several key risks, including intense competition across all its business lines, potential disruptions from global economic and geopolitical conditions, reliance on third-party sellers, cybersecurity threats, international operational risks, and regulatory scrutiny. The company also noted the variability in its retail business and the strain on its operations from continuous expansion.
What is Amazon's outlook for the first quarter of 2024?
For the first quarter of 2024, Amazon expects net sales to be between $138.0 billion and $143.5 billion, representing a growth of 8% to 13% compared to Q1 2023. Operating income is projected to be between $8.0 billion and $12.0 billion. This outlook includes a favorable impact from foreign exchange rates and a reduction in depreciation expense due to an increase in the estimated useful life of servers.
06—Continue