Amazon.com, Inc. – Amazon.com Announces Third Quarter Results

Inventing on behalf of customers

Amazon is driven by a passion for invention across all of its business areas. The company builds new products and services that customers ask for, and also invents new ones that customers didn’t know they wanted but make their lives or businesses better in some meaningful way. For example, Amazon:

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  Launched product review highlights, a new generative AI–powered feature that lets shoppers in Amazon’s U.S. store quickly determine what other customers are saying about a product before reading through reviews. Review highlights provide a short paragraph on the product detail page with features and customer sentiment frequently mentioned across reviews.
  
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  Introduced generative AI capabilities to help sellers create product listings as part of numerous innovations at Accelerate 2023, Amazon’s annual seller conference. Other announcements included an end-to-end, fully automated set of supply chain services called Supply Chain by Amazon that allows sellers to quickly and reliably move products directly from their manufacturers to customers. In India, Amazon also announced a generative AI–based digital assistant to help small businesses establish an ecommerce presence. The tool will help sellers with registration, listing, and advertising.
  
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  Previewed a smarter and more conversational Alexa, powered by generative AI and an LLM custom-built for voice interactions. New conversational AI capabilities include the ability to make multiple requests at once, make more ambiguous smart home requests, set up an Alexa Routine entirely by voice instead of the app, and make more natural and conversational requests without having to use specific phrases or device names.
  
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  Announced new LLM tools that will make it easier for developers to create more conversational and intuitive Alexa experiences for their customers. Brands using these new tools include BMW, Character.AI, iRobot, Philips Hue, Splash, and Volley.
  
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  Introduced the next-generation Echo Show 8 built-in smart home hub that can process common smart home requests 40% faster than previous generations, Echo Hub smart home control panel to manage smart home devices, and next-generation Echo Frames smart audio glasses with hands-free access to Alexa, extended battery life, and improved audio.
  
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  Announced updates to the Fire TV experience, including an enhanced AI-powered Fire TV voice search, so customers can ask Alexa open-ended questions about TV shows and movies using conversational language; a “Continue Watching” row that aggregates content from streaming entertainment providers, including Amazon Freevee, Disney+, Hulu, MGM+, Peacock, and STARZ; and an AI Art feature, so customers can create artwork on their Fire TV devices using their voice.
  
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  Unveiled the Fire TV Stick 4K Max, which comes with the Fire TV Ambient Experience that turns the TV into an always-smart display so customers can see Calendars and Reminders, control smart devices, or play audio. Amazon also introduced the Fire TV Stick 4K with support for Wi-Fi 6, and the Fire TV Soundbar that provides room-filling sound with support for DTS Virtual:X and Dolby Audio.
  
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  Expanded home security offerings with the Ring Stick Up Cam Pro, giving customers an aerial perspective to pinpoint and send more accurate alerts; Blink Outdoor 4, with improved image quality for person detection; and Blink Sync Module Pro with extended range, giving customers options in where they install their cameras.
  
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  Introduced eero Max 7, which combines patented TrueMesh networking technology with the latest Wi-Fi 7 standard to dramatically increase speeds, avoid interference, and improve latency.
  
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  Kicked off Project Kuiper’s Protoflight mission with the launch of two prototype satellites aboard an Atlas V rocket from United Launch Alliance. Project Kuiper, Amazon’s low Earth orbit satellite broadband initiative, will use this multimonth mission to test its satellites and network from space, and collect data ahead of the planned start of satellite production later this year. Project Kuiper also announced a partnership with Vodafone and Vodacom to extend the reach of their 4G/5G networks in Africa and Europe, provide backup to businesses, scale for major events, and quickly recover after disasters.
  
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  Enhanced the viewing experience for Thursday Night Football with AI-driven features powered by AWS, such as Prime Targets and Defensive Alerts. Prime Targets uses ML to highlight which receivers are in position to convert a first down. Defensive Alerts uses a generative AI model that grows more accurate over time to identify players that are likely to rush the quarterback.
  
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  Announced new AWS technologies and capabilities that help customers of all sizes take advantage of generative AI, improve productivity, and enhance their security posture. Customers are using Amazon Bedrock to bring generative AI to their businesses, including adidas, Booking.com, Bridgewater Associates, Clariant, Coda, GoDaddy, LexisNexis Legal & Professional, Lonely Planet, Merck, Royal Philips, Showpad, Travelers, and United Airlines. New offerings include:
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    General availability of Amazon Bedrock, a fully managed service that offers leading foundation models as a single application programming interface (API), along with capabilities that help customers build generative AI applications, simplifying development while maintaining privacy and security.
    
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    More choice for Amazon Bedrock customers with the addition of Meta as a model provider. Amazon Bedrock is the first service to offer Meta’s Llama 2 model as a fully managed service available through a single API.
    
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    New model customization capability for Amazon CodeWhisperer, an AI-powered coding companion, allowing organizations to securely customize CodeWhisperer suggestions to include their internal code base.
    
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    AWS Entity Resolution, an ML-powered analytics service that helps organizations improve the quality of their data by analyzing, matching, and linking related consumer, business, and product records stored across multiple applications, channels, and data stores.
    
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    New business intelligence authoring capabilities for Amazon QuickSight, so data analysts can use natural language queries to ask forecast and “why” questions, receive accurate answers, and create compelling visualizations in seconds.
    

Empowering employees and delivery service partners

In addition to its focus on customers, Amazon strives to make every day better for its employees and delivery service partners. For example, the company:

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  Announced that Amazon will hire 250,000 full-time, part-time, and seasonal employees in the U.S. this holiday season. Amazon also announced its largest-ever annual investment in U.S. hourly employee pay—$1.3 billion—bringing the new average hourly wage for customer fulfillment and delivery roles to more than $20.50 per hour. Over the last five years, Amazon has invested $10 billion in hourly employee wages.
  
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  Added 14 benefits to Amazon’s FamilyFlex program, which provides operations employees and their family members with tools to help them achieve personal and professional growth. New benefits include financial wellness resources, mental health offerings, and temporary schedule adjustment policies for flexibility. Amazon also extended its family-building and fertility benefits to support more than 1 million employees and their partners across Africa, Asia-Pacific, Europe, Latin America, and the Middle East.
  
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  Announced an $840 million investment in the Delivery Service Partner (DSP) program in the U.S. to support DSPs in providing higher wages and more benefits to drivers, including childcare-support services and tuition reimbursement for coursework at accredited universities as part of the Next Mile education program, which already offers access to more than 2,000 academic programs and up to $5,250 in annual tuition coverage.
  

Supporting communities and protecting the environment

Amazon believes that success and scale bring broad responsibility to help the planet, future generations, and communities. Amazon employees have passion for investing in these areas, and a sampling of the efforts from this past quarter are that Amazon:

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  Supporting humanitarian aid efforts amid the Israel-Hamas war. Amazon is focused on ensuring that employees in the area are safe and have access to resources such as My HR Live Support, where employees can discuss their specific situations with advisers, and the Employee Assistance Program, which provides resources to support employees and their families. Amazon’s disaster relief team has been in close contact with international humanitarian relief partners and is making financial contributions to these organizations. Amazon is making it easy for employees to contribute to them through Amazon GIVEhub, an internal tool to support volunteerism, donations, and community engagement.
  
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  Activated Amazon’s disaster relief teams to provide support in response to the Maui wildfires, Hurricane Idalia in Florida, and the earthquake in Morocco. Amazon mobilized its global logistics infrastructure and inventory, and quickly donated more than 300,000 relief items. Additionally, AWS helped set up temporary communications infrastructure to provide internet and phone connectivity in Maui in collaboration with the Information Technology Disaster Resource Center, and funded mappers to assess the earthquake-affected areas in Morocco.
  
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  Committed to promoting the safe, secure, and transparent development of AI technology in collaboration with the White House, policymakers, technology organizations, and the AI community. The commitment builds on Amazon’s approach to responsible AI development and lays the groundwork for enhancing the benefits of AI and minimizing its risks.
  
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  Published the company’s latest Economic Impact Study, which estimates that Amazon generated more than $240 billion in investment in the U.S. in 2022 and supported more than 2 million indirect jobs across industries such as logistics, construction, hospitality, and professional services, among others.
  
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  Announced a $40 million program to help moderate-income residents in Amazon’s hometown communities become homeowners. As part of the Amazon Housing Equity Fund, this is the first program aimed at homeownership—helping members in these communities purchase homes and build generational wealth.
  
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  Celebrated its annual Global Month of Volunteering in September, when tens of thousands of Amazon employees in more than 50 countries volunteered with over 400 community organizations around the world.
  
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  Announced that 90% of electricity consumed by Amazon in 2022 was powered by renewable energy sources—up from 85% in 2021. From 2014 through 2022, Amazon’s wind and solar farms helped generate $12.6 billion in investments for communities around the world, and contributed more than $5.4 billion in global gross domestic product (GDP). Amazon now has more than 400 wind and solar projects globally.
  
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  Announced that the company will require suppliers to share their carbon emissions data with Amazon and set carbon goals beginning in 2024, and that Amazon will provide tools and resources to help suppliers reach their goals. Amazon also announced the Sustainability Solutions Hub, a new resource to help independent sellers in France, Germany, Italy, Spain, UK, and U.S. with product and packaging sustainability efforts.
  
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  Invested in direct air capture, a technology that chemically scrubs carbon dioxide from the air before storing it deep underground or in applications like building materials and low-carbon fuels, from 1PointFive and CarbonCapture Inc.
  
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  Announced that in 2022 Amazon decreased single-use plastic by 11.6% across its global operations by expanding paper-based packaging, continuing to use lighter and more flexible packaging, and eliminating packaging altogether where possible.
  

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of October 26, 2023, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market constraints, world events, the rate of growth of the Internet, online commerce, cloud services, and new and emerging technologies, and the various factors detailed below.

Fourth Quarter 2023 Guidance

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  Net sales are expected to be between $160.0 billion and $167.0 billion, or to grow between 7% and 12% compared with fourth quarter 2022. This guidance anticipates a favorable impact of approximately 40 basis points from foreign exchange rates.
  
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  Operating income is expected to be between $7.0 billion and $11.0 billion, compared with $2.7 billion in fourth quarter 2022.
  
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  This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded.
  

A conference call will be webcast live today at 2:30 p.m. PT/5:30 p.m. ET, and will be available for at least three months at amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results and outcomes could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of claims, litigation, government investigations, and other proceedings, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, variability in demand, the degree to which the Company enters into, maintains, and develops commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services, and technologies, system interruptions, government regulation and taxation, and fraud. In addition, global economic and geopolitical conditions and additional or unforeseen circumstances, developments, or events may give rise to or amplify many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

Our investor relations website is amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases, which may contain material information about us, and you may subscribe to be notified of new information posted to this site.

About Amazon

Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Amazon strives to be Earth’s Most Customer-Centric Company, Earth’s Best Employer, and Earth’s Safest Place to Work. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Career Choice, Fire tablets, Fire TV, Amazon Echo, Alexa, Just Walk Out technology, Amazon Studios, and The Climate Pledge are some of the things pioneered by Amazon. For more information, visit amazon.com/about and follow @AmazonNews.