Earnings Results
- Revenue:
- Q1 2024 reported revenue was $143.3 billion, marking a 13% year-over-year increase, excluding foreign exchange impacts.
- Operating Income:
- $15.3 billion in operating income, a significant rise of 221% year-over-year.
- Free Cash Flow:
- Trailing 12-month free cash flow adjusted for equipment finance leases is up $53.2 billion year-over-year, totaling $48.8 billion.
- AWS Revenue Growth:
- AWS year-over-year revenue growth accelerated to 17.2% in Q1, up from 13.2% in Q4.
- Advertising Sales:
- Advertising sales increased by 24% year-over-year, excluding the impact of foreign exchange.
- Third-Party Seller Services Revenue:
- Increased by 16% year-over-year, excluding the impact of foreign exchange.
Future Guidance
- Q2 Revenue Guidance:
- Expected to be between $144 billion and $149 billion, translating to growth of 7% to 11% compared to the second quarter of 2023.
- Operating Income Guidance for Q2:
- Projected to be between $10 billion and $14 billion.
- Capital Expenditures:
- Anticipate a meaningful year-over-year increase in overall capital expenditures for 2024, primarily due to higher infrastructure CapEx to support growth in AWS, including for generative AI.
- Foreign Exchange Impact:
- Q2 guidance anticipates an unfavorable foreign exchange impact of approximately 60 basis points.
- Consumer Spending and Macro Trends:
- Guidance also considers varying consumer spending behavior and macro-level trends, especially noting a slightly weaker environment in Europe compared to the U.S.
Trends, Market Conditions, Sentiment
- Enhanced Customer Experience:
- Amazon continues to focus on improving customer experiences through faster delivery, expanded selection, and maintaining low prices amidst economic uncertainties.
- Generative AI Investment:
- Significant investments in generative AI, especially within AWS, indicating a strong belief in the emerging technology’s potential to drive future growth.
- Sustainable Growth in AWS:
- AWS shows reaccelerating growth with a large opportunity ahead, given that a vast majority of global IT spend remains on-premises.
- Advertising Performance:
- Strong performance in advertising, particularly in sponsored products and emerging opportunities like streaming TV ads and Prime Video ads.
- Emphasis on Efficiency and Profitability:
- Efforts to improve operational efficiency and drive profitability, especially in international markets and emerging business sectors.
- Macro-Economic Observations:
- Acknowledgment of macro-economic challenges, including recession fears, inflation, and regional disparities in consumer behavior, while emphasizing Amazon’s adaptability and focus on customer value.
Notable Quotes
- Andy Jassy (CEO):
- “Our financial results are an encouraging reminder of the progress we’re making."
- "We’re at $100 billion-plus annualized revenue run rate, yet 85% or more of the global IT spend remains on-premises."
- "There is a very large opportunity in front of us.”
- Brian Olsavsky (CFO):
- “AWS is now a $100 billion annualized revenue run rate business."
- "We anticipate our overall capital expenditures to meaningfully increase year-over-year in 2024.”
This summary consolidates the key points of Amazon’s Q1 2024 earnings call, focusing on their strong performance indicators, future expectations, observed and anticipated trends, and insightful comments from the company’s leadership.