Amazon Q3 earnings exceeded analysts’ expectations, with revenue jumping 13% to $143.1 billion and profit increasing to $9.9 billion.
The company’s Amazon Web Services division generated $23.1 billion in revenue, compared to the $23.2 billion analysts had expected. Meanwhile, its advertising business yielded $12.1 billion in revenue, higher than analysts’ expectation of $11.6 billion.
The latest results indicate that the company has seemingly turned the corner after a challenging 2022, which saw record-high inflation and interest rates. The company benefited from its cost-cutting measures, which saw the company put the kibosh on some of its previous unprofitable ventures and lay off 27,000 employees.
“We had a strong third quarter as our cost to serve and speed of delivery in our Stores business took another step forward, our AWS growth continued to stabilize, our Advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” said Amazon CEO Andy Jassy.
For the holiday quarter, the company expects sales to be in the $160 billion to $167 billion range as compared to the $166.6 billion analysts were expecting. Meanwhile, the company’s median guidance range of $163.5 billion in revenue for Q4 would mark a 9.6% improvement from the $149.2 billion it had reported last year. Analysts at LSEG, formerly Refinitiv, had expected $166.6 billion.
The earnings update comes on the heels of a landmark lawsuit that has been filed by the Federal Trade Commission and 17 other states, alleging that the company harmed fair competition and abused its market dominance. Amazon has, however, refuted the claims, noting that the lawsuit is wrong on the facts and the law.
Amazon is far from the only tech company that saw a strong recovery during the third quarter. Other tech giants, including Google, Meta, and Microsoft, have all reportedly posted positive results — busting fears of a near-term economic downturn.