Amazon.com Inc (AMZN, Financial) released its 8-K filing on February 6, 2025, announcing its financial results for the fourth quarter ended December 31, 2024. The company, a leading online retailer and marketplace for third-party sellers, reported a 10% increase in net sales to $187.8 billion, surpassing the analyst estimate of $187,299.18 million. The net income for the quarter rose to $20.0 billion, or $1.86 per diluted share, exceeding the estimated earnings per share of $1.48.
Company Overview and Segment Performance
Amazon's business model is diversified, with retail-related revenue accounting for approximately 75% of its total revenue. Amazon Web Services (AWS) contributes 15%, advertising services 5% to 10%, and other segments make up the remainder. International segments, led by Germany, the United Kingdom, and Japan, constitute 25% to 30% of Amazon's non-AWS sales.
In Q4 2024, Amazon's North America segment sales increased by 10% year-over-year to $115.6 billion, while international segment sales grew by 8% to $43.4 billion. AWS continued its robust performance with a 19% increase in sales, reaching $28.8 billion.
Financial Achievements and Importance
Amazon's operating income for the fourth quarter rose to $21.2 billion, compared to $13.2 billion in the same period last year. This growth is significant for a retail-cyclical company like Amazon, as it highlights the company's ability to leverage its diverse revenue streams effectively. The North America segment's operating income increased to $9.3 billion, while the international segment turned around from a loss to an operating income of $1.3 billion. AWS's operating income also saw a substantial increase to $10.6 billion.
Key Financial Metrics and Analysis
Amazon's full-year 2024 net sales increased by 11% to $638.0 billion, aligning closely with the annual revenue estimate of $637,619.88 million. The company's net income for the year was $59.2 billion, or $5.53 per diluted share, surpassing the estimated annual earnings per share of $5.15. Operating cash flow increased by 36% to $115.9 billion, and free cash flow rose to $38.2 billion.
These metrics are crucial as they demonstrate Amazon's strong cash generation capabilities and its ability to reinvest in growth opportunities. The company's balance sheet remains robust, with total assets increasing to $624.9 billion and stockholders' equity rising to $285.97 billion.
Commentary and Future Outlook
“The holiday shopping season was the most successful yet for Amazon and we appreciate the support of our customers, selling partners, and employees who helped make it so,” said Andy Jassy, President and CEO, Amazon.
Amazon's strategic initiatives, such as the introduction of the Trainium2 AI chip and new AWS capabilities, position the company well for future growth. The company's ability to innovate and expand its service offerings continues to drive its competitive advantage in the retail and cloud computing sectors.
Conclusion
Amazon.com Inc (AMZN, Financial) has demonstrated strong financial performance in Q4 2024, exceeding analyst expectations in both revenue and earnings per share. The company's diversified business model and strategic investments in technology and infrastructure have contributed to its robust growth. As Amazon continues to innovate and expand its market presence, it remains a key player in the retail-cyclical industry, offering significant value to its investors.
Explore the complete 8-K earnings release (here) from Amazon.com Inc for further details.
