Amazon's Revenue Sees a Significant Increase in Q3
Retail giant Amazon has released better-than-expected financial results for its third quarter, ending Sept. 30. The company reported $143.1 billion in revenue, up 11% year over year; $11.2 billion in operating income, up 343% year over year, or $8.7 billion; and $20.2 billion in trailing 12-month free cash flow adjusted for equipment finance leases, which is up $41.7 billion versus the comparable period last year.
North America segment sales increased 11% year over year to $87.9 billion.
“We continue to be encouraged by the progress we're making in lowering our cost to serve, improving our customer experiences and investing for future growth,” said CEO Andy Jassy during the company’s quarterly earnings call.
“Our move earlier this year from a single national fulfillment network in the U.S. to eight distinct regions represented one of the most significant changes to our fulfillment network in our history,” said Jassy. “This change has gone more smoothly and made more impact than we optimistically expected. And you can see the benefits in many forms.”
Most importantly, customers are getting their shipments faster. Jassy said that Amazon remains on pace to deliver the fastest delivery speeds for Prime customers in its 29-year history.
[Read more: "Amazon Cuts Grocery Delivery Threshold"]
CFO Brian Olsavsky mentioned that Amazon held its biggest Prime Day event ever during Q3, with Prime members purchasing more than 375 million items worldwide.
“Outside of Prime Day, we continue to see strong demand across everyday essentials, including categories like beauty and health and personal care,” added Olsavsky.
Meanwhile, a top priority for most companies continues to be generative AI. Amazon is using the technology to help people better discover the products they want and more easily access the information needed to make decisions.
“We use generative AI models to forecast inventory we need in our various locations and to derive optimal last-mile transportation routes for drivers to employ,” said Jassy. “We're also making it much easier for our third-party sellers to create new product pages by entering much less information and letting the models do the rest.”
There wasn’t much talk of Amazon’s grocery segment during the Q3 earnings call. This past summer, the company revealed that it was restructuring its Amazon Fresh business and laying off hundreds of zone leads tasked with managing certain areas of the physical stores and training associates.
Jassy confirmed earlier in the year that the company is still pursuing a grocery business but taking the time to hone the concept for the most effective model. "We have a set of experiments and concepts that we are working on across the dozens of stores and are pretty optimistic that some may work, and hopeful that over the next year we find that. We believe we have the opportunity for it to be much larger for Amazon and to help customers more broadly,” he said during the company’s quarterly earnings call in early May.
Seattle-based Amazon is No. 2 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named the company one of its Retailers of the Century.
