Amazon reports 10% revenue growth in Q4 2024 with strong AWS performance

Amazon.com, Inc. reported impressive financial results for the fourth quarter of 2024, driven by strong performance across its Amazon Web Services (AWS) segment and North America operations. The e-commerce giant’s revenue growth and significant improvement in profitability underscore the effectiveness of its strategic investments in cloud computing, artificial intelligence (AI), and global logistics.

With net sales increasing by 10% to $187.8 billion, compared to $170 billion in the same period last year, Amazon has demonstrated resilience amid a challenging economic environment. The company’s growth trajectory reflects its ability to capitalise on technological advancements while meeting evolving consumer demands​.

What drove Amazon’s revenue growth in Q4 2024?

Amazon’s revenue growth in Q4 2024 was fuelled by a combination of factors, including strong holiday sales, increased demand for cloud services through AWS, and improved operational efficiencies in North America. Excluding the $0.9 billion unfavourable impact from foreign exchange rate fluctuations, net sales rose by 11% year-over-year, highlighting the company’s robust underlying performance.

The North America segment contributed significantly, with sales rising 10% to $115.6 billion. Amazon benefited from record-breaking events such as Black Friday and Cyber Monday, which not only drove product sales but also boosted its third-party seller services. CEO Andy Jassy attributed much of this success to operational innovations and faster delivery speeds for Prime members, with over 65% more items delivered same-day or overnight compared to the previous year.

Internationally, Amazon reported 8% sales growth, reaching $43.4 billion. Excluding foreign exchange impacts, sales growth improved to 9%, signalling recovery and expansion in key global markets. Notably, Amazon turned around its international segment’s performance, achieving an operating income of $1.3 billion compared to a $0.4 billion loss in Q4 2023.

How did AWS performance impact Amazon’s overall growth?

AWS remained the crown jewel of Amazon’s operations, with AWS segment performance significantly influencing the company’s financial results. AWS sales surged by 19% year-over-year to $28.8 billion in Q4 2024, while its operating income grew to $10.6 billion from $7.2 billion a year earlier.

The segment’s growth reflects the increasing global demand for cloud computing services, AI capabilities, and scalable infrastructure solutions. Amazon launched several innovations, including the Trainium2 AI chip and Amazon Nova foundation models, which offer businesses enhanced performance and cost-efficiency. Major companies like SAP, PayPal, and Northrop Grumman have signed new agreements with AWS, further solidifying its position as a leader in the cloud services market.

Andy Jassy emphasised the transformative potential of AWS’s new offerings, noting that innovations such as Amazon Bedrock and Amazon Q are enabling businesses to migrate from legacy systems more efficiently. These advancements are expected to drive sustained growth in the coming quarters as businesses increasingly adopt AI-driven technologies.

What does Amazon’s profitability reveal about its business strategy?

Amazon’s profitability saw remarkable improvement in Q4 2024, with net income doubling to $20 billion, or $1.86 per diluted share, compared to $10.6 billion, or $1.00 per diluted share, in the same quarter of 2023. The company’s operating income surge was particularly striking, rising to $21.2 billion from $13.2 billion, driven by cost optimisation initiatives and revenue growth across all segments.

The North America segment posted an operating income of $9.3 billion, up from $6.5 billion in the previous year, reflecting improved efficiency in fulfilment operations and logistics networks. Meanwhile, the international segment’s return to profitability highlights Amazon’s ability to adapt to diverse market conditions and optimise costs globally.

For the full year 2024, Amazon reported net sales of $638 billion, representing an 11% increase from $574.8 billion in 2023. Operating income for the year surged to $68.6 billion, nearly doubling from $36.9 billion in the previous year. This strong financial performance underscores Amazon’s strategic focus on high-margin businesses like AWS and digital advertising, which continue to deliver robust returns.

What are Amazon’s growth prospects for 2025?

Looking ahead, Amazon expects continued growth in 2025, with Q1 net sales projected to range between $151 billion and $155.5 billion, representing 5% to 9% growth compared to Q1 2024. The company anticipates an unusually large negative impact from foreign exchange rates, estimated at $2.1 billion, which may temper overall revenue growth. Additionally, the absence of the Leap Year effect, which added approximately $1.5 billion in sales in Q1 2024, will create a tougher year-over-year comparison.

Operating income for Q1 2025 is expected to be between $14 billion and $18 billion, compared to $15.3 billion in Q1 2024. Amazon’s growth strategy will likely continue to focus on expanding its AWS offerings, enhancing logistics efficiency, and investing in AI and automation technologies to maintain competitive advantages.

Industry analysts remain optimistic about Amazon’s growth trajectory. The company’s focus on innovation, cost efficiency, and customer-centric services positions it well to navigate potential economic headwinds and capitalise on emerging opportunities in e-commerce and cloud computing.