Amazon reports strong Q2

Amazon’s net sales increased 11% to $134.4 billion in the second quarter, compared with $121.2 billion in the second quarter of 2022. Excluding the $.3 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 11% compared with second quarter 2022.

Amazon's North America segment sales increased 11% year-over-year to $82.5 billion.

The company's international segment sales increased 10% year-over-year to $29.7 billion.

AWS segment sales increased 12% year-over-year to $22.1 billion.

Amazon's operating income increased to $7.7 billion in the quarter, compared with $3.3 billion in the prior year period.

The company's North America segment operating income was $3.2 billion, compared with an operating loss of $0.6 billion in Q2 of 2022.

Amazon's international segment operating loss was $.9 billion, compared with an operating loss of $1.8 billion in the second quarter of 2022.

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AWS segment operating income was $5.4 billion, compared with operating income of $5.7 billion in second quarter 2022.

Amazon's net income was $6.7 billion in the quarter, or 65 cents per diluted share, compared with a net loss of $2 billion, or 20 cents per diluted share, in the prior year period.

The company's second quarter 2023 net income includes a pre-tax valuation gain of $.2 billion included in non-operating expense from the common stock investment in Rivian Automotive, compared to a pre-tax valuation loss of $3.9 billion from the investment in the prior year period.

Amazon's operating cash flow increased 74% to $61.8 billion for the trailing 12 months, compared with $35.6 billion for the trailing 12 months ended June 30, 2022.

Free cash flow improved to an inflow of $7.9 billion for the trailing 12 months, compared with an outflow of $23.5 billion for the trailing 12 months ended June 30, 2022.

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“It was another strong quarter of progress for Amazon,” said Andy Jassy, CEO of Amazon. “We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded. Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases that make it much easier and more cost-effective for companies to train and run models (Trainium and Inferentia chips), customize Large Language Models to build generative AI applications and agents (Bedrock), and write code much more efficiently with CodeWhisperer.

Jassy continued, "We’re also continuing to see strong demand for our advertising services as the team keeps innovating for brands, including the ramp up for Thursday Night Football with the ability for advertisers to tailor their spots by audience and create interactive experiences for consumers. We remain excited about what lies ahead for customers and the company.”

Among the many accomplishments Amazon touted:

• Amazon delivered its largest selection of products to U.S. Prime members at the fastest speeds ever in the quarter. The company now offers U.S. Prime members free Same-Day or One-Day Delivery on tens of millions of the most popular items. Across the top 60 largest U.S. metro areas, more than half of Prime member orders arrived the same or next day in the quarter. So far this year, Amazon has delivered more than 1.8 billion units to U.S. Prime members the same or next day—nearly four times the number of units delivered at those speeds by this point in 2019.
• Amazon held the biggest Prime Day event ever on July 11-12, in the third quarter, as Prime members worldwide purchased more than 375 million items and saved more than $2.5 billion. This year, Amazon offered more deals than any past Prime Day, with home, fashion and beauty among the top-selling deal categories. This was the largest Prime Day ever for Amazon’s independent sellers, most of which are small and medium-sized businesses, and the first where U.S.-based Prime members could shop deals directly from merchant sites using Buy with Prime.
• Amazon increased selection in the U.S. Amazon store. Amazon added new beauty and fashion brands, including D’Amelio Footwear, Dyson hair care, IT Cosmetics, Ralph Lauren Fragrances, and Urban Decay, and extended its collaboration with Victoria’s Secret. This marks the first time Victoria’s Secret lingerie and apparel are available through a retail partner in North America. Amazon also expanded its selection of grocery items from brands such as General Mills and Coca-Cola.

Amazon gave upbeat guidance for Q3. It expects net sales to be between $138 billion and $143 billion, or to grow between 9% and 13% compared with third quarter 2022. This guidance anticipates a favorable impact of approximately 120 basis points from foreign exchange rates, the company said.

Amazon's operating income is expected to be between $5.5 billion and $8.5 billion, compared with $2.5 billion in third quarter 2022, Amazon said.