Shares of Amazon (NASDAQ: AMZN) jumped 6% in Thursday's after-hours trading, following the e-commerce and cloud computing leader's release of its third-quarter 2024 report. The stock's gain is attributable to the quarter's revenue and earnings exceeding Wall Street's estimates, with the bottom-line beat particularly impressive.
Investors seemed to shrug off that fourth-quarter revenue guidance was a little lighter than analysts had been expecting. This makes sense as it's likely that management was conservative in setting its outlook since it's challenging to forecast consumer spending during the big holiday season. Moreover, there's more potential volatility surrounding spending this holiday quarter than usual due to the upcoming presidential election.
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Below is an overview of Amazon's Q3 2024 results and its guidance, centered around six key metrics.
1. Total revenue grew 11% year over year
Amazon's net quarterly sales grew 11% year over year to $158.9 billion, surpassing the $157.2 billion Wall Street had projected. That result also topped the company's guidance range of $154 billion to $158.5 billion. Revenue in constant currency also grew 11%.
Growth got a boost from Prime Day in July, which was the company's "largest and most successful" Prime Day, CEO Andy Jassy said on the earnings call.
Data source: Amazon. YOY = year over year.
The company's AWS cloud computing business performed well. Its year-over-year revenue growth of 19% was the same as in the prior quarter (Q2), and that quarter marked an acceleration from Q1, when this metric was 17%.
For context, the North America segment's year-over-year revenue growth was 9% in Q2 and 12% in Q1. And international's year-over-year revenue growth was 7% (10% in constant currency) in Q2 and 10% (11% in constant currency) in Q1.
AWS was capacity-constrained due to very robust demand for artificial intelligence (AI) capabilities. "I actually believe that the rate of growth there has a chance to improve over time as we have bigger and bigger capacity," Jassy said about AWS on the earnings call.
2. Advertising revenue rose 19%
Amazon's digital advertising business continues to perform well. This business generated revenue of $14.3 billion, an increase of 19% year over year. That's 9% of Amazon's total revenue.