Amazon Revenue Jumps as Consumer and Business Spending Improves

Amazon reported solid quarterly sales on Thursday, showing that corporations and consumers are spending as inflation has eased.

The company posted $143.1 billion in revenue for the third quarter, up 13 percent from a year earlier. It had $9.9 billion in profits. The results beat analysts’ expectations and surpassed Amazon’s own forecast.

But Amazon also projected a cautious forecast for the holiday quarter, saying sales growth may moderate somewhat in the last three months of the year. The fourth quarter is typically Amazon’s biggest, a period that includes Christmas shopping and an October deals event.

Investors have been keenly focused on the performance of Amazon’s cloud computing business, which is critical to Amazon because it produces a majority of the company’s profits.

For almost a year, the growth of the cloud computing business rapidly decelerated, as enterprise customers cautiously watched their budgets in the uncertain economy. But Thursday’s results showed signs it was stabilizing. Sales in the cloud computing division were up 12 percent, to $23 billion. It had $7 billion in operating profit.

It’s a “delicate” moment, Brian Olsavsky, Amazon’s finance chief, said on a call with reporters and investors. He said the work business customers have done to reduce their cloud computing costs has slowed some — but not entirely. At the same time, some of them are adding new cloud projects.

Though Amazon is the top provider of cloud computing, it is working to shake off the perception that it is lagging behind rivals, most notably Microsoft and Google, in the wave of generative artificial intelligence sweeping the industry. It has introduced new A.I. products for enterprise customers, and last month it announced plans to invest up to $4 billion in the A.I. start-up Anthropic, which competes with OpenAI, the Microsoft-backed start-up that created the popular chatbot ChatGPT.

A year ago, investors fretted about the state of Amazon’s retail business, whose profits tanked after overexpanding during the pandemic. Andy Jassy, the company’s chief executive, has focused on driving profits by cutting costs and has overseen layoffs, and a drastic pullback in hiring. The company employed 1.5 million people in the most recent quarter, down 3 percent from a year earlier, though still twice as many as before the pandemic.

Consumers are still spending, though are “deal driven” and focusing on lower cost items, Mr. Olsavsky said.

This year, Amazon also rolled out changes to how it fulfilled customer orders, placing more inventory closer to customers in a move that improved delivery speeds and brought down costs.

“The benefits of moving from a single national fulfillment network in the U.S. to eight distinct regions are exceeding our optimistic expectations,” Mr. Jassy said in a statement.

Faster speeds have “increased purchase frequency,” Mr. Olsavsky said, and the lower costs have improved profit margins. Sales for the consumer and retail offerings in North America, its most mature market, increased 11 percent to $87.9 billion, producing $4.3 billion in operating profit.

Several of the most profitable parts of its e-commerce business — notably its advertising offerings — performed well. Growth of Amazon’s advertising revenue accelerated to 26 percent, reaching $12 billion in the quarter.

Sales of services Amazon provides to third-party sellers on its marketplace grew 20 percent, to $34 billion. The costs for sellers to do business on Amazon is a key issue in the long-anticipated antitrust lawsuit brought by the Federal Trade Commission last month.