Amazon reported revenue of $187.79 billion (271.69 trillion won) and a net income of $1.86 per share (2,691 won) for the fourth quarter of last year on the 6th.
Revenue slightly exceeded Wall Street analysts' average estimate of $187.3 billion, while net income per share significantly surpassed the estimate of $1.49. Revenue represented a 10% increase compared to the same period last year. Online retail sales revenue grew by 7% to $75.56 billion, surpassing the estimate of $74.55 billion.
Revenue from Amazon Web Services (AWS), a cloud service, increased by 19% to $28.79 billion, but slightly fell short of the estimate of $28.87 billion. AWS's growth rate is higher than the 13% growth rate from the same period last year. Matt Garman, CEO of AWS, noted in an interview with CNBC that "Apple is using Amazon's custom chips to run artificial intelligence (AI) models and is testing next-generation AI training chips."
Advertising revenue was $17.3 billion, falling short of the estimate of $17.4 billion. Amazon projected that first-quarter revenue would range from $151 billion to $155.5 billion, an increase of 5% to 9% compared to a year ago. This is lower than the estimated $158.5 billion. Amazon stated, "The first-quarter earnings outlook expects an unusually large negative impact due to exchange rates," adding, "$2.1 billion, which is about 1.5%, is expected to be affected."
On the day, Amazon's stock, which closed up 1.13% in regular trading on the New York Stock Exchange, is down more than 4% in after-hours trading following the earnings announcement.
Brian Olsavsky, CFO of Amazon, said in a conference call with investors following the earnings announcement that "capital expenditure for the fourth quarter amounts to $26.3 billion," noting, "This reasonably reflects the level of capital expenditure for this year."
Annualized, the total capital expenditure for this year is expected to be about $105 billion. Olsavsky specified, "Most of the capital expenditure will focus on AI and AWS," adding, "As in last year, a substantial portion of the expenditure will be used to support the increasing demand for AI services and to enhance the technological infrastructure of North American and international institutional sectors."
Andy Jassy, CEO of Amazon, explained the company's interest in developing its own AI chips by saying, "Most AI computing is led by NVIDIA chips," and added, "Although there are not yet many large-scale generative AI applications, costs rise sharply in actual AI applications like Alexa (Amazon's AI assistant)."
He also mentioned the Chinese AI startup DeepSeek. Jassy said, "I was deeply impressed by what DeepSeek has done," and noted, "It was impressive that they applied reinforcement learning to allow AI to learn independently from the outset, unlike traditional methods."