Amazon posts strong Q4 results as ad revenue surges

Billion dollar investment, job generation plans and Prime growth help drive company's robust sales and profit growth in Q4.

Bezos: strongest growth in AWS category
Bezos: strongest growth in AWS category

Amazon has posted strong financial results for the fourth quarter of 2019, with sales up 21% to $87.4bn and profit rising to $6.47 a share, beating analyst expectations. Ad revenue grew more than 40% in the quarter to get closer to the $5bn mark. 

For the full year, net revenue increased 20% to $280.5bn, compared with $232.9bn in 2018. Shares surged 12.7% in after-hours trading on the news. 

Amazon, led by founder and chief executive Jeff Bezos, provides little in the way of detailed geographic breakdowns, splitting performance into just three broad earnings categories: North America (responsible for 61% of total sales in 2019), international (27%) and Amazon Web Services (12%).

North American net sales jumped 22% in the quarter and 21% for the year to an annual total of $171bn, while international sales rose 14% in the quarter and 13% for the year to reach $75bn in 2019. 

But the AWS segment grew the most, with fourth-quarter revenue of $9.95bn, up 34% from $7.43bn a year ago, while its annual revenue jumped 37% to $35bn for the full year. Its "other" category, comprising mostly advertising revenue, totalled $4.78bn in the three months – an increase of 41% year on year.

Elsewhere, Prime in particular showed strong growth. The delivery and video service crossed 150 million paying customers, compared with 100 million in 2018, showing that the company is potentially looking to overseas markets as its core US audience saturates.

"At the end of 2019, we are very happy with our top-line growth… [and] our adoption and acceptance from customers," Amazon chief financial officer  Brian Olsavsky told analysts in a post-results call.

A version of this story first appeared on Campaign Asia-Pacific

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