Amazon triples net income, nears $100bn in quarterly revenue

International operations turned a profit of $407m, while revenue for the company's 'other' category, which is mainly its advertising services, grew 50% year over year.

Amazon: it's 'other' services, which mostly comprise advertising, grew 51% to $5.4bn (Picture: Shutterstock)
Amazon: it's 'other' services, which mostly comprise advertising, grew 51% to $5.4bn (Picture: Shutterstock)

Expectations for Amazon's third-quarter financial results were high, yet the company surpassed them handily, reporting net income of $6.33bn (£4.81bn) on a 37.4% year-over-year increase in revenue, which reached $96.15bn.

The net-income figure represents nearly a tripling (197%) on a year-on-year basis. Operating income nearly doubled (96%) to $6.19bn.

The company reported a 51% year-on-year increase in net sales, to $5.4 billion, in its 'Other' category, which represents primarily its advertising services. The company did not provide income figures for this segment.

Meanwhile, AWS, the company's hosting service, hit $11.6bn in net sales, a 29% year-on-year gain, resulting in $3.54bn in operating income, up 56% year on year.

Amazon Q3 2020 earnings snapshot

  • Revenue: $96.15bn
  • Net income: $6.33bn
  • 'Other' revenue (includes advertising services): $5.4bn
  • International net sales: $25.17bn
  • International operating income: $407m

While North America—where net sales increased 39% year on year to $59.37bn and operating income grew 76% year on year to $2.25bn—remains the company's primary market, international expansion efforts are paying off. International operations delivered net sales of $25.17bn for the quarter, up 37% year on year. And, whereas the international segment lost $380m a year ago (and continued to notch losses through Q1 of this year), it delivered $407m in operating income this quarter. 

Looking ahead, Amazon said it expects net sales between $112bn and $121bn in Q4, which would represent a year-on-year improvement between 28% and 38%. It expects operating income between $1bn and $4.5bn, compared with $3.9bn in Q4 of 2019, which takes into account approximately $4bn in costs related to Covid-19.

Amazon also called attention to "millions of dollars" in product and monetary donations to more than a thousand charities this holiday season in markets including Australia, Canada, China, France, Germany, India, Italy, Japan, Singapore, Spain, the UK and the US.

A version of this article was first published by Campaign Asia-Pacific


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