Amazon cruised past Wall Street estimates in the second quarter, swinging from a loss in the year-ago period to better-than-expected profits.
The financials for the period ending June 30 beat analysts’ forecasts in pretty much every category. Total revenue rose 11% to $134.4 billion, earnings came in at 65 cents a share on a diluted basis, compared with a loss of 20 cents.
Revenue in the web services division also exceeded estimates, totaling $22.1 billion.
In its earnings release, Amazon included Prime Video in its list of bullet-point highlights, noting the release of Air in theaters and then on the company’s streaming platform. The tech giant also touted its 68 Primetime Emmy nominations.
“It was another strong quarter of progress for Amazon,” CEO Andy Jassy said.
Advertising services posted a healthy 22% year-over-year gain to $10.7 billion, as the company pushed deeper into live sports and started to see traction on its free, ad-supported streaming outlet, Freevee. Jassy called out the ad results, which saw a better percentage gain than any other revenue line.
“We’re also continuing to see strong demand for our advertising services as the team keeps innovating for brands, including the ramp up for Thursday Night Football with the ability for advertisers to tailor their spots by audience and create interactive experiences for consumers,” he said. “We remain excited about what lies ahead for customers and the company.”
Exclusive Thursday night streams began in September 2022 in the first year of an 11-year deal with the NFL. While the games drew viewership levels well below those of linear TV, the audience was notably younger than that on TV and the opportunity to leverage the top-rated league gave a boost to the company’s overall ad efforts. This fall, the company is teaming up with the NFL to present the first Black Friday game, which will afford opportunities to tie in with retailers in the spirit of the unofficial post-Thanksgiving holiday.
Once an also-ran in terms of ad sales compared with the well-entrenched duo of Facebook (now Meta) and Google, Amazon has recently made a lot of strides in the brand world. The growing industry and Wall Street consensus that ad-supported streaming is the best path forward for both streaming companies and bargain-minded customers alike also favors Amazon given its overall programming mix.
Reduced costs have helped the company’s overall financial profile. About 62,000 employees have left the company over the past year, either due to job eliminations or attrition, leaving the total workforce at 1.46 million as of the end of the quarter. Jassy began his tenure as CEO two years ago shortly before the economy started to sour and Amazon found it had to scale back ambitious growth plans for infrastructure and staffing. It joined other large tech firms in implementing the first widespread layoffs in the tech sector in more than a decade.
Shares in Amazon immediately spiked in after-hours trading on the earnings news, adding more than 7% to $138.55.