Amazon reported revenues of $127.1 billion in the third quarter, missing Wall Street expectations, and sending its stock price lower after-hours. Net revenue was up 15 percent from the same quarter a year ago (up 19 percent when foreign exchange rates are factored in). Net income fell to $2.9 billion, compared to $3.2 billion a year ago.
The third quarter was a pivotal one for Amazon, with the company hosting its annual Prime Day shopping event, and embarking on its most significant content push yet on Prime Video.
The launch of NFL Thursday Night Football and Lord of the Rings: The Rings of Power marked arguably the biggest launches yet for the video streaming platform, with the NFL package also turbocharging a burgeoning advertising business. In fact, the Prime Video launches were the first parts of the business includes in in Amazon’s typically sprawling quarterly highlights letter.
While it mostly touted the debuts of the video programming, Amazon did say that Rings of Power is “closing in on 100 million viewers to date,” after initially announcing 25 million viewers in its first day.
On the company’s quarterly earnings call, CFO Brian Olsavsky further said that Rings of Power drove “more Prime sign ups globally than any other Prime original,” and that TNF drove the “3 biggest hours of U.S. Prime sign-ups” during its September debut.
And while the rest of the tech industry it seeing its advertising business get hammered, Olsavsky said that its ad business was up 30 percent year over year.
The tech giant has also been grappling with inflation, which has impacted shopping, hiring, and logistics. On the call, Olsavsky reiterated that inflation and macroeconomic concerns are impacting the company’s retail business.
In a statement, Amazon CEO Andy Jassy hinted that the company’s investments will be “streamlined” in the months ahead to account for the uncertain state of the global economy.
“There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets,” Jassy said. “What won’t change is our maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”
And the company forecast a slowdown in Q4, with net sales of $140-$148 billion, up only 2 percent to 8 percent from a year earlier. Net income is projected to be between $0-$4 billion.