What you need to know
- Amazon announced its Q4 2022 financial earnings on February 2.
- The company saw a net sales increase of 9% compared to Q4 2021, with a revenue of $149.2 billion.
- Amazon expects small revenue growth in the first quarter of 2023 following the company's biggest employee layoff in history.
Amazon's fairly upbeat holiday season seemed to counter the economic challenges Big Tech is facing, as highlighted by the company's recent financial earnings. The e-commerce giant posted its financials from Q4 2022, which were up 9% compared to the same period in 2021, bringing its total net sales to $149.2 billion.
This follows a decent Q3 and a busy year that saw not one but two Prime Day sales events. Amazon wasn't exactly upbeat about its expectation for the holiday season, and sales were above even Amazon's top-end expectations of $148 billion.
"Our relentless focus on providing the broadest selection, exceptional value, and fast delivery drove customer demand in our Stores business during the fourth quarter that exceeded our expectations—and we’re appreciative of all our customers who turned to Amazon this past holiday season," said Amazon CEO Andy Jassy in a statement.
Jassy also alluded to the recent employee layoffs as he remarked on amazon's cost-cutting measures to fight an "uncertain economy."
In November, Amazon announced a round of layoffs that would reduce its headcount by as much as 10,000 employees. Then, in January, the company announced more employee layoffs would total as much a. s 18,000, the largest in the company's history.
Although how much that will help the company remains unclear in the short and mid-term, and Amazon's outlook for Q1 2023 shows how things are slowing down for the company. Amazon's guidance for the quarter sees its revenue at somewhere between $121 billion and $126 billion. However, analysts estimated $125.5 billion for the quarter, per Bloomberg.
Meanwhile, AWS saw healthy year-over-year growth of 20% to $21.4 billion, despite coming just short of the expected $21.87 billion. Advertising revenue was also higher than expected at $11.56 billion.
Overall, Amazon seemed to fair better than others such as Alphabet and Microsoft, although the weaker guidance highlights that no one is immune to the tech industry's struggles.
