Amazon posts strong Q2; spotlights fulfillment and A.I.

SEATTLE — Amazon beat expectations for the second quarter, with net sales and operating income exceeding the top end of guidance.

Net sales for the second quarter were up 11% to $134.4 billion compared with $121.2 billion in Q2 2022. The North America segment was also up 11%, reaching sales of $82.5 billion, while the international segment grew by 10% to $29.7 billion year-over-year. Its cloud-computing unit, AWS, saw sales jump 12% year-over-year to $22.1 billion.

Operating income rose to $7.7 billion for the second quarter vs. $3.3 billion in the same quarter a year ago. Net income for Q2 was $6.7 billion, or 65 cents per diluted share, compared with a net loss of $2 billion and 20 cents per diluted share for the quarter in 2022.

“It was a strong quarter for Amazon,” said CEO Andy Jassy. “We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded.”

During the earnings call, Jassy noted that “customers care about faster delivery,” and Amazon is seeing that translate into higher purchasing. As a result, the company continues to focus on regional distribution centers that place shipping closer to the customers as well as increasing same-day delivery options in its largest metros.

So far this year, Amazon has delivered more than 1.8 billion units to its Prime members the same or next day, which is nearly four times the number of units delivered at those speeds at the same point in 2019.

The company is also continuing to pursue the use of generative artificial intelligence. Despite being in its “early days,” Jassy noted every business within Amazon “has multiple generative A.I. initiatives going on. It will be at the heart of what we do.”

Amazon is expecting to continue its strong performance into the third quarter, with guidance projecting net sales to be between $138 billion and $143 billion, an increase of between 9% and 13%. Operating income is expected to be in the $5.5 billion to $8.5 billion range compared with $2.5 billion in Q3 2022.

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