Buy a grocer—Check.
Open an air hub and get a bunch of planes—Check.
Hire nearly 225,000 employees—Check.
Set off a stampede among city planners wanting a piece of Amazon’s action—Check.
Suffice to say, 2017 was a busy—and strong—year for Amazon.com Inc., which today reported its Q4 and full-year financial results.
The e-retailer generated $177.9 billion in revenue in 2017, up 30.8% from $136.00 billion in 2016. Its net income also climbed 27.8% to $3.03 billion from $2.37 billion in 2016.
Excluding revenue from service sales, such as computing power and commissions paid by Amazon marketplace sellers, product sales totaled $118.57 billion, up 25.2% from $94.67 billion in 2016 and $79.27 billion in 2015.
Shoppers made Amazon their go-to e-retailer for holiday shopping. The e-retailer reported fourth quarter 2017 revenue of $60.45 billion, with North American sales, excluding Amazon Web Services, increasing by 42.1% and international sales up by 29.1%.
Amazon’s online stores—product and digital sales—contributed $35.38 billion to Q4’s sales, up 20% year over year. Sales at physical stores—Whole Foods, Amazon Bookstores, etc.—generated $4.52 billion. Third-party seller services (including marketplace commissions) added $10.52 billion in Q4, up 38%.
The Q4 results come in at the high end of Amazon’s expectations. In its Q3 2017 results, Amazon projected it would generate sales of between $56.0 billion to $60.5 billion during the fourth quarter.
The e-retailer posted net income of $1.86 billion for the quarter, up 148.0% from $749 million a year earlier.
Amazon says, when excluding $1.10 billion in favorable impact from foreign exchange rates, net sales increased 36.0% in Q4. For the full year, when including $210 million in unfavorable impact from foreign exchange rates, net sales increased 31.0%. Amazon operates websites in 14 countries outside the United States.
Sellers on Amazon’s marketplace accounted for 51% of units sold during Q4, up two points from 49% a year earlier.
Amazon, No. 1 in the Internet Retailer 2017 Top 500, accounted for at least 39% of visits to the websites of the top 50 online retailers during November and December, according to Hitwise, a division of Connexity Inc., a provider of e-commerce marketing automation technology. However, this figure undersells Amazon’s pull during the holidays as it excludes traffic to mobile apps, and Amazon has the top shopping app in the United States. Hitwise says that among the top 50 online retailers, Amazon accounted for nearly 70% of the 403 million transactions the firm tracked during the period.
For the fourth quarter ended Dec. 31, Amazon reported:
- Net sales of $60.45 billion, a 38.2% increase from $43.74 billion in the same quarter in 2016. Of that revenue, about $41.33 billion stemmed from merchandise Amazon itself sold to consumers, what the e-retailer terms “net product sales”—up 34.9% year over year. The rest, $19.13 billion, came from commissions from outside merchants that sell on Amazon marketplaces, the Amazon Web Services cloud computing service and other smaller revenue sources. Those “net service sales,” as Amazon calls them, were up 45.9% from last year.
- North American net sales of $37.30 billion, up 42.1% from $26.24 billion for the fourth quarter of 2016. North America accounted for about 61.7% of sales in the fourth quarter of 2017, inclusive of web services sales.
- International net sales totaling $18.04 billion, up 29.1% from $13.97 billion in 2016. International accounted for about 29.8% of sales in the fourth quarter, inclusive of web services sales.
- Amazon Web Services revenue was $5.11 billion in Q4, up 44.4% from $3.54 billion a year earlier.
- Net income of $1.86 billion compared with net income of $749 million in the same period in 2016, a 148.3% increase.
- Spending on marketing increased 37.1% to about $3.44 billion from $2.51 billion.
- Spending on technology and content, including fees for licensing content for its Amazon Video service, increased 38.7% to $6.31 billion from $4.55 billion.
- Spending on fulfillment increased 56.8% to $8.97 billion from $5.72 billion from in Q4 2016.
- General and administrative spending grew about 45.0% year over year to $1.04 billion from $717 million.
For the full year 2017, Amazon reported:
- Net sales of $177.87 billion, a 30.8% increase from $136.00 billion in 2016. Of that revenue, $118.57 billion stemmed from Amazon selling products itself to consumers, and those sales were up 25.2% year over year. The rest, $59.29 billion, came from commissions from outside merchants that sell on Amazon marketplaces, the Amazon Web Services cloud computing service and other smaller revenue sources. Those “net service sales,” as Amazon calls them, were up 43.5% from last year.
- North American net sales of $106.11 billion, up 33.0% from $79.79 billion in 2016. North America accounted for 59.7% of sales in 2017, compared with 58.7% in 2016.
- International net sales totaling $54.30 billion, up 23.5% from $43.98 billion in 2016. International accounted for 30.5% of sales in 2017, compared with 32.3% in 2016.
- Amazon Web Services revenue was $17.46 billion, up 42.9% from $12.22 billion a year earlier. AWS sales accounted for 9.8% of 2017 consolidated revenue.
- Net income of $3.03 billion compared with a net income of $2.37 billion in 2016.
- Spending on marketing increased 39.3% to $10.07 billion from $7.23 billion in 2016.
- Spending on technology and content increased 40.6% to $22.62 billion from $16.09 billion.
- Spending on fulfillment increased 43.3% to $25.25 billion from $17.62 billion in 2016.
- General and administrative spending increased 51.0% year over year to $3.67 billion from $2.43 billion in 2016.
Amazon is the No. 1 retailer in the Internet Retailer Top 500 Guide.Favorite