Amazon reports 32% jump in Q4 ad revenue

The tech company also increased Prime subscriptions amid a spike in net sales.
Amazon

Tech juggernaut Amazon reported net sales of $137.4 billion for Q4, an increase of 10% year-over-year, excluding the impact of foreign exchange. Overall net income was $14.4 billion in the fourth quarter.

Amazon also reported ad revenue of $9.7 billion for Q4, up 32% from 2020, and $31 billion for the year.

David Fildes, the company’s co-chief executive, said in the company’s recent conference call that Amazon is focused on serving brands in the sponsored ad space. “On the advertising side, the sponsored products and brands, they make up the majority of the ad revenue today,” Fildes said.

“Longer term, demand-side platform opportunities with Amazon DSP is something that we’re continuing to work on and refine,” he added.

With properties like Fire TV, IMDb TV, Twitch, Fildes said the company is exploring opportunities in live sports, such as its agreement with the NFL in the U.S. to be the exclusive broadcaster of Thursday Night Football.

The company said it’s continuing to see consistently high member renewal rates across geographies for Amazon Prime. It also announced a price hike for Amazon Prime in the U.S. as it continues to improve the service, citing the continued expansion of Prime member benefits, increased member usage, as well as a rise in wages and transportation costs.

CFO Brian Olsavsky, touted successes such as Best Buy selecting Amazon Web Services (AWS) as its preferred cloud provider for cloud infrastructure services, and Meta, the parent co. of Facebook, Instagram and WhatsApp selecting AWS as its long-term strategic cloud provider to boost AI research and development.

According to Olsavsky, the company is not only encouraged by the acceleration of companies going to the cloud, but also by the adoption of digital benefits, the use of is grocery services, and the company’s ability to double its fulfillment capacity, having made strides in its Amazon Logistics.

Regarding global infrastructure expansion, he cites plans to launch AWS West in the Calgary region in 2023 or 2024 and that AWS will invest over $21 billion in Canada by 2037 on the construction and operation of its two Canadian infrastructure regions.