Amazon Q4 Ad Revenue Climbs 18% but Misses Wall Street Estimates, Total Profit Hits $20 Billion in Holiday Shopping Period

Amazon‘s share of the digital ad market continues to balloon: The ecommerce giant reported $17.29 billion in advertising sales for the fourth quarter of 2024, an increase of 18%. Overall earnings for the period smashed Wall Street expectations, but Amazon forecast Q1 sales below analyst estimates.

The Q4 ad revenue figure fell short of analyst expectations of $17.4 billion, per StreetAccount. The growth rate of Amazon’s advertising business, as it puts up even bigger numbers, is slowing — in Q4 2023, ad services revenue jumped 26%.

Amazon’s ad services line item is a big bucket that includes sales of video advertising, display ads and sponsored ads to sellers, vendors, publishers, authors and others. In early 2024, Prime Video enabled advertising by default, expanding the inventory in Amazon’s arsenal.

Meanwhile, Amazon’s subscription services revenue — which includes Prime membership fees and other non-AWS subscription services for video, audiobooks, ebooks and music — rose 10%, to $11.51 billion in the most recent quarter.

Overall, Amazon reported sales of $187.8 billion billion, up 10%, and net income of $20.0 billion in the fourth quarter (compared with $10.6 billion in the year-earlier period) or $1.86 per diluted share. That would, for the first time, put the company’s revenue over Walmart, which Wall Street forecasts will post sales of $180 billion in Q4.

That topped Wall Street forecasts on the top and bottom lines. Analysts on average expected revenue of $187.3 billion and earnings of $1.49 per share, according to LSEG Data & Analytics.

“The holiday shopping season was the most successful yet for Amazon and we appreciate the support of our customers, selling partners, and employees who helped make it so,” president and CEO Andy Jassy said in announcing the results.

For Q1, Amazon provided guidance for revenue of between $151.0 billion and $155.5 billion (up 5% to 9% compared with Q1 2024) — which “anticipates an unusually large, unfavorable impact” of approximately $2.1 billion, or 150 basis points, from foreign exchange rates, the company said. Amazon also noted that the additional Leap Year day in the 2024 quarter added approximately $1.5 billion in net sales. The forecast was below Wall Street analyst average estimates for sales of $158.3 billion.

In its Q4 earnings release, Amazon touted the success of “Red One,” the Christmas action-comedy starring Dwayne Johnson and Chris Evans Christmas, which drew 50 million worldwide viewers on Prime Video in its first four days. That made it Amazon MGM Studios’ most-watched film debut ever on Prime Video.

In addition, the company noted that Prime Video completed the third season of “Thursday Night Football” with a full-season average of 13.2 million viewers, according to Nielsen, up 11% over 2023. “TNF” had a peak of 24.7 million viewers during the Jan. 11 NFL Wild Card playoff game between the Steelers and Ravens.