Amazon Prime
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The winter quarter was different for the behemoths of the tech and social media industries. While Google’s parent Alphabet generated $75.32 billion in revenue in Q4 2021, Facebook saw the number of its global daily active users decline from the previous quarter for the first time. That also resulted in mass-sale of its stock, which plummeted by nearly 20%.

To Amazon’s relief, it did not see such decline and instead clocked impressive numbers in Q4 2021 and its shares rose by as much as 14 in extended trading. The e-commerce juggernaut clocked $137.4 billion in revenue in the winter quarter (a rise of 9%), while its earnings per share (EPS) smashed all expectations to amount to $27.75 (exceeding the estimate of $3.78).

For the entire year, Amazon’s EPS came at $64.81 and net sales came at $469.82 billion. For Q4 2021, its operating income dropped to $3.5 billion, while net income increased to $14.3 billion for the same period. For 2021, operating income increased to $24.9 billion, while net income increased to $33.4 billion for the year.

Going forward, Amazon expects to generate $112-117 billion in net sales (growth of 3-8% as compared to Q1 2021). Operating income is expected to be between $3-6 billion as well.

“A big thank you to employees across Amazon who overcame another quarter of COVID-related challenges and delivered for customers this holiday season. Given the extraordinary growth we saw in 2020 when customers predominantly stayed home, and the fact that we’ve continued to grow on top of that in 2021, our Retail teammates have effectively operated in peak mode for almost two years. It’s been a tremendous effort, and I’m appreciative and proud of how hard our teams have worked to serve customers,” said Andy Jassy, Amazon CEO.

Let us talk more about Amazon’s Q4 numbers. You may remember that Amazon had made investments in EV company Rivian and even had a stake of 20% in the company. Those investments have yielded rich rewards for Amazon, which gained almost $12 billion in profits from the investment. Rivian had gone public last year and its IPO was priced at $78/share, valuing the company at $66.5 billion. At its peak, the stock climbed past $172/share.

Amazon Web Services (AWS) continued to impress as well, as its revenue clocked a year-over-year growth of nearly 40% during the winter quarter to come to $17.8 billion. While AWS accounted for a mere 13% of the company’s revenue, it accounted for all of the operating income during the quarter. The international sales and subscription-based business segments reported a combined operating loss of $1.8 billion during the quarter.

Expect AWS to post such impressive numbers in Q1 2022 as well, since Amazon raised the price of its annual Amazon Prime subscription by 20%.

“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron,” Jassy said in the earnings statement. “Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic.”