Amazon Q4 2024 Earnings Preview: AWS, Ads Drive Growth, Holiday Performance in Focus

As we approach Amazon's Q4 2024 earnings call on February 6, investors are eagerly awaiting insights into the company's performance during the crucial holiday season. With a strong focus on AWS (Amazon Web Services) and advertising services, Amazon is expected to deliver robust growth and profitability. Let's dive into the key factors driving Amazon's holiday performance and the expectations for these segments.



AWS: A Major Growth Driver

Amazon Web Services has been a significant driver of the company's growth and profitability. In Q4 2023, AWS segment sales increased by 13% year-over-year to $24.2 billion, and operating income was $7.2 billion, compared to $5.2 billion in the same period last year. AWS's long-term focus on customers and feature delivery, coupled with new generative AI (GenAI) capabilities like Bedrock, Q, and Trainium, has resonated with customers and contributed to Amazon's overall results.

For Q4 2024, analysts expect AWS's operating profit margin to hit 17.5% next year, with a range of 9.3% to 18.5%. This expectation reflects the continued strength and growth potential of AWS, which is well-positioned to capitalize on the increasing demand for cloud services.



Advertising Services: A Rising Star

Amazon's advertising business has been growing rapidly, with ad revenue climbing to $11.8 billion in the first quarter of 2025, up 13% from a year earlier. For Q4 2024, Amazon's ad business is expected to bring in $11.7 billion, with consensus EPS of $2.12/share driven by differing assumptions around costs. Amazon's advertising services continue to improve and drive positive results, contributing to the company's overall profitability.



Holiday Performance: A Key Focus

Amazon's holiday performance in Q4 2024 was driven by several key factors, including a record-breaking holiday shopping season, the regionalization of its U.S. fulfillment network, AWS's long-term focus and GenAI capabilities, improving advertising services, and progress in newer businesses. These factors contributed to a successful holiday season, with strong consumer demand and engagement.

Comparing this to previous holiday seasons, Amazon's Q4 2024 performance shows several improvements, such as significant revenue growth, improved profitability, and stronger cash generation. These factors suggest that Amazon's holiday performance in Q4 2024 was robust and compares favorably to previous holiday seasons.



In conclusion, Amazon's focus on AWS and advertising services has driven significant growth and profitability in recent quarters. For Q4 2024, expectations are high for both segments, with AWS's operating profit margin expected to reach 17.5% and advertising revenue expected to reach $11.7 billion. Amazon's holiday performance in Q4 2024 was driven by several key factors, contributing to a successful holiday season. As we await Amazon's Q4 2024 earnings call, investors can look forward to a strong performance from these key segments.