Amazon’s online advertising business logged $17.29 billion in the fourth quarter, up 18% from a year ago.
TakeAway Points:
- Amazon’s online advertising business logged $17.29 billion in the fourth quarter.
- The online retail giant revealed its latest advertising sales results as part of its fourth-quarter earnings.
- Meta on Jan. 29 reported fourth-quarter sales that rose 21% year over year to $48.39 billion.
- For the first time, Amazon is expected to surpass Walmart in revenue.
Amazon’s online advertising business growth
Analysts polled by StreetAccount were expecting Amazon to report ad revenue of $17.4 billion.
The online retail giant revealed its latest advertising sales results Thursday as part of its fourth-quarter earnings. The company said fourth-quarter sales were $187.79 billion, which was ahead of analysts’ estimates of $187.3 billion. But the company’s shares fell on disappointing guidance for the current quarter.
Amazon’s online advertising unit has grown considerably over the years and is the third-biggest platform in the global digital advertising market, trailing Alphabet and Meta, respectively, according to data provided to CNBC by Emarketer.
Meta on Jan. 29 reported fourth-quarter sales that rose 21% year over year to $48.39 billion.
Alphabet reported its fourth-quarter earnings Tuesday and said its Google advertising sales and YouTube ad revenue came in at $72.46 billion and $10.47 billion, respectively, representing an 11% and 14% increase from the prior year.
As part of Microsoft’s latest quarterly earnings, revealed Jan. 29, the enterprise tech giant said its search and news advertising sales increased 21% year over year. Microsoft does not disclose that unit’s specific quarterly sales figures.
Also on Thursday, Pinterest reported fourth-quarter sales of $1.15 billion, representing an 18% increase from the prior year during the same period.
Snap on Tuesday reported fourth-quarter sales rose 14% year over year to $1.56 billion.
Reddit will report its latest quarterly earnings on Wednesday.
Amazon set to pass Walmart in revenue for first time
Amazon long ago passed Walmart in terms of market cap, but the e-commerce giant is finally poised to leapfrog its brick-and-mortar rival by another key metric: revenue.
For the past dozen years, Walmart held the distinction of being the top revenue generator each quarter. In 2012, it overtook oil giant Exxon Mobil, according to LSEG senior research analyst Tajinder Dhillon.
Walmart remained in the lead after oil prices tumbled in subsequent years from their previously lofty levels of more than $100 per barrel.
In its earnings release after the close of trading Thursday, Amazon is expected to report revenue of $187 billion, according to analysts surveyed by LSEG. Walmart reports on Feb. 20 and is projected to announce sales of $180 billion.
Walmart, which is often dubbed the world’s biggest retailer in reference to its revenue, still leads the way when it comes to annual sales. The company has turned in more than $600 billion in sales in each of the past two years. That number is expected to reach nearly $681 billion for the latest fiscal year.
Amazon is catching up. Based on fourth-quarter estimates, Amazon’s full-year revenue for 2024 will come in at around $638 billion, marking the first time it’s surpassed the $600 billion milestone.
One big reason Amazon has shot up the charts is its cloud business, Amazon Web Services. Revenue at AWS has more than doubled since 2020 and now accounts for about 17% of total sales.
The Covid pandemic also dramatically altered consumer behavior toward online shopping, which has helped Amazon’s annual North America sales increase more than 100% since 2019, the year before the pandemic.
Very few companies ever even reach $100 billion in revenue in a quarter. In addition to Walmart and Amazon, Apple has done so, but only during the holiday quarter, its key iPhone selling period. Last week, Apple reported revenue for the latest quarter of $124 billion.
The newest member of the exclusive $100 billion club is UnitedHealth, which saw its top line climb past that mark in the first quarter of last year and then again in the third and fourth quarters.
The two companies closest to joining the group, with a little bit of growth, are CVS Health and McKesson. CVS exceeded $95 billion in revenue in the September quarter, while McKesson hit $94 billion.
