Amazon boosted its advertising revenue by 20% in the second quarter of 2024, by integrating ads into Prime Video though the increase fell short of analysts’ expectations.
Notably, for the second quarter, Amazon reported ad sales of $12.77 billion marking a 20% increase. However, this figure fell short of the $13 billion in ad revenue that analysts had predicted, according to StreetAccount.
Amazon President and CEO Andy Jassy revealed that Prime Video had exceeded 200 million monthly viewers in April and highlighted the introduction of advertising, which started in January and is enabled by default unless users opt to pay an additional fee. Recently, the company enhanced the Prime Video user interface to increase engagement with the streaming service.
According to LSEG, Amazon reported second-quarter revenue of $148.0 billion, a 10% increase, but missed Wall Street’s forecast of $148.56 billion. However, net income surged to $13.5 billion, or $1.26 per diluted share, surpassing analyst expectations of $1.03 per share.
Additionally, Amazon Web Services (AWS)sales rose 19% to $26.28 billion, while operating income increased to $9.3 billion, up from $5.4 billion in the same period last year.
Andy Jassy, President and Chief Executive Officer of Amazon, said, “We’re continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth.”
In the second quarter, Amazon MGM Studios released 19 films and series, including “Fallout,” which became the second most-watched original title globally on Prime Video at launch, and Season 4 of “The Boys,” which topped Prime Video charts in over 165 countries within its first two weeks. The company also celebrated receiving 62 Emmy nominations, with 17 for “Fallout” and 16 for “Mr. and Mrs. Smith.” Furthermore, Amazon has secured streaming rights for the NBA over an 11-season period starting in 2025-26, with estimates suggesting the deal costs around $1.8 billion annually.
For the third quarter, Amazon forecasts sales will range from $154.0 billion to $158.5 billion, reflecting an anticipated growth of 8% to 11% year-over-year. The midpoint of this range falls short of the analyst consensus estimate of $158.24 billion. The company also expects operating income to be between $11.5 billion and $15.0 billion, compared to $11.2 billion in the same quarter last year.