In the quarter four of the year 2017, Amazon rose above expectations and sustained the growth of its business of Amazon Web Services and said it sold “tens of millions” of its Echo hardware devices last year and that its cheapest products were responsible for the bulk of the sales it made.
Although we don’t know the exact quantity of Echos sold since Amazon is known to be impervious about when it comes to its unit sales in some of its product groups, however, “tens of millions” serves as evidence that there is a market for smart speakers outside the estimation of certain analysts. Amazon said that the Cyber Monday of last year was the biggest shopping day ever and that it was even more exceptional than Prime Day 2017.
The Q4 earnings were announced yesterday after the close of the market. Wall Street anticipated high numbers from Amazon both online and offline, as a result of the company’s huge expansion of Echo products in the past year and its strong performance during Black Friday and Cyber Monday. The fourth quarter of Amazon’s revenue of $60.45 billion manifested a jump of 38.2 percent from the reported revenue of $43.7 billion of the previous quarter. Amazon reported a net income of $1.86 billion (earnings of $3.75 per share).
Amazon’s physical stores, bookstores and Whole Foods included made $4.5 billion in revenue. Its cloud services business, Amazon web is still booming, reaching $5.11 billion in revenue surpassing analyst estimates of $5 billion.
Despite Amazon’s large financial health, there are signs of huge expenditures which is the company’s tactic for continuous growth. Free cash flow decreased from $10.5 billion in 2016 to $8.4 billion in 2017.
In total, the operating income of the company reduced by 2% to $4.1 billion, in contrast to $4.2 billion year over. The operating income of Amazon Web Services increased by 46% the year over to $1.4 billion. AWS contributed the bulk of Amazon’s operating income in the fourth quarter.
These financials however, are only part of what the company shares. Amazon has revealed in the past those products which it sold most (the Fire TV Stick and the Echo Dot) as well as the total number of items it shipped worldwide through Prime last year (which was 5 billion). Amazon also said that more Prime members joined in 2017 than ever before. Although, it still refused to share the amount of unit sales for each product category, and how many Prime members have joined the service each year.