Amazon‘s initiative to insert ads into Prime Video helped drive its advertising revenue up 20% for the second quarter of 2024 — but it was less than analysts expected.
The company reported ad sales of $12.77 billion for the period, up 20%. Analysts were anticipating the tech giant to generate $13 billion in ad revenue, according to StreetAccount.
In April, Amazon president and CEO Andy Jassy announced that Prime Video had surpassed 200 million monthly viewersand toutedthe service’s addition of advertising (enabled by default unless users pay an extra fee) starting in January. The company recently spruced up the user interface for Prime Video, aimed at boosting engagement with the streaming service.
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Overall, Amazon reported revenue of $148.0billion (up 10%), which fell short of Wall Street forecasts for revenue of $148.56 billion, per LSEG. Net income doubled to $13.5 billion in the second quarter, or $1.26 per diluted share, topping analyst estimates of EPS of $1.03.
In announcing the results, Jassy — former head of Amazon Web Services — touted the growth of AWS, which saw sales up 19% to $26.28 billion and segment operating income of $9.3 billion, compared with $5.4 billion in the second quarter of 2023.
“We’re continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth,” Jassy said in prepared remarks.
The company noted that during Q2 Amazon MGM Studios released 19 films and series including: “Fallout,” the second most watched original title worldwide ever on Prime Video during its launch, and Season 4 of “The Boys,” which was No. 1 on Prime Video in over 165 countries in its first two weeks. Amazon also touted its 62 Emmys nominations, including 17 for “Fallout” and 16 for “Mr. and Mrs. Smith.”
Meanwhile, Amazon landed streaming rights for the NBA for 11 seasons, starting in 2025-26, for which it’s estimated to be paying about $1.8 billion per year.
For Q3, Amazon expects sales to be between $154.0 billion and $158.5 billion, or to grow between 8% and 11% compared with third quarter 2023. (The midpoint of that range is below analyst consensus estimates of $158.24 billion.) It said operating income is expected to be between $11.5 billion and $15.0 billion, compared with $11.2 billion in Q3 2023.
