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Amazon’s ad division revenue grew 19% year-over-year (YoY) during 3Q2024, outpacing its retail sales growth, the company shared in its latest quarterly report on Thursday.
Amazon posted earnings per share of $1.43 and revenue of $158.9 billion.
Advertising revenue was in line with analyst expectations at $14.3 billion, showing strong growth and potential for the future.
“While we’re generating a lot of advertising revenue today, there remains considerable upside,” Amazon CEO Andy Jassy said on a call with analysts on Thursday.
Jassy added Amazon saw “meaningful” growth with its sponsored products offering this past quarter, when it improved ad relevance and created other optimization options. Amazon also increased its AI capabilities in advertising, including adding video generation and live image capabilities for marketers.
“Our expansive reach, ability to service relevant offers to our customers, opportunity to engage customers from the top of the funnel to point of purchase and leading capabilities around measuring outcomes at every touch point provide all types of brands with full-funnel advertising at scale,” Jassy said.
Other new generative AI advancements in Q3 include the launch of AI shopping guides as well as AI seller assistant Project Amelia, which offers business insights for productivity and sales growth. Amazon’s AI shopping assistant Rufus was also launched in several new countries, including Canada, France, Germany, India, Italy, Spain and the UK.
However, Jassy warned continuing to innovate on AI meant Amazon would increase its capital expenditures to $75 billion this year. It was also likely the budget would increase in 2025.
“The increase bumps here are really driven by generative AI,” Jassy said. “It is a really unusually large, maybe once-in-a-lifetime type of opportunity.”
The comments echoed similar sentiment Meta CEO Mark Zuckerberg had on his company’s earnings call on Wednesday.
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