Amazon absolutely dominated Q4 2017 with massive sales numbers for the Christmas and holiday shopping season. The online giant offered up its Q4 earnings report this week and noted that operating cash flow increased 7% to $1.4 billion. The big news in the earnings report is that net sales increased 38% to $60.5 billion in Q4; sales for the same period in 2016 were $43.7 billion.
Amazon also saw operating income climb massively (69%) to $2.1 billion for the quarter. Net income for the quarter was $1.9 billion, or $3.75 per diluted share, while net income in Q4 2016 was $1.54 per diluted share. For all of 2017, net sales increased 31% to $177.9 billion, up from $136 billion in 2016. Despite the big gains, there was an overall operating income decrease to the tune of 2% for $4.1 billion compared to 2016 when operating income was $4.2 billion.
A good portion of the success for Amazon in Q4 is laid at the feet of Alexa and Alexa-powered devices. "Our 2017 projections for Alexa were very optimistic, and we far exceeded them. We don’t see positive surprises of this magnitude very often — expect us to double down," said Jeff Bezos, Amazon founder and CEO. "We’ve reached an important point where other companies and developers are accelerating adoption of Alexa. There are now over 30,000 skills from outside developers, customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa, and we’re seeing strong response to our new far-field voice kit for manufacturers. Much more to come and a huge thank you to our customers and partners."
Amazon also offered a glimpse into some highlights for 2017. More than 5 billion items shipped with Prime globally in 2017. Prime also saw more new paid members in 2017 than in any previous year both globally and in the U.S. The best-selling products of 2017 were the Fire TV Stick and Echo Dot across all of Amazon. The online giant says that customers purchased "tens of millions" of Echo devices last year.
Amazon wrote, "The Alexa Skills store now offers more than 30,000 skills, including new developer tools for Alexa Gadgets and gaming experiences, such as Activision’s new Ghost skill for console game Destiny 2. Other new categories of skills include daily beauty podcasts from Hearst, All-Star game voting from the NBA, and more. Customers can also now use Alexa to control more than 4,000 smart home devices from 1,200 unique brands."
Amazon also offers a glimpse at what it expects in Q1 2018, "Net sales are expected to be between $47.75 billion and $50.75 billion, or to grow between 34% and 42% compared with first quarter 2017. This guidance anticipates a favorable impact of approximately $1.2 billion or 330 basis points from foreign exchange rates."