In his annual letter to shareholders on Thrursday, Amazon.com, Inc. CEO Andy Jassy outlined the company’s progress and growth prospects across its diverse businesses. Jassy emphasized the importance of customer obsession, relentless invention, and a long-term focus as the key drivers of Amazon’s continued success.
The letter is divided into three parts, the first of which focuses on the company’s performance in 2022. Jassy reported that Amazon’s net sales grew by 35% YoY to $539 billion, with operating income increasing by 47% YoY to $30 billion. He attributed this strong performance to Amazon’s customer-centric approach, which has helped the company maintain its leadership position in e-commerce, expand into new markets, and innovate on behalf of customers.
The second part of the letter highlighted some of the key investments Amazon is making to drive long-term growth. Jassy discussed the success of Amazon Business, a platform that allows businesses to procure products at great savings. He also talked about Buy with Prime, a program that helps third-party brands and sellers offer their products on their own websites, while leveraging Amazon’s logistics and shipping capabilities. Additionally, Jassy announced that Amazon is expanding into healthcare through its recent acquisition of One Medical, a primary care provider with a patient-focused experience that is a great foundation to build upon. Finally, Jassy talked about the potential of Kuiper, a low-Earth orbit satellite system that will deliver high-quality broadband internet service to places around the world that don’t currently have it.
The final part of the letter focused on Amazon’s investments in large language models (LLMs) and generative AI. Jassy explained that Amazon has been using machine learning for 25 years, but recently has been focused on LLMs and generative AI as a transformative technology that will improve virtually every customer experience. Jassy stated that Amazon is democratizing this technology so companies of all sizes can leverage generative AI and is delivering applications like CodeWhisperer, which revolutionizes developer productivity by generating code suggestions in real time.
In conclusion, Jassy expressed his optimism for Amazon’s future growth prospects. He noted that while Amazon’s consumer business is already a $434 billion business, the vast majority of total market segment share in global retail still resides in physical stores (roughly 80%), and 90% of global IT spending is still on-premises and yet to migrate to the cloud. Jassy believes that Amazon’s leading customer experiences, relentless invention, customer focus, and hard work will result in significant growth in the coming years.
Overall, Jassy’s letter highlights Amazon’s continued focus on the customer and long-term growth prospects. The company’s diverse investments across e-commerce, logistics, healthcare, and LLMs/generative AI demonstrate its commitment to innovation and its willingness to pursue new opportunities. As Amazon continues to expand its reach into new markets and invest in new technologies, it will be interesting to see how the company evolves and what new opportunities it uncovers.
