The fact that Amazon made lots of money in 2017, both in the full year and its fiscal fourth quarter, may not surprise anybody who keeps tabs on the retailer/cloud services provider/video streamer/drone operator.
But the newsworthy thing about its latest quarterly financial report (PDF), released on Thursday, comes from comparing it to a prior earnings report from October 2017: just how bad Amazon was at predicting its bonkers Q4 income.
Amazon’s October guidance predicted (PDF) an operating income not exceeding $1.65 billion for Q4 2017—a pretty sky-high estimate, considering that the company reported $1.3 billion of operating income in Q4 2016. But that was nothing. Amazon’s Q4 2017 operating income was actually $2.1 billion—a cool 69-percent jump over the same period last year.
Similarly, that quarter’s net income climbed to $1.9 billion in Q4 2017, compared to $749 million in the same period last year.
So, what the heck happened? Amazon CEO Jeff Bezos added a brief statement to the report that indicated “optimistic projections for Alexa” being exceeded, along with a vague sales figure of “tens of millions” of Echo-related devices throughout all of 2017. For context, you only have to scroll down a few paragraphs in the Thursday report, which states that the company’s Kindle line has sold “tens of millions” of devices since its November 2007 launch. That doesn’t necessarily confirm that Echo devices only needed a year to reach a Kindle-like device sales count, but it certainly hints at the possibility.
Nearly half of the Q4 report is dedicated to the remarkable number of new products introduced by the AWS family in the quarter. This list includes a litany of “machine-learning” services, along with Amazon Rekognition Video, a video analysis service whose capabilities were teased in 2016, released in late 2017, and arguably resemble the tracking technologies employed at the company’s new no-cashier Amazon Go grocery store in its headquarters city of Seattle.