Amazon has to thank Alexa for Christmas present

Amazon has achieved a record profit in 2018: in the fourth quarter, the e-commerce giant performed beyond expectations, thanks to voice assistant Alexa. Still, the company is less hopeful for 2019.

Record profit in fourth quarter

Amazon’s 2018 turnover was just below 233 billion dollars (almost 210 billion euros), 31 % more than the year before. Operational profits almost tripled to 10.1 billion dollars (9 billion euros).

The new record for the e-commerce giant is partly due to fiscal advantages and to the company’s cloud services. Although Amazon Web Services only represents 10 % of turnover, that division does bring in 58 % of total operational profits. In addition, the American tax office IRS granted Amazon benefits of 789 million dollars (some 700 million euros) last year.

Figures for the fourth quarter were also better than expected as turnover increased by 20 % to reach 72.4 billion dollars (64 billion euros) – 500 million more than analysts had predicted. Net profits rose to 3 billion dollars (2.7 billion euros), a billion dollars more than the year before.

Alexa gets smarter, Bezos more careful

Still, top executive Jeff Bezos has been predicting a slowdown in growth, but he credits voice assistant Alexa as his saving grace. “Alexa was very busy during the holiday season,” Bezos said. “Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year.” Amazon will keep betting on the smart assistant: the number of researchers working on Alexa has doubled in the past year and the system has learned to answer over 20 % more questions thanks to machine learning.

Still, the multinational is worried about what 2019 will bring: while analysts were expecting a turnover of about 60.5 billion dollars (54 billion euros) for the first quarter, Amazon thinks they will only end up with an amount between 56 and 60 billion. That would mean a 10 to 18 % growth, which is quite a bit lower than the growth figures the market has come to expect from the Seattle-based giant.