Amazon Beats Q4 Projections With $149 Billion in Revenue Despite Profit Drop

“Rings of Power” drove more Prime Video sign-ups than any other series, the company says

Amazon Lord of the Rings Rings of Power Viewership
(Amazon Prime Video)

Despite a drop in profits, Amazon handily beat expectations for the fourth quarter of 2022, posting $149 billion in revenue, the company announced Thursday. Analysts had predicted revenue of around $145 billion.

While Amazon didn’t get too specific about its entertainment division’s financial performance in the quarterly report, it indicated one of the highlights of Q4 was “The Lord of the Rings: The Rings of Power.” The show, a prequel series explaining how the whole “one ring to rule them all” thing came about, brought in more than 100 million viewers during its first season. It was Amazon’s most-watched original series in every region and, according to AMazon, brought in more new Prime Video subscribers than any previous show.

Overall, the company’s earnings in the fourth quarter rose by 9% over the same period in 2021. But profits were $278 million, quite a drop from the $14.3 billion the year before. The company attributes that drop to a combination of factors, including higher costs amid the spike in prices last year that sparked a debate over whether it was due to inflation or price gouging.

The biggest dent in Amazon’s quarterly profits came from a $2.3 billion drop in the value of its investment in electric vehicle manufacturer Rivian. Behind that was the $640 million it spent on severance payments. More costs could be coming when Amazon reports its next quarter’s earnings, since Amazon laid off 18,000 people in January, part of a wave of tech industry cuts driven in part by fears of a recession that didn’t actually pan out.

Also in its entertainment business, Amazon also had good luck with “Thursday Night Football,” which began streaming live on Prime Video last fall. Streamed games had the youngest median age of any football broadcast in a decade, according to Nielsen, and also rose in the 18-34 demo by 11%.