Amazon: Playing The Long Game On Prime Subscriptions


  • Amazon’s subscription business is showing strong growth despite earlier concerns about market saturation.
  • Year-on-year growth in the recent quarter showed a jump of 17%, which was higher than the last four quarters.
  • The recurring revenue base of subscriptions is a strong bullish trend for Amazon as it allows the company to introduce new services to its customers.
  • The subscription revenue for fiscal year 2022 was $35.2 billion with a higher revenue share when compared to the overall revenue base.
  • Even with a low teen growth rate, subscription revenue could hit $100 billion by the end of this decade, which makes this segment a key driver for future valuation growth.

Amazon fulfillment center building in Las Vegas

4kodiak/iStock Unreleased via Getty Images

Amazon’s (NASDAQ:AMZN) investors should look closely at the steady growth rate delivered by the company’s subscription business. In the latest quarter, the company reported 17% YoY growth in the subscription business excluding F/X fluctuations. This is a

YoY growth rates for subscription business in the last few quarters.

Company report

Amazon Prime membership compared with other services used by US households.


Growth in subscription revenue in the last two years.

Company report

PS ratio and YoY revenue growth of Netflix and Spotify.


Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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