Amazon delivered robust results in the first quarter of 2024, with revenue of $143.31 billion, a 13% increase compared to the same period last year. Net income reached $10.43 billion, or $0.98 per share, significantly surpassing Wall Street analysts’ expectations of $0.84 per share.
“It was a good start to the year across all business sectors, which is evident in both the improvements in customer experience and financial results,” said Andy Jassy, CEO of Amazon, in a statement.
The e-commerce giant, based in Seattle, has been exceeding expectations during the holiday shopping season, observing strong consumer spending aided by discounts and faster delivery times. The company held another promotional event at the end of March, just before the close of the first quarter.
According to Brian Olsavsky, Amazon’s chief financial officer, American customers are being “very careful” with their spending, seeking promotions and opting for more budget-friendly products. He noted that the company is particularly observing a decrease in spending in Europe.
AWS in Acceleration
The company’s cloud computing division, Amazon Web Services (AWS), recorded sales of $25.04 billion in the first quarter, a 17% growth compared to the same period last year. AWS, whose customers are primarily businesses, has been the cornerstone of Amazon’s strategy in the competitive artificial intelligence race among major technology companies.
Jassy stated that AI resources have accelerated AWS’s growth rate, which is now on track to hit $100 billion in annual revenue. Hours before the results were released, Amazon announced the full launch of a business chatbot called Q, which promises to help employees be more productive at work.
High advertising, including Prime Video
Sales in the company’s online advertising business saw a 24% jump, mainly driven by sponsored product ads. Olsavsky highlighted that Amazon, which began displaying ads on Prime Video at the end of January, currently has a ‘light’ number of ads on the streaming service compared to TV or other providers.
‘The ads are performing well and attracting several new advertisers who did not use Amazon’s advertising services,’ the CFO said, referring to the Prime Video initiative, which allows customers to avoid ads for an additional monthly fee of $2.99.
Amazon’s shares rose about 2% in after-market trading, reflecting investors’ confidence in the reported results.
For the second quarter, Amazon expects net sales between $144 billion and $149 billion, while analysts estimate $150.2 billion.
