NEW YORK (AP) — Amazon reported strong first-quarter results driven by growth in its cloud-computing unit and new ad dollars from its Prime video streaming service.
The Seattle-based e-commerce giant reported revenue of $143.31 billion in the first three months of this year, up 13% from the same period last year. Net income was $10.43 billion, or 98 cents per share. That beat Wall Street analysts' expectations for 84 cents a share, according to FactSet.
“This was a good start across the business, and you can see that in both our customer experience improvements and financial results,” Amazon CEO Andy Jassy said in a statement.
The nation's largest online retailer is delivering better-than-expected results during the holiday shopping season. Amazon held another discount event in late March, before the end of the first quarter.
Overall, U.S. consumer spending continued to grow despite higher prices and higher borrowing costs as a result of Federal Reserve interest rate hikes. Economy of the country has decreased In the first three months of this year But hiring And going strong.
Amazon's U.S. customers are “very thoughtful” about their spending, Chief Financial Officer Brian Olszowski said on a call with reporters. He noted that consumers are looking for deals and cutting back on trade-ins, and the company is seeing lower costs “particularly” in Europe.
Aside from its core retail business, Amazon's first-quarter sales of its cloud computing unit, Amazon Web Services, were $25.04 billion, up 17% from the same period last year.
AWS, whose customers are mostly businesses, is a cornerstone of Amazon's strategy in the artificial intelligence race where big tech companies compete. Growth slowed last year as companies cut costs amid concerns about the economy. However, Amazon is using its AI offerings to buck that trend and attract more companies to its cloud business.
Jassi said AI capabilities have re-accelerated AWS's growth rate, and it's now on pace for $100 billion in annual revenue.
Hours before Amazon released its earnings report on Tuesday, the company announced the full rollout of a business chat called Q, which it says will help employees be more productive at work. Last month, it completed its $4 billion investment in San Francisco AI startup Anthropic, a competitor to Microsoft-affiliated OpenAI. Anthropic is collaborating with Amazon to develop so-called foundation models that underpin AI technologies.
Sales in the company's online advertising business also rose 24%, most of which was driven by advertising for sponsored products, Olshavsky said.
Amazon, which began showing ads on Prime Video in late January, currently has “mild” ads on the streaming service compared to TV or other streaming providers, he said. The ads, which customers can skip for an additional $2.99 monthly fee, are going well and are “attracting a lot of new advertisers who aren't currently using Amazon's ad services,” Olszowski said.
Amazon.com Inc. Shares were up about 2% in after-hours trading.
Under Jassi, Amazon has cut costs in various areas of its business to stay profitable. This year, the company cut hundreds of positions across AWS, Prime Video and MGM Studios. Its subsidiaries, popular social media site Twitch and audiobook service Audible, have also laid off workers.
Additionally, Amazon faces regulatory hurdles. In January, the company terminated a contract To buy robot vacuum maker iRobot after facing regulatory hurdles in Europe. Its A further case was filed by the Federal Trade Commission on antitrust concerns.
Amazon says it expects second-quarter net sales of between $144 billion and $149 billion. Analysts were expecting $150.2 billion, according to FactSet.
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