Image: © Tada Images/Stock.adobe.com
The company expects net sales to grow by 7-11pc this quarter, bringing in between $144bn and $149bn. Shares were up in extended trading.
Amazon has posted strong financial results in its latest quarterly earnings report with net sales up 13pc and operating income from its cloud services nearly doubled.
The global e-commerce giant reported yesterday (30 April) that net sales for the quarter ended 31 March was $143.3bn, compared to $127.4bn in the same quarter in 2023. This growth was largely uniform across its North America and international segments, while Amazon Web Services (AWS) sales were up 17pc to $25bn.
Andy Jassy, president and CEO of Amazon, said that the latest earnings mark a “good start to the year” across its major business segments: retail, cloud and advertising.
“The combination of companies renewing their infrastructure modernisation efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate, now at a $100bn annual revenue run rate,” he said.
AWS operating income stood at $9.4bn in the first quarter, compared to just over $5bn in the same period last year. Last November, the Amazon cloud division revealed an AI assistant called Q that is designed for business environments.
“The operating income boost indicates that AWS has managed to invest to stay in the AI game without dragging down the operating income that helps drive Amazon overall,” said Lee Sustar, principal analyst at Forrester.
Amazon has been pumping billions into generative AI to enhance its business, particularly in cloud. In March, it invested $2.75bn into Anthropic (which recently opened its first EU office in Dublin) to complete a $4bn investment commitment it made last year.
“Our advertising efforts continue to benefit from the growth of our Stores and Prime Video businesses. It’s very early days in all of our businesses and we remain excited by how much more we can make customers’ lives better and easier moving forward,” Jassy said.
Impending regulatory woes
Amazon shares rose in extended trading after the earnings were announced. The company expects net sales to grow by 7-11pc this quarter, bringing in between $144bn and $149bn.
The latest growth comes after the company went through multiple rounds of mass layoffs in 2022 and 2023 as it tried to become a leaner organisation.
Mark Boost, CEO of cloud computing company Civo, said that AWS’s attempts to monopolise the cloud market are a “huge factor” behind its latest earnings announcement.
“It has become a company centred on locking in customers to its services. Misleading and confusing egress fee procedures and free credits now extending to AI services are all methods for preventing users from leaving their public cloud services,” he said.
“This goes beyond greater freedom for customers. It’s about enabling an open marketplace that allows innovation to thrive. There are plenty of challenger providers with open approaches that support both of these outcomes. Accepting the status quo is no longer enough, we need to see regulatory action to prevent these anti-competitive practices.”
Just days ago, the US Federal Trade Commission claimed top Amazon executives used Signal’s disappearing message feature to delete potential evidence related to its ongoing antitrust lawsuit – which claims Amazon uses “anticompetitive and unfair strategies” to illegally maintain monopoly power.
Find out how emerging tech trends are transforming tomorrow with our new podcast, Future Human: The Series. Listen now on Spotify, on Apple or wherever you get your podcasts.
