Amazon.com reported better-than-expected quarterly results on the back of cloud-computing numbers driven by the excitement around Artificial Intelligence (AI) and growth in advertising revenue.
Sales in the first quarter increased 13 percent to $143.3 billion compared to $127.4 billion a year earlier, beating LSEG estimate of $142.5 billion, while net income more than tripled to $10.4 billion, compared with $3.2 billion.
Amazon also said it has plans to launch new infrastructure Regions in the Kingdom of Saudi Arabia and in Mexico, which will give developers, startups, entrepreneurs, and enterprises greater choice for running their applications and serving end users.
Amazon to invest over $5.3 billion in Saudi Arabia
As part of AWS’s long-term commitment, it is planning to invest more than $5.3 billion in Saudi Arabia and more than $5 billion in Mexico over the next several years.
North America segment sales increased 12 percent year-over-year to $86.3 billion. International segment sales increased 10 per cent to $31.9 billion, and AWS segment sales increased 17 per cent to $25.0 billion.
Operating income increased to $15.3 billion in the first quarter, compared with $4.8 billion in first quarter 2023.
Operating cash flow increased 82 per cent to $99.1 billion for the trailing twelve months, compared with $54.3 billion for the previous year, and free cash flow improved to an inflow of $50.1 billion for the trailing twelve months, compared to an outflow of $3.3 billion for the trailing 12 months ended March 31, 2023.
Andy Jassy, President and CEO, Amazon, said: “It was a good start to the year across the business, and you can see that in both our customer experience improvements and financial results.
“The combination of companies renewing their infrastructure modernisation efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate; our Stores business continues to expand selection, provide everyday low prices, and accelerate delivery speed, while lowering our cost to serve; and, 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.”
As for second-quarter guidance, Amazon said net sales were expected to be between $144 billion and $149 billion, up between 7-11% compared with second quarter 2023. This anticipates an unfavourable impact of approximately 60 basis points from foreign exchange rates. Operating income is expected to be between $10 billion and $14 billion, compared with $7.7 billion in second quarter 2023.
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