Amazon posted $ 108.5 billion in revenue for the first three months of the year on Thursday, up 44 percent year over year. The company posted profits of $ 8.1 billion, an increase of 220 percent over the same period last year.
The first quarter results exceeded Wall Street expectations. In aftermarket trading, shares rose by up to 5 percent.
The most profitable parts of Amazon’s retail business were booming. Revenue from merchants listing items on their website and using their warehouses rose 64 percent to $ 23.7 billion. The “other” business area, which is mainly the lucrative advertising business, rose by 77 percent to almost 7 billion US dollars.
Amazon previously announced that 200 million people are paying for Prime memberships, and subscription revenue for this and other services hit nearly $ 7.6 billion in the quarter. In addition to paying $ 119 a year or $ 12.99 a month for free shipping and other perks, Prime membership households typically spend $ 3,000 a year on Amazon, more than double, according to Morgan Stanley as much as households without membership.
The high volume of orders during the pandemic has enabled Amazon to work more efficiently. The warehouses are almost at full capacity, and the deliverers have made more stops on their routes and spent less time between customers. The number of items sold by Amazon increased 44 percent, but the cost of fulfilling those orders only increased 31 percent.
The pandemic move to remote computing has also been a boon to Amazon’s profitable cloud computing business, Amazon Web Services, which had sales of $ 13.5 billion.
“We definitely had strong volume in all of our businesses,” said Amazon’s CFO Brian Olsavsky when he called reporters. He said the company is investing heavily in future growth. Almost $ 50 billion has been invested in investments over the past 12 months, mainly to expand logistics operations and data centers. This corresponds to an increase of 80 percent compared to the previous year. Mr Olsavsky said he expected “another strong year” for investment.
“In just 15 years, AWS has grown into a $ 54 billion annual revenue company that competes with the world’s largest technology companies, and its growth is accelerating,” said Jeff Bezos, Amazon Founder and General Manager. in a statement. Mr. Bezos plans to step down as chief executive later this year and take on the role of executive chairman.
The total workforce at Amazon declined slightly between December and the end of March, falling by 27,000 to 1,271,000 worldwide. That was still 51 percent more employees than in the same period last year. On Wednesday, Amazon announced it would raise wages for half a million workers and hire more “tens of thousands”.