Amazon reports revenue of $143.3 billion in the first quarter of 2024

Amazon reported its highest first-quarter profit on Tuesday, continuing to gain efficiencies from its retail operations and recharging growth in its cloud computing operations.

The company was also, for the first time, on track to hit $100 billion in annual cloud computing sales.

In the first three months of the year, the company reported revenue of $143.3 billion, up 13% from a year earlier. Profit more than tripled to $10.4 billion. The results exceed analysts' expectations.

“It's been a good start to the year for the entire company, and you can see it in both customer experience improvements and financial results,” Andy Jassy, ​​Amazon's chief executive, said in a statement.

After a year in which companies slashed technology spending, Amazon's lucrative cloud computing business has regained momentum. Cloud computing sales increased 17% to $25 billion. Growth was the fastest pace in more than a year. Operating profit from that business grew 84% to $9.4 billion, accounting for the majority of the company's operating profit.

Amazon's stock price rose more than 3% in after-hours trading Tuesday.

Amazon spent about $14 billion on capital expenditures and leasing in the quarter, a figure driven mostly by investments in cloud computing, Brian Olsavsky, Amazon's finance chief, said on a call with investors. This amount was about $1 billion more than the same period last year. He said Amazon plans to spend more over the course of the year, “primarily to service the generative AI opportunities we're seeing.”

The company has been building data centers and making other infrastructure investments to keep pace in the race to turn AI advances into real business. Microsoft has narrowed Amazon's lead in cloud computing, partly due to customers wanting access to the advanced artificial intelligence systems of its partner, the start-up OpenAI.

(The New York Times sued OpenAI and Microsoft in December, alleging copyright infringement of news content related to their AI systems.)

Sales of generative AI services amount to “multibillions of dollars” per year, Dave Fildes, Amazon's head of investor relations, said at the press conference. Last week, Microsoft said artificial intelligence accounted for more than a fifth of its cloud computing growth, leading analysts to estimate AI sales of about $1 billion in the quarter.

“Generative AI could represent the biggest technological transformation since the cloud,” Jassy said in a letter to shareholders this month.

What analysts consider the most profitable parts of Amazon's retail business have grown the fastest. This includes advertising, which grew 24% to $11.8 billion. In January, Amazon began placing streaming video ads for Prime members unless customers paid an additional $2.99 ​​a month to opt out. The subscription business, which includes Prime and other upgrades, brought in $10.7 billion, up 11%.

Amazon has focused on shipping products quickly by bringing more items closer to customers. The faster the delivery, the more customers turn to Amazon. The company said Monday that 60% of items ordered by Prime members in major U.S. cities were delivered the same day or the next day after the order was placed. The number of items purchased by customers increased 12% last quarter.

Bringing inventory closer to customers also reduces delivery costs, allowing Amazon to sell more items at a lower cost. Its operating profit in North America grew to $5 billion, up from less than $1 billion a year earlier.

Even as it makes capital investments, Amazon has thrown away more money than ever. It has made some deals, such as investing $4 billion in artificial intelligence startup Anthropic, but is blocked by federal antitrust scrutiny, including a major lawsuit by the Federal Trade Commission.

In January, Amazon abandoned its $1.7 billion acquisition of iRobot, which makes the Roomba vacuum cleaner, after regulators in the United States and Europe expressed skepticism about the deal. It had $73 billion in cash and equivalents in the latest quarter, up from $34 billion two years ago.

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