Amazon exceeded Wall Street projections for its first-quarter performance, driven by a robust 18% surge in advertising revenue. The company’s advertising services segment, which encompasses revenue from sponsored ads, display, and video advertising sold to sellers, vendors, publishers, authors, and others, generated $13.9 billion. When adjusted for foreign exchange rate impacts, this segment’s revenue growth reached 19%.
The subscription services segment also saw solid growth, with net sales rising 9% to $11.72 billion. This segment includes revenue from Amazon Prime memberships (both annual and monthly fees) and digital offerings such as video, audiobooks, music, e-books, and other non-Amazon Web Services (AWS) subscriptions.
Key financial highlights for the quarter include:
- Net income: $17.1 billion, a significant increase from $10.4 billion in the same quarter last year.
- Earnings per share: $1.59 per diluted share, surpassing the $1.35 anticipated by analysts polled by Zacks Investment Research.
- Net sales: $155.7 billion, reflecting a 9% year-over-year increase, compared to the $154.56 billion expected by Zacks analysts. Excluding a $1.4 billion unfavorable impact from foreign exchange rate fluctuations, net sales grew 10% compared to Q1 2024.
- Operating income: $18.4 billion, up from $15.3 billion in the prior year’s first quarter.
Amazon’s strong results underscore the growing importance of its advertising and subscription businesses, which continue to complement its e-commerce and cloud computing segments, driving profitability and reinforcing its diversified revenue streams.
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