Amazon shattered analyst expectations for profits in the first quarter, more than doubling last year’s numbers and even beating out the busy holiday season last quarter.
Revenue: Amazon reported net sales of $59.7 billion, up 17 percent over a year ago and narrowly beating analyst expectations of $59.65 billion.
Profit: Amazon set a record for profits in the quarter, reporting net income of $3.6 billion for the quarter, or $7.09 per share, crushing analyst expectations for earnings of $4.72 per share. Amazon continues to set a new high bar for profits every quarter, with the previous record of $3 billion set last quarter.
Amazon stock is up slightly in after-hours trading.
Amazon CEO Jeff Bezos elected to shout out the company’s Future Engineer program to fund computer science program in schools across the country in his quarterly quote.
“The son of a working single mom, Leo Jean Baptiste grew up speaking Haitian Creole in a New Jersey home without internet access. He’s also one of our inaugural group of 100 high school seniors to receive a $40,000 Amazon Future Engineer scholarship and Amazon internship,” Bezos said in a statement. “He rose to the top of his class and is set to study computer science at college this fall, with the dream of getting a job in machine learning. Our passion for invention led us to create Amazon Future Engineer so we could help young people like Leo from underrepresented groups and underserved communities across the country. In addition to 100 college scholarships a year, we’re funding computer science classes in 1,000 high schools and counting, and inspiring younger kids to explore coding through coding camps and after-school programs. We love this program, and we can’t wait to see what Leo and his fellow future engineers invent.”
Here are a few other key numbers and results from Amazon’s fourth quarter:
Amazon Web Services: Revenue from the cloud market share leader came in at $7.7 billion during the quarter, up 41 percent compared to the same period last year. Operating income was $2.2 billion, up 55 percent over the year-ago quarter.
Headcount: Amazon finished the quarter with 630,600 workers, up 12 percent over a year ago. The company’s headcount actually dropped from last quarter, though the same trend happened a year ago, and is likely due to the increased number of seasonal workers during the holiday period.
Advertising: The company’s rapidly growing advertising business doesn’t have its own category and is listed under a category called “Other.” That category brought in $2.7 billion in revenue in the quarter, up 34 percent over a year ago. However, the explosive growth of that business, which saw accelerations of more than 100 percent just a couple quarters ago, has slowed somewhat.
Physical Stores: After reporting a 3 percent year-over-year drop in sales at its brick and mortar stores, Amazon posted a gain of 1 percent to $4.3 billion.
Prime Surprise: Amazon this month kicked off an immense effort to transform its Prime two-day shipping program into a one-day offering. Amazon CFO Brian Olsavsky made the surprising announcement during the company’s earnings call and said it will spend upwards of $800 million this quarter alone on the initiative.
Highlights from the quarter
- Amazon’s future growth was perhaps the biggest story swirling around the company in the quarter. After selecting New York as one of two sites for major expansion in the HQ2 process, Amazon abruptly pulled out January. About a month later, the company confirmed plans to back out of a massive office tower in downtown Seattle and sublet the space to someone else. That was followed by rapid expansion in nearby Bellevue, including news that the company would move the key worldwide operations teams there.
- In January, Amazon unveiled a cooler-sized package delivery robot named Scout that it is testing in an unspecified neighborhood in Snohomish County, north of Seattle. A teaser video showed a mini six-wheeled robot with blue Prime branding rolling slowly down an even sidewalk on a sunny day. We haven’t heard anything more about the program since then, and the delivery robots have yet to be spotted in the wild.
- Details about the intriguing healthcare joint venture between Amazon, JPMorgan Chase and Berkshire Hathaway are starting to come out. In March, the venture finally got a name: Haven. Between its new website and information that has come out in a court case, we’ve learned that Haven will focus on access to primary care, simpler insurance benefits and lowering prescription drugs prices. It is also looking at how to use data to improve the healthcare system overall.
- Amazon made several acquisitions and investments in the quarter that give insight into areas the tech giant has its eye on. Amazon invested in a pair of transportation companies, teaming with General Motors to invest in electric pickup truck maker Rivian and joining a $530 million round for autonomous vehicle startup Aurora. During the quarter, Amazon acquired eero, the San Francisco-based maker of mesh home WiFi routers, and AWS scooped up TSO Logic, a Vancouver, B.C. startup that offers a service that helps customers understand how much running their current workloads will cost them on the cloud.