Amazon Reports $143.3 Billion in Revenue for First Quarter of 2024

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May 1

Amazon reported its highest first-quarter profit on Tuesday as it continued to wring efficiencies out of its retail business and recharge growth in its cloud computing operations.

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

The company had $143.3 billion in revenue in the first three months of the year, up 13 percent from a year earlier. Profit more than tripled, to $10.4 billion. The results beat analysts' expectations.

"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," Andy Jassy, Amazon's chief executive, said in a statement.

After a year of companies paring back tech spending, Amazon's lucrative cloud computing business has been regaining steam. Sales from cloud computing were up 17 percent, to $25 billion. The growth was the fastest pace in more than a year. Operating income for that business grew 84 percent to $9.4 billion, accounting for most of the company's operating profit.

Amazon's share price was up more than 3 percent in after-hours trading on Tuesday.

Amazon spent about $14 billion on capital expenses and leases in the quarter, a figure particularly driven by investments in cloud computing, Brian Olsavsky, Amazon's finance chief, said on a call with investors. That amount was about $1 billion more than for the same period last year. He said Amazon expected to spend more as the year goes on, "primarily to serve the generative A.I. opportunities that we are seeing."

The company has been building data centers and making other infrastructure investments to keep up in the race to turn A.I. advances into real businesses. Microsoft has been closing Amazon's lead in cloud computing, in part from customers wanting access to advanced A.I. systems from its partner, the start-up OpenAI.

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

Sales of generative artificial intelligence services amounted to "multibillion dollars" a year, Dave Fildes, Amazon's head of investor relations, said on the press call. Last week, Microsoft said A.I. accounted for more than a fifth of its cloud computing growth, leading analysts to estimate the A.I. sales were about $1 billion in the quarter.

"Generative A.I. may be the largest technology transformation since the cloud," Mr. Jassy said in a letter to shareholders this month.

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

Amazon has been focusing on shipping products quickly by putting more items closer to customers. The faster the delivery, the more customers turn to Amazon. The company said on Monday that 60 percent of items ordered by Prime members in major U.S. cities were delivered the same or the next day after being ordered. The number of items customers bought rose 12 percent in the last quarter.

Putting inventory closer to customers also reduces delivery costs, letting Amazon sell more lower-cost items. Its North American operating profit grew to $5 billion, up from less than $1 billion a year earlier.

Even as it makes capital investments, Amazon has been throwing off more cash than ever. It has done some deals, like investing $4 billion in the A.I. startup Anthropic, but it is hemmed in by federal antitrust scrutiny, including a major lawsuit from the Federal Trade Commission.

In January, Amazon abandoned a $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. In the latest quarter, it had $73 billion in cash and equivalents, up from $34 billion two years ago.