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drew in $127.4 billion in revenue in the first quarter, beating its own forecasts of $116.4 billion.
Amazon reported a net income of $3.2 billion in the first quarter, or $0.31 per diluted share, compared to a net loss of $3.8 billion, or $0.38 per diluted share in Q1 2022.
AWS, which makes up 17% of the company’s sales for the ecommerce giant, posted $21.3 billion in revenue as the cloud segment grew 16% year-over-year (YoY). The unit had seen an annual growth rate of 37% in the corresponding quarter of last year.
Customers evaluating cloud expenses in the wake of tough economic conditions has been driving a rout in AWS sales as it declined for fifth straight quarter.
“AWS business navigates companies spending more cautiously in this macro environment, we continue to prioritise building long-term customer relationships both by helping customers save money and enabling them to more easily leverage technologies like Large Language Models and Generative AI,” Amazon CEO Andy Jassy said in a statement.
Amazon’s advertising revenues grew 23% YoY as sponsored product and brand offerings remained key drivers of growth.
“Even in difficult economies, most people still shop. And with the largest ecommerce shopping venue, we have a lot of customers that companies seek to reach,” Brian Olsavsky, Chief Financial Officer, said during an earnings call.
The North American segment witnessed an 11% YoY increase in sales, and operating margins turning positive for the first time in five quarters.
In a bid to cut costs, Amazon examined performances of each of its businesses leading to “shuttering certain businesses” over the last year, according to Amazon chief’s annual letter to shareholders.
“We stopped pursuing physical store concepts like our Bookstores and 4 Star stores, closed our Amazon Fabric and Amazon Care efforts, and moved on from some newer devices where we didn’t see a path to meaningful returns.” Jassy said.
Since January this year, Amazon has laid off around 27,000 workers, marking the largest cull in ecommerce giants’ history.
The cost-cutting measures seem to be showing results as operating expenses fell by 11% to $2.25 billion.
The company also expects the “fastest Prime delivery speeds ever in 2023.” As it plans to provide its customers more one-day and same-day deliveries.
Amazon is the latest tech companies to declare stronger-than-forecasted performance. Earlier this week Facebook parent Meta announced return to revenue growth as its ad revenue increased to $28.1 billion.
Google and Microsoft also posted strong results driven by their cloud computing segments.