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Amazon is apparently doing really well after all those layoffs

by | May 6, 2024 | E-commerce News

Amazon reported its first-quarter earnings last week and it turns out the company is doing really well. CEO Andy Jassy and CFO Brian Olsavsky informed investors of several company milestones on its recent earnings call: 

  • Amazon exceeded estimates for net sales and earnings per share, and tripled its profits in the previous quarter.
  • The company reported $10.4B in profit on revenue of $143.3B, compared with a profit of $3.2B on $127.4B in sales in the same period a year earlier.
  • Net sales at its online store rose 7% to $54.7B and at physical stores rose 6.3% to $5.2B.
  • Third-party seller services rose 16% to $34.6B and subscriptions rose 11% to $10.7B.
  • Its Amazon Web Services division saw net revenue of $25B.
  • Amazon's introduction of ads to its streaming service is resonating with advertisers.
  • Ad sales overall rose 24% to $11.8B in $11.8B.
  • AWS is seeing strong customer demand for generative AI and non-generative AI workloads. The company expects that demand for these services will increase, but warns that spending on infrastructure will grow along with it.
  • Amazon's AI-powered assistant, Q, is now widely available. The company calls Q its “most capable” generative AI tool for “accelerating software development” and “leveraging companies' internal data”

Amazon also boasted about its delivery speeds on the earnings call — claiming that it delivered to Prime members at its faster speeds ever, with nearly 60% of Prime orders delivered the same or next day in the 60 largest US metro areas.

Meanwhile, Amazon sellers are hearing those numbers and looking at that new low inventory fee like — umm, excuse me?

The question of whether Chinese marketplaces like Temu and Shein are giving Amazon a run for its money is still on investors minds, but it wasn't addressed during the call. 

GlobalData Managing Director Neil Saunders said, “The question of whether Amazon is losing customers to marketplaces offering even lower prices, such as Shein and Temu, is worth asking. And from our data, we believe this is happening at the margins. However, the propositions are still sufficiently different to allow Amazon a defensive position. This may, however, change over time as other marketplaces start to broaden out their offer.”