Amazon reported increased profits and sales for the first quarter, surpassing analyst expectations. The e-commerce giant's net income rose to $12.5 billion, up from $10.2 billion in the same period last year, driven by robust growth in its cloud computing division, Amazon Web Services (AWS), and advertising business.
Key Financial Highlights
Revenue increased 12% to $143.2 billion, compared to $127.4 billion in Q1 2025. AWS revenue grew 17% to $25.6 billion, while advertising sales jumped 22% to $12.8 billion. The company also reported improved operating margins, with operating income rising to $15.3 billion from $11.8 billion.
Factors Behind the Growth
Amazon's focus on cost-cutting measures and efficiency improvements contributed to the profit boost. The company has streamlined its logistics network and reduced headcount in some areas. Additionally, increased adoption of AI services through AWS and higher ad spending by businesses fueled revenue growth.
CEO Andy Jassy highlighted the company's investments in artificial intelligence and machine learning, noting that AWS's AI offerings are seeing strong demand. He also mentioned that Amazon's retail business continues to benefit from faster delivery times and expanded product selection.
Market Reaction
Shares of Amazon rose 4% in after-hours trading following the earnings release. Analysts praised the company's ability to balance growth with profitability. However, some expressed caution about potential headwinds from regulatory challenges and competition in cloud computing.
Looking ahead, Amazon provided guidance for the second quarter, projecting revenue between $148 billion and $153 billion. The company also announced a $10 billion share buyback program.
