Key Takeaways
- Amazon reported first-quarter earnings after the bell Tuesday that beat analysts’ estimates on the back of growth from its Amazon Web Services (AWS) and advertising revenue.
- Earlier in the day, the company also announced its artificial intelligence (AI) assistant Amazon Q became generally available for its AWS enterprise customers.
- Despite a strong quarter, Amazon’s projection for second-quarter revenue was short of analyst estimates.
Amazon (AMZN) reported first-quarter earnings after the bell Tuesday that came in above analysts’ expectations, thanks to growth from its Amazon Web Services (AWS) and advertising revenue. Shares of Amazon climbed over 2% in extended trading following the release.
The company reported $10.43 billion in net income or 98 cents per share on total revenue of $143.31 billion, with all three measures coming in well above analyst estimates compiled by Visible Alpha. Amazon’s revenue rose over 12% from the year-ago period, while net income and earnings per share more than tripled.
CEO Andy Jassy credited the strong quarter to growth from AWS, in part fueled by new artificial intelligence (AI) features, as well as progress in its advertising business.
“The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate,” he said. AWS segment sales rose 17% year-over-year to $25 billion.
For the current quarter, Amazon projects revenue of $144 billion to $149 billion, which would represent growth of 7% to 11% from the year-ago quarter, though analysts were expecting $150.27 billion.
| Q1 2024 Actuals | Analyst Estimates for Q1 2024 | Q1 2023 | Year-over-year (%) change | |
|---|---|---|---|---|
| Revenue | $143.31 billion | $142.63 billion | $127.36 billion | 12.52% |
| Diluted EPS | 98 cents | 84 cents | 31 cents | 216.13% |
| Net Income | $10.43 billion | $8.95 billion | $3.17 billion | 229.02% |
Ahead of the earnings report’s release, Amazon announced that its AI assistant Amazon Q is generally available for AWS customers. Amazon said its Amazon Q Business allows enterprise customers to customize the AI-powered assistant to meet their needs, while Amazon Q Developer offers coding-specific features. The new offerings could help Amazon better compete with companies like Microsoft (MSFT) and Alphabet’s Google (GOOGL), which already offer their own AI assistants for enterprise customers and coding tools for developers.
Despite some speculation about whether Amazon could follow the lead of companies like Meta (META) and Alphabet in announcing a dividend with its earnings report, Amazon opted not to do so.
After falling 3.3% in the regular session, Amazon shares were 2.9% higher at $181.01 in extended trading as of 5:20 p.m. ET Tuesday following the release.