Riding high on its cloud business of AWS, Amazon has posted $29.13 billion in revenues on a net income of $513 million, or $1.07 per share. This is also the biggest ever quarterly net income posted by the company with operating income growing to $1.1 billion from $255 million in the same period last year .
And ofcourse, with this stellar performance, the company easily beat the analysts’ expectations who had estimated earnings of 58 cents per share on $27.98 billion in revenues. The revenues showed an increase of 28% compared to $22.72 billion last year which had witnessed a loss of 12 cents per share.
A major highlight of the earnings report was the continued success of its cloud business led by Amazon Web Services despite the increasing competition from Microsoft, Google, and others.
AWS revenues jumped 64 percent to $2.57 billion from $1.57 billion in the same quarter last year, beating the estimates of $2.54 billion. Operating income in the segment also grew more than three times, reaching $604 million. In fact, AWS delivered more profit than the company’s retail business in the quarter.
In addition to the success of AWS, the company also reported a strong growth in its Amazon Prime membership model which is now expanded to Europe and Japan and experiencing similar success and growth like in North America where it was first launched.
“We feel that program is working. We’re going to significantly increase our spend in that area, “said Chief Financial Officer Brian Olsavsky during the conference call.
The company is further investing to add services to this $99 a year subscription program which offers services like deliveries in less than one hour; original TV programming and access to its digital entertainment products such as Prime Music and Prime Video.
It will also invest more amount in creating original video content for Prime customers under Prime Originals after its highly popular programs “Mozart in the Jungle” and “Transparent” won Golden Globe awards.
Amazon has also started a monthly program of Prime subscription at $10.99 a month and plans to launch the video streaming service as a standalone service for a monthly fee of $8.99.
Another thing revealed by the company was the success of its new hardware products like low cost tablets and voice activated home assistant Echo .
Referring to Echo and the Fire TV Stick, Amazon CEO Jeff Bezos said in the statement, “Amazon devices are the top selling products on Amazon.” Without revealing the sales numbers, he further said that Echo had been a surprise hit and the company could not keep it in stock.
Amazon has also forecasted postive numbers for the second quarter. It has estimated revenues between $28 billion to $30.5 billion and operating income between $375 million and $975 million against the Wall street estimates of $860.5 million on a GAAP basis on $28.32 billion revenue.
Amazon shares were trading at more than 10% after the earnings call.