Credits: Amazon

The COVID-19-fueled momentum continues for e-commerce behemoth Amazon, as people continue to rely on its services in the twilight stage of the pandemic. Like Google and Facebook, which reported giant revenue gains this week, Jeff Bezos’ Amazon surpassed all expectations as it reported revenue of $108.5 billion for the first quarter of 2021, an increase of 44% year-over-year, and earnings per share (EPS) of $15.79, surpassing Wall Street estimates of $104.5 billion and earnings per share of $9.54.

Amazon’s shares climbed more than 3% in extended trading on Thursday after the first-quarter earnings were released. It announced record profits of $8.1 billion and an operating margin of 8.2%.

There are few companies that have benefitted in 2020 like Amazon. The company has become the “go-to” place for online shopping during the pandemic, especially with people confined in their homes.

Operating cash flow during Q1 2021 increased by 69% to $67.2 billion, while free cash flow for the same period increased to $26.4 billion. Amazon’s net sales grew by 44%, while the net sales for Amazon Web Services (AWS) grew by 32% to come to $13.5 billion, with $4.1 billion in operating income.

AWS continues to drive Amazon’s profits, being a leader in the cloud infrastructure services market with a share of 32% (surpassing Microsoft (19%) and Google (7%)). While advertising revenue was not given separately, Amazon’s revenue from “Other” sources grew by 77% to come to $6.9 billion.

It is thus, hardly a surprise that Amazon touted massive financial success for the first quarter, along with its investments in worker safety, higher wages for operations workers, and pandemic relief. For the second quarter, it expects to earn revenue through sales between $110 billion and $116 billion, surpassing Wall Street’s projection of $108.6 billion, along with operating income between $4.5 billion and $8 billion. COVID-19-related costs are expected to be $1.5 billion. It clearly expects the COVID-19-fueled momentum to continue. Amazon also confirmed that Prime Day would take place in June and not July due to pandemic-related uncertainty.

Amazon CFO Brian Olsavsky, when asked about Prime Day, said, “In many areas, July is vacation month, so it might be better for customers, sellers, and vendors to experiment with a different time period. We believe that it might be better timing later in [the second quarter], so that’s what we’re testing this year.”

Amazon Prime, the company’s popular streaming services, has been one of the major sectors to witness gain during the pandemic as people turned to re-watching their favorite shows and films as they were confined at home. Amazon CEO Jeff Bezos said that 175 million Amazon Prime members streamed content in 2021, with streaming hours increasing by 71%. Subscription services revenue, which includes Prime memberships, came in at $7.5 billion, an increase of 34%, Bezos said. Amazon now has more than 200 million Prime subscribers.

When it came to revenue from Physical stores (which includes Whole Foods Market and other brick-and-mortar offerings such as Amazon Books), however, sales dropped by 16% to come to $3.9 billion. Amazon’s shipping costs during Q1 2021 came to $17.1 billion, an increase of 57%.