Amazon share price: 3 things we learnt from Q1 results

The online retailer's Q1 earnings had three vital facts for investors.

Amazon logo after Amazon Q1 earnings Source: Bloomberg

Amazon share price is slightly down days after its positive Q1 revenue report. Investors had these three major lessons from Amazon’s Q1 earnings.

AWS success drove Amazon's Q1 results

Amazon Web Services (AWS) was a major part of Amazon’s Q1 profits. The cloud computing section’s revenue climbed 41% to $7.7 billion by expanding its services and AWS operating income also grew to $2.2 billion, a surge of 59%. Despite competition from Google cloud, AWS is still the dominant cloud company for businesses.

Prime continued to surge in Amazon's Q1 revenue

Amazon’s Q1 revenue increased with strong subscription numbers for its Prime service. The company’s earnings from the subscription services section, which includes Amazon Prime, jumped 40% to $4.3 billion. Amazon also plans to give more to its profitable subscription division by investing $800 million to enable one-day shipping for Amazon Prime subscribers’ items.

Stuart Applebaum, president of the Retail, Wholesale, and Department Store Union, expressed concern about Amazon’s upcoming plan to have one-day shipping will affect the company’s warehouse workers.

‘Increasing fulfillment speeds means they need to hire more workers, under more sustainable speeds that don't put worker's lives in jeopardy,’ said Applebaum.

The race to offer one-day shipping to customers is already inspiring brick-and-mortar rivals like Walmart and Target to consider making the same offer to consumers.

Amazon Q1 earnings increased from international sales

Amazon’s Q1 profits increased partially because of an uptick in global sales. International purchases from the site grew by 9% and totaled $16.2 billion. Despite tough regulations from India and competition from China’s own ecommerce giant Alibaba, Amazon’s Q1 revenue continued to grow outside the US.

Amazon’s Q1 earnings show that Amazon’s growth beyond retail and outside the US have paid off for the online retailer. Amazon’s Q1 profits also prove that its Prime subscription is continuing to attract customers.


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