Amazon posted $108.5 billion in revenue in the first three months of the year, up 44 percent from the same span last year, thanks to the pandemic shifting sales online and customers flush with stimulus checks. It also made a profit of $8.1 billion, up 220 percent from the same time last year.
The first-quarter results were better than expected by Wall Street. In aftermarket trading, shares were up as much as 5%.
Amazon's most profitable areas of the retail industry grew at a rapid pace. Merchant revenue from listing products on its website and using its warehouses increased by 64% to $23.7 billion. The company's "other" market category, which includes its lucrative advertisement business, grew by 77% to nearly $7 billion.
Amazon recently revealed that 200 million users pay for Prime memberships, with subscription revenue for that and other services totaling about $7.6 billion in the third quarter. According to Morgan Stanley, households with Prime memberships spend $3,000 a year on Amazon, more than double what households without the membership spend, in addition to paying Amazon $119 a year or $12.99 a month for free shipping and other perks.
Amazon has been able to work more effectively due to the large volume of orders placed during the pandemic. It has filled its warehouses, and its delivery drivers have made more stops along their routes, allowing them to spend less time traveling between customers. The number of products Amazon sold increased by 44%, but the cost of fulfilling those orders only increased by 31%.
Amazon's lucrative cloud computing company, Amazon Web Services, which had $13.5 billion in revenue, benefited from the pandemic's transition to remote computing.
On a conference call with reporters, Amazon's finance manager, Brian Olsavsky, said, "We had high volumes across all of our companies." He mentioned that the company is heavily investing in future development. It invested nearly $50 billion in capital expenditures last year, primarily on expanding its logistics operations and data centers, increasing 80% over the previous year. Mr. Olsavsky predicted that capital investment would have "another good year."
Amazon's founder and CEO, Jeff Bezos, said in a statement that "in just 15 years, AWS has grown to become a $54 billion annual revenue run rate company competing against the world's largest technology firms, and its growth is accelerating." Mr. Bezos intends to leave his position as CEO later this year and take on the role of executive chairman.
Between December and the end of March, Amazon's overall workforce shrank significantly, dropping by 27,000 to 1,271,000 workers worldwide. Even so, it was a 51% increase over the same time last year. Amazon revealed on Wednesday that it would raise wages for half a million employees and would hire "tens of thousands" more.
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