Amazon reported its highest first-quarter profit on Tuesday, showcasing its ability to drive efficiencies in its retail business and accelerate growth in its cloud computing operations. The company’s revenue for the first three months of the year reached $143.3 billion, a 13 percent increase from the previous year, with a profit of $10.4 billion, more than triple the amount from the same period last year.
Amazon’s cloud computing business, which is on track to reach $100 billion in annual sales for the first time, saw a 17 percent increase in sales to $25 billion. Operating income for the cloud computing segment grew by 84 percent to $9.4 billion, accounting for a significant portion of the company’s overall profit.
The company’s share price surged more than 3 percent in after-hours trading following the positive earnings report. Amazon’s CEO, Andy Jassy, attributed the strong performance to improvements in customer experience and financial results.
As companies resume tech spending after a year of cutbacks, Amazon’s cloud computing business has been gaining momentum. The company has been investing in data centers and infrastructure to keep pace with competitors like Microsoft, which has been closing the gap in cloud computing market share.
Amazon’s retail business, particularly its advertising and subscription services, has also been driving growth. Advertising revenue grew by 24 percent to $11.8 billion, while subscription services brought in $10.7 billion, an 11 percent increase.
The company’s focus on fast shipping and inventory management has also paid off, with 60 percent of items ordered by Prime members in major U.S. cities being delivered the same or next day. This has led to a 12 percent increase in the number of items purchased by customers.
Despite making significant capital investments, Amazon has been generating more cash than ever before. The company has been cautious in its deal-making due to antitrust scrutiny, including a major lawsuit from the Federal Trade Commission. In the latest quarter, Amazon had $73 billion in cash and equivalents, up from $34 billion two years ago.
Overall, Amazon’s strong first-quarter performance underscores its position as a leader in both retail and cloud computing, with continued growth expected in the coming quarters.
