Amazon’s attempts to reverse its fortunes appear to be paying off, as its first-quarter 2023 results, reported Thursday, beat analyst estimates.
The e-tail giant pulled in $127.4 billion in revenue, sailing 9 percent over the same period in 2022, with year-over-year growth edging out last year’s 7 percent. That doesn’t make up for the lack of gonzo growth Amazon was used to previously, but it’s an improvement that, investors hope, may signal the company is on track for a strong comeback. The company reported net income of $3.2 billion, with earnings per share of 31 cents — a far cry from the net loss of $3.8 billion in the year-ago quarter.
The figures topped analysts’ expectations of $124.55 billion in revenue and earnings of 21 cents.
Its cloud business, Amazon Web Services, saw growth slow, but not as much as anticipated. After last year’s 37 percent growth, Wall Street was bracing for 15 percent in the March quarter, but exhaled when Amazon clocked 16 percent, for a total of $21.4 billion.
“There’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy,” said chief executive officer Andy Jassy in a statement.
The CEO also cited machine learning investments driving growth in Amazon’s ad business, which saw revenue jump 23 percent to $9.51 billion, beating the $9.05 billion expected.
Its applications of artificial intelligence “help customers see relevant information when they engage with us, which in turn delivers unusually strong results for brands,” he added. Investors apparently agreed, sending shares up 11 percent in after-market trading.
But there are other reasons the numbers look different this time around. Last year, Amazon was dogged by its investment in electric car company Rivian, with a massive $7.8 billion loss dragging its top line down. More recently, it has also been sharpening its cost-cutting scissors, as one of several tech giants laying off thousands of workers to improve their bottom lines.
Round two is underway now, and when it’s complete, the total will come to 27,000 pink slips since January.
According to Jassy, the company’s focus on efficiency isn’t over yet. “Our Stores business is continuing to improve the cost to serve in our fulfillment network while increasing the speed with which we get products into the hands of customers (we expect to have our fastest Prime delivery speeds ever in 2023),” he said.