Amazon is on a record run of profits, crushing its previous high mark again with $3.6 billion in net income in the first quarter. But it hasn’t always been that way.
For much of the tech giant’s existence as a public company, it ran slim profits or posted losses as it plowed whatever money it had back into growing the business. However, in the fourth quarter of 2017, when it posted more than $1 billion in net income for the first time, the company began a trend of skyrocketing profits that continues today.Also at GeekWire:
Here are the key numbers behind the trend.
Amazon Web Services is an important factor, as it is responsible for a huge chunk of the company’s overall profits and revenue, and that isn’t likely to change any time soon....MORE
- The simple math behind the Amazon’s rapidly rising profits is that revenue is outpacing spending. Revenue barely beat expectations in the first quarter, through it grew at a healthy 17 percent year-over-year clip to $59.7 billion. Meanwhile, Amazon’s operating expenses grew by 12 percent to $55.1 billion.
- Amazon’s $3.6 billion in net income in the first quarter represents a rise of 118 percent over the prior year. Amazon posted earnings of $7.09 per share, shattering analyst expectations of $4.72 per share.
- Despite these record increases, Amazon remains well behind fellow tech giants in the profit department. Earlier this week, Microsoft reported net income of $8.8 billion, more than double Amazon’s record this quarter on about half the revenue of its rival.
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