Amazon.com Inc (NASDAQ:AMZN) posted healthy 1Q earnings led by its cloud computing division, Amazon Web Services (AWS), which put in a strong performance in the first quarter.
AWS delivered its strongest sales growth in a year, a significant recovery for the e-commerce giant's most profitable unit, indicating a resurgence in business spending on technology projects.
The division generated $25 billion in revenue, surpassing the expected $24.1 billion and showing substantial growth from $21.4 billion in Q1 2023.
AWS also saw its cloud margin reaching 37.6%, marking the highest margin ever recorded by the division, as well as a significant uptick in net sales, excluding foreign exchange effects, with a growth rate of 17%, surpassing analysts' expectations of 14.5%.
In the first quarter, Amazon reported net sales of $143.3 billion, slightly surpassing analysts' expectations of $142.6 billion and marking a significant increase from $127.4 billion in Q1 2023. Adjusted earnings per share also exceeded expectations, reaching $0.98 compared to the anticipated $0.83, a notable improvement from $0.31 in the first quarter of the previous year.
Additionally, the company's advertising segment performed well, with revenue totaling $11.8 billion, meeting expectations and showing significant growth from $9.5 billion in the first quarter of the previous year.
Looking ahead, Amazon anticipates net sales in the second quarter to range between $144 billion to $149 billion, slightly below analysts' estimates. However, the company's optimism remains high, as evidenced by its operating income forecast for the second quarter, expected to be in the range of $10 billion to $14 billion.
Shares of Amazon gained almost 3% in post-market trading Tuesday.