Amazon posted a record profit of $3.6 billion for the first quarter of 2019, amid revenue slowdown but booming cloud services growth.
Amazon posted a record profit of $3.6 billion for the first quarter of 2019, powered by the rapid growth of its cloud services unit even as overall revenue slowed.
Amazon
Blows Past Estimates to Post Record $3.6 Billion Quarterly Profit
Total revenue for the company grew 16.9 percent over the
first quarter of 2018, marking its slowest growth quarter in four years. North
American revenue grew 17 percent while last
year’s first quarter growth came in at 46 percent. International
growth fell to 9 percent from last
year’s first quarter growth of 34 percent.
The
growth of Amazon’s advertising unit slowed
to 34 percent after five
straight quarters of 60 percent growth or higher. It’s brick and
mortar stores, like Whole Foods barely grew at all by comparison, increasing
just one percent over
last year.
Revenue growth for Amazon’s cloud
service unit meanwhile remained relatively steady, growing at 41 percent over last year, though this
was a dip from last year’s 49
percent growth in the first quarter.
In all, Amazon had a record net profit of $3.6 billion in
the first quarter, while having an operating
profit of $4.4 billion, a profit
margin of 7.4 percent, nearly double last year’s profit margin of 3.8 percent.
The growth in profits were created from the company’s cloud services, advertising, and third-party seller services, which have lower total sales, but much lower costs, making each sale more profitable than a sale in its other businesses, such as Whole Foods. The steady revenue growth of its popular Amazon Web Services cloud service certainly played a part in producing the company’s record-setting quarterly profit.
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