Cloud Stocks: Amazon’s Ad Revenue On The Rise


Tech giant Amazon (Nasdaq: AMZN) recently reported quarterly results that surpassed all market expectations. The company is seeing stellar growth within the e-commerce business driven by the global lockdown conditions. But it is not just e-commerce. Amazon continued to upgrade its products and services across the board and is seeing strong market performance across all categories.

Amazon’s Financials

Amazon’s first quarter revenues grew 44% to $108.52 billion, ahead of the market’s forecast of $104.63 billion. Net income of $15.79 per share was significantly higher than the Street’s forecast of $9.64 per share as well. The growth in earnings was attributed to its global shipping and fulfillment efficiency. Overall, its investments in the fulfillment centers helped reduce shipping costs per unit by nearly 2% over the year.

By segment, net product sales grew 37.4% to $57.5 billion and net service sales increased 51.8% to $51.03 billion.

North American sales grew 40% to $64.4 billion, while international sales grew 60% to $30.7 billion.

Revenues from Amazon Web Services (AWS) increased 32% to $11.6 billion. Subscription services revenues grew 36% to $7.6 billion. Revenues from “other” category which primarily includes advertising grew 77% to $6.9 billion.

Amazon expects its current quarter revenues at $110-$116 billion with an operating income of $4.5-$8 billion. The market was looking for revenues of $108.03 billion for the quarter, and $473.11 billion for the fiscal year.

Amazon’s Product Upgrades

During the quarter, Amazon continued to improve its product offerings. It announced the launch of a new generation of its Echo Buds. These Buds now have a new design and offer premium audio, custom-designed Active Noise Cancellation technology, wireless charging capabilities, and hands-free access to Alexa. For Ring, it announced Ring Video Doorbell Pro 2 and Ring Floodlight Cam Wired Pro, both of which have 3D Motion Detection and Bird’s Eye View powered by radar technology.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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