Amazon.com Inc. grew sales in its fiscal Q1 ended March 31, 2024, and it did so with improved operational efficiency.
Whereas Amazon net sales increased to $143.3 billion in its fiscal first quarter (up 13% from $127.4 billion in Q1 2023), its operating income more than tripled. Amazon operating income grew to $15.3 billion in Q1 2024 from $4.8 billion in Q1 2023.
That also translated to shareholder profits tripling, as net income increased to $10.4 billion in the first quarter, or $0.98 per diluted share, Amazon said. That compares to $3.2 billion, or $0.31 per diluted share, in Q1 2023.
“Despite having hundreds of millions of items and the broadest selection available, we remain intensely focused on adding even more selection,” Amazon president and CEO Andy Jassy told investors in an April 30 earnings call. “One way is to continue adding brands we know our customers want.”
Another way to drive selection, he said, is to make it easier for Amazon third-party sellers to add their products to the marketplace.
“We’ve recently launched a new generative AI tool that enables sellers to simply provide a URL to their own website, and we automatically create high-quality product detail pages on Amazon,” Jassy said. “Already, over 100,000 of our selling partners have used one or more of our GenAI tools.”
Amazon ranks No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by third-party GMV.
How much did Amazon make in Q1 sales?
In North America, Amazon Q1 sales increased 12% year-over-year, reaching $86.3 billion. Meanwhile, international Amazon sales in Q1 increased 10% year over year to reach $31.9 billion. Sales from Amazon Web Services (AWS) grew to $25.0 billion in Q1, a 17% year-over-year increase.
And in North America, Amazon operating income in Q1 grew more than 5x year over year. It grew to $5.0 billion in Q1 2024 from $0.9 billion in Q1 2023. On the other hand, international operating income dipped to $0.9 billion in Q1 compared with $1.2 billion in the prior-year period. Meanwhile, AWS operating income grew to $9.4 billion from $5.1 billion.
“Customers are shopping but remain cautious, trading down on price when they can and seeking out deals,” Jassy said on the call. “In Q1, we helped customers save with shopping events worldwide, including our first Big Spring Sale in Canada and the U.S. We also held Spring Deal Days in Europe and our Ramadan event in Egypt, Saudi Arabia, and the UAE.”
Fastest fulfillment yet
Amazon delivered to Prime members at its fastest speeds ever in Q1, Jassy said. In March, across its 60 largest metropolitan areas in the U.S., he said, nearly 60% of Prime members’ orders arrived the same or next day.
“We’ve continued to inspect our fulfillment network for additional opportunities and are working on several areas where we believe we can lower costs even further while also improving customer experience,” Jassy said. “One example of this is our work to increase the consolidation of units into fewer boxes. As we further optimize our network, we’ve seen an increase in the number of units delivered per box, an important driver for reducing our cost.”
Consolidating more units into a box results in fewer boxes and deliveries, a better customer experience and a cost reduction, all while lowering Amazon’s carbon impact, Jassy said.
Amazon also seeks to revamp its processes for inbound products in the U.S. so it can place inventory closer to customers. Jassy said this will be an “iterative process throughout the year.”
Generative AI continues to fuel AWS growth
Year-over-year AWS revenue growth increased to 17.2% in Q1, Jassy said. That was up from 13.2% in Q4. AWS continues to add capabilities to each of the three layers in its generative AI tech stack, he added.
The three layers in Amazon’s generative AI stack:
- Top layer: Where developers and companies build generative AI applications, building on the foundations below.
- Middle layer: Where developers and companies who prefer not to build models from scratch — and instead seek to leverage an existing large language model (LLM) — customize it with their own data.
- Bottom layer: Where developers and companies build models themselves.
Referring to the top layer, Jassy announced the availability of Amazon Q. He called it “the most capable generative AI-powered assistant for software development and leveraging” a company’s internal data.
Jassy said Q can generate code, test it, debug coding conflicts, and transform code from one form to another.
“Today, developers can save months using Q to move from older versions of Java to newer, more secure and capable ones,” he said. “In the near future, Q will help developers transform their dotNET code as well, helping them move from Windows to Linux.”
Amazon Q also features a capability called Agents that Jassy said can autonomously perform a range of tasks, including implementing features, documenting, and refactoring code to perform software upgrades. He gave an example of asking Amazon Q to implement an “add to favorites” feature in an app. He said the agent will analyze existing application code and generate a step-by-step implementation plan that includes code changes across multiple files and suggested new functions. Developers, he said, can collaborate with the agent to review and iterate on the plan.
“The agent implements it, connecting multiple steps together and applying updates across multiple files, code blocks and test suites,” Jassy said. “It’s quite handy.”
Recent Amazon layoff announcements
Amazon said in April that it would cut hundreds of jobs in its AWS division, impacting sales, marketing and global services (SMGS) roles. It also said it would cut “a few hundred roles” on the Physical Stores Technology team.
Amazon also announced in January that it would lay off about 5% of its Buy with Prime unit, or about 30 workers. Prior to that, Amazon laid off 500 workers at Twitch, a streaming platform it acquired in 2014.
Amazon earnings
For its fiscal first quarter ended March 31, Amazon.com Inc. reported:
- Amazon sales in Q1 increased 13% to $143.3 billion. That compares with $127.4 billion in Q1 2023.
- Sales in North America increased 12% year over year to $86.3 billion.
- AWS sales increased 17% year over year to $25.0 billion.
- Operating income increased to $15.3 billion. That compares with $4.8 billion in the year-ago period.
Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Amazon earnings article.
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