Amazon’s first-quarter revenue grew more than expected as rising sales in North America and its burgeoning cloud-computing services unit offset new business investments.
The e-commerce giant gave financial details of its secretive cloud-computing unit Amazon Web Services for the first time yesterday, revealing that revenue soared almost 50% to £1.04bn. The unit’s operating income grew 8% to £175m.
Amazon Web Services (AWS) makes money by charging businesses to host websites and other applications. The AWS division provides cloud computing services to household names including Dropbox, Spotify, Netflix, Uber, Samsung and even the CIA – helping to send notifications, stream video and synchronise data.The figures confirm that Amazon’s cloud business is the biggest of its kind in terms of revenue.
Chief Executive Jeff Bezos said in a statement that Amazon Web Services is a $5bn business and its growth is accelerating.
The online pure play also added that it continues to build its Prime delivery business with its one-hour delivery service called Prime Now. It is also investing in original content for its Prime instant video services and devices.The international unit, which accounts for around 35% of total sales, is not the best performer. Commenting on investments, Chief Financial Officer Tom Szkutak said:
“The growth rate in India is very rapid. A big part of the challenge there is helping sellers to succeed and grow their online businesses.”
Amazon reported a loss of £38m for the first quarter compared with a profit of £71m a year earlier as it puts money into new products and services such as the recently introduced Amazon Echo, a Bluetooth speaker that responds to voice commands and Amazon Dash, standalone buttons that can be pressed to reorder common household goods like Tide detergent.It has also added to its offering with a service that helps users book travel and hire people to complete household projects.
Today, Amazon introduces its shopping app for the Apple Watch.
“This is still day-one for wearable devices. And we are excited to offer new ways for our customers to get quick glimpses of information they need from Amazon through Apple Watch,” said Paul Cousineau, Director of Mobile Shopping. “There are times when it might not be convenient to get your phone out of your pocket. So we worked to distill the best parts of the Amazon shopping experience into fast and simple access points from your wrist. Customers can use voice search, 1-Click purchasing, and find all of the key pieces of product information they need. We can’t wait to see how our customers respond.”