Although Amazon’s core e-commerce business may be having trouble, its revenue-generating segments are performing well. According to the company’s announcement on Thursday, online sales were unchanged in the first three months of the year compared to the same period in 2022.
However, it made up for that with stronger-than-anticipated sales in its advertising and cloud services businesses.
In a sign that the company’s cost-cutting drive may be beginning to pay off, profits also increased.
CEO Andy Jassy stated, “There’s a lot to enjoy about how our employees are delivering for consumers, especially amid an uncertain environment.
Amazon sales have been slow as consumers have cut back on spending because to growing living costs and their return to in-store shopping after the pandemic.
Concerns over the direction of the economy have also affected its company as companies become more frugal with their spending.
Since taking CEO last year, Mr. Jassy has pushed the company to increase performance, suspending real estate development ambitions, revamping its US shipping network, and announcing thousands of employee losses. This week, he shut down the Halo fitness subsidiary.
Since March of last year, the firm’s workforce has decreased by 10%, losing more than 75,000 workers since the year’s end alone.
This might be beginning to pay off, according to chief analyst Andrew Lipsman of Insider Intelligence.
For the first time in a number of quarters, Mr. Lipsman said, “Amazon may finally have a bit of wind at its back.”
Revenue at Amazon’s advertising division increased 23% over the previous year, while revenues at Amazon Web Services—the company’s longtime main source of profits—rose 16%.
The January-March period saw an increase in overall sales of 9% to $127.4 billion, which is close to growth at the end of last year and a significant down from the pandemic, when sales increased by more than 40% in some quarters.
The company’s performance was nonetheless better than many analysts had predicted, as profits increased to $3.2 billion from a $3.8 billion loss in the corresponding quarter previous year.
According to Mr. Lipsman, “Amazon did what it needed to do in Q1 by reversing, or at the very least stalling, its most problematic declining growth trends.”
After-hours trading of the company’s shares originally saw a surge of more than 7%; however, officials cautioned analysts that companies were still being cautious about investing on cloud services.