What you need to know
- Amazon announced its Q1 2024 financial earnings.
- The company posted better than expected results, which is thanks in part to various cost-cutting measures.
- Amazon also highlights the success of AWS as it pushes its AI capabilities for customers to take advantage of.
Amazon posted its Q1 2024 financial earnings on Tuesday, reporting revenue of $143.3 billion, a 13% increase compared to the first quarter of 2023. This includes strong sales in North America, international markets, and within AWS.
Amazon CEO Andy Jassy attributes some of its growth to the ongoing AI boom, lowering costs, and improvements within its Ads business. "The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS's AI capabilities is reaccelerating AWS's growth rate," Jassy says in a statement.
While companies such as Google and Microsoft have been much more expressive about their generative AI efforts, Amazon has also made it a focus of the company by leveraging AWS. As a result, AWS saw a 17% increase in revenue to $25 billion, and Jassy notes that the business is "now at a $100 billion annual revenue run rate."
Amazon is also leveraging generative AI for its own consumer-facing products. Earlier this year, Amazon began rolling out an AI chatbot called Rufus to help consumers discover products on the Amazon app. Rufus can answer questions about products, make comparisons, and even make recommendations.
Amazon's advertising business also saw an impressive 24% growth. After announcing a new ad-driven tier for Prime Video last year, it seems the early results have been quite positive for the company, with Jassy saying it's off to a really good start.
"I think advertisers are coming excited about being able to expand their ability to advertise with us video beyond Twitch for up to two Prime Video shows and movies," Jassy said during the earnings call. "I think they also find that the relevancy and the measurability of that type of advertising and Prime Video Ads is unique for them."
While no cost changes were introduced to the standard Prime Video subscription, users who want to opt out of ads would have to pay an additional $2.99 per month to get rid of them.
Notably, the move followed even more layoffs at the company, with hundreds of Prime Video and MGM employees dismissed from Amazon at the top of the year. In a letter to employees, Amazon's SVP of Prime Video and MGM notes that it was necessary to "reduce or discontinue investments in certain areas while increasing our investment and focus on content and product initiatives that deliver the most impact."
Since late 2022, Amazon laid off thousands of employees across various businesses in order to reduce spending.
