What you need to know
- Amazon announced its financial results for the first quarter of 2024.
- The company achieved better-than-expected results, partly due to various cost-cutting measures.
- Amazon also highlights the success of AWS as it expands its AI capabilities so customers can benefit.
Amazon released its financial results for the first quarter of 2024 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, cost reductions and improvements in its advertising business. “The combination of companies renewing their efforts to modernize their infrastructure and the attractiveness of AWS’s AI capabilities is once again accelerating AWS’s growth rate,” Jassy said in a statement.
While companies like Google and Microsoft have been much more vocal about their generative AI efforts, Amazon has also made it a corporate focus through its use of AWS. As a result, AWS saw a 17% increase in revenue to $25 billion, and Jassy notes that the company “now has annual revenue of $100 billion.”
Amazon also uses 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 impressive growth of 24%. After announcing a new ad-driven tier for Prime Video last year, early results for the company appear to have been quite positive, and Jassy said it’s off to a really good start.
“I think advertisers are excited to be able to expand their video advertising capabilities with us beyond Twitch for up to two Prime Video shows and movies,” Jassy said during the earnings call. “I think they also find that the relevance and measurability of this type of advertising and Prime Video Ads is unique to them.”
While there have been no cost changes to the standard Prime Video subscription, users who want to disable the ads would have to pay an additional $2.99 per month to get rid of them.
Notably, the move follows even more layoffs at the company, with Amazon laying off hundreds of Prime Video and MGM employees earlier this year. In a letter to employees, Amazon’s SVP of Prime Video and MGM noted that it was necessary to “reduce or stop investments in certain areas while increasing our investments and focusing on content and product initiatives that have the greatest impact.” achieve”.
Since the end of 2022, Amazon has laid off thousands of employees at various companies to reduce expenses.