Amazon Q1 Earnings Top Wall Street Expectations, Tech Giant Swings to $3.2 Billion Profit Amid Layoffs

Amazon, in the midst of paring back its workforce, topped Wall Street forecasts with better-than-expected revenue growth for the first quarter of 2023.

The company reported Q1 revenue of $127.4 billion, up 9% year over year, improving over a 7% rise in the year-earlier quarter but still off its historical pace of top-line growth. Net income was $3.2 billion, or 31 cents per share, compared with a net loss of $3.8 billion in Q1 2022 (which included a $7.8 billion loss on its stake in electric-vehicle maker Rivian).

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The results come as the ecommerce colossus is in the middle of laying off 9,000 workers in corporate roles, on top of the 18,000 job cuts announced in January. On Thursday, the company laid off about 100 employees at Amazon Studios and Prime Video.

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Amazon’s Q1 results easily coasted past financial analyst projections. On average, Wall Street expected revenue of $124.55 billion and earnings per share of 21 cents, according to Refinitiv data. Shares of Amazon climbed more than 11% in after-hours trading on the beat.

“There’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy,” CEO Andy Jassy said in announcing the results. “Our Advertising business continues to deliver robust growth, largely due to our ongoing machine learning investments that help customers see relevant information when they engage with us, which in turn delivers unusually strong results for brands.”

Amazon’s ad segment had sales of $9.5 billion, an increase of 21% year over year, beating analyst expectations of 15% growth. “We have a lot of upside” going forward in advertising, Jassy said on the earnings call, saying Amazon is still trying to find the optimal way to deliver ads in video and live sports.

The company’s AWS cloud segment saw sales rise 16% year-over-year to $21.4 billion, while operating income declined 21%, to $5.1 billion.

On the entertainment front, Amazon touted MGM’s release of “Creed III,” directed by and starring Michael B. Jordan, which grossed $100.4 million globally in its opening weekend, marking the biggest U.S. debut for any sports film in history. Prime Video’s original limited series “Daisy Jones & the Six” debuted at No. 1 on the service globally. The streaming service’s additional original films and series launched in Q1 included action comedy “Shotgun Wedding,” starring Jennifer Lopez and Josh Duhamel; romantic comedy “Somebody I Used to Know,” directed by Dave Franco; comedic thriller “The Consultant,” starring Christoph Waltz; and “Swarm,” from co-creator and executive producer Donald Glover.

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