Amazon's Q1 ad revenue clocks $2.03 billion in sales; up 139% from 2017
Amazon.com's first quarter sales up 43% to $51 billion; Amazon.com CFO says that advertising continues to be a bright spot both from a product standpoint and also financially
Published - Apr 27, 2018 8:58 AM Updated: Apr 27, 2018 8:58 AM
Amazon.com, Inc. (NASDAQ: AMZN) has announced its financial results for its first quarter ended March 31, 2018.
Amazon's "other" revenue, which primarily comes from its advertising business, saw a whopping increase of 139% from 2017 clocking $2.03 bn in sales this quarter.
In the earnings call, Brian T. Olsavsky, CFO, Amazon.com, Inc., said, “I would say advertising continues to be a bright spot both from a product standpoint and also financially. It continued to be a strong contributor to profitability in Q1. Our philosophy there again is that we're continuing to focus on finding valuable ways to make our advertising opportunities better for customers, showing them new products that they may not have seen otherwise and also for emerging and established brands, helping them to reach customers. I think the advertisers generally are in all shapes and sizes, and their common theme is that they want to reach our customers generally to drive brand awareness, discovery and eventually purchase.”
“AWS (Amazon Web Services) had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,” said Jeff Bezos, Amazon founder and CEO. “As a result, the AWS services are by far the most evolved and most functionality-rich. AWS lets developers do more and be nimbler, and it continues to get even better every day. That’s why you’re seeing this remarkable acceleration in AWS growth, now for two quarters in a row. A huge thank you to all our AWS customers, and you can be sure we’ll keep working hard for you.”
Commenting on video advertising opportunities in Prime Video, Olsavsky said, “Yes, there may be opportunities over time to have more advertising in our Video, but we choose not to do that right now.”
Operating cash flow increased 4% to $18.2 billion for the trailing 12 months, compared with $17.5 billion for the trailing 12 months ended March 31, 2017.
Free cash flow decreased to $7.3 billion for the trailing 12 months, compared with $10.1 billion for the trailing 12 months ended March 31, 2017. Free cash flow less lease principal repayments decreased to $1.1 billion for the trailing 12 months, compared with $6.1 billion for the trailing 12 months ended March 31, 2017. Free cash flow less finance lease principal repayments and assets acquired under capital leases decreased to an outflow of $3.0 billion for the trailing 12 months, compared with an inflow of $3.3 billion for the trailing 12 months ended March 31, 2017.
Common shares outstanding plus shares underlying stock-based awards totalled 504 million on March 31, 2018, compared with 497 million one year ago.
Net sales increased 43% to $51.0 billion in the first quarter, compared with $35.7 billion in first quarter 2017. Excluding the $1.6 billion favourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 39% compared with first quarter 2017. Operating income increased 92% to $1.9 billion in the first quarter, compared with operating income of $1.0 billion in first quarter 2017.
Net income was $1.6 billion in the first quarter, or $3.27 per diluted share, compared with net income of $724 million, or $1.48 per diluted share, in first quarter 2017.
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