- Amazon reported total net sales of $181.5 billion and a profit of $30.3 billion, or $2.78 per share, topping Wall Street expectations.
- Amazon confirmed that Prime Video is profitable on its own
- Shares of the tech giant rose over 4% in after-hours trading following the results
As Amazon doubles down on its investment into AI, the tech giant is bracing itself for the new technology to “radically change” internal operations, beyond the 16,000 workers laid off earlier this year.
With AI transforming the customer experience, Amazon CEO and president Andy Jassy said on Wednesday’s first-quarter earnings call that AI is already impacting workflow within the company, noting how agentic coding is “changing how we’re all building products.”
“It’s going to have a comparable impact how we do DevOps and how we do customer service, how we do research, how we do analytics, how sales is conducted — I think every single one of these functions that we all do at work are going to very significantly change,” Jassy said, pointing to a project that previously would’ve taken 40-50 people a year to complete that was instead handled by five “AI-forward thinking” staffers in 65 days.
“That is a very different world of operating and that’s the world I think we’re heading to over the next few years,” he continued.
His comments come amid a particularly brutal wave of layoffs hitting the media and tech industry. And while Jassy did not comment on how these changes would affect staffing, they touch upon the growing fear that AI is the catalyst for much of the job disruptions going on at the moment.
Like all of the other tech giants, Amazon is investing big into AI, with the company launching Creative Agent, an agentic AI service for advertisers in Canada, France, Germany, India, Italy, Spain and the UK, which helps research, brainstorm and generate ad campaigns using conversational guidance and Amazon’s retail data.
Profitable Prime Video
During the call, Amazon Chief Financial Officer Brian Olsavsky confirmed that Prime Video is in the black, offering clarity on a part of the business that has largely been obscured by larger operations.
“Our investments in original and exclusive content and live sports, combined with our third party partner titles, offer the best selection of premium video content, in addition to delivering compelling value to Prime members, advertisers and partners, Prime Video is now large and profitable business in its own right,” Olsavsky said.
In November, the company revealed that Prime Video’s ad tier reaches over 315 million monthly active users globally, including more than 130 million in the United States alone. An update on the MAU figure will likely be disclosed during Amazon’s upfront presentation to advertisers next month.
Other countries where the ad tier is available include Australia, Austria, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, New Zealand, The Netherlands, Spain, Sweden and the U.K. In addition to its ad-supported tier, Prime Video users can pay a fee of $4.99 per month to upgrade to an ad-free experience — an increase from its previous $2.99 per month fee. The increase happened this month, and isn’t factored into today’s results.
Strong overall results
Amazon smashed Wall Street expectations for its first quarter, with net sales growing 17% to $181.5 billion. The tech giant also posted a profit of $30.3 billion, or 2.78 per share, which included pre-tax gains of $16.8 billion related to investments in Anthropic.
Prime Subscription and Ads also up
Net sales in the subscription services segment, which includes annual and monthly fees associated with Amazon Prime memberships, as well as digital video, audiobook, digital music, e-book and other non-Amazon Web Services subscription services, grew 15% to $13.4 billion.
Meanwhile, advertising services revenue, which includes sales to sellers, vendors, publishers, authors and others through programs such as sponsored ads, display and video advertising, grew 24% to $17.2 billion.
Box office success
Entertainment highlights for the quarter include the release of “Project Hail Mary,” which has generated nearly $615 million in global box office to date, including an $80 million+ opening weekend in the U.S. and Canada. Prime Video also averaged nearly 2.8 million U.S. viewers across six exclusive broadcasts for the NBA SoFi Play-In Tournament, up 18% compared to last year on cable.
Looking ahead
For the second quarter, Amazon is forecasting net sales between $194 billion and $199 billion, representing growth between 16% and 19% over the prior year, and operating income between $20 billion and $24 billion, compared to $19.2 billion a year ago. The projections include an “unfavorable impact” from foreign exchange rates and the assumption that Prime Day occurs during the quarter.
It also previously forecasted that it would spend $200 billion in capital expenditures for 2026, touting “strong” demand for its existing offerings and “seminal opportunities” with AI, chips, robotics and low Earth orbit satellites.
Amazon shares rose 4% in after-hours trading on Wednesday following the release of the results.
