Amazon recorded revenue of $75.5 billion in Q1 2020, up from $59.7 billion in the same quarter last year.
While earnings per share (EPS) are down from $7.09 to $5.01, sales in North America and internationally leaped by 29% and 18% respectively.
Amazon Web Services (AWS), meanwhile, surpassed $10 billion in revenue, despite growth continuing to drop, this time to 33% from 34% in Q4 2019.
Additionally, revenue generated by subscriptions for services such as Amazon Prime were up 28% to $5.56 billion.
In the lead-up to the release, head of equity at Carmignac, David Older, predicted a successful Q1 showing for Amazon, stating at a recent virtual roundtable that the company have been “a clear winner in the market” during the current pandemic.
Carmignac head of equity discusses pandemic effects on tech sector
“Amazon has seen a shift in sales from electronics to lower margin demand,” said Older. “Things will normalise over time, but they’ll hold on to their customers.
“One other benefit is regulators may have been less aggressive, as it’s been seen as the lifeblood of the economy, and have been saving people from having to go outside.”
In Amazon’s Q1 2020 earnings report, Amazon CEO Jeff Bezos stated: “From online shopping to AWS [Amazon Web Services] to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced.”
Seemingly, Bezos predicts future prosperity in the midst of the pandemic, as he went on to say that investors “may want to take a seat” as the company goes into Q2.
Information Age analysis
Amazon’s continued growth in revenue and sales in the midst of the pandemic comes as little surprise. A substantial bulk of its consumers are having to stay at home, so will feel more compelled to order products from home to their door, accordingly.
The company continues to offer an array of products for all manner of home-based needs, and activity on the online marketplace is at Black Friday levels. It’s no wonder that Amazon has continued to keep its workers on and have announced plans to take on a further 175,000 employees, while competing retailers have had to make staff redundant.
The role of AWS throughout this outbreak shouldn’t be forgotten, either. Amazon’s cloud offering continues to support Zoom in storing the continuously surging amounts of data generated by the rising amount of users flocking to video calls and meetings over the conferencing platform.
Additionally, enterprises have turned to cloud services such as AWS for assistance with continued collaboration as their workforces operate remotely, not to mention its partnership with the World Health Organisation.
Then, there’s Amazon’s video on-demand wing, Prime Video, which was bound to see the growth it did, given that it’s yet another service that takes advantage of lockdowns worldwide.
Even though Amazon has warned that profits could be wiped out by the coronavirus pandemic in Q2, with the company planning on funding personal protective equipment (PPE) and other Covid-related expenses, it’s highly possible that the services it provides will continue to prosper in the current climate, and beyond.