Amazon reported its first-quarter earnings, and on the surface, they look fantastic. Total revenue hit $181.5 billion, up 17% year-over-year and well above Wall Street's $177.3 billion estimate. Earnings per share came in at $2.78 — nearly double the analyst consensus of $1.64. But here's the catch: that number includes a massive $16.8 billion pretax gain from its investment in Anthropic. Strip that out, and adjusted EPS lands at roughly $1.61 — a penny below expectations. The stock dropped over 3% in after-hours trading.
AWS revenue grew 28% to $37.59 billion, beating the $36.64 billion estimate and marking the fastest growth in 15 quarters. Operating profit hit $14.16 billion with a 37.7% margin, far above the expected $12.84 billion. CEO Andy Jassy noted that the company's self-developed chip business has exceeded $20 billion in annualized revenue, growing at triple-digit rates year-over-year. Over the past 12 months, Amazon has deployed more than 2.1 million AI chips, over half of which are its own Trainium processors.
Capital expenditure in Q1 was $44.2 billion, a bit above the $43.6 billion consensus, with the full-year budget set at $200 billion. The price? Free cash flow over the trailing twelve months plummeted to $1.2 billion — a 95% drop from the prior year. Advertising revenue reached $17.24 billion, up 24% and above expectations.
For Q2, Amazon guided revenue between $194 billion and $199 billion, above analysts' $188.9 billion estimate. Operating profit is expected between $20 billion and $24 billion. And Prime Day is moving up to June.