Competitor Watch
Amazon has reported its largest ever quarterly profit in the period to the end of June, coming in at $2.5bn (around £1.96bn), buoyed by growth in its Web Services cloud computing division and improving margins in online retail. It was Amazon’s third consecutive quarter of surpassing $1bn in profit.
Overall revenue was up 39% to $52.9bn, with the company’s North American retail business contributing 61% of revenue, while international grew 21% to represent 28% of revenue. Marketplace sellers’ revenue grew 36% to $9.7bn, while subscription services, including Prime membership, grew 55% to $3.4bn. Physical stores contributed $4.3bn in sales in the quarter, mainly as a result of the Whole Foods grocery chain Amazon acquired last year.
Amazon’s advertising revenue rose 129% to $2.2bn. CFO Brian Olsavsky said: "A big contributor to the quarter, and the last few quarters obviously have been strong growth in our highest profitability businesses and also advertising. We’ve seen a greater-than-expected efficiency in a lot of our spend in things like warehouses, data centres, marketing.’
With Amazon continuing to invest heavily in international expansion, the international division reported a loss of $494m, although this was an improvement on the loss of $724m reported a year ago. Meanwhile, overall shipping costs rose 31% to $6bn.
