Amazon's Astonishing Revenue Growth


Amazon reports yet another huge jump in revenue, albeit at lower profits, compared with last year.  Revenue in Q1 2018 is ~$51billion, up 39 percent from last year's $35.71 billion. Amazon gave revenue guidance in the range of $47.75 billion to $50.75 billion.


AWS growth
AWS continues to be the main growth driver for Amazon. The cloud service is now at a $20 billion revenue run rate, but is expected to grow another 44 percent this quarter to $5.3 billion in revenue. Keybanc Capital Markets analyst Edward Yruma recently wrote in a note that AWS is estimated to double its revenue to $41 billion by 2020.

Future investments
Amazon's investment in its business will continue to weigh on its profitability. The company said it would "double down" on growing its voice-assistant technology Alexa last quarter, while it's been expanding its logistic network and international footprint. Investors believe these investments will help grow Amazon's core retail business, as well as its Prime membership program, which the company disclosed last week for the first time had exceeded 100 million worldwide.

New growth areas
Amazon is also focused on growing a number of new business segments, including its business marketplace (Amazon Business), advertising, and hardware devices (Echo, Kindle, etc). These are smaller than other parts of the business, but investors may want more clues on how to assess their value.

 

Amazon revenue growth


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