Amazon may have a struggling core business, but its profit-making business is booming.
The company reported on Thursday that online sales in the first quarter of this year were the same as in 2022.
It offset this with sales that were better than expected in its cloud-services and advertising units.
Profits jumped as well, a sign the firm may finally be seeing some results from its cost-cutting efforts.
Andy Jassy, chief executive of the company, said that there are many things to be pleased about in an uncertain economic climate.
Amazon sales are sluggish, as consumers return to store spending following the pandemic. They have also tightened their budgets due to rising costs.
As firms become more cautious in their spending, concerns about the direction of the economy are also impacting its business.
Since he took over the company last year, Jassy has pushed the firm to improve performance. He recently ended some programs, including its Halo Fitness division, stopped real estate expansion plans and overhauled its US delivery network.
Since March of last year, the size of the company’s workforce has decreased by 10% – that is more than 75,000 fewer employees since the end last year.
Insider Intelligence’s principal analyst Andrew Lipsman believes that this is starting to payoff.
“Amazon may have finally found some wind behind it for the first time since several quarters,” said Mr Lipsman.
Amazon Web Services, the company’s long-time profit generator, saw a 16% increase in sales.
Sales were up by 9% in January-March, to $127.4bn. This is comparable with growth seen at the end last year. It’s a significant drop from the Pandemic period when sales soared over 40% in certain quarters.
The firm’s performance, however, was better than most analysts expected. Profits jumped from $3.8bn to $3.2bn compared to a $3.8bn profit in the same quarter last year.
“Amazon achieved what it had to in Q1 – by reversing or at least stalling its most troubling declining growth trends,” said Mr Lipsman.
After-hours trading saw shares of the company rise by more than 7%. However, this was reversed after executives warned that cloud service spending was still a concern for firms.