Amazon gave Wall Street analysts a reason to smile, but it can thank a business that has nothing to do with retail for much of the good news.
The Wall Street Journal was giddy, writing of Amazon’s first-quarter performance, “Superlatives abound: Its 28% sales growth was the highest since the second quarter of 2012, while its operating margin of 3.7% was its best in more than five years.” It noted the first quarter was Amazon’s most profitable quarter ever.
But, the newspaper continued, “The cash cow driving these figures is AWS, a decade-old operation that pioneered the business of hosting computer servers.”
Not that Amazon’s marketplace business didn’t do well, and here are a few factoids the company threw out during its earnings call on Thursday:
Worldwide paid unit growth grew 27% year over year.
Worldwide seller units represented 48% of paid units.
Worldwide active customer accounts exceeded 310 million.
Worldwide active customer accounts excluding customers who only had free orders in the preceding 12-month period exceeded 285 million.
And, believe it or not, that extra day in the quarter thanks to Leap Year helped add 150 basis points to its revenue growth rate.
Amazon said it expanded selection, improved in-stock levels, and introduced new product categories. In its earnings press release, it called out its new handmade marketplace and its category for services, writing:
“Handmade at Amazon, featuring genuinely handcrafted items sold directly from artisans, has increased selection to nearly 400,000 products from 12,000 artisans in more than 80 countries.
Amazon Home Services, providing customers with a simple way to buy and schedule professional services, now serves more than 40,000 U.S. zip codes with more than 1,200 service options across 45 categories.”
Amazon executives were asked about the company’s acquisition of trailers – “the typical use case is running a lag between a Fulfillment Center and a Sort Center,” an executive said, adding that its airplane leases had a similar use case.
“The reason we add logistics capability and transportation capability is so we can serve our customers at faster and faster delivery speeds. We added more of our own capacity to supplement our carriers and our partners. They’re still great partners,… but we see opportunities where we need to add additional capacity, and we’re filling those voids.”
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