Amazon announced its first quarter earnings on Thursday, beating analyst expectations. The Seattle-based e-commerce behemoth reported total sales of $51.04 billion for the three months ending March 31, up from $35.71 billion in Q1 2017. Net profit jumped up to $1.6 billion in comparison to $724 million in last year’s Q1.
As our chart illustrates, Amazon’s profit (or what is left of it) is mainly driven by its highly profitable cloud business these days. Amazon Web Services (AWS), the market leader in the highly competitive market for cloud infrastructure
, accounted for more than 72 percent of the company’s operating profit in the past quarter. Unlike recent years Amazon managed to monetize their other operations more effectively in. The fact that AWS accounted for little more than 10 percent of the company’s revenue at the same time, illustrates how high the operating margin is in the cloud segment compared to Amazon notoriously low-margin e-commerce business.
For many years, Amazon has reinvested nearly every dollar
it earns into its own growth. And even now that the cloud segment is making so much money, it seems like Jeff Bezos isn't running out of ideas to reinvest most of it.