Amazon published its first quarter financial report on Thursday, with better-than-expected earnings and revenue in line with market estimates. Amazon Web Services accounted for just 13 percent of Amazon's Q1 revenues, but the cloud business pulled in nearly half of the company's operating income.
Amazon's net income in Q1 came to $3.6 billion, or $7.09 per diluted share, compared with net income of $1.6 billion, or $3.27 per diluted share, in the first quarter of 2018. Net sales for Q1 increased 17 percent year-over-year to $59.7 billion.
Analysts were looking for earnings of $4.72 per share on revenue of $59.65 billion.
AWS had $7.7 billion in sales, with a growth rate of 41 percent year-over-year. The cloud businesses's operating income came to $2.2 billion for the quarter. In a conference call Thursday, Amazon CFO Brian Olsavsky said AWS now has an annualized run rate of over $30 billion. He highlighted AWS's customer wins for the quarter, including deals with Volkswagen, Ford, Lyft and Gogo.
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"More broadly, we're seeing continued momentum in enterprise migrations," he said. "People are moving their workloads to AWS at a faster pace."
As tech analyst Patrick Moorhead noted, AWS's year-over-year revenue growth of $2.25 billion is more than most total quarterly cloud revenue.
"The AWS train doesn't look to be stopping any time soon," Moorhead said in a statement to ZDNet. Its growth, he said, is "a testament to a growing market but also AWS sustained competitiveness with cost-saving downshifting features, a multitude of compute, storage, networking and database options, and winning in core areas of machine learning."
Meanwhile, Amazon North America had $35.8 billion in Q1 sales, with a 17 percent year-over-year growth rate, and an operating income of $2.3 billion.
International business brought in $16.2 billion in sales and an operating loss of $90 million.
Advertising is another fast-growing source of revenue for Amazon. Advertising services is the primary driver of sales in Amazon's "Other" category, which is not an official business segment. Amazon said the category grew 34 percent in the first quarter to bring in $2.7 billion in net sales.
For the second quarter, Amazon expects net sales between $59.5 billion and $63.5 billion.