Amazon is continuing its run as a gangbusters pandemic success story, posting huge year-over-year increases in both sales and profit in the first three months of the year.

Much of its earnings, though, will be plowed back into the company: Amazon plans to keep spending big to retain the nearly 50 million new Prime subscribers it gained during the pandemic, Chief Financial Officer Brian Olsavsky said Thursday.

Revenue rose a 44% compared to the same period last year, to $108.5 billion. The company’s net income, meanwhile, more than tripled to a record $8.1 billion, or $15.79 per share. Amazon’s performance beat analysts’ projections, which had predicted revenue would hover around $104.7 billion with earnings per share of $9.62, according to Seeking Alpha.

The pandemic has brought record profits for Amazon, as homebound shoppers have turned to online retail amid a wave of physical store closures and lockdowns. The number of subscribers to Amazon’s Prime membership club rose by nearly 33% in the past year, from 150 million to more than 200 million.

Amazon forecast continued growth, estimating revenue of between $110 billion and $116 billion in the quarter ending in June; that would represent growth of between 24% and 30% compared with the same period last year. Analysts, on average, had estimated second-quarter sales of $108.4 billion, according to data compiled by Bloomberg.

In the company’s earnings release Thursday, Amazon CEO Jeff Bezos nodded to the success of the company’s Prime Video and Amazon Web Services divisions.


“Two of our kids are now 10 and 15 years old — and after years of being nurtured, they’re growing up fast and coming into their own,” Bezos wrote. AWS celebrated the 15th anniversary of its first product launch last month; Prime Video rolled out unlimited streaming for Prime members in 2011. In its earnings release, Amazon reported Prime Video streaming hours are up nearly 70% year-over-year — and nearly half of Amazon’s first-quarter profit was generated by AWS, which saw profit rise 36% to $4.16 billion.

But as vaccination efforts ramp up in the U.S. and Europe, and companies — including Amazon — announce they expect workers back in the office starting this fall, investors have wondered whether Amazon can sustain the past year’s breakneck growth in a post-pandemic economy.

Amazon’s share price has stayed more or less flat since last August, analysts noted, underperforming the S&P 500’s roughly 20% gain in that period.

Still, even accounting for a slower growth rate than Amazon has seen in the past year, the Seattle commerce behemoth appears set to overtake Walmart to become the largest U.S. retailer by 2025, according to a report from market research firm Edge by Ascential.

To meet the boom in online shopping and demand for cloud computing, Amazon has invested heavily on infrastructure like warehouses, data centers, trucks and vans. In the past year, Amazon’s spending on such items surged to $40.1 billion — a 165% increase from the previous year.

In a call with reporters, Olsavsky said the company plans to continue spending big in those areas, in part to “make Prime membership better” by increasing the percentage of shipments delivered to customers in one day, or on the same day. Amazon’s one-day-shipping rate has languished during the past year’s high package volumes.


Amazon appears to be taking other steps to keep its customers hooked on the online shopping and viewing habits they developed during the pandemic once they’re fully vaccinated and back in offices. Olsavsky confirmed the company will hold its annual Prime Day sales event later this quarter, which ends in June.

“We’re going to do it at a date where we think it will be better for customers, get more attention for customers,” he said on the call. Amazon will also continue investing in content for Prime Video, he said.

Amazon announced Wednesday $1 billion in early wage increases for nearly 500,000 workers, a move Olsavsky characterized as an attempt to head off hiring threats from other industries as the economy reopens.

The wage increase came weeks after a high-profile unionization push at an Amazon warehouse in Bessemer, Alabama — organized in part around a call for higher wages — ended in defeat for the union. Nevertheless, the organizing drive prompted Bezos in his most recent shareholder letter to pledge to “to do a better job for employees.” That promise, though, doesn’t have a budget attached to it, Olsavsky confirmed on the earnings call.

“What [Bezos] meant by that was his commitment to safety, health and welfare of employees. … We’ve always felt we’ve had a great focus on making this a great place for employees,” Olsavsky said, pointing to LinkedIn’s designation Wednesday of Amazon as the top company where Americans want to work in 2021.

Amazon’s conduct during the union drive, however, has generated additional scrutiny of the company’s business practices. The National Labor Relations Board will hear complaints from union officials May 7 that the agency has said could cause it to overturn the Bessemer election. And lawmakers in the U.S. and the European Union are turning their gaze on how Amazon runs its Marketplace platform for third-party vendors. All told, Amazon is facing “significant” regulatory headwinds, said D.A. Davidson senior analyst Tom Forte.

Meanwhile, consumer spending on goods rose 5.4% in the first three months of the year compared to the previous three-month period, according to the federal Commerce Department, a positive sign for retailers.

Amazon released its first-quarter results after markets closed Thursday; shares rose more than 2% in extended trading, so they may top the company’s previous high of $3,552 when markets open Friday.

Bloomberg News contributed to this report.