Amazon Highlights Q1 Success with ‘Project Hail Mary’ and Surprises Wall Street in the AI Competition

Amazon reported revenue of $181.5 billion for the March quarter, outpacing Wall Street expectations by 17% compared to the previous year. In a statement released Wednesday, CEO Andy Jassy highlighted the success of Project Hail Mary, which has earned nearly $615 million at the box office.

The company’s sales and profit figures exceeded forecasts, with Amazon Web Services (AWS) generating $37.6 billion in revenue, a 28% year-on-year increase.

Net income rose significantly to $30 billion, up from $17 billion, benefiting from a pre-tax gain of $16.8 billion from investments in Anthropic. Earnings per share increased to $2.78, up from $1.59.

However, free cash flow fell to $1.2 billion over the trailing 12 months as Amazon ramped up its artificial intelligence investments. During after-hours trading, shares dropped 4%, reflecting market volatility as other tech giants, including Microsoft, Meta, and Alphabet, also released their earnings. Collectively, Google, Amazon, Microsoft, and Meta reported over $130 billion in quarterly capital expenditures as they expand AI infrastructure.

Jassy noted, “AWS is growing 28% (our fastest growth in 15 quarters) on a very large base, our chips business topped a $20 billion revenue run rate (growing triple digits year-over-year), Advertising grew to over $70 billion in TTM [trailing 12-month] revenue, and unit growth in our Stores reached 15% (the highest since the tail end of Covid lockdowns).” He also mentioned significant milestones in delivery speed and highlighted ongoing projects, including Project Hail Mary and Amazon Leo.

“We’re making customers’ lives easier and better every day across all our businesses, and their response is driving significant growth,” he stated. “We’re in the middle of some of the biggest inflections of our lifetime, we’re well positioned to lead, and I’m very optimistic about what’s ahead for our customers and Amazon.”

While media and entertainment, which includes Amazon MGM Studios and Prime Video, are grouped under Amazon services and not itemized separately, executives have reiterated their commitment to theatrical releases. Mike Hopkins, head of Prime Video & Amazon MGM Studios, assured theater owners at CinemaCon that the company plans to release at least 15 films in theaters annually.

During the reported quarter, Amazon also highlighted several achievements:

• Introduced Amazon Audiences for advertisers to purchase ads on Netflix, allowing brands to leverage Amazon’s proprietary shopping and browsing data to effectively reach relevant audiences.

• Launched Creative Agent, an AI solution for advertisers in multiple countries, functioning as a virtual partner to help with ad campaign development using conversational guidance and retail data.

• Provided exclusive coverage of the NBA SoFi Play-In Tournament, averaging nearly 2.8 million viewers on Prime Video across six broadcasts, an 18% increase over last year’s cable viewership.

Amazon executives will hold a conference call at 5:30 p.m. ET today to discuss the results further.