Amazon swings to Q1 loss on higher expenses; Web Services booms

Seattle – Increases in expenses including fulfillment, marketing and technology helped swing Amazon.com to a net loss of $57 million in the first quarter of fiscal 2015 from net income of $108 million the same quarter a year earlier. Amazon met Wall Street expectations with the loss.



Amazon fared better with net sales, which increased 15% to $22.72 billion from $19.74 billion. In North America, net sales grew 24% to $13.41 billion from $10.08 billion.



In addition, for the first time Amazon released separate results for its Amazon Web Services (AWS) division, which includes its hosted cloud business, and they were impressive. AWS generated revenue of $1.57 billion, up 49% from $1.05 billion.



During fiscal 2014, AWS generated $5.63 billion in revenue, up 49% from $4.04 billion. During fiscal 2015, Amazon expects $6.23 billion in revenue from AWS, which would represent 11% year-over-year growth. Cloud represented about 7% of Amazon’s total revenues for the quarter, but given its rapid growth rate and high margins, will likely continue to increase in importance as a revenue stream for the company.



“Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating,” said Jeff Bezos, founder and CEO of Amazon.com. “Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon. We strive to focus relentlessly on the customer, innovate rapidly, and drive operational excellence.”



During the second quarter of fiscal 2015, net sales are expected to be between $20.6 billion and $22.8 billion, or to grow between 7% and 18% compared with second quarter 2014.