Amazon shares rose 8% in extended trading on Thursday after the e-retailer reported first-quarter revenue that topped analysts’ estimates.
Here are the key numbers:
Earnings: 31 cents per share
Revenue: $127.4 billion vs $124.5 billion expected, according to analysts surveyed by Refinitiv
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Here’s how other key Amazon segments did during the quarter:
Amazon Web Services: $21.3 billion vs.$21.22 billion expected, according to StreetAccount
Advertising: $9.5 billion vs. $9.1 billion, according to StreetAccount
It is not immediately clear if the reported earnings are comparable to the Refinitiv analyst estimate of 21 cents per share.
For the second quarter, Amazon said revenue will be $127 billion to $133 billion. Analysts had called for sales of $129.8 billion, according to Refinitiv.
“Our advertising business continues to deliver robust growth, largely due to our ongoing machine learning investments that help customers see relevant information when they engage with us, which in turn delivers unusually strong results for brands,” CEO Andy Jassy said in the earnings statement.
Jassy said that while AWS continues to navigate more cautious spending from cloud customers, he believes “there’s much growth ahead,” pointing to the company’s investments in large language models.
Jassy, who succeeded founder Jeff Bezos at the helm in July 2021, has been aggressively slashing costs at the company as it grapples with slowing sales in its online shopping and cloud computing divisions. Amazon has shuttered several of its more unproven bets, like a telehealth program, a virtual reality tours service, and a fitness wearable, that weren’t growing as quickly as other businesses.
Amazon is also laying off 27,000 employees, the largest job cuts in its 29-year history. Earlier this week, some employees in AWS and human resources were let go, following cuts in advertising and Twitch live streaming.
Amazon shaved its headcount by about 76,000 people to 1.46 million employees as of the end of the end of the first quarter, reflecting in part the recent layoffs, as well as attrition in its warehouses that typically occurs following the peak holiday shopping period.
Revenue increased 9% from $116.4 billion a year earlier. While the figure exceeded expectations, Amazon remains mired in single-digit sales growth coming off its weakest year for expansion in its quarter-century as a public company.
The second-quarter forecast suggests Amazon expects sales to rise between 5% and 10% from the same period a year earlier.
Sales at AWS rose about 16% in the first quarter to $21.35 billion, above the $21.22 billion projected by Wall Street. Still, that’s a deceleration from the previous quarter, when AWS grew 20%. Companies have been trimming their cloud spend in recent months amid a challenging economic environment.
Operating income in the quarter rose to $4.77 billion from $3.67 billion a year earlier. The company is still dependent on AWS for its profitability, as the cloud unit generated operating income of $5.1 billion in the quarter.
Amazon’s advertising unit was a bright spot during the quarter, with revenue jumping 23% year-over-year to $9.51 billion.
“Advertising was a strong growth during the quarter at 23%, and that is continuing to hold up very well in an environment where perhaps the underlying sales of products is slowing,” CFO Brian Olsavsky said on a call with reporters.
The price of the second largest cryptocurrency rose as high as $4,954.81 on Sunday afternoon. It was last higher by less than 1% at $4,776.46.
Meanwhile, bitcoin at one point erased all the gains from its Friday rally, falling as low as $110,779.01, its lowest level since July 10. It was last trading lower by nearly 2% at about $112,000. The flagship cryptocurrency hit its most recent record of $124,496 on Aug. 13.
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Ether (ETH) and bitcoin (BTC)
On Friday, crypto rocketed with the broader market after Federal Reserve Chair Jerome Powell hinted at upcoming rate cuts and investors returned to risk-on mode. Ether surged 15% and bitcoin gained 4%.
Ether, rather than bitcoin, has been leading the crypto marker for several weeks thanks to regulatory tailwinds, a boom in interest in stablecoins and buying en masse by a new cohort of corporate ether accumulators. On Saturday, Bitmine Immersion Technologies, the ether treasury company chaired by Wall Street bull Tom Lee, bought $45 million of ether, according to crypto data provider Arkham.
That shift in leadership has helped sustain ETH, which has sustained the $4,000 level this month after unsuccessfully testing the resistance mark a handful of times since 2021.
“The buyers are finally bigger than the sellers,” said Ben Kurland, CEO at crypto research platform DYOR. “ETH ETFs are drawing steady inflows, and public companies are beginning to treat ETH as a treasury asset they can stake for yield — a stickier form of demand than retail speculation.”
“Additionally, nearly a third of supply is locked in staking, scaling solutions are mature and, with rate cuts back on the table, the cost of capital is falling,” he added. “Those forces turned $4,000 from a resistance level into a foundation for re-pricing ETH’s next chapter.”
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SpaceX is valued at around $400 billion and is critical for U.S. space access, but it wasn’t always the powerhouse that it is today.
Elon Musk founded SpaceX in 2002. Using money that he made from the sale of PayPal, Musk and his new company developed their first rocket, the Falcon 1, to challenge existing launch providers.
“There were actually a lot of startup aerospace companies looking to take on this market. They recognized we had a monopoly provider called United Launch Alliance. They had merged the Boeing and Lockheed rocket launch capacity to one company, and they were charging the government hundreds of millions of dollars to launch satellites,” said Lori Garver, a former deputy administrator at NASA.
In 2003, Musk paraded Falcon 1 around the streets of Washington hoping to attract the attention of government agencies and the multi-million dollar contracts that they offered. It worked, and in 2004, SpaceX secured a few million dollars from the Defense Advanced Research Projects Agency, or DARPA, and the U.S. Air Force to further develop its rockets.
Despite the government support, the company struggled. Its first three launches of the Falcon 1 failed to reach orbit.
“NASA, and specifically the the initial commercial cargo contract, is what saved the company when it was on the brink of bankruptcy,” said Chris Quilty, president and Co-CEO of Quilty Space, a space-focused research firm.
NASA awarded the $1.6 billion contract, known as Commercial Resupply Services to SpaceX in 2008, just months after the first successful flight of the Falcon 1. The contract called on SpaceX to use its new rocket, the Falcon 9, along with its Dragon capsule to ferry cargo and supplies to the International Space Station over the course of 12 missions. In 2014, SpaceX won another NASA contract worth $2.6 billion to develop and operate vehicles to ferry astronauts to and from the International Space Station.
Today, SpaceX dominates large parts of the space market from launch to satellites. In 2024, SpaceX conducted a record-breaking 134 orbital launches, more than double the amount of launches done by the next most prolific launch provider, the China Aerospace Science and Technology Corporation, according to science and technology consulting firm BryceTech. These 134 launches accounted for 83% of all spacecraft launched last year. According to a July report by Bloomberg, SpaceX was valued at $400 billion.
SpaceX’s Dragon capsule and Falcon 9 rocket are the primary means by which NASA launches astronauts and supplies to the International Space Station. The company’s Starlink satellites have become indispensable for providing internet access to remote areas as well as to U.S. allies during wartime. The company’s Starship rocket, though still in testing, is also key to the U.S. plan to return to the moon. SpaceX is also building a network of spy satellites for the U.S. government called Starshield as part of a $1.8 billion contract. Even competitors including Amazon and OneWeb have launched their satellites on SpaceX rockets.
“The ecosystem of space is changed by, really it’s SpaceX,” Garver said. “The lower cost of access to space is doing what we had dreamed of. It is built up a whole community of companies around the world that now have access to space.”
Sanjay Beri, chief executive officer and founder of Netskope Inc., listens during a Bloomberg West television interview in San Francisco, California.
David Paul Morris | Bloomberg | Getty Images
Cloud security platform Netskope will go public on the Nasdaq under the ticker symbol “NTSK,” the company said in an initial public offering filing Friday.
The Santa Clara, California-based company said annual recurring revenue grew 33% to $707 million, while revenues jumped 31% to about $328 million in the first half of the year.
But Netskope isn’t profitable yet. The company recorded a $170 million net loss during the first half of the year. That narrowed from a $207 million loss a year ago.
Netskope joins an increasing number of technology companies adding momentum to the surge in IPO activity after high inflation and interest rates effectively killed the market.
So far this year, design software firm Figma more than tripled in its New York Stock Exchange debut, while crypto firm Circle soared 168% in its first trading day. CoreWeave has also popped since its IPO, while trading app eToro surged 29% in its May debut.
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Netskope’s offering also coincides with a busy period for cybersecurity deals.
Founded in 2012, Netskope made a name for itself in its early years in the cloud access security broker space. The company lists Palo Alto Networks, Cisco, Zscaler, Broadcom and Fortinet as its major competitors.
Netskope’s biggest backers include Accel, Lightspeed Ventures and Iconiq, which recently benefited from Figma’s stellar debut.
Morgan Stanley and JPMorgan are leading the offering. Netskope listed 13 other Wall Street banks as underwriters.