Amazon's ad business grew 19% in first quarter, topping estimates
Amazon reported a 19% increase in online ad revenue in the first quarter, beating analyst estimates.
Ad sales climbed to $13.92 billion, while analysts on average were expecting $13.74 billion, according to StreetAccount.
The numbers were contained in Amazon's first-quarter earnings report. The company reported total first-quarter sales of $155.67 billion, compared to Wall Street projections of $155.04 billion.
Although Amazon's online ad business represents a fraction of overall sales, it's emerged in recent years to become the third-biggest platform in the global digital advertising market, behind only Alphabet and Meta.
Online advertising is a particular area of focus for investors due to economic uncertainty and increasing tensions between the U.S. and China over trade. While President Donald Trump's China tariffs will likely impact Amazon's core retail business, the company's online ad unit could also feel some pain.
So far, tech companies with online ad businesses have reported solid first-quarter earnings, but warned of potentially tougher times later in the year.
Meta reported stronger-than-expected first-quarter earnings this week, but said that ad sales in the Asia-Pacific region came in at $8.22 billion for the quarter, trailing analyst estimates of $8.42 billion.
Meta finance chief Susan Li said during an earnings call that "Asia-based e-commerce exporters" have slowed their online ad spending likely due to the de minimis trade loophole ending this Friday.
When Alphabet reported first-quarter earnings last Thursday, it revealed that that ad sales grew 8.5% year over year to $66.89 billion and YouTube ad revenue increased 10% to $8.93 billion. But Alphabet executives told analysts that it expects headwinds to its Asia-Pacific-focused advertising business.
Snap on Tuesday said it had "experienced headwinds to start the current quarter," which resulted in the company saying it would not provide guidance.
Last week, Microsoft's reported its latest quarterly earnings and said that search and news advertising sales, minus payments to its affiliates, grew 15% year over year to $449 million.
Pinterest reports earnings on May 8.
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