Amazon’s Prime subscription revenue climbed 28% in the first quarter from a year ago as house-bound shoppers are increasingly relying on the tech giant for everything from grocery deliveries to their evening’s entertainment.
Subscription sales, including Amazon Prime memberships, have grown to $5.6 billion, the company reported yesterday (April 30). This consistently growing division helped boost Amazon’s sales revenues to $77.5 billion, beating analyst expectations.
During the conference call with investors, Amazon CFO Brian Olsavsky noted the company’s Prime customers have been shopping more often and for more items. First time viewers for the company’s Prime Video and digital offerings, such as music and video rentals, also nearly doubled for the month of March.
It’s not yet clear how Amazon might use the data from these new Prime users for marketing and new product development, as well as how spending habits will continue to shift due to the Covid-19 pandemic.
Even with the growth in Prime memberships, as well as revenues from product purchases and cloud computing, Amazon’s expenses are expected to significantly grow due to the novel coronavirus. The company said it will spend an estimated $4 billion on personal protective equipment—including items such as masks, gloves, and sanitation supplies—as well as overtime wages for its workers. The news hit the stock price hard today as shares fell more than 7%. Amazon’s stock has still performed well this year, rising by more than 20% since Jan 2.