A woman cleans the store window of the Amazon house after activists sprayed paint on its logo during a protest on the opening day of the 55th annual meeting of the World Economic Forum in Davos, Switzerland, on Jan. 20, 2025.
Yves Herman | Reuters
Amazon reported a 19% increase in online ad revenue in the first quarter, beating analysts’ 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 has 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 affect 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 ad sales in the Asia-Pacific region came in at $8.22 billion for the quarter, trailing analysts’ estimates of $8.42 billion.
The company’s 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 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 reported its latest quarterly earnings and said search and news advertising sales, minus payments to its affiliates, grew 15% year over year to $449 million.
Reddit also reported first-quarter earnings on Thursday that beat on sales and guidance. The company’s first-quarter sales soared 61% year over year to $392 million.
Although Reddit’s second-quarter guidance topped analysts’ projections, CEO Steve Huffman said there is some economic shakiness.
“Ever-shifting macro environments like these create both challenges and opportunities,” Huffman wrote in a letter to shareholders. “We’ve grown through challenging times before — people need connection and information just as much in uncertain times.”
Pinterest reports earnings on May 8.
