Amazon reported a 19% increase in its online ad revenue for the first quarter, surpassing analysts’ expectations. Ad sales reached $13.92 billion, slightly exceeding the anticipated $13.74 billion. This growth came as part of Amazon’s broader first-quarter performance, which included total sales of $155.67 billion, above Wall Street projections of $155.04 billion.
While Amazon’s online advertising business remains a smaller segment of its overall revenue, it has grown to become the third-largest player in the global digital advertising market, following Alphabet and Meta. Online advertising is a key focus area for investors amid economic uncertainty and escalating trade tensions between the U.S. and China. Although Amazon’s core retail business might face pressures from the U.S. tariffs on Chinese imports, its online ad division could also experience some challenges.
Tech companies with substantial online ad businesses, including Amazon, have so far posted solid first-quarter earnings but have warned of potential difficulties in the coming months. Meta, for instance, reported stronger-than-expected first-quarter results but noted that ad sales in the Asia-Pacific region fell short of analysts’ forecasts. Meta’s finance chief, Susan Li, attributed the shortfall to a slowdown in ad spending from Asia-based e-commerce exporters, likely linked to the end of the de minimis trade loophole.
Alphabet also reported strong ad sales growth in its Q1 earnings, with a year-over-year increase of 8.5%, reaching $66.89 billion, and YouTube ad revenue growing 10% to $8.93 billion. However, Alphabet executives cautioned about potential headwinds to their ad business in the Asia-Pacific region. Snap, meanwhile, acknowledged facing challenges at the start of the current quarter, leading the company to withhold guidance.
Reddit also reported strong first-quarter earnings, with sales surging 61% year-over-year to $392 million. The company’s second-quarter outlook exceeded expectations, but CEO Steve Huffman noted the ongoing economic uncertainty. Despite this, he expressed confidence in Reddit’s ability to grow through challenging times, highlighting the ongoing demand for connection and information during periods of uncertainty.
Pinterest will report its earnings on May 8.
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