Amazon Is Increasing the Price of Amazon Prime Memberships, Including Renewals

Amazon: For every dollar of op. profit going into Bezos' pockets, 73 cents came from AWS

AWS' net sales increased from $3.6 billion in 2017 to $5.4 billion in the first quarter of 2018. The segment's net sales grew year-over-year 49 percent.

Shares were up 7% in after-hours trading on Wall Street, as it also forecast a jump in second quarter profit.

A year prior, the company reported earnings of $1.48 per share on revenue of $35.71 billion.

In January, the service announced it was boosting its monthly subscription option for Prime from $10.99 to $12.99.

Amazon Inc.'s share had a good day on Thursday afternoon, when its shares surged 6.3 percent to $1,614 in extended trading in NY. The company's core operating expenses - excluding its cost of sales covering items like payments for products that Amazon sells online - is consistently growing faster than Amazon's rapidly growing revenue. Sure the company is likely to lose a few Prime subscribers, but that small loss will be more than covered by the aforementioned 20% increase from each remaining customer.


What has changed, however, is that Amazon is becoming a fundamentally more profitable company.

Jeff Bezos, Amazon's CEO, has claimed that the number of Prime subscribers has risen to 100 million people worldwide.

"We always evaluate the price of Prime", Amazon CFO Brian Olsavsky said on the call, adding that the price had not increased since 2014. In the previous quarter, which included the busy holiday shopping season, it had a profit of more than $1.8 billion.

Getting the deal would help the company cement its top spot in U.S. cloud services - boosting its highly profitable cloud business - and give it an advantage in future government cloud contracts. That's why you're seeing this remarkable acceleration in AWS growth, now for two quarters in a row. Amazon has relentlessly invested in its logistics network and even runs some of its own delivery trucks alongside UPS and FedEx.

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