Amazon.com, Inc. (NASDAQ: AMZN) stock rallied over 7.5% in the pre-market session on April 27th, 2018 boosted by a solid performance.
The subscription services revenue, which rose over 56% ex-FX year-over-year. For the first quarter, they are currently recognized annual Prime membership revenue straight line over the 12-month period. Before 2018, they recognized this revenue over the 12-month period with more revenue allocated to the fourth quarter each year. The other revenue, in total, surged 132% ex-FX year-over-year to over $2 billion during the first quarter with the majority of this included in the North America segment.
North America revenue growth was continued to be driven by the Prime and the Prime flywheel. The group witnessed a solid customer demand, driven by Prime benefits and saw a better engagement with Prime benefits, especially digital benefits. They enhanced the value of Prime, including speed selection and digital entertainment options. They have been expanding FREE Same-Day Shipping and One-Day options. Their Two-Day shipping, which is currently available on over 100 million items, which is an increase from 20 million in 2014.
The shipping options and digital benefits, is coming at the cost of rising in costs. From May 11, the group is going to enhance the price of their U.S. annual plan from $99 to $119 for new members. The new price would apply to renewals starting on June 16. Prime offers a unique combination of benefits, and continue to invest in making this Prime program even more valuable for their members.
AWS revenue, have accelerated for the last two quarters with the FX-neutral growth of 48% during the first quarter and a rise from 44% on the same basis in Q4 and 42% in Q3. AWS is currently at a a $22 billion run rate.
The group is constantly pursuing opportunities and finding valuable ways to make their advertising opportunities better for customers, showing them new products that they may not have seen otherwise and also for emerging and established brands, helping them to reach customers.