Apparently not everyone is enthralled with Amazon’s latest financial report. ‘Amazon has the nerve to hike Prime to $119 on the same day it announces massive $1.6 billion profits,’ read the headline of an Inc. article last week. On Thursday, Amazon (NASDAQ: AMZN) reported impressive first quarter financials, including net sales of $51.0 billion, an increase of 43 percent year-over-year. The company also reported net income of $1.6 billion, or $3.27 per diluted share, compared to net income of $724 million, or $1.48 per diluted share, for the first quarter of 2017.

Amazon founder and CEO Jeff Bezos credits Amazon Web Services for some of the company’s success.

‘AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,’ said Bezos in a news release. ‘As a result, the AWS services are by far the most evolved and most functionality-rich. AWS lets developers do more and be nimbler, and it continues to get even better every day. That’s why you’re seeing this remarkable acceleration in AWS growth, now for two quarters in a row. A huge thank you to all our AWS customers, and you can be sure we’ll keep working hard for you.’

Other financial highlights for the first quarter include:

• Net sales in North America were $30.7 billion, international net sales were $14.9 billion, and AWS net sales were $5.4 billion.
• Subscription revenue accounted for $3.1 billion of Amazon’s net sales, a 56 percent increase year-over-year.
• Operating income was $1.9 billion, a 92 percent increase year-over-year.
• Operating cash flow was $18.2 million for the previous 12 months, a 4 percent increase.
• Total assets as of March 31, 2018 were $126.3 billion.
• As of March 31, 2018, Amazon had 504 million common shares outstanding plus shares underlying stock-based awards, compared to 497 million as of March 31, 2017.

Operational highlights for the quarter include:

• Amazon acquired home security company Ring. The deal closed on April 12.
• Amazon introduced FreeTime on Alexa and a special kids edition for Echo Dot with parental controls.
• Prime Video released new seasons of Sneaky Pete and Bosch.
• ‘Tens of millions of paid customers’ are using Amazon Music. Also, subscribers to Amazon Music Unlimited grew over 100 percent in the last six months.
• Amazon, Chase and Whole Foods partnered to let eligible Prime members get 5 percent back on Whole Foods purchases when using the Amazon Prime Rewards Visa.
• Amazon is now offering two-hour grocery delivery from Whole Foods in 10 U.S. cities.
• AWS welcome several new enterprise customers during the quarter including GoDaddy, Cox Automotive, Shutterfly and NextGen Healthcare.

Amazon announced the following guidance for the second quarter of 2018:

• Net sales between $51.0 billion and $54.0 billion, representing growth between 34 percent and 42 percent.
• Operating income between $1.1 billion and $1.9 billion, compared to $628 million in the second quarter of 2017.

During an earnings call on Thursday, Amazon also announced that it will raise the annual subscription fee for Amazon Prime from $99 to $119. According to Inc., the new pricing will go into effect next month for new subscribers and the following month for existing subscribers.

‘If you own or run a business, when do you raise prices? Usually it’s when you need to because your costs are going up and your profits are slipping–not on the same day that you announced you made more money than anyone ever imagined you could. But apparently if you’re Jeff Bezos, just because your company is doing extraordinarily well is no reason to give its most loyal customers a break,’ wrote Minda Zetlin for Inc.

Investors didn’t seem phased by the price hike. In fact, Amazon stock went from $1,460.17 on Wednesday, April 25, the day before the financial report, to $1,517.96 on April 26 and $1,572.62 on April 27.

Insider Take:

Beating analyst forecasts, Amazon had a stellar first quarter, reporting huge increases in net sales and net income, and investors voiced their pleasure accordingly. This is likely due to Amazon’s continued dominance in the world of e-commerce, but also because Amazon continues to innovate with new AWS offerings, deals like the Ring acquisition and a $130 million deal to stream Thursday night football games, and offering more services to Prime members.

The $20 a year price hike may be disappointing to some, particularly because of the timing of the announcement, but Amazon’s costs are going up like everyone else’s, and $119 a year is still a deal to those of us who use Amazon for free shipping, Prime Video and dozens of other perks available to Prime members. Amazon may lose some customers as a result, or more customers may convert to the monthly payment option versus the annual one, but it will retain customers like me who are getting a steal with the free shipping alone.