Amazon.com Inc has announced that it will be raising the price of its annual Prime subscription in the United States by 17%. The decision comes after the company reported a net income of $14.3 billion for the holiday quarter, double the amount from the previous year. The increase in fees is intended to help offset rising costs for shipping and wages.

Starting February 18, new members will pay an annual fee of $139, up from $119, while the monthly fee will be raised to $14.99 from $12.99. Despite the price hike, Amazon’s shares rose as much as 17% in extended trading after the announcement, as investors were encouraged by the company’s strong performance and the continued growth of its cloud unit, Amazon Web Services.

Analysts have noted that the increase in Prime fees was long overdue, considering the rising costs faced by the company. Amazon last raised its annual fees for U.S. subscribers four years ago. However, there will be no changes to Prime membership fees outside of the United States.

In addition to its successful cloud business, Amazon also experienced growth in its advertising revenue. In the fourth quarter, ad sales reached $9.7 billion, surpassing the ad sales of Alphabet’s YouTube for the same period. Despite privacy changes by Apple, Amazon stated that brands’ ability to reach consumers through its ad properties remained largely unaffected.

Looking ahead, Amazon projects first-quarter sales between $112 billion and $117 billion, which is slightly lower than Wall Street estimates. However, the company expects its revenue to grow between 3% and 8% in the first quarter. With over 200 million members worldwide, Amazon’s Prime membership continues to be a significant driver for consumer spending on the platform, with fees alone amounting to $8.1 billion in the fourth quarter.

Useful Links:
1. Amazon Prime Membership
2. Amazon Web Services