AWS sees profit boost in challenging quarter for Amazon
Amazon Web Services (AWS) growth accelerated in Q4 and outperformed analyst’s predictions.
AWS sees profit boost in challenging quarter for Amazon
The AWS business generated $17.78 billion in revenue in the last quarter, according to its statement. That equals to a 39.5 per cent year-over-year increase and works out to be more than the $17.37 billion consensus among analysts polled by StreetAccount.
It ended the quarter with a $5.29 billion in operating income, up almost 49% and well above the $4.84 billion StreetAccount consensus.
“On the growth rate, I think it’s a combination of things. We’ve been adding resources in sales and marketing over the last two years, and that is starting to pay off,” Brian Olsavsky, Amazon’s finance chief said of revenue growth during a conference call with analysts.
The final quarter of 2021 saw AWS announce even more new customers, and develop deeper portfolios with its existing companies as part of their ongoing digital transformation efforts.
Customers include the US stock exchange, NASDAQ, which plans to shift all of its North American exchanges onto the AWS cloud.
It also includes Facebook parent Meta, as it plans to run more infrastructure that supports its various social media entities in the AWS public cloud.
However, AWS’s growth masked one of the worst operating losses in recent history for the rest of Amazon.
Amazon reported that its total operating profit was $3.5 billion for the fourth quarter of 2021. However, that includes the $5.3 billion in operating income from AWS.
Without AWS’s growth, Amazon would have effectively posted an operating loss of $1.8 billion.
Amazon said costs in the fourth quarter were about $4 billion higher than normal due to spending more to ensure fast delivery times despite labour shortages, supply chain constraints, and inflation.
Amazon’s CEO Andy Jassy said: “Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic. When you combine how we’re staffing and scaling our fulfilment network to bring even faster delivery to more customers, the extraordinary growth of AWS with 40% year-over-year growth (and now a $71 billion revenue run rate.”
Subscribe to our Editor's weekly newsletter