Amazon’s cloud unit grew 36.5% year over year in the first quarter, slightly faster than analysts had expected. But Amazon shares fell about 9% in after-hours trading as investors focused on the e-commerce giant’s total net loss of $ 3.8 billion.
The cloud business results point to a lighter but still fast demand for computer, storage and database services delivered from remote server farms. Amazon Web Services’ revenue growth fell from 39.5% in the fourth quarter. Meanwhile, AWS ‘toughest rivals, Microsoft’s Azure and Alphabet’s Google Cloud Platform, have maintained steady growth or slowed slightly.
Amazon revealed in its quarterly earnings announcement that AWS revenue was $ 18.44 billion in the quarter, above the $ 18.27 billion consensus among analysts polled by StreetAccount. That equates to about 16% of Amazon’s total revenue.
Adam Selipsky, CEO of Amazon Web Services, speaks at the CERAWeek by S&P Global Conference in Houston on March 8, 2022.
Aaron M. Sprecher | Bloomberg | Getty Images
And the cloud is not just another fast-growing business for Amazon. At Amazon, cloud means profit. AWS returned $ 6.52 billion in operating revenue in the first quarter, an increase of nearly 57% and higher than the StreetAccount consensus of $ 5.62 billion. Amazon’s total operating revenue was $ 3.67 billion in the quarter, meaning the overall business would have lost even more money if it were not for the profitable AWS.
AWS ‘operating margin rose to 35.3% from 29.8% in the fourth quarter.
Amazon introduced AWS in 2006, ahead of Microsoft Azure or the Google Cloud Platform, and by 2020, AWS led the market with a share of about 41%, according to research firm Gartner.
During the quarter, AWS said Stellantis, the automaker formerly known as Fiat Chrysler, will draw on its cloud services for in-car dashboard software, and electronics retailer Best Buy will use more AWS tools.
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