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AWS revenue hits $2.9 billion in Q2

ICE Graveyard 28/07/2016 Frederic Lardinois

Amazon reported earnings for its second fiscal quarter of 2016 today and for its AWS unit, it was once again a big quarter. AWS net sales hit $2.9 billion in the last quarter, up from $2.5 billion in net sales in the last quarter. That’s up from $1.8 billion in the year-ago-quarter.

It’s worth noting that that’s a slightly slower quarter-to-quarter growth rate than in the last quarter, though. While Q1 net sales were up 64 percent year-over-year, they were “only” up 58 percent from Q1 to Q2.

Operating income for AWS in the Q1 quarter was $604 million and accounted for more than half of all of Amazon’s operating income. This quarter, operating income was $718 million. Just like in the last quarter, that’s higher than Amazon’s operating income from its other operations in North America ($702 million) and internationally (where it lost $135 million).

Unlike Amazon’s other business units, AWS operates with very high margins. In Q1, AWS was running with an operating margin of 27.9 percent, compared to an even better 29.9 percent in Q2. This rate has increased steadily over the last couple of quarters.

While Google competes with AWS in the cloud computing space and also released its (or better, Alphabet’s) earnings today, Google sadly doesn’t offer specific numbers for its cloud business. Cloud Platform revenue is rolled into what Google/Alphabet calls “other revenues,” but it’s virtually impossible to say how much of this comes from its cloud services.

Microsoft, too, doesn’t specifically talk about revenue from its Azure unit, but the company has said that its annual run rate has now hit $10 billion and that it expects that number to grow to $20 billion by 2018.

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