The public finally knows a little more about Amazon's 9 year old cloud computing businesss Amazon Web Services. The company for the first time broke out revenue and profit figures for AWS, saying it had $1.57 billion in sales in the first quarter of this year and $265 million in profit, up from a $245 million profit and $1.05 billion in sales in the first quarter of last year. AWS's margins, however, declined to 16.9% from 23.3% in the first quarter of last year.
While the revenue figure was in line with what many analysts expected, the robust profit figure was a surprise, especially considering how willing Amazon is to sacrifice the profitability of a business in order to drive up revenue and win market share.
"Amazon Web Services is a $5 billion business and still growing fast — in fact it's accelerating," Jeff Bezos, the chief executive of Amazon, said in a statement. "Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon. We strive to focus relentlessly on the customer, innovate rapidly, and drive operational excellence."
While analysts and industry figures always knew Amazon was the biggest player in cloud computing—streaming video giant Netflix is one prominent customer—the company's willingness to break out the numbers shows just how massive it is. Rackspace, one of Amazon's cloud competitors, had $1.8 billion in revenue in all of 2014. Amazon said it pulled in $4.6 billion in the same period.
Otherwise, it was a typical quarter for Amazon: the company lost just as much money as analysts expected (12 cents a share, or $57 million) and saw revenue grow a little faster than Wall Street expected, leaping 15% to $22.7 billion. Investors cheered the results, boosting the stock up more than 6% in after-hours trading.
"We are so grateful to our AWS customers and remain dedicated to inventing on their behalf," Bezos said.
Matthew Zeitlin is a business reporter for BuzzFeed News and is based in New York. Zeitlin reports on Wall Street and big banks.
Contact Matthew Zeitlin at email@example.com.
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