Amazon cloud revenues up by nearly a half in third quarter

AWS logo on black background
(Image credit: AWS)

Amazon's AWS cloud business increased by 46% year-on-year in its third financial quarter.

It made revenues of $6.68 billion in the quarter, compared with the average estimate of $6.71 billion. AWS also netted over $2 billion in profit.

Net sales for AWS for the last 12 months were $23.3 billion, and operating income for AWS was $2.077 billion, up 77% year-over-year for the third quarter ending 30 September.

In a conference call with media Brian Olsavsky, Amazon's chief financial officer said that AWS had been able to keep a lid on operating costs over the past quarter due to "better efficiencies" across its network of data centres.

"We're very happy with the growth in the business," he said in a conference call to reporters. He added that the efficiencies in AWS's datacentres benefitted Amazon's consumer business. Amazon has also been hiring fewer employees and adding less warehouse space.

AWS also saw a 31% operating margin in the third quarter, the highest in four years. But, AWS still only accounted for just 12% of Amazon's net sales

The company's cloud arm continues to add features while cutting prices. In Q3 AWS slashed prices of its Lightsail virtual private servers and a new computing instance T3, which the company said boasts a 30% improvement in price to performance over its precursor.

Amazon CEO Jeff Bezos said that its Amazon Business was now posting a $10 billion annual sales run rate.

"Amazon Business is adding customers rapidly, including large educational institutions, local governments, and more than half of the Fortune 100," he said. "These organisations are choosing Amazon Business because it increases transparency into business spending and streamlines purchasing, with increased control."

Despite the positive news, Amazon's shares fell 8% in after-hours trading.

Rene Millman

Rene Millman is a freelance writer and broadcaster who covers cybersecurity, AI, IoT, and the cloud. He also works as a contributing analyst at GigaOm and has previously worked as an analyst for Gartner covering the infrastructure market. He has made numerous television appearances to give his views and expertise on technology trends and companies that affect and shape our lives. You can follow Rene Millman on Twitter.