According to Amazon.com’s latest earnings report, Thursday, Amazon Web Services (AWS), exceeded Wall Street expectations for its quarter ended March 31.
The cloud giant generated revenues of $5.4 Billion in its fiscal first quarter. Analysts had predicted $5.2 billion. The company’s revenue is up 6% compared to the previous quarter, and 49% compared with Q1 2017, when it received $3.7 billion.
This year-over-year growth is AWS’ biggest since Q3 2016 and suggests a return of accelerating growth that started in Q4 2017 (see table). AWS’ growth was slowing as Microsoft and other competitors increased their market share.
Reporting Period AWS Revenue, (Billions). Q1 2018 $5.449 Q4 2017 $4.142 Q1 2017 $3.743 Q4 2016 $3.255 Q2 2016 $2.958 Q1 2016 $2.664 Q4 2015 $2.469 Q3 2015 $2.178 Q2 2015 $1.881 Q1 2015 * $1.649
Amazon.com CEO Jeff Bezos said Thursday’s Q1 results are a return to form for AWS. This is due to AWS’s stronger position in the market than its competitors.
Bezos stated that AWS had the unique advantage of having a seven-year lead before it faced similar-minded competitors and the team has never slowed. “AWS services are the most advanced and feature-rich. AWS allows developers to do more and be more agile, and it keeps getting better every day. This is why you are seeing a remarkable acceleration in AWS growth for the second quarter in a row.
Amazon.com’s strong year-over-year growth in AWS also outpaced other business units. The North America retail segment grew by 46% while the International segment grew 34%.
AWS’ quarterly operating income of $1.4 billion was 57% higher than the previous year.
Microsoft, whose Azure cloud platform can be considered AWS’ closest competitor reported its earnings on Thursday. Although Microsoft did not report revenues for its cloud properties, it did report a 93% increase in Azure earnings year-over-year.
Amazon.com made $51 billion in Q1. The earnings per share of Amazon.com, $3.27, far exceeded analyst expectations of $1.25.
