Amazon Kisses $10B Annual Cloud Revenue

Mitch Wagner
7/28/2016

Amazon Web Services came close to $10 billion revenue for the trailing 12 months -- $9.9 billion, to be precise, according to second-quarter results Amazon reported Thursday.

For the quarter ending June 30, Amazon Web Services Inc. revenue was up 58% year-over-year, to $2.9 billion, with operating income of $718 million, up 135%.

Overall, Amazon net sales were $30.4 billion for the quarter, up 31% from $23.2 billion in the year-ago quarter. Net income was $857 million, or $1.78 per diluted share, compared with $92 million, or $0.19 per diluted share in the second quarter of 2015, the company said. It is Amazon's fifth consecutive profitable quarter. (See Amazon.com Announces Q2 Sales up 31% to $30.4B.)

Amazon traded at $766 up 1.78% after hours.

In its earnings press release, the company highlighted activity in India, where it launched a new AWS Region, and introduced Prime, with Prime Video coming soon, which will include Indian content.


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Media revenue, including movies as well as books, music, software and more, was $2.9 billion for the quarter in North America, up 12% year-over-year, and $2.3 billion internationally, up 9%.

Amazon plans to double its spending developing original video content in the second half of 2016 compared with the year-ago half. Company officials on the analysts' call Thursday declined to provide any specifics on that spending, other than to say the company spent $1.3 billion on original content in 2014, the last time it disclosed that spending figure.

For the third quarter, Amazon expects net sales to be between $31 billion and $33.5 billion, up 22% to $32 percent year-over-year. Operating income is expected to be between $50 million and $650 million, compared with $406 million in the third quarter of 2015.

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kq4ym
kq4ym
8/12/2016 | 11:04:33 AM
Re: Competition
It makes me wonder considering that "Amazon's fifth consecutive profitable quarter" showing the cloud business doing a staggerningly well job, why Amazon gambles on lesser performing businesses where the competition is so tough.
Mitch Wagner
Mitch Wagner
8/2/2016 | 7:01:37 PM
Re: Competition
Amazon is far and away in the lead for cloud services.

Competitors such as IBM, Microsoft, and Google are avoiding the race to the bottom by adding services. IBM and Microsoft in particular are emphasizing enterprise cloud, which makes sense given their heritage. 
danielcawrey
danielcawrey
8/2/2016 | 6:41:13 PM
Competition
There are rivals going after this growing revnue. Google has been trying hard to compete with AWS. And I know smaller companies really enjoy Digital Ocean. The competition is trying to woo developers with cheaper fees. I'm concerned that the cloud may be a race to the bottom - we'll see. 
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