AWS Quarterly Revenue Growth Rebounds, Hits USD 16.1 Billion!
Amazon’s cloud platform AWS (Amazon Web Services) witnessed a 39 percent uptick in its third-quarter revenue (or Q3, 2021).
With businesses increasingly migrating to the cloud amid the pandemic, AWS has seen a massive influx of revenue.
“AWS is seeing a general level of recovery across a lot of its customer base,” said Amazon Chief Financial Officer Brian Olsavsky.
According to Amazon’s quarterly earnings report, the cloud platform revenue increased to USD 16.1 billion in the quarterly period which ended on September 30. The earnings are significantly up from USD 11.6 billion in the same quarter last year.
This is the highest growth rate AWS experienced since the first quarter of 2019, when revenue increased by 44 percent.
“AWS has seen a reacceleration of revenue growth as customers have expanded their commitment to the cloud and selected AWS as the cloud partner,” said CFO Olsavsky.
“We feel really good about the acceleration and growth. We know there was some suppression last year, but the growth last year was still in the 28 to 33 percent range through most of the year,” he added.
“While many customers accelerated their journeys to the cloud during the pandemic, others curtailed their spending.”
“Some companies, like Disney, Zoom, Netflix were booming,” mentioned Olsavsky. “Others that were more travel-related were suppressed in their demand.”
The positive third-quarterly revenue results have come out after both Amazon as well as AWS have undergone leadership change.
Adam Selipsky, the former Tableau leader and Amazon veteran, officially became the CEO of AWS on July 5, five days after the commencement of the quarter.
On the same day, former AWS CEO Andy Jassy replaced Jeff Bezos as the CEO of Amazon.
According to CFO Olsavsky, AWS revenue growth was propelled due to the wide range of service offerings, including Machine Learning (ML).
“We’ve been investing in this area for several years, offering an extensive set of Machine Learning services, including ones that can be applied to common business problems, like Amazon Connect for contact center intelligence or Amazon Kendra for intelligent enterprise search,” said Olsavsky.
According to the CFO, Amazon recently launched industry-specific cloud solutions, including Machine Learning services.
For instance, the tech giant launched Amazon HealthLake to empower its healthcare and life sciences customers to seamlessly transform their data across disparate sources and glean insightful medical information.
Another cloud machine-learning platform Amazon SageMaker enables customers to scale their use of ML to core workloads. With tens of thousands of active external users every month, SageMakers is one of the fastest-growing services in AWS history.
Moreover, the cloud platform is witnessing massive growth in the adoption of its custom silicon and AWS-designed Graviton2 processors. The Graviton2 processor outpaced the current x86 processors by delivering customers up to 40 percent better price performance.
Amazon Quarterly Results in a Nutshell:
The eCommerce giant witnessed a revenue growth of USD 110.8 billion in the third quarter, up 15.2% from USD 96.14 billion in the same period in 2020.
However, the revenue collection fell short of the analyst’s consensus revenue estimate of USD 111.8 billion.
“The coronavirus pandemic that drove shoppers to Amazon.com for personal protective equipment, food, and other items came at a cost as the company ramped up its investments to meet demand,” said Amazon CEO Jassy.
“Just one example is that we’ve nearly doubled the size of our fulfillment network since the pandemic began,” Jassy said.
The fourth-quarter revenue of Amazon is estimated to reach USD 130-140 billion, representing a growth of 4-12 percent from the same period in 2020.
Likewise, the operating income is estimated to reach USD 3 billion, significantly down from USD 6.9 billion in the same period last year.
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