How AWS has turned into Amazon’s crutch

Amazon Web Services continues to drive profits for parent company Amazon

Red wheel barrow filled with money
Credit: Thinkstock

When Amazon announced its earnings last week, Wall Street was disappointed, with the company’s stock tumbling 5%. But if Amazon didn’t have its cloud business, Wall Street may have been even more bearish.

By non-Wall Street standards, the online ecommerce giant had a nice quarter: Revenues of $32.7 billion were up 29% from the same quarter last year and the company turned a $575 million profit.

The revenues and earnings were less than consensus estimates and Amazon gave vague guidance on future performance heading into the always-busy holiday shopping season.

aws financial results Amazon

AWS continued its healthy growth across sales, operating income and Trailing Twelve Month (TTM) Net Sales  

Meanwhile, Amazon Web Services – the cloud computing behemoth arm of the company - reported revenues of $3.2 billion with an $861 million profit. Revenues for AWS were up 55% year-over-year and profits have more than doubled. In the past year, AWS has earned $11.1 billion in revenue.

So imagine what Amazon’s overall figures would be like if it didn’t have AWS? Without AWS’s $861 million operating income, Amazon could have lost $286 million. Reuters reported last week: “Long known for heavy spending and losses, Amazon has come to turn a profit consistently, partly thanks to selling computer storage and services in the cloud.”

Investment website Quartz added: “While Amazon is best known as the “Everything Store” of online retail, cloud-computing has become its financial life preserver.”

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