Amazon Web Services CEO Adam Selipsky speaks at the AWS Reinvent conference in Las Vegas. 30, 2021.
Noah Berger | Getty Images
Amazon said on Thursday that its cloud segment revenue grew 33% in the second quarter, beating analysts’ estimates.
According to Amazon Web Services, revenue for this period was $19.74 billion. statement. Analysts polled by StreetAccount had expected $19.56 billion. Growth slowed from nearly 37% in previous quarter.
While Amazon still relies on retail as the bulk of its revenue, AWS is the company’s profit engine and provides a significant source of diversity to the economy. slow and consumers stagger in spending. However, even in areas of the high-tech market, there are changes in the purchasing behavior of customers.
Amazon was left with AWS operating income of $5.72 billion, up 36% year-over-year but below StreetAccount’s consensus estimate of $6.04 billion. However, it still played a critical role for the e-commerce giant, which had a total operating income of $3.32 billion. AWS operating margin fell to 29% from 35.3% in the first quarter. Operating expenses in the second quarter included higher stock-based compensation, Brian Olsavsky, Amazon’s chief financial officer, told analysts on a conference call.
“AWS results include a broader set of these costs, reflecting wage increases in high-demand areas, including engineers and other technical workers, as well as increased investment in technology infrastructure to support long-term growth,” Olsawski said. Amazon also pays higher electricity rates in data centers, he said.
Earlier this week, Alphabet as well as Microsoft noted a slowdown in their cloud computing divisions. Both companies lag behind AWS, which controls rated 39% of the market. Microsoft reported 40% revenue growth from Azure, while sales of Google cloud services grew 36% year-over-year.
When asked on Tuesday what led to Google cloud growth slowdownCEO Sundar Pichai, said: “You do see a different mix of some customers who are affected by their ability to spend, some customers just spend a little more time and maybe in some cases think about the length of time they book and so on.” .
At Microsoft, Azure cloud consumption growth slowed during the quarter. Executive Director Satya Nadella told analysts on Tuesday that clients are “trying to make sure they can do more with less.” He said that Microsoft is encouraging its vendors to keep their cloud bills down.
Amazon is ready to help its customers survive even more difficult economic conditions.
“Just like during the recession in 2020, we are ready to help customers optimize their costs and help them [with] any scaling,” Olsavsky said.