AWS continues to grow in importance as a revenue stream as its former head Andy Jassy takes over as Amazon CEO.
Amazon posted quarterly results that fell short of market expectations on revenue but surpassed on profits.
In the second quarter of the year, the e-commerce giant had revenues of $113.1bn, a 27pc increase year on year, while Wall Street had been expecting $115.1bn. Its profits came to $7.8bn or $15.12 per share, a 47pc increase, while analysts had predicted $12.22 per share.
Amazon’s stock price slipped by more than 7pc in the hours after the announcement, despite this being the company’s third quarter in a row with more than $100bn in revenue.
Net sales from Amazon Web Services (AWS) totalled $14.8bn, up 37pc from last year, as revenue streams outside the company’s core e-commerce business continue to become more important. Revenue from subscription services reached $7.9bn, a 32pc increase, and ‘other’ revenue, including the company’s ad business, also hit $7.9bn, up 87pc from last year.
“Over the past 18 months, our consumer business has been called on to deliver an unprecedented number of items, including PPE, food, and other products that helped communities around the world cope with the difficult circumstances of the pandemic,” said Andy Jassy, Amazon’s new CEO.
“At the same time, AWS has helped so many businesses and governments maintain business continuity, and we’ve seen AWS growth reaccelerate as more companies bring forward plans to transform their businesses and move to the cloud.”
The slip in the company’s share price may be tied to the outlook for next quarter. Amazon forecasts it will bring in between $106bn and $112bn in revenue in Q3, while analysts had expected an outlook of approximately $118bn. As traditional retail continues to recover from the pandemic and consumers are leaving their homes again, investors had already been expressing concern about the near future of growth in e-commerce.
Just after Jassy left his position leading the cloud computing division, more than 550 AWS workers submitted a petition criticising “an underlying culture of systemic discrimination, harassment, bullying and bias against women and underrepresented groups.” Earlier this week, Amazon was also ordered to pay a settlement to 42,000 workers for not compensating them for time spent having their bags searched by security.