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AWS a bright spot in subdued set of Q1 results for Amazon
Cloud shrugs off woes of retail parent while advertising cash also increased
AWS shone in an otherwise subdued set of financials from megacorp Amazon last night.
While Amazon.com registered a loss [PDF] in operating income for both its North American and International arms ($1.6 billion and $1.3 billion respectively) and a drop in International net sales, AWS continued to notch up impressive gains, with revenue rising to $18.4 billion for the three months ended March 31 from $13.5 billion in the same period last year.
The performance of AWS will have increased calls for the division to be spun out into its own entity despite protestations from boss Adam Selipsky last month.
During a call with analysts, Amazon CFO Brian Olsavsky lavished praise on AWS, noting a 37 percent year-on-year increase in net sales and an annualized sales run rate of nearly $74 billion. Going forward, the relentless infrastructure build-out is set to continue, according to Olsavsky, with centers positioned to enable the building of services by customers with "single-digit millisecond latency performance."
David Fildes, head of Investor Relations at Amazon, commented on AWS customers' longer-term commitments, and highlighted an $88.9 billion backlog by the end of March, up 68 percent year on year. "The weighted average remaining life term for those is 3.8 years," he said.
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Also lurking in the figures was a year-on-year increase in money Amazon Corp made through advertising: $7.9 billion for Q1 2022, up from $6.4 billion in Q1 2021. The figure "includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising."
Despite the performance of AWS, Amazon still managed to turn in a loss for the quarter. Though total group sales increased to $116 billion from $108 billion in the same period last year, it also managed to turn a $8.1 billion profit that it made in the same quarter last year into a $3.8 billion loss in this one.
AWS's growth joins that of rival Microsoft, which similarly notched up big gains (although the Windows behemoth is not tied to a retail operation struggling to turn a profit).
Analyst Gartner published a report earlier this month predicting that worldwide public cloud end-user spending would hit nearly $500 billion in 2022 and the cloud giants, including AWS, appear set to gobble a healthy chunk. ®