AWS tops $10 billion in quarterly revenue for the first time
- Some Amazon Web Services customers, like Slack and Zoom, saw major usage gains in the quarter as companies and schools sent people home to avoid coronavirus.
- AWS announced a deal with 3M in the quarter.
Amazon’s market-leading cloud business crossed $10 billion in revenue for the first time in the first quarter. At $10.22 billion, Amazon Web Services revenue grew 33% on an annualized basis, the company said in a statement on Thursday.
Analysts surveyed by FactSet had expected $10.33 billion in first-quarter revenue, although comparing results with estimates is not straightforward given that the coronavirus spread across the globe in the quarter.
Alibaba, Google, IBM, Microsoft and Oracle all continue to trail AWS even as its growth has slowed. Microsoft, which is considered the No. 2 cloud infrastructure provider, doesn’t disclose revenue, although it said on Wednesday that revenue from the Azure cloud grew 59% in the quarter.
AWS delivered 13.5% of Amazon’s total revenue.
Operating income from AWS totaled $3.08 billion, which was up 38% and above the $2.96 billion FactSet consensus estimate. That works out to 77% of Amazon’s overall operating income.
Amazon shares dropped about 4% after hours on the earnings results.
Goldman Sachs analysts led by Heath Terry, who have a buy rating on Amazon stock, raised their estimates for first- and second-quarter AWS revenue in a note distributed to clients last week.
“Our partner checks continue to reflect the relative strength in the AWS platform, as incremental demand from customers to accelerate their migration into the cloud, provide full virtual-desktop coverage (AWS WorkSpaces), and other work-from-home and business continuity needs, seem to have more than offset the disruption from longer sales cycles and delays in planned migrations as IT priorities have shifted in the current environment,” the analysts wrote.
In the quarter AWS announced deals with 3M, Bundesliga and Carrier.
AWS came close to the $10 billion mark in the fourth quarter, when it delivered $9.95 billion in revenue.