Amazon’s Q1 Earnings are Boosted by Cloud Growth

Amazon.com reported positive earnings for its first quarter financial report on Thursday. The company’s cloud business growth was the main highlight.
Amazon Web Services Inc. (AWS), which raked in $2.57 Billion in revenue, topped Wall Street estimates for its quarter ended March 31. This is a 64% increase over the year-ago period, and 7% more than the previous quarter.
AWS is on track to meet the $10 billion run rate that Amazon.com CEO Jeff Bezos predicted in a letter to shareholders this month.
AWS’ operating income more than tripled in the past year to $604 Million in Q1. However, that’s still more than tripled from the $687 million earned in the previous quarter. Operating margin was 28%.
AWS’ year over-year revenue growth was far greater than that of Amazon.com’s other ecommerce units, which account for the majority of the company’s earnings. The North America segment generated $17 Billion in revenue with 27% growth year-over year, while the International unit earned $9.57 Billion with 24% growth year-over year.
Overall, Amazon.com exceeded analyst expectations. The total revenue for the period increased by 28.2% year over year to $29.13 Billion, compared with estimates of $27.98 Billion. Earnings per share were $1.07, which was well above the $0.58 expected. The net income was $513million, an increase from the $57 million loss in the previous year.
Amazon.com highlighted several AWS offerings in its earnings statement as contributing to its growth. These include the Lumberyard game development platform launched in February and the Database Migration Service, which became generally available in March. According to Amazon.com, the product has moved additional 1,000 databases to AWS since the launch of DMS.