AWS Revenue Falls Short of Estimates in Fiscal Q2

Amazon Web Services (AWS) fell shy of Wall Street estimates in its fiscal second quarter, reporting $8.38 billion in revenue compared to analyst projections of $8.49 billion.

That's nevertheless a 9% increase from the $7.7 billion in revenue it earned in Q1, and a 37% increase from the year-ago period when it reported revenue of $6.1 billion.

However, there have been indications over the past four quarters that AWS growth is decelerating. In Q2 2018, AWS revenue increased by 49% year over year. In subsequent quarters, that rate has slowed to 46%, 45% and 41%. This quarter's year-over-year growth rate is the slowest on record for the cloud business.

Operating income was $2.12 billion, a 29% year-over-year increase.

Parent company released its latest earnings report on Thursday for the quarter-ended June 30. Overall, revenues clocked in at $63.4 billion, exceeding analyst estimates, though its earnings per share, at $5.22, fell short of the expected $5.57.

Despite its slowdown, AWS was once again's fastest-growing segment year-over-year. By comparison, its International retail segment grew by 17%, and its North America segment by 20%. AWS comprised 13% of's total business for the period.

Long recognized as the runaway leader in the cloud market, AWS faces ever-increasing competition from Microsoft Azure. The No. 2 cloud's parent company, Microsoft, released its latest earnings report last week. Though it didn't separate Azure revenue from its total cloud-based earnings, Microsoft did report that Azure grew by 64% year-over-year, contributing to combined commercial cloud revenues of $11.0 billion.

About the Author

Gladys Rama (@GladysRama3) is the editorial director of Converge360.


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