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AWS Revenue Surges in Amazon's Q2 Earnings

Amazon.com's cloud business is booming.

The retail giant reported its second quarter earnings on Thursday, breaking out its Amazon Web Services (AWS) unit as a separate reporting category for only the second time (the first was for its Q1 earnings report in April).

AWS raked in $1.82 billion in revenue for the quarter ended June 30, a staggering 81% jump from the year-ago period when revenue was roughly $1 billion. AWS revenue also went up quarter-to-quarter by 16.5%, from $1.57 billion in Q1.

That growth far exceeds analysts' forecasts, which had been more in the ballpark of 55% year-over-year growth and $1.56 billion in revenue.

Operating income for AWS was $391 million, up 314% year-over-year and up 48% quarter-to-quarter.

AWS was Amazon.com's fastest-growing segment by far, dwarfing the year-over-year growth of the "North America" (26%) and "International" (3%) segments.

In Q1, Amazon.com CEO Jeff Bezos called AWS a "$5 billion business." Thursday's Q2 results put AWS well ahead of that pace, with a run rate that now exceeds $7 billion.

For comparison, Microsoft -- a major rival in the cloud computing space -- this week reported a run rate of $8 billion for its commercial cloud business, although the company did not break out how much of that comes from Office 365, its cloud-based productivity suite, and how much of it is from Azure, its cloud platform.

Overall, Amazon.com beat analysts' expectations, reporting $23.19 billion in revenue for the quarter, marking a year-over-year growth rate of 20%. Operating income came in at $464 million and earnings-per-share at $0.19.

About the Author

Gladys Rama is the senior site producer for Redmondmag.com, RCPmag.com and MCPmag.com.

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