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 Amazon.com released its latest earnings report on Thursday for the quarter-ended June 30. Overall, Amazon.com 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 Amazon.com'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 Amazon.com'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.
Gladys Rama (@GladysRama3) is the editor of Redmondmag.com, RCPmag.com and AWSInsider.net, and the editorial director of Converge360.