Amazon Web Services posted 32 percent revenue growth in the first quarter, giving the cloud computing industry leader a US$54 billion-plus annualized revenue run rate – a US$13 billion increase from last year’s same period.
AWS has seen great usage and expansion across a number of industries and customer types, from startups to enterprises, according to Brian Olsavsky, chief financial officer of parent company Amazon.com.
“We have firm confidence that we offer a lot of advantages to AWS customers, from functionality to a vibrant and robust partner ecosystem,” Olsavsky said during an earnings call with analysts today. “We also have less downtime and better security, which I think is super important to all of our customers — especially security nowadays.”
AWS posted US$13.5 billion in revenue for the first quarter that ended March 31, an increase of 32 percent from the same period last year, when it reported US$10.22 billion in revenue.
“During COVID, we’ve seen many enterprises decide that they no longer want to manage their own technology infrastructure,” Olsavsky said. “They see that partnering with AWS in moving to the cloud gives them better costs, better capability and better speed of innovation. We expect this trend to continue as we move into the post-pandemic recovery.”
Olsavsky highlighted customer wins from some of the world’s most popular sports leagues, which in the last quarter announced new migration commitments with AWS: the National Hockey League, the PGA Tour, Formula One and Germany’s Bundesliga professional association football league.
“We continue to expand our AWS infrastructure footprint to support the strong growth we’re seeing,” Olsavsky said. “AWS offers 80 availability zones across 25 geographic regions around the world, but we’ve announced plans to launch 15 more availability zones in five more regions.”
AWS’ stellar performance follows a record fourth quarter, when AWS posted its strongest quarter-over-quarter performance — and strongest year-over-year performance — since its launch in 2006.
“Two of our kids are now 10 and 15 years old, and after years of being nurtured, they’re growing up fast and coming into their own,” Amazon founder and CEO Jeff Bezos said in a statement, referring to the now 10-year-old Prime Video and 15-year-old AWS. “In just 15 years, AWS has become a $54 billion annual sales run-rate business competing against the world’s largest technology companies, and its growth is accelerating. Companies from Airbnb to McDonald’s to Volkswagen come to AWS because we offer what is by far the broadest set of tools and services available, and we continue to invent relentlessly on their behalf.”
AWS had a backlog of future contracts totaling US$52.9 billion at the end of the quarter, with a weighted average remaining life of just more than three years. “That’s up about 55 percent…so it really continues to be really strong,” said David Fildes, Amazon’s director of investor relations. “The momentum we’re seeing in here is a lot of hard work and innovation. You can expect to continue to see customers making these long-term commitments.”
Amazon.com’s overall revenue, meanwhile, surged almost 44 percent to US$108.51 billion, compared to revenue of US$75.45 billion for the first quarter of 2020, easily eclipsing Zacks’ analyst consensus estimate of US$105.23 billion. Its net income reached US$8.12 billion or US$15.79 per share, compared to net income of US$2.53 billion in last year’s first quarter or US$5.01 per share, again handily beating Zacks’ analyst consensus estimate of US$9.75 per share.
Shares of Amazon, which closed at US$3,471.31, up 0.37 percent, climbed in after-hours trading. The per-share price stood at US$3,556 as of 7 p.m., a 2.44 percent increase. Amazon’s earnings release and call with analysts did not address a rumoured stock split.
In March, Amazon announced that Tableau CEO and 11-year AWS alum Adam Selipsky would become the next CEO of AWS in the third quarter, replacing Andy Jassy, who’ll succeed Bezos as Amazon.com’s next CEO at that time. Selipsky will rejoin AWS this month, shadowing Jassy until the third-quarter transition.
Selipsky has been CEO of Tableau, an analytics platform provider acquired by San Francisco’s Salesforce for US$15.7 billion in stock in 2019, for five years after leaving AWS in 2016. He first joined AWS in 2005, serving as vice president of marketing, sales and support – a chief operating officer role — with worldwide responsibility for AWS marketing, sales, business development, partner management, technical support, customer service, and product marketing and management.