- Amazon Web Services again accelerated revenue growth even as it continues to lead the market.
- The Amazon segment announced plans to build data centers in Israel and the United Arab Emirates in the quarter.
The latest results further solidify Amazon Web Services' grasp on the market for tools businesses, school and governments use to run applications and websites using computing infrastructure located in faraway remote data centers. AWS held 41% of the market in 2020, more than double the second-largest contender, Microsoft, according to estimates from technology industry research company Gartner.
AWS revenue totaled $14.81 billion in the quarter, more than the $14.20 billion consensus among analysts polled by Refinitiv. The acceleration in growth comes as Amazon's results compare against the second quarter of 2020, which included impact from the coronavirus pandemic. Back then, growth rates varied across industries as a result of the arrival of Covid.
"We do note that last year, there was a lot of effort by companies to limit their spend, and operate more efficiently as we're all plunged into a kind of an unknown demand curve, and some industries were hurt worse than others," Brian Olsavsky, Amazon's finance chief, said on a conference call with analysts.
AWS was left with $4.19 billion in operating income, above the $4.17 billion StreetAccount consensus, putting the operating margin at 28.3%, narrowing from 30.8% in the first quarter.
Of Amazon's $113.08 billion in total revenue, 13% is attributable to the cloud unit, and 54% of the company's operating income came from AWS.
Amazon shares dropped as much as 5% in after-hours trading after the company reported disappointing total revenue during the second quarter.