Amazon Web Services Accelerates Cloud Growth in Third Quarter
Amazon Web Services surpasses analyst expectations with nearly 39% revenue growth, driven by ongoing pandemic-fueled cloud adoption. The cloud unit generates the majority of Amazon's operating income despite the parent company's weaker overall guidance.
Amazon Web Services grows faster than expected in the third quarter as companies continue to rely on its computing and storage infrastructure. Revenue reaches $16.11 billion, up almost 39% from a year ago and beating analyst expectations of $15.48 billion. This growth acceleration stems from customers who fast-track their move to the cloud due to the pandemic, including delayed spending from industries like travel.
The cloud unit generates $4.88 billion in operating income, up 38% and exceeding analyst estimates of $4.12 billion. AWS accounts for almost 15% of Amazon's total revenue and provides a healthy supply of income for the parent company. Notably, AWS produces more operating income than the entirety of Amazon, which faces an operating loss in its international business segment.
AWS maintains its dominant position in the cloud infrastructure market with about 41% share and achieves an operating margin of 30.3%. The company continues to seek operating efficiencies and reduce prices for customers while expanding its global footprint. During the quarter, AWS announces plans for a new data center region in New Zealand and offers free USB security keys to employees of U.S.-based customers.