Amazon beats, stock jumps, and its cloud business is quite profitable
Amazon just reported earnings for the first quarter of 2015, and it was a nice beat. The stock bounced around after hours, but is now up almost 5%.
Here are the numbers:
- $22.72 billion revenue, vs $22.39 billion expected.
- EPS of ($0.12) versus ($0.13) expected. Net loss was $57 million, versus net income of $108 million a year ago.
- AWS revenue came in at $1.57 billion, or a run rate of a little over $6 billion a year. That’s up 49% from last year’s figure, and in line with what most analysts were expecting.
- AWS profits of $265 million, up from $245 million a year ago. Analysts had all kinds of expectations for AWS earnings, so this is a surprise. If it sticks to this rate, that means AWS earns more than $1 billion in profit a year.
- North American net sales of $13.41 billion, up 24% from a year ago. North American net income was $517 million.
- International net sales of $7.75 billion, down slightly from a year ago. Net loss in this segment was $76 million, more than double last year’s figure of ($33 million).
Amazon also said that it’s expecting Q2 sales of between $20.6 billion and $22.8 billion, in line with consensus expectations of around $22.1 billion.
The company is doing something it’s never done before: Breaking out finances for Amazon Web Services, its cloud computing service that companies use to host applications so they don’t need their own data centers full of hardware. We now know that AWS is on a $6 billion+ annual run rate, which makes it the biggest cloud infrastructure provider out there, at least by one measurement. It’s also profitable, which we didn’t know before.
In a statement in the press release, CEO Jeff Bezos said “Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating. Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon… We manage by two seemingly contradictory traits: impatience to deliver faster and a willingness to think long term. ”
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.