It’s that time of the year again when companies worldwide unveil their quarterly financial figures, and Amazon’s latest report doesn’t disappoint, largely thanks to the exceptional performance of its Amazon Web Services (AWS) cloud division.
Amazon’s financials for the third quarter of 2023 showcased robust growth, with total net sales climbing 11% year-over-year to reach a staggering $143.1 billion in the period leading up to September 30, 2023. Furthermore, the company’s performance in the preceding three months had been even more impressive, with a 13% increase over that period.
AWS, a cornerstone of Amazon’s business, was valued at $23.1 billion in Q3 2023, and it also experienced substantial growth, with a 12% year-over-year increase. The robust performance of AWS contributed significantly to Amazon’s success in this quarter.
Commenting on the company’s positive growth, Amazon CEO Andy Jassy emphasized that “our AWS growth continued to stabilize.” Notably, the operating income for AWS saw a substantial uptick, reaching $7.0 billion, a notable increase from the $5.4 billion reported during the same period the previous year.
AWS attributed much of its success to a new strategic partnership with Anthropic, aimed at advancing generative AI. Additionally, AWS gained a handful of new and renewed high-profile customers, including BMW Group, UK bank NatWest, and international energy company Occidental.
To further support its growth and provide enhanced customer service, Amazon introduced the AWS Israel (Tel Aviv) Region and a new AWS Local Zone in Phoenix, Arizona.
An intriguing aspect of Amazon’s report is the controlled growth of AWS operating expenses. Despite significant investments in AI over the past year, AWS managed to keep its expenses from surging. In Q3 2022, the company reported operating expenses of $16.1 billion, a modest increase from $15.1 billion in Q3 2022, reflecting a 6.6% rise.
However, it’s worth noting that Amazon’s cloud business did not achieve the same level of success as some of its competitors, such as Google Cloud (up 22%) and Microsoft Azure (up 29%). This could be attributed to a combination of ongoing economic uncertainty and a slowdown in Amazon’s cost-cutting efforts, which have resulted in more than 27,000 job cuts across its entire portfolio.
