Amazon reports healthy AWS growth

But company still operating at a loss, financial results show

Tags: Amazon Web Services ( Incorporated
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Amazon reports healthy AWS growth While AWS only made up 7% of total revenue, the unit's operating income grew by 8% (Getty Images)
By  Tom Paye Published  April 26, 2015

Amazon broke out financial details of its cloud business, Amazon Web Services (AWS), for the first time last week, showing a 50% jump in revenue to $1.57bn.

In last week's earnings report, Amazon was keen to show investors that it will eventually be profitable - the company has a long history of making large investments and has so far shown little in terms of returns. By breaking out its cloud business financials, it hoped to show that parts of the company are showing healthy growth.

While AWS only made up 7% of total revenue, the unit's operating income grew by 8% over the last year, Amazon said. The company's CEO, Jeff Bezos, claimed in a statement that the unit is turning into a $5bn business.

"We're putting a lot of capex there, and we think over time we will be able to generate significant free cash flow," Tom Szkutak, Amazon's CFO, added on a conference call.

Upon the results being made public, Amazon's shares rose by $26.01 to $416, Reuters reported.

Meanwhile, the company said that North American sales had grown by 24%, garnering revenue of $13.4bn for the quarter ended March 31. However, Amazon's international business - which makes up more than a third of sales - continued to underperform. The company said sales for the quarter had fallen by 1.77% to $7.75bn.

To counter this, Amazon said that it was ramping up investments in India and China.

Amazon estimated that the quarter would yield anything between an operating loss of $500m and an operating income of $50m.  

Total revenue for the coming quarter would reach $22.8bn, Amazon said, slightly above analyst expectations of $22.11bn.

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