The Amazon juggernaut rolls on. The company’s Q4 financial results show strong holiday sales and more strong growth from Amazon’s cloud platform, Amazon Web Services (AWS).

Amazon’s share price rose 6 per cent on the news of the results, which beat analyst expectations.

Fourth quarter sales were $60.5 billion, up 38 per cent compared with $43.7 billion in fourth quarter 2016.

For the full year Amazon sales were $177.9 billion, a 31 per cent increase on 2016 figures. However, operating profit was down 2 per cent to $4.1 billion as Amazon continues to invest.

Total fourth quarter costs reached $58 billion, a 38 per cent increase year-over-year. In Q4 2016 cost rose 23 per cent from the 2015 period.

The AWS Cash Machine

AWS sales surged 45 per cent year on year generating $5.1 billion in Q4 revenue and $17.46 billion for all of 2017. The cloud platform now accounts for nearly 10 per cent of Amazon’s total yearly revenue.

The results showed how important AWS is to Amazon with the platform contributing $1.3 billion in operating income – a 64 per cent share of Amazon’s total operating income and a 73 per cent share of net income.

Amazon CFO, Brian Olsavsky, said the AWS performance was mainly being driven by an uptick in usage.

“Usage growth continues to be strong, growing at a higher rate than our revenue growth rate, and customers continued to add workloads and expand. We’re adding new services and features all the time, over 1,400 in 2017 alone,” Olsavsky said on an earnings call.

According to CNBC, AWS is the fastest growing and most profitable Amazon business.

Earlier in the week, Amazon was named the world’s most valuable brand in the 2018 Brand Finance rankings.

In a company statement, CEO, Jeff Bezos, commented on the success of Amazon’s virtual assistant ‘Alexa’.

“Our 2017 projections for Alexa were very optimistic, and we far exceeded them. We don’t see positive surprises of this magnitude very often — expect us to double down,” Bezos said. Infographic: Amazon's Impressive Long-Term Growth | Statista

LinkedIn
Previous post

Amazon displaces Google as the World's Most Valuable Brand

Next post

Alibaba takes equity stake in Ant Financial