Amazon’s cloud computing arm continues to generate billions in revenue and help the tech giant post a profit.
Amazon Web Services reported $3.53 billion in revenue for Q4 2016, up 47 percent from the year-ago quarter and up more than $300 million from Q3 2016.
AWS accounted for 8 percent of Amazon’s $44.68 billion in total revenue for Q4. That’s about in line with last quarter, when AWS reeled in $3.2 billion, or nearly 10 percent of Amazon’s total Q3 revenue.
With $926 million in operating income for Q4, AWS accounted for more than 71 percent of Amazon’s $1.3 billion in operating income.
On a post-earnings call with reporters, Amazon CFO Brian Olsavsky noted that AWS has now reached a $14 billion annual run rate. AWS posted $12.2 billion in sales for 2016 and more than $3 billion in profit.
Olsavsky noted that Amazon has a “very balanced group” of customers, from startups to small-and-medium-sized businesses, all the way to large enterprise and the public sector.
“We’re seeing strong usage growth across all those groups,” he added.
While AWS revenue spiked 47 percent from the year-ago quarter, that’s a lower clip than year-over-year growth for the past several quarters. For example, the $2.4 billion in AWS revenue during Q4 2015 was up 69 percent year-over-year.
Olsavsky noted that Amazon made seven AWS price reductions during Q4.
“We’re constantly balancing innovation, lower prices and also taking costs out through greater efficiencies in infrastructure,” he said.
Amazon has come to depend on AWS to fuel the rest of its sprawling business and feed its global ambitions. It’s impossible to say how Amazon would be managing its expenses and profit margins if it hadn’t launched AWS more than a decade ago. But it’s clear that AWS has emerged as a huge economic engine.
Amazon said it released 308 new services and features for AWS last quarter; there were 1,017 total upgrades released in 2016. The company also unveiled a bevy of new AWS-related services and products at its annual re:Invent conference in December.
AWS, used by Amazon itself and customers like Netflix who pay for computing power, competes with other cloud computing products from companies like Google and Microsoft.
Shares of Amazon dipped in after-hours trading after the company missed expectations for total revenue.