AWS saw revenue growth of 49% in the second quarter
Amazon Web Services (or AWS), Amazon’s (AMZN) cloud-computing business, is the company’s crown jewel. The business had another fantastic quarter in Q2 2018.
AWS generated $6.1 billion in revenue, growing 49% YoY (year-over-year) in the second quarter. Revenue from AWS has been accelerating over the last three quarters. In Q2 2017, it increased 42% YoY.
AWS’s operating margins are widening
AWS’s operating margins have also been expanding. In the second quarter, it had an operating income of $1.64 billion, rising 79% from Q2 2017. That means AWS had an operating margin of 26.9% in the second quarter, the best ever in AWS’s history. AWS is by far the biggest contributor to Amazon’s net income. We’ll look at that more in the next part of this series.
AWS’s tremendous growth trajectory continues, despite increased competition lately from Microsoft (MSFT) and Google. Microsoft Azure’s revenue growth decelerated to 89% YoY in the second quarter. However, AWS has a larger base than Azure.
AWS is one of the main factors for Amazon’s valuation to come close to the $1 trillion mark. Many analysts are now predicting that Amazon will overtake Apple as the first public company to breach that number. It now has a market cap of ~$900 billion compared to Apple’s at $945 billion.