AWS Q1 Earnings Report 2023

Adam Selipsky, CEO of Amazon Web Services, speaks at the CERAWeek by S&P Global conference in Houston on March 7, 2023.

F Carter Smith | Bloomberg | Getty Images

Amazon said Thursday that its cloud unit grew revenue by about 16% in the first quarter, a slightly faster pace than analysts had been forecasting.

Amazon Web Services revenue totaled $21.35 billion, accounting for nearly 17% of Amazon’s total revenue, according to the company’s earnings statement. Analysts polled by StreetAccount were expecting $21.22 billion in AWS revenue. In the fourth quarter, AWS revenue grew 20%.

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“AWS sales and support teams continue to spend significant time helping customers optimize AWS spend to weather this uncertain economy,” said Brian Olsavsky, Amazon’s chief financial officer, in a conference call with analysts.

Amazon faces competition from Alibaba alphabet, MicrosoftAnd oracle but enjoys a comfortable lead in the global cloud infrastructure market. Microsoft executives said earlier this week that its cloud customers took steps during the quarter to improve the efficiency of their cloud spend.

On Tuesday, Alphabet said its Google Cloud segment made money for the first time on record, posting $191 in operating income.

According to Amazon, AWS operating revenue was $5.12 billion, slightly below the StreetAccount consensus of $5.18 billion. AWS has been generating profits for its parent company since 2014. Amazon as a whole had operating income of $4.77 billion.

AWS operating margin was 24%, the lowest since 2017. On Wednesday, Amazon’s AWS CEO Adam Selipsky released a memo saying the company had started notifying employees who are being laid off from the division .

“Both the size of our company and the size of our team have grown significantly over the past few years, driven by customer demand for the cloud and the unique value that AWS offers,” Selipsky wrote.

“This growth came quickly as we moved as quickly as possible to build what customers need. With this rapid growth, as well as the overall business and macroeconomic climate, it is critical that we focus on identifying and deploying our resources behind our top priorities – the things that matter most to our clients and make the difference for ours will give business.”

During the quarter, AWS announced it would open a data center region in Malaysia.

AWS revenue growth rates in April were 500 basis points lower than in the first quarter, Olsavsky said on the earnings call.

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