Amazon.com has released its Q2 2021 earnings, and revealed that revenue from its cloud business Amazon Web Services has jumped 37 per cent to an annualized rate of $59 billion – a figure that takes it past Cisco’s annual revenue and puts it within striking distance of Lenovo.
In Thursday’s investor earnings call, Chief Financial Officer Brian Olsavsky said:
That $59 billion surpasses last reported full-year revenue from both Cisco ($49.3B, FY2020) and HP Inc ($56.6B, FY2020). The figure leaves AWS very close to overtaking Lenovo’s 2021 revenue of $60.7 billion.
AWS only commenced operations in 2006, so creating a Cisco-sized business in the 15 years since is quite an achievement.
AWS was already leading the cloud market, but experienced accelerated growth in Q2.
CFO Olsavsky attributed the revenue growth to enterprises, governments, educational and research institutions, as well as startup and digital-native customers. A press release [PDF] released on Thursday detailed a slew of new AWS contracts, ranging from telecom companies to financial services to automotive.
And, as with the rest of Amazon, COVID played a part in AWS’s growth. According to Olsavsky:
Amazon’s Q2 2021 total revenue – across AWS, its digital tat bazaar and other activities – was reported at $113.1 billion, of which 13 per cent was from AWS. Yet AWS provided 54 per cent of Amazon’s operating income.
The cloud business’s operating margin for Q2 was down to 28.3 per cent from Q1’s 30.8 per cent. Olsavsky attributed the decline to pressure to cut prices, foreign exchange rates and workforce and infrastructure expansion.
“We are very happy with the numbers,” said Olsavsky on the call, adding “We know it’s going to bounce around as we invest, but also work very hard to scale our businesses and efficiently run our assets.” ®