AWS Q3 Revenue Rises To $9B, But Growth Rate Slows

Amazon stock dropped as much as 9 percent in after-hours trading after the tech giant says its overall profit had decreased in its most recent quarter and growth rate slowed at AWS.

Amazon continues to cash in on cloud. On Thursday, the Seattle-based tech titan said revenue from its cloud computing unit rose 35 percent to $9 billion during its most recent quarter -- but below the growth rate in recent quarters and below the $9.1 billion that analysts expected.

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The growth rate for Amazon Web Services is below the previous quarter’s rate of 37 percent and significantly below the 46 percent growth rate from the same quarter a year before.

CFO Brian Olsavsky told analysts on an earnings call that AWS is making “great progress” when it comes to deals with enterprises moving into the cloud. During the quarter, Amazon said AWS -- which surpasses Microsoft Azure or Google Cloud in market share -- signed up new customers, including health information supplier Cerner Corp.; Canadian media firm The Globe and Mail; Old Mutual Limited; and electronic home appliances maker Galanz.

Amazon reported that its third quarter net sales increased 24 percent to $70 billion, compared with $56.6 billion in the same period the year before.

However, net income fell in the quarter to $2.1 billion, compared with $2.9 billion in the same period a year before. The company fell short of analysts’ estimates for earnings per share of $4.62 versus the $4.23 it reported for the quarter. As a result, investors sent Amazon stock tumbling in after-hours trading, with shares down as much as 9 percent from its closing price of $1,780.78 on Thursday. Shares had risen more than 15 percent since the beginning of this year.