Amazon Web Services (AWS) chalked up the biggest year-on-year revenue gain in its history during the fourth quarter of 2021, with the Covid-19 pandemic continuing to fuel demand for its public cloud offerings.
The final quarter of 2021 saw Amazon.com’s cloud arm continue to buck the law of big numbers with its revenue growth figures, with AWS reporting a 40% year-on-year uptick in its net sales figures.
AWS made $17.8bn in revenue during Q4, up from $12.7bn the previous year, and posted a full-year revenue figure of $62.2bn for the 2021 financial year, up from $45.4bn in Q4 2020.
Furthermore, AWS reported a quarterly profit of $5.2bn, which is up on the previous year when it banked $3.5bn during the final three months of 2020. Its full-year profit topped $18.5bn, up from $13.5bn in 2020.
During a conference call with analysts, to discuss Amazon’s full-year results, the company’s chief financial officer, Brian Olsavsky, confirmed Q4 2021 marks the fourth consecutive quarter that AWS has reported “revenue growth rate acceleration”.
Furthermore, the company’s performance this quarter means the company has gone from being a $51bn annualised run rate business to a $71bn one over the course of the past 12 months.
“Despite lapping 2020’s extraordinary sales growth, we continue to see an increase in customer demand and sales during the remainder of 2021, even as the economy opened back up,” said Olsavsky, in a call transcribed by financial blogging site Seeking Alpha.
The final quarter of 2021 saw AWS announce a steady stream of new customers, but it also revealed details of how several of its existing clients were planning to go even deeper into its product portfolio as part of their ongoing digital transformation efforts.
These include the US stock exchange, NASDAQ, which set out plans in late 2021 to shift all of its North American exchanges to the AWS cloud, having been a long-term user of its products for several years.
Facebook owner Meta also revealed details this quarter about its plans to run more of the infrastructure underpinning the social media conglomerate’s various entities in the AWS public cloud.
During the analyst conference call, Olsavsky also outlined the company’s commitment to increasing the “useful life” of the servers and networking equipment housed in its datacentres, as part of a push to lower its asset depreciation expenses.
As such, the firm said it plans to extend the useful life of its servers from four years to five, and its networking equipment from five years to six in the future.
“This reflects a tremendous team effort by AWS to make our server and networking equipment last longer,” he said. “We’ve been operating at scale for over 15 years and we continue to refine our software to run more efficiently on the hardware.
“This then lowers stress on the hardware and extends the useful life, both for the assets that we use to support AWS’s external customers as well as those used to support our own internal Amazon businesses.”
Single-digit growth
While AWS enjoyed another strong period of revenue and profit growth, its parent company reported its first period of single-digit growth since 2017, after a quarterly revenue of $137.4bn during Q4.
The company also saw a year-on-year downturn in profit from $6.9bn in Q4 2020 to $3.4bn during the final quarter of 2021, although its full-year results showed the firm banked more profit overall in 2021 than 2020, with its operating income for the year rising from $22.8bn to $24.8bn.
The company also saw a year-on-year downturn in profit from $6.9bn in Q4 2020 to $3.4bn during the final quarter of 2021, although its full-year results showed the firm banked more profit overall in 2021 than 2020, with its operating income for the year rising from $22.8bn to $24.8bn.
During the conference call, Olsavsky made reference to several staffing challenges the firm faced during the quarter because of the emergence of the Omicron Covid-19 variant and tight labour market conditions, which he said contributed to the firm losing productivity and seeing its operations disrupted.
“The fundamentals of our retail business are strong and we are optimistic about a number of growth businesses and a strong innovation pipeline,” he said.
