AWS is key to the company’s profit increase.
Amazon have posted a record profit of £1.91 billion in their second quarter results last night, a massive increase of 1,286 percent compared to the £150 million it made in Q2 of 2017.
Interestingly, this huge boon in profits occurred as the company didn’t see an increase on revenue from the last quarter, but did see a 39 percent rise year-on-year.
The expansion in profit margins is largely due to the sale of products that are not connected to Amazon’s e-commerce offering.
Out of £4.65 billion in Amazon Web Services revenue, the company managed to draw off £1.25 billion in profit.
The stock markets reacted favourably to the results and at the time of writing its shares rose by three percent.
See Also: This is of course in stark contrast to the 20 percent drop we saw Facebook take yesterday.
Investors at Amazon have confidence in the company as it grows new offerings on its AWS platform.
Investors Conference Call
During the investor conference call last night, the board discussed how they were making changes within the company to drive efficiencies.
They believe that it is the reduction of non-efficient methods and streamlining of processes which have seen them increase profits this quarter, but this internal examination is also why revenue has not increased on last quarter.
Amazon CFO Brian Olsavsky told one investor who asked about the purchasing of small start-ups and their integration into AWS that Amazon is: “Looking for well-run companies.”
While he also noted earlier in the conversation that they are: “Continuing to invest on a lot of fronts.”
My Olsavsky did note that in this quarter they looked internally for a lot of the roles they filled, while they focuses on making what they had operationally more efficiently.
Alexa the Trojan Horse
It seems for Amazon they want to keep they virtual assistant Alexa in the forefront no matter how good the numbers are.
In their official press release for the Q2 results, CEO Jeff Bezos only comment was very much Alexa related: “We want customers to be able to use Alexa wherever they are.”
“There are now tens of thousands of developers across more than 150 countries building new devices using the Alexa Voice Service, and the number of Alexa-enabled devices has more than tripled in the past year.”
Mark Hung, Research VP with Gartner told Computer Business Review that: “Amazon continues to use Alexa as a Trojan horse to expand its platform and other businesses.
“It was announced that Alexa now has more than 45,000 skills, in addition to 13,000 devices from 2,500 brands.”
Mr Hung also notes that Amazons AWS offering is also driving its creation of IoT devices and edge computing.
He told us that: “The company also continued to expand its IoT product offerings with AWS Snowball Edge, which provides enterprises with a viable alternative for performing large data transfers on the edge.”