Amazon Web Services (AWS) has reported a 19% year-on-year (YoY) increase in revenue for the second successive quarter in its latest financial results, covering the three months to 31 December 2024.
The company reported a Q4 revenue of $28.8bn, up from $24bn during the same quarter in 2023, and reported an uptick in profit from $7.1bn in Q4 2023 to $10.6bn in 2024.
The results suggest the company is continuing to the ride the wave of the “significant reacceleration” in its growth, with the company saying it was reaping the benefits from when it posted its third-quarter results in November 2023.
At the time, the company credited this trend with the fact that enterprises were increasingly turning their attention to expanding their use of its public cloud technologies, having spent a significant chunk of 2023 scaling back their off-premise migration plans due to macroeconomic pressures.
The public cloud giant’s full-year results provided further evidence of this trend, with the company reporting a 19% YoY uptick in revenue to $107.6bn, and a swing back to profitability having banked an operating income of $39.8bn for 2024 after making a loss of $2.7bn in 2023.
Andy Jassy, president and CEO of Amazon, described the final quarter of 2024 as being one of “remarkable innovation” for AWS, following the roll-out of new artificial intelligence (AI)-enabling chips and foundation models, in the company’s financial statement.
During a conference call with analysts, transcribed by financial news site The Motley Fool, Jassy said the company is anticipating some ups and downs in AWS’s fortunes over the coming years, but – on the whole – he is optimistic that its cloud will be underpinning a large portion of the world’s AI workloads.
“AWS is a reasonably large business by most standards, and though we expect growth will be lumpy over the next few years as enterprise adoption cycles, capacity considerations, and technology advancements impact timing, it’s hard to overstate how optimistic we are about what lies ahead for AWS’ customers and business,” said Jassy.
“And while it may be hard for some to fathom a world where virtually every app has generative AI infused in it … and most companies having their own agents that accomplish various tasks and interact with one another, this is the world we’re thinking about all time. And we continue to believe that this world will mostly be built on top of the cloud with the largest proportion of it on AWS.”
The positive impact AI adoption is having on AWS’s financial results has been a recurring theme in recent quarters, but Jassy also stated on the call that AWS remains focused on helping companies modernise their infrastructure estates and migrate them from on-premise environments to the public cloud.
On this point, he name-checked a number of new agreements the company has signed where cloud migrations remain a core focus, which has seen it add a number of customers to its roster.
Either way, building out the underlying datacentre infrastructure to accommodate the growing demand for public cloud and AI workloads will incur costs, with the company reporting capital investment spend of more than $26bn during the final quarter.
It also anticipates that this will be representative of its capital expenditure trends throughout 2025, said Amazon chief financial officer Brian Olsavsky, with AWS on course to spend around $100bn on infrastructure over the coming 12 months.
“Similar to 2024, the majority of the spend will be to support the growing need for technology infrastructure,” said Olsavsky.
Lee Sustar, principal analyst at IT market watcher Forrester, said AWS customers will be pleased to hear of the company’s infrastructure investment plans, but the results left investors underwhelmed.
“AWS’s increase in annual revenue of 19 percent in 2024 would be a cause for celebration in most companies, but the expectations around the AI boom meant that investors were disappointed,” he said.
“Amazon CEO Andy Jassy used the call to highlight that existing equipment will be retired ahead of schedule, with a big hit to 2025 operating income, in addition to ongoing big investments to support the buildout for AWS, although that will result in lower operating margins. Investors may be impatient about that, but AWS customers will welcome the continued investments.”
