Name: Amazon reports $96.1 billion in Q3 2020 revenue: AWS up 29%, subscriptions up 33%, and ‘other’ up 51%
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Amazon reports $96.1 billion in Q3 2020 revenue: AWS up 29%, subscriptions up 33%, and ‘other’ up 51%

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Amazon today reported earnings for its third fiscal quarter of 2020, including revenue up 37% to $96.1 billion, net income of $6.3 billion, and earnings per share of $12.37 (compared to revenue of $70.0 billion, net income of $2.1 billion, and earnings per share of $4.23 in Q3 2019). North American sales were up 39% to $59.4 billion, while international sales grew 37% to $25.2 billion.

This is Amazon’s second full quarter during the coronavirus pandemic. Given the company’s leadership position in online retail and the cloud, its results are a bellwether for the industry. In Q2, Amazon set aside “$4.0 billion in costs related to COVID-19,” followed up by $2.0 billion in Q3. For Q4, Amazon set aside another “$4.0 billion of costs related to COVID-19.” The company does not want to be seen as benefiting too much from the pandemic — its $5.2 billion in quarterly profit in Q2 was the largest ever in its 26-year history. It broke that record again in Q3 with $6.3 billion in quarterly profit, up 200% year-over-year.

In a statement, Amazon CEO Jeff Bezos highlighted that Amazon had “created over 400,000 jobs this year alone.” Indeed, Amazon’s headcount jumped 28% from 876,800 employees in Q2 to 1,125,300 in Q3 (up 50% year-over-year).

Analysts had expected Amazon to earn $92.7 billion in revenue and report earnings per share of $7.41. The retail giant thus easily beat on both. The company’s stock was up 1.5% in regular trading and down 2% in after-hours trading. Amazon gave fourth quarter revenue guidance in the range of $112.0 billion and $121.0 billion, compared to a consensus of $112.3 billion from analysts. Bezos noted “more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season.”

AWS settles at sub-30% growth
In Q1, Amazon Web Services (AWS) passed the $10 billion milestone, even as growth continued to slow. In Q2, AWS growth fell to 29% — the first sub-30% growth rate since Amazon started breaking out AWS numbers. It stayed there, at 29%, this past quarter. The growth rate has been falling steadily for the past two years, and while COVID-19 accelerated the trend, at least Q3 wasn’t worse than Q2.

AWS is the cloud computing market leader, ahead of Microsoft Azure and Google Cloud. High-percentage growth cannot continue unabated, but for a market leader, sales growth of 29% to $11.6 billion is still impressive.

AWS accounted for about 12.1% of Amazon’s total revenue for the quarter, which is on the lower end but in line with Q2. “We’re seeing a lot of customers who are now moving to the cloud at a faster pace,” CFO Brian Olsavsky said on the Q3 earnings call.

Subscriptions and “other” (ads)
Subscription services were up 33% to $6.58 billion. This segment mainly constitutes Amazon Prime and its 150 million paid members. Amazon highlighted Prime Day, which took place this year on October 13-14 (and doesn’t fall into Q3 results). Instead of saying this year’s event was its “biggest in history,” as Amazon has said in past years, the company described it as “the two biggest days ever for small and medium businesses in Amazon’s stores.” A company spokesperson declined to comment on how Prime Day 2020 compared to Prime Day 2019.

Amazon’s “other” category, which mostly covers the company’s advertising business, was up 51% to $5.4 billion in revenue. The company knows plenty about what its customers want to buy, or don’t want to buy, and so its advertising business continues to pay dividends. As the company rakes in online shopping dividends from the pandemic, its advertising business benefits as well.

As always, Alexa was mentioned many times (19, to be exact) in the company’s press release. Amazon still won’t break out the voice assistant in its earnings reports. In Q1, the company noted that Alexa “can now answer tens of thousands of questions related to COVID-19.” It didn’t say anything similar for Q2 or Q3. Amazon did, however, highlight new Echo devices unveiled during its September showcase. That event reminded us that the company is also in the business of surveillance-as-a-service.

Amazon today reported earnings for its third fiscal quarter of 2020, including revenue up 37% to $96.1 billion, net income of $6.3 billion, and earnings per share of $12.37 (compared to revenue of $70.0 billion, net income of $2.1 billion, and earnings per share of $4.23 in Q3 2019). North American sales were up 39% to $59.4 billion, while international sales grew 37% to $25.2 billion.

This is Amazon’s second full quarter during the coronavirus pandemic. Given the company’s leadership position in online retail and the cloud, its results are a bellwether for the industry. In Q2, Amazon set...

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Emil Protalinski writes breaking tech news. He has previously written for The Next Web, CNET, ZDNet, Techspot, Ars Technica, and Neowin.

https://venturebeat.com/author/emil-protalinski/

Emil Protalinski

VentureBeat is an American technology website headquartered in San Francisco, California, United States. It publishes news, analysis, long-form features, interviews, and videos. The VentureBeat company was founded in 2006 by Matt Marshall, an ex-correspondent for The Mercury News. In March 2009, VentureBeat signed a partnership agreement with IDG to produce DEMO Conference, a conference for startups to announce their launches and raise funding from venture capitalists and angel investors.

Amazon reports $96.1 billion in Q3 2020 revenue: AWS up 29%, subscriptions up 33%, and ‘other’ up 51%

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