AWS revenue increases to $10 billion in Q1

Compared to the same quarter last year, Amazon Web Services (AWS) revenue topped $10.22 billion in the first quarter of 2020 up 33%, which gives the public cloud business a $41 billion annual run rate.

But despite its cloud growth, Amazon reported overall net income decreased to $2.5 billion in Q1, down $1 billion from the $3.6 billion that the company reported in the first quarter of 2019.

CEO Jeff Bezos has stated that the company will spend $4 billion or more — all of its expected Q2 profit — on COVID-19 related costs. Bezos said in a statement, “If you’re a shareowner in Amazon, you may want to take a seat. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe. The best investment we can make is in the safety and well-being of our hundreds of thousands of employees. I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.”

This will include spending money on gloves and face masks, deep cleaning Amazon facilities, processes that enable social distancing, higher wages for hourly employees, and “hundreds of millions to develop our own COVID-19 testing capabilities.

Amazon’s earnings cap a week that saw all three major public cloud providers report revenue growth over the most recent quarter. While AWS continues to dominate the Q1 market, No. 2 Microsoft reported its Azure public cloud revenues surged 61% year over year. While it doesn’t provide a dollar amount specific to Azure, Microsoft’s Intelligence Cloud business, which includes Azure, Windows Server, SQL Server, and GitHub increased to $12.3 billion for the quarter.

Meanwhile, Google earlier this week reported a 52% year-over-year increase in its cloud revenues to $2.78 billion for its most recent quarter.