Crypto trading played role in Amazon Web Services slowing growth in Q4
Quick Take
- Amazon released its fourth-quarter earnings report on Thursday and beat analyst expectations on sales.
- Crypto played a role in Amazon Web Services (AWS) slowdown in growth, which declined compared with the prior quarter.
Amazon beat analyst expectations on Thursday when it announced its fourth-quarter results for 2022, reporting a 9% increase in revenue growth.
The tech giant reported $149.2 billion in net sales, compared with an expected $145.42 billion, according to Yahoo Finance analyst estimates.
Despite the top-level win, some of Amazon's business lines experienced slowdowns, including sales for Amazon Web Services (AWS) and Amazon's online stores. Changes in crypto trading activity were partly to blame for AWS's slowdown in the fourth quarter, said Brian Olsavsky, Amazon's chief financial officer, on an earnings call.
AWS's revenue growth was 20% in the fourth quarter, compared with 27% in the third quarter. Generally, businesses that leverage AWS were trying to get their "spend down" during this economic downturn, Olsavsky said.
The company also reported a net loss of $2.7 billion for the year, compared with a net income of $33.4 billion the prior year.
RELATED INDICES
Amazon's shares jumped 7% yesterday following the earnings announcement, but are now down 5.6% in pre-market trading.
Amazon's stock fell 50% over the course of 2022, while the Nasdaq dropped about 33%. Other big tech companies have produced mixed results this earnings season. Apple reported its first revenue miss since 2016, while Meta beat expectations and received a positive response from the markets for its cost-cutting measures.
Amazon stock chart from TradingView
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