All Quiet On The Cloud Front: Amazon Remains Silent On AWS Q2 Earnings

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Despite analysts' hopes Amazon would reveal just how much Amazon Web Services contributed to the company's bottom line during its second-quarter earnings call Thursday, the Seattle-based cloud giant remained predictably quiet even as it pushes to expand its cloud computing business.

Wall Street analysts asked Amazon executives how much Amazon Web Services factored into the company's revenues, which rose by 22 percent over the second quarter of 2012, although Amazon still reported a loss of $7 million, or two cents a share, compared to the second quarter of 2012.

"We're off to a very good start and continue to invest in that business," Amazon CFO Tom Szkutak said, referring to Amazon Web Services.


[Related: Amazon Files Court Complaint Over CIA Cloud Contract]

Otherwise, Szkutak limited his response to saying that AWS business is growing and the company is launching new services and offering price reductions.

"In terms of AWS, the business is growing very, very strongly," he told analysts. "We've got a great team that's innovating on behalf of customers, launching the services, becoming more productive, which allows us to be able to lower prices," he said.

"We've had many price reductions since we started with AWS and we share that very visibly and so we're excited about that business. And even though we were off to a very good start, it's a very big opportunity and we continue to invest in that business and we're very excited to do it. We think it's a great long-term opportunity and we've great team working on it," he said.

Amazon does not break out AWS revenue. But earlier this year, Macquarie Securities Group estimated AWS revenue at $2 billion in 2012 and predicted AWS is on track for revenues of $3.8 billion this year.

Company-wide, Amazon revenue this quarter was $15.7 billion, an increase of 22 percent compared to $12.8 billion in the second quarter of 2012. Net sales grew 25 percent compared with the same time last year. Operating income decreased 26 percent to $79 million in the second quarter, compared with $107 million in second quarter 2012.

In May, Amazon received Federal Risk Authorization Management Program security certification, or FedRAMP. The certification could open the way to expanding the AWS public cloud reach to more government agencies by showing that Amazon can meet strict security and compliance requirements for running sensitive government applications and protecting data.

The cloud deal with the CIA, however, has been on hold because of a challenge by IBM.

On Thursday, Amazon filed a complaint in the U.S. Court of Federal Claims asking that the $600 million deal be allowed to move forward despite the protest sustained in part June 6 by the Government Accountability Office.

The move comes just two weeks before the CIA is due to decide whether to reopen bids for the contract awarded in January.

NEXT: Expectations For Next Quarter

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