AWS Once Again The Star Of Amazon Earnings Call

Amazon's stock price soared after the e-commerce giant presented Q2 financial results on Thursday that blew away investor expectations and documented even greater growth and profitability of its industry leading public cloud.

With Amazon Web Services profits up almost 50 percent from the previous quarter, and a whopping 407 percent year over year, Amazon delivered profits of $92 million, or 19 cents per share, contrary to expectations of a 14-cent loss.

The positive net income, stemming from $23.18 billion in revenue, sent shares up as much as 18 percent in after-hours trading -- Amazon stock, which opened Thursday at $491, was trading around $566 a share at publication time.

[Related: Amazon Q1 Earnings: AWS Is A Cash Cow]

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Amazon CFO Brian Olsavsky told investors that AWS is seeing greater demand for its cloud services while realizing more cost efficiencies.

A few months after Amazon stunned investors by revealing how profitable its cloud really was, all financial metrics of AWS' performance surged. Olsavsky said it wasn't just price driving record adoption and profits.

"Innovation is accelerating, not decelerating. We had over 350 significant new features and services, and we believe that's what resonates with customers," Olsavsky said.

"While pricing certainly is a factor, we don't believe it's always the primary factor. In fact, what we hear from our customers is the ability to move faster and more agilely is what they value," he added.

Growth of the cloud business was up 81 percent year over year, compared with 49 percent the previous quarter, in which Amazon broke out the cloud's financials for the first time. The year-over-year surge makes sense, considering it was in the second quarter of last year that Amazon significantly dropped prices.

Amazon realized $250 million more in revenue than it did the previous quarter.

And Olsavsky said usage growth was outpacing revenue growth.

Amazon will continue cutting prices, he said, as it has 49 times in the past. But while price cuts are "a fundamental part of our business model," so are innovation and capital investment, he said.

AWS further strengthens the overall company by providing the e-commerce business with its platform, a "double whammy" that doesn't show up as AWS revenue because of the interbusiness relationship, Olsavsky said.

While margins are higher than most imagined before they were revealed in the last earnings call, the long-term model for reducing prices is "to innovate and use scale and position to pass savings on to customers," the CFO said.

Amazon execs also disclosed plans to open a new India region for AWS in 2016, which is expected to further drive future revenue.