Amazon’s earnings show why Andy Jassy is now in charge

As stores reopen and in-person shopping ramps up again, the surge in demand for Amazon purchases has finally begun to abate — not a lot of, to be clear, but just enough to frustrate investors.

From April to June, Amazon saw revenue of $113.1 billion in products and services, a 27 percent year-over-year growth. That’s a huge amount of money, but investors were hoping for a little more, about $115 billion, and Amazon’s stock has been falling since the numbers were released in May. its earnings report for the second quarter of 2021 this afternoon.

But there was one place that investors are happy about, and it helps explain the company’s recent board changes. Amazon Web Services had net sales of $14.8 billion, an increase of 37 percent year-over-year. That substantial growth surpassed Amazon as a whole and AWS’ previous Q2, when it grew 29 percent. It was the only corporate bright spot that Andy Jassy, ​​Amazon’s new CEO, found worthy of mention in his release comments, saying, “We’ve seen AWS’s growth accelerate again.”

Jassy was in charge of AWS until July 5, when he was elevated to CEO to replace Jeff Bezos, who left to go bowling food in space. The cloud division has always been a powerhouse for Amazon, accounting for the bulk of the company’s operating revenues. While growth had slowed during the pandemic, the division now appears to be accelerating again, as Jassy said.

As for the rest of Amazon, investor concerns about a company that made just $113.1 billion in a three-month period may come from two places. First, Amazon grew much faster last year — it saw net sales grow 40 percent this time around in 2020, up from 27 percent this year — although you may recall that a certain global pandemic was ramping up in those months, which is a boom. in online shopping. But second, the other tech giants did quite well this quarter by exceeding investor expectations, leaving Amazon a maverick.

Prime Day was also held in June this year, which likely helped push those numbers up. Amazon said 250 million items were purchased, more than any previous Prime Day.

There are signs that the growth of online shopping as a whole is starting to slow down. Growth is still growth, but it means Amazon and its investors can’t expect to see huge profits like those in 2020 as much of the world tried to avoid indoor shopping.

Jassy hasn’t given any indication of how he’ll run the company differently than Bezos, but today’s numbers help show why he’s in charge. AWS remains a bright spot and the leader now has the rest of Amazon to take care of.