Skip to main content

Amazon’s overall earnings disappoint, but its server business is looking just fine

Amazon's AWS data center
Amazon's AWS data center Amazon Web Services
Things aren’t looking up at the company that Jeff Bezos built. During the Internet retailer’s earnings call on Thursday, the company reported disappointing profits of $1 per share in the fourth quarter of last year — far below Wall Street’s projection of $1.56. Amazon missed on revenue too, generating $35.75 billion instead of the $35.93 billion investors were expecting.

At fault were upward-creeping capital investments. Operating costs accounted for 3.1 percent of Amazon’s net sales, a climb from the third quarter 2015’s 1.6 percent. Q4 expenses totaled $34.64 billion overall, up from $28.74 billion a year ago.

The news isn’t all bad, though. Revenue was up 22 percent from the same period the year prior, when Amazon recorded net earnings of $29.3 million. And net revenue in North America climbed 24 percent to $21.5 billion while international earnings hit $11.84 billion on a 12 percent upswing. News on Amazon’s Web Services front, which comprises its cloud computing and Web hosting business, was particularly encouraging: The division notched revenue of $2.41 billion in Q4, up an impressive 69 percent year over year. It slightly beat Wall Street expectations of $2.38 billion.

Amazon’s Prime offering remains a veritable juggernaut. Memberships grew 51 in 2015, only a few percentage points under 2014’s expansion of 51 percent, and paid memberships in the U.S. grew 47 percent. The number of Prime subscribers now totals 54 million members in the United States, according to market research firm Consumer Intelligence Research Partners (CIRP).

Amazon will no doubt look to Prime for future growth — members on average spend about $1,100 on Amazon compared to $600 for nonmembers, reports CIRP. To that end, the company’s likely to maintain its longtime strategy of incentivizing sign-ups with a never-ending barrage of added benefits. Prime still gets you free two-day shipping and discounted one-day shipping, of course, but the company launched food delivery for Chicago-based Prime members earlier this week. Other perks include grocery delivery in eligible metros, a 20 percent discount on video games, unlimited photo storage, free monthly ebooks, and access to a growing library of original television, music, and movies.

Perhaps anticipating a leveling off in Prime growth, though, Amazon’s exploring new markets. Its had recent success in the hardware business after a few missteps: the company’s Fire TV set-top devices bested Chromecast, Roku, and the third-generation Apple TV in the first quarter of 2015 according to Strategy Analytics, and the company’s Alexa voice assistant-driven Echo speaker was the top-selling $100+ item on Amazon during Black Friday last year.

On the services side, Amazon’s reportedly hammering out the details of a $10 a month music subscription service — discounted for owners of an Echo speaker — to compete with Spotify, Apple Music, and others.

Editors' Recommendations

Kyle Wiggers
Former Digital Trends Contributor
Kyle Wiggers is a writer, Web designer, and podcaster with an acute interest in all things tech. When not reviewing gadgets…
Semrush Free Trial: Try the advanced online marketing tool
how to clean up your keywords and refresh seo strategy semrush logo feature image large

It takes a lot to run a business, let alone start one. There is so much more to establishing an online business than just registering a domain, making a website -- even with a Wix free trial -- and calling it a day. Potential customers must be made aware that your business exists, and for that to happen in the digital age, you need to make use of modern online marketing tools. That's a broad field, though, encompassing keyword research, search engine optimization, data analytics, and other elements that can be pretty technical (not to mention intimidating) to the uninitiated. Enter Semrush, one of the best online marketing suites that makes all that stuff easy -- but it's not free. Maybe you want to give it a try before signing up for a premium subscription? If that's the case and you are looking for a Semrush free trial, then you're in luck. Read on. We have all the details for you, below.

Is there a Semrush free trial?

Read more
No W-2s? 2023 is the year of QuickBooks Online
Intuit helping construction business

This content was produced in partnership with Intuit.
For the average employed person, tax season is a relative breeze. Pop in some W-2 information and watch the refunds accumulate. At least that's what it seems like from the outside, for the increasing number of us who make money via freelancing, side hustles, and small businesses. For us, tax season can be a real headache and the endless forms for dozens of income streams can feel like a minefield.

What's worse is that guidance has never been so terrible. Established businesses have tax-prep procedures built up over the years and the resources to hire teams to get the nasty bits done, while millennials – and our younger, Gen Z friends – feel left in the dust. Doing a little Google Sheets data entry and praying that PayPal won't make any mistakes with their new reporting requirement is rough enough. Trying to put this information into unfeeling, computerized boxes that don't always match 1-to-1 with what you are wanting is enough to warrant full-on panic.

Read more
If You Own a Business, Here’s Why You Should Be Using 1Password
password management image from Unsplash

This content was produced in partnership with 1Password.
From QuickBooks to WordPress, there's an account for that. For entrepreneurs and business owners, it can pose a challenge. Using the same password for everything can save you a massive memory headache, but is the equivalent of putting all of your account eggs in one password basket. Or, you can make new passwords for everything and hope they stick in your mind for when you need them. Perhaps you can even jot them down in a notebook. But, with this approach, especially when you're talking about business credentials, you're always one mishap or stolen notebook away from a crisis.

Enter: The password manager.

Read more