Another blockbuster quarter for Amazon Web Services masked one of the worst operating losses in the recent history of the rest of the company.
For the company as a whole, Amazon reported total operating profit of $3.5 billion for the fourth quarter of 2021 in its financial results Thursday afternoon.
However, that total includes $5.3 billion in operating income from AWS. Subtracting those cloud operating profits from the total shows that the rest of Amazon effectively posted an operating loss of $1.8 billion.
The numbers show yet again what a financial juggernaut AWS has become. Overall revenues for AWS were $17.8 billion, up 40%. The AWS operating profit of $5.3 billion was an increase of 49% from the same quarter a year ago.
Brian Olsavsky, Amazon’s chief financial officer, told analysts that the AWS growth resulted from factors including an increase in sales and marketing resources and pent-up demand for cloud services from some corporate customers.
The loss in the rest of the business shows how much Amazon is spending in its e-commerce business in the latter days of the pandemic to ensure fast delivery times despite labor shortages, supply chain constraints and inflation. Amazon said costs were about $4 billion higher than normal in the quarter due to those issues.
Prior to 2018, it wasn’t unusual for AWS to effectively prop up Amazon’s broader profits in this way, but the e-commerce side of the business has been operating at a profit since then — until the last two quarters.