The big three cloud providers have posted their Q1 2022 earnings results, and it seems the growth times are still going strong.

Amazon, Microsoft, and Google all posted growth in their cloud units. But not all is rosy: AWS’ growth couldn’t stop Amazon as a whole posting a loss for the quarter, while GCP is still losing money on a regular basis.

– Wikimedia Commons

AWS: Another big quarter, can’t keep Amazon as a whole in profit

AWS posted net sales of $18.44 billion for the quarter, with an operating income of $6.5 billion – sales for Q4 2021 were $17.8bn while income was $5.3bn.

AWS achieved close to $70 billion in net sales over the last 12 months. Despite this, Amazon as a whole posted a net loss of $3.8 billion for the quarter.

“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” said Andy Jassy, Amazon CEO. “With AWS growing 34 percent annually over the last two years, and 37 percent year-over-year in the first quarter, AWS has been integral in helping companies weather the pandemic and move more of their workloads into the cloud.”

In the subsequent earnings calls, CFO Brian Olsavsky said that Amazon’s capital investments were $61 billion on the trailing 12-month period ended March 31, of which around 40 percent of that went to infrastructure, primarily supporting AWS.

David Fildes, AWS Director of Investor Relations, noted that the company had seen “some volatility” in utility pricing for energy costs in operating AWS data centers.

Microsoft: Azure still growing

Revenue in the company’s ‘Intelligent Cloud’ unit, which includes Azure alongside Office 365 and other services, was $19.1 billion and increased 26 percent year-on-year. It noted server products and cloud services revenue increased 29 percent, driven by Azure and other cloud services. Revenue the previous quarter was $18.3 billion.

Across the whole company, Microsoft posted revenues of $49.4 billion, operating incoming of $20.4bn, and net income of $16.7bn.

“Going forward, digital technology will be the key input that powers the world’s economic output,” said Satya Nadella, chairman and chief executive officer of Microsoft. “Across the tech stack, we are expanding our opportunity and taking share as we help customers differentiate, build resilience, and do more with less.”

“Continued customer commitment to our cloud platform and strong sales execution drove better than expected commercial bookings growth of 28 percent and Microsoft Cloud revenue of $23.4 billion, up 32 percent year over year,” added Amy Hood, executive vice president and chief financial officer of Microsoft.

In the earnings call, Nadella noted the number of $100 million-plus Azure deals more than doubled year-over-year.

Google Cloud: Growing but still in the red

Google Cloud revenues – which includes both GCP and Workspace – for Q1 2022 reached $5.82 billion, up from $5.54bn the previous quarter and from $4bn in Q1 2021. The unit posted a $931 million loss for the quarter – higher than the previous quarter’s $840 million but slightly lower year-on-year.

Company-wide revenues reached $68 billion for the quarter, with a net income of $16.4bn.

Sundar Pichai, CEO of Alphabet and Google, said: “Q1 saw strong growth in Search and Cloud, in particular, which are both helping people and businesses as the digital transformation continues. We’ll keep investing in great products and services, and creating opportunities for partners and local communities around the world.”

Ruth Porat, CFO of Alphabet and Google, said: “We are pleased with Q1 revenue growth of 23 percent year over year. We continue to make considered investments in Capex, R&D, and talent to support long-term value creation for all stakeholders.”

In the earnings call, Porat noted that the company’s total cost of revenues for the quarter were $29.6 billion, also up 23 percent.

“The biggest factors here were: costs associated with data centers and other operations; followed by content acquisition costs, primarily driven by costs for subscription content and then costs for YouTube’s advertising-supported content,” she said.

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