It's earnings season, and the quarterly results posted by Amazon.com (AMZN 1.49%) had its shareholders doing a happy dance. The online retailer booked revenue of $25.4 billion and net income of $79 million, both of which comfortably beat Wall Street's estimates. But which business segment in particular was responsible for the company's impressive quarter?
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Sean O'Reilly: The earnings came out, I was sitting at the hotel that morning, and a big, wry smile cracked across my face. I was like "Dammit, Jeff Bezos!"
Dylan Lewis: Happy to be a shareholder, I'm sure, for a lot of Fools. Revenue of $25.4 billion, up 23% year over year, and up 30% if you exclude some of the unfavorable impact from some foreign exchange on the currency side.
O'Reilly: That darn dollar.
Lewis: Yeah. Net income, $79 million, or $0.17 per share, which is up from a loss of $0.95 per share during the Q3 of 2014.
O'Reilly: Hold on, Dylan. Does that say "net income"?
Lewis: Yes. Analysts were expecting a loss of $0.17 per share and revenue of about $24.9 billion.
O'Reilly: So they were way off.
Lewis: They beat on both. For them to be net income positive is shocking.
O'Reilly: It's a big deal.
Lewis: Not something that we're used to seeing from Amazon.
O'Reilly: Net income, as we both know, does not actually matter to a company like Amazon. Let's talk about operating income, cash flow.
Lewis: Yeah. Operating income was well above the prior guidance. It came in at $406 million, a swing of almost $1 billion over last year.
O'Reilly: I can't even whistle loud enough for that.
Lewis: Yeah, shocking. Of course, the stock popped about 10% after hours.
O'Reilly: Naturally, because that's what Amazon does.
Lewis: All in all, destroyed.
O'Reilly: I think I know why. Is it because of AWS?
Lewis: It's because of AWS. They started breaking out Amazon Web Services about two reports ago. It's been less than a year that we've been able to track it.
O'Reilly: In fact, when they started talking about it separately, the stock popped.
Lewis: The fact that they identified it as a business segment and mentioned it was like, "This is great." AWS just continues to grow. They had a revenue of $2 billion, growing 78% year over year.
O'Reilly: Okay. Real quick, just for our listeners that may or may not be familiar, what is AWS in four sentences?
Lewis: It's basically web hosting and cloud aspect of the business server providing for other companies. They're providing all the infrastructure for companies to run their tech.
O'Reilly: So they own a bunch of servers in a warehouse.
Lewis: Yes, basically.
