Q3 Earnings: Andy Jassy on why AWS growth keeps accelerating

Summary

• AWS grew 39.3% year over year in the third quarter, marking the sixth consecutive quarter of acceleration & the fastest growth rate in nearly five years.
• The AWS backlog reached $578 billion, growing at triple-digit rates year over year & remains well diversified.
• An AI accelerator is installed approximately every 14 seconds & customers consume capacity at a similar pace.
• Core compute & storage revenue grew at their fastest rates in several years.
• Operating margins are improving rapidly on the AI side despite heightened component costs & significant depreciation from capital expenditures.
• AWS is reinvesting in functionality & AI, with conviction that these investments will yield larger revenue & free cash flow than previously imagined.
• A flywheel effect exists where leading functionality, security, & operational performance drive customer adoption, which increases AI demand, which in turn drives Core AWS demand & further reinvestment.
• Approximately 85% of global IT spend remains on-premises, with a projected 10 to 20 year cycle for this equation to flip to the cloud.
• AWS has built unique cloud substitutes & AI-driven migration capabilities to move conventional workloads like Mainframes & Storage Array Networks to the cloud.
• The acquisition of DuckLabs will make DuckDB the universal SQL dialect for AWS storage & analytics, eliminating migration or portability costs between query engines.
• Fortune 500 companies spent nearly 7x more on Amazon Bedrock year over year, with total Bedrock token volume growing nearly 17x year over year.
• Bedrock is the fastest growing multi-billion dollar service in AWS history & recently added OpenAI, Kimi, GLM, & SpaceX models.
• Bedrock ensures data security by keeping inputs & outputs private, not sharing them with model providers, & creating private copies for model tuning with full encryption.
• AWS Continuum discovers, prioritizes, validates, & remediates code vulnerabilities at machine speed & is being integrated into Anthropic's Claude Code, OpenAI's Codex, & AWS's Kiro.
• Tens of thousands of customers use AgentCore, deploying 2x more agents in Q3 than the prior three quarters combined.
• Turnkey agentic services include Kiro for coding, Amazon Connect for contact center agents, Amazon Transform for migrations, & Amazon Quick for intelligent AI work companions.
• Large enterprises such as Mondelez, EchoStar, 3M, Southwest Airlines, & DXC are adopting Amazon Quick.