AWS reports lowest growth since it started disclosing numbers

Cloud arm accounts for around two thirds of Amazon's total operating income

Amazon Web Services (AWS) saw sales growth fall short of analyst expectations in Q3, with Amazon's share price dropping as a result.

Amazon saw sales rise 24 per cent year on year to $70bn (£55bn), while operating income fell 13.5 per cent to $3.2bn, as the internet giant boosts investment in AWS and other areas.

AWS saw revenue grow 35 per cent to $9.1bn - the lowest quarterly growth seen since Amazon started reporting AWS numbers.

The public cloud arm still counted for around two thirds of Amazon's total operating profit, at $2.3bn.

On an earnings call transcribed by Seeking Alpha, Amazon CFO Brian Olsavsky said the firm expects AWS' growth to fluctuate over the coming months, particularly in the enterprise space.

"I think we're making great progress [in] the enterprise," he said.

"It's going to be hard on revenue growth; it's going to fluctuate quarter to quarter. It's hard to predict the pace of some of the sales cycles and the enterprise migrations that companies are willing to make. Some are faster than others and some have other work to do before they can migrate.

"So there's a lot of factors at play there on the enterprise business, but we are having great success and we're adding a lot of sales force or sales representatives, especially for the enterprise market."

Olsavsky said that AWS will be one of two areas that Amazon invests in most over the coming months, along with its one-day shipping initiative.

"We continue to feel really good about not only the top line, but also the bottom line in that business," he added.

"We are investing a lot more this year in sales force and marketing personnel, mainly to handle a wider group of customers, [and] an increasingly wide group of products.

"We continue to add thousands of new products and features a year, and we continue to expand geographically."

Amazon's share price fell as much as nine per cent in after-hours trading and 4.6 per cent when markets reopened.