Amazon turned a profit in the holiday fourth quarter, but it came in well below analyst expectations, sending shares down more than 10 percent in after-hours trading.
Amazon recorded a record quarterly profit of $482 million, or $1 a share, well under the $1.56 number analysts were expecting. Amazon also missed slightly on revenue expectations, registering $35.75 billion in revenue compared to the $35.93 billion average estimate.
At least one bright spot? Amazon’s AWS cloud computing business met expectations with $2.4 billion in revenue and continues to show increased margins. The unit’s operating profit margin was 29 percent, up sequentially from 25 percent in the third quarter, 21 percent in Q2 and 17 percent in Q1.
The company said Prime memberships grew 51 percent in 2015, decelerating slightly from 53 percent growth in 2014. Paid U.S. Prime membership grew 47 percent in 2015. Prime members typically pay $99 a year in the U.S. for unlimited two-day shipping, and a growing list of other perks such as music and video streaming, and unlimited photo storage.
By some estimates, Amazon could have as many as 54 million Prime members in the U.S.; the company has said only that it has “tens of millions” of members.
Despite the miss, the fourth quarter marked the third straight quarter in which Amazon turned a profit. The company has built a reputation as a money loser, even though it often invests profits into new initiatives. Still, the string of profitable quarters shows that the company can expand margins as its retail and AWS platforms eat up market share.
Here’s how the company’s quarterly profits have fared against analyst estimates:
This article originally appeared on Recode.net.