Web Services sales rose to $2.41 billion in the quarter, up 69 percent from the previous year. Analysts expected the segment to post $2.38 billion in revenue, according to a StreetAccount consensus estimate. Operating income for Web Services climbed to $687 million, up 187 percent, as operating margin rose to 28.5 percent.
Net revenue in North America rose to $21.5 billion, up 24 percent from the previous year. The same metric in international markets reached $11.84 billion, up 12 percent. Amazon said it took a hit of about $1.2 billion from foreign exchange rate changes.
Its operating margin as a percentage of net sales was 3.1 percent, up from 2 percent from the previous year. Operating income rose 88 percent to $1.1 billion.
"I think people want to see Amazon continue to make progress on the margin front, and margins were higher than last year, but I think after two very large beats or three very large beats, people were a little bit too optimistic about margin progress in this quarter, " said Allianz Global Investors senior portfolio manager Walter Price on CNBC's "Squawk on the Street."
Though investors may have been too hopeful about the company's margins this quarter, the long-term outlook continues to be "very good" for Amazon, Price added.