Amazon.com, Inc. released its second-quarter 2025 earnings report on Thursday, showcasing strong sales and profit growth, though tempered by lighter-than-expected guidance for the third quarter.
Overview of the earnings:
Earnings Per Share (EPS): Amazon reported an adjusted EPS of $1.68, surpassing the Wall Street consensus estimate of $1.33, as polled by LSEG. This represents a significant increase from $1.26 in Q2 2024, reflecting improved profitability.
Revenue: Net sales reached $167.7 billion, up 13% year-over-year from $148.0 billion in Q2 2024, exceeding analysts’ expectations of $162.09 billion. Excluding a $0.9 billion unfavorable impact from foreign exchange rates, revenue growth was 14%.
Key segments performance included:
- Online Stores: Sales grew 11% to $61.49 billion, beating estimates of $59.13 billion, driven by resilient consumer spending and faster delivery times.
- Amazon Web Services (AWS): Revenue increased 19% to $30.87 billion, slightly above the $30.8 billion forecast, fueled by demand for cloud computing and AI services.
- Advertising: Ad sales rose 20% to $15.7 billion, topping the $14.9 billion estimate, boosted by sponsored ads and Prime Video advertising.
- Third-Party Seller Services: Revenue grew 11% to $40.35 billion, exceeding the $38.97 billion forecast.
- Subscription Services: Sales, including Prime memberships, increased 12% to $12.21 billion, above the $11.92 billion estimate.
Operating Income:
- Operating income soared to $18.4 billion, up 20% year-over-year, reflecting cost efficiencies and high-margin growth in AWS and advertising. The operating margin improved to 11.0%, compared to 7.8% in Q2 2024.
- Net Income: Net income was $17.6 billion, or $1.68 per share, compared to $13.5 billion, or $1.26 per share, in Q2 2024, driven by strong sales and margin expansion.
- E-Commerce Resilience: Despite tariff uncertainties under the Trump administration, Amazon’s online stores saw robust 11% growth, supported by a record-setting Prime Day event in July 2025, which drove significant sales volume.
CEO Andy Jassy noted that consumers showed resilience, with some “stocking up” in anticipation of potential tariff-driven price increases.
AWS Growth: AWS, contributing 19% of total revenue, grew 19% year-over-year, driven by AI workload demand and cloud infrastructure expansion. AWS’s operating margin reached 39.5%, the highest since at least 2014, bolstering overall profitability. New AI models like Nova and custom Trainium chips enhanced AWS’s offerings, positioning it to capture AI-driven demand, though growth lagged behind Microsoft’s Azure (31%) and Google Cloud (30%).
Advertising Strength: The advertising unit was a standout, with 20% growth fueled by increased spending on sponsored ads (89% of ad agencies increased budgets, per Wedbush) and new ad formats on Prime Video and shopping carts in physical stores. This high-margin segment significantly boosted profits.