Amazon’s second-quarter results beat lofty expectations: revenue rose 13 % y/y to USD 167.7 bn and diluted EPS reached USD 1.68, far above consensus. Yet the shares slipped about 3 % in after-hours trading as investors focused on a softer-than-expected operating-income forecast and a shrinking AWS margin.
Key metrics:
- Revenue: USD 167.7 bn (+13 % y/y) | Operating margin: 11.4 %
- AWS revenue: USD 30.9 bn (+17.5 %) | AWS operating margin: 32.9 %
- North America sales: USD 100.1 bn (+11 %) | International: USD 36.8 bn (+16 %)
- Advertising revenue: USD 15.7 bn (+23 %)
- EPS: USD 1.68 vs USD 1.26 a year ago (+33 %) | Net income: USD 18.2 bn (+35 %)
- Operating income: USD 19.2 bn (+31 %) | TTM operating cash flow: USD 121.1 bn (+12 %)
- TTM free cash flow: USD 18.2 bn (–66 %) — higher AI and logistics capex
AWS segment concerns?
AWS operating margin fell to 32.9 % in Q2 2025, down 660 bp from Q1 2025 (39.5 %) and 260 bp from a year earlier (35.5 %). Management blamed a “front-loaded” wave of investments to meet generative-AI demand. Last quarter AWS launched new Blackwell GPU instances, Bedrock foundation models and agent-based developer tools such as Kiro and AgentCore. Amazon also announced multibillion-dollar data-centre expansions in North Carolina, Pennsylvania and Australia, driving higher depreciation, energy and staffing costs before full revenue kicks in.
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Management commentary
CEO Andy Jassy wrote that “AI will change every customer experience,” citing rapid adoption of Alexa+, agent-style developer tools like Kiro and their Bedrock/AgentCore integrations. Management also pointed to record savings on Prime Day, the accelerated roll-out of same- and next-day delivery, and a string of large AWS deals (PepsiCo, Airbnb, Nissan, SAP). The tone remained upbeat: heavy AI and logistics investment is already speeding innovation and boosting operational efficiency.
Outlook
For Q3 Amazon guides for net sales of USD 174–179.5 bn (+10–13 % y/y) and operating income of USD 15.5–20.5 bn. The midpoint is slightly below Wall Street’s 19.5 bn expectation but still above last year’s 17.4 bn. The company assumes a 130 bp FX tail-wind and continued AI-infrastructure capex, while flagging tariffs and macro uncertainty as risk factors.
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