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Amazon Earnings: Record Prime Day and AI Momentum Drive 13% Sales Growth

  • Writer: Hardik Shah
    Hardik Shah
  • Jul 31
  • 3 min read

A stylized Amazon fulfillment center with visible robots and conveyor belts, overlaid with glowing neural network lines or code snippets to represent AI.

TLDR


šŸ›’ Revenue Strength: Net sales rose 13% YoY to $167.7B, led by robust growth across AWS, international, and advertising.

šŸ“ˆ Margin Trends: Operating margin expanded to 11.4%, as North America and international segments posted strong margin gains.

šŸ”® Forward Outlook: Q3 sales guidance of $174Bā€“$179.5B reflects 10ā€“13% growth; AI, AWS capacity expansion, and delivery speed improvements key growth levers.


Business Overview


Amazon.com, Inc. (NASDAQ: AMZN) operates a global ecosystem across e-commerce, cloud computing, advertising, and consumer devices. The business spans three main segments:

  • North America:Ā Online and physical retail, Prime subscriptions, and third-party seller services.

  • International:Ā Similar operations outside the U.S., including emerging markets.

  • Amazon Web Services (AWS):Ā Cloud infrastructure and AI/ML platforms.


Amazon has deep penetration across consumer and enterprise markets, with increasing investments in AI, robotics, and logistics innovation to drive long-term growth.


Amazon Earnings Q2'25


  • Revenue:Ā $167.7B (+13% YoY; +12% ex-FX)

  • Operating Income:Ā $19.2B (+31% YoY)

  • Net Income:Ā $18.2B or $1.68 per diluted share (+35% YoY)

  • Free Cash Flow (TTM):Ā $18.2B, down from $53B a year ago

  • Operating Margin:Ā 11.4% (vs. 9.9% in Q2 2024)


By Segment:


  • North America:

    • Revenue: $100.1B (+11%)

    • Operating Income: $7.5B (+48%)

    • Margin: 7.5% (+190bps YoY)

  • International:

    • Revenue: $36.8B (+16% reported; +11% ex-FX)

    • Operating Income: $1.5B (vs. $0.3B last year)

  • AWS:

    • Revenue: $30.9B (+17.5%)

    • Operating Income: $10.2B

    • Margin: 32.9%, down from 39.5% in Q1 due to higher stock comp and depreciation


ā€œYou have a $123 billion annual revenue run rate business, and it's still early. It's a very unusual opportunity that weā€™re very bullish about.ā€Ā ā€” Andy Jassy, CEO

Forward Guidance


Management Outlook:

  • Q3 Net Sales:Ā $174B to $179.5B (+10ā€“13% YoY), includes ~130bps FX tailwind

  • Q3 Operating Income:Ā $15.5B to $20.5B (vs. $17.4B last year)

  • Continued investments expected in AI, data centers, and automation.


Risks & Opportunities:

  • Tariffs and FX remain uncertain. So far, Amazon has not seen diminished demand or broad price hikes despite tariff pressures.

  • AI-led growth and AWS backlog of $195B (+25% YoY) offer long-term visibility.


Operational Performance


Amazonā€™s logistics network saw significant improvements:

  • 30% more items delivered same/next day YoY.

  • Orders using direct lanes rose 40%.

  • Package travel distances reduced by 12%.

  • Robots now exceed 1M; DeepFleet AI improved travel efficiency by 10%.


Prime Day was Amazonā€™s biggest ever, driving record sales and signups.


Market Insights


Despite global tariff concerns, Amazon observed:

  • Strong performance in everyday essentials (ā…“ of units sold).

  • Broad adoption of perishables via same-day fulfillment nodes.

  • Independent sellers reached all-time Prime Day highs.


Advertising growth (up 22%) reflects the strength of Amazonā€™s multi-surface ad ecosystem, bolstered by DSP expansion and Disney/Roku integrations.


Consumer Behavior & Sentiment


  • High adoption of perishables: 75% of users were first-timers; 20% returned within a month.

  • Faster delivery in smaller markets is leading to increased frequency and basket size.

  • Alexa+ is gaining traction with millions of users and significantly higher engagement rates.


ā€œCustomers are advantaged shopping at Amazon because theyā€™re more likely to find lower prices on the items they care about.ā€ ā€” Andy Jassy, CEO

Strategic Initiatives


Generative AI & AWS Innovations:

  • AWS launched Bedrock AgentCore, Nova Act, and Curo IDE.

  • Trainium 2 and NVIDIA Grace Blackwell chips powering new AI workloads.

  • Expanded Kiro IDE, Strands agent tools, and deep model customization.

Retail & Fulfillment:

  • Nike returns to Amazon.

  • 4,000+ smaller U.S. communities to gain same/next-day delivery by EOY.

Space & Connectivity:

  • Project Kuiper completed two launches; commercial rollout expected late 2025 or early 2026.


ā€œOur AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and Iā€™m excited for what lies ahead.ā€ ā€” Andy Jassy, CEO

Capital Allocation


  • CapEx (Q2):Ā $31.4B, with AWS as the primary driver.

  • Cash Position:Ā $57.7B; total assets grew to $682.2B.

  • Ongoing investments in AI infrastructure, delivery automation, and robotics.

  • No dividend or buyback announcements this quarter.


The Bottom Line


Amazonā€™s Q2 results reinforce its leadership across e-commerce, cloud, and AI. Strong execution in delivery speed, margin expansion, and advertising monetization showcase operational leverage. With a $195B AWS backlog, a growing AI portfolio, and expanding logistics in underserved regions, Amazon appears well-positioned for durable growth.


Investor Watchpoints:

  • AWS margin recovery pace and capacity constraints

  • Tariff-driven cost absorption in H2

  • Acceleration in GenAI commercialization and Alexa monetization



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