Executive Summary

Strong top-line and profit beat: Net sales $167.7B (+13% Y/Y) vs S&P Global consensus $162.1B; Diluted EPS $1.68 vs $1.32 consensus; Operating income $19.2B vs $16.8B consensus. The beat was driven by broad-based strength in North America, continued acceleration in ads (+23% Y/Y), and AWS revenue growth of 17.5% Y/Y . Q2 2025 consensus values marked with an asterisk are from S&P Global*.
AWS: Revenue run-rate >$123B with robust demand, but margins stepped down Q/Q (32.9% vs 39.5% in Q1) due to seasonal SBC, higher depreciation from capex, and FX; management reiterated commitment to AI infrastructure investment and highlighted a $195B AWS backlog (+~25% Y/Y) .
Retail execution: Record Prime Day, fastest delivery speeds ever, and 62% third‑party unit mix; International margins improved to 4.1% (+320 bps Y/Y) amid network productivity gains .
Outlook: Q3 net sales guidance $174–$179.5B (+10–13% Y/Y; ~+130 bps FX tailwind) and operating income $15.5–$20.5B; watch list includes tariff uncertainty, elevated capex cadence (Q2 cash capex $31.4B), and AWS capacity constraints that should ease gradually over “several quarters” .

What Went Well and What Went Wrong

What Went Well
- Record Prime Day and improving delivery speeds; 30% more items delivered same/next day Y/Y; expanded same/next-day to 4,000+ U.S. communities targeted by year-end .
- Ads strength and mix: Advertising services +23% Y/Y to $15.7B, supporting segment profitability; third‑party unit mix reached 62% (highest ever) .
- International profitability: Operating margin up to 4.1% (+320 bps Y/Y) with sustained 10-quarter improvement trajectory; productivity gains similar to U.S. network .
- CEO quote: “Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth” .
What Went Wrong
- AWS margin compression: AWS operating margin fell to 32.9% from 39.5% in Q1 due to seasonal SBC, higher depreciation, and FX; management expects margin variability amid elevated AI investments .
- Free cash flow TTM contracted to $18.2B from $53.0B a year ago as capex scaled; management highlights FCF is a non‑GAAP focus metric and reconciled in exhibits .
- Tariff uncertainty: No demand impact yet, but management flagged unknown end‑state and cost absorption dynamics as inventory forward-buys roll off .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025 (Actual)	Q2 2025 (Consensus)
Revenue ($B)	$148.0	$155.7	$167.7	$162.09*
Diluted EPS ($)	$1.26	$1.59	$1.68	$1.32*
Operating Income ($B)	$14.7	$18.41	$19.17	$16.84*
Operating Margin (%)	9.9%	11.8%	11.4%	—

Notes:

Actuals vs consensus: Revenue +$5.6B (~~+3.5%), EPS +$0.36 (~~+27%), Operating Income +$2.3B (~+14%). Consensus figures marked with an asterisk (*) are from S&P Global.

Segment performance (Net Sales, Operating Income)

Segment	Q2 2024	Q1 2025	Q2 2025
North America Net Sales ($B)	$90.03	$92.89	$100.07
North America Op Inc ($B)	$5.07	$5.84	$7.52
International Net Sales ($B)	$31.66	$33.51	$36.76
International Op Inc ($B)	$0.27	$1.02	$1.49
AWS Net Sales ($B)	$26.28	$29.27	$30.87
AWS Op Inc ($B)	$9.33	$11.55	$10.16

Key KPIs and mix

KPI	Q2 2024	Q1 2025	Q2 2025
Advertising Services Rev ($B)	$12.77	$13.92	$15.69
3P Seller Services Rev ($B)	$36.20	$36.51	$40.35
WW Paid Units – Y/Y Growth	11%	8%	12%
WW Seller Unit Mix	61%	61%	62%
WW Shipping Costs ($B)	$21.97	$22.50	$23.37
Operating Cash Flow TTM ($B)	$107.95	$113.90	$121.14
Free Cash Flow TTM ($B)	$52.97	$25.93	$18.18

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	Q2 2025	$159.0–$164.0B (5/1/25)	Actual: $167.7B	Above high end
Operating Income	Q2 2025	$13.0–$17.5B (5/1/25)	Actual: $19.2B	Above high end
Net Sales	Q3 2025	—	$174.0–$179.5B; +10–13% Y/Y; ~+130 bps FX tailwind	New
Operating Income	Q3 2025	—	$15.5–$20.5B	New

Management did not provide explicit guidance for margins, OpEx lines, OI&E, or tax rate; commentary emphasized FX, tariff uncertainty, and execution inputs (selection, price, speed) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Quarter (Q2’25)	Trend
AI/Technology stack (Nova/Bedrock/Trainium)	Q4’24: Trainium2, Nova, Bedrock expansions ; Q1’25: Trainium2, Bedrock model expansion, Kuiper satellites	New launches: Kiro IDE, Bedrock AgentCore, Strands Agents; NVIDIA Blackwell instances; DeepFleet; AI zones; multi‑billion‑$ GenAI biz with triple‑digit growth	Accelerating product velocity and enterprise adoption
Delivery speed & network	Q1’25: “another delivery speed record”	30% more same/next‑day items; expansion to 4,000+ communities	Sustained speed gains, wider geographic reach
AWS growth & margins	Q4’24–Q1’25: strong growth; Q1 margin 39.5%	17.5% growth; margin 32.9% on SBC seasonality, depreciation, FX	Healthy top-line; margin volatility amid capex ramp
International profitability	Progress noted	Margin 4.1% (+320 bps Y/Y); productivity gains in transport/inventory placement	Improving, more U.S.-like margins in mature markets
Tariffs/macro	Limited prior disclosure	No demand impact yet; absorption unknown as pre-buys roll off	Watchful stance; risk monitoring
Advertising	Ongoing growth	+22–23% Y/Y; Roku/Disney integrations; larger CTV footprint	Strengthening, diversified surfaces
Pharmacy/Health	—	Amazon Pharmacy +50% YTD growth	Emerging growth vector

Management Commentary

CEO Andy Jassy on AI broad impact: “Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth” .
CFO Brian Olsavsky on AWS margin drivers: “Largest Q/Q driver [of AWS margin decline]… seasonal step-up in stock-based compensation… also higher depreciation… and unfavorable FX” .
CFO on capex: “Cash CapEx… $31.4B in Q2… representative of quarterly rate for back half… AWS primary driver as we invest to support demand for our AI services” .
International profitability: “Operating margin was up 320 bps Y/Y to 4.1%… strong productivity in transportation… higher units per package and faster delivery speeds at lower costs” .

Q&A Highlights

Tariffs: No broad ASP increases or demand weakness yet; ultimate cost absorption uncertain as inventory forward-buys deplete .
AWS capacity and backlog: Backlog $195B (+~25% Y/Y); constraints primarily power/chips/servers; expected to improve over “several quarters,” not fully resolved in a couple .
Alexa+ monetization: Millions in early access; Prime members free; non‑Prime $19.99/month; opportunities in devices, commerce, and ads as usage increases .
Guidance drivers: Strong Q2 inputs (units, Prime Day), inventory placement and speed underpin Q3 revenue guide; tariffs remain a contingency .

Estimates Context

Q2 2025 vs consensus (S&P Global): Revenue $167.7B vs $162.09B*, EPS $1.68 vs $1.32*, EBIT $19.17B vs $16.84B* — broad beats across the P&L .
Q1 2025 also modestly ahead: Revenue $155.7B vs $155.12B*; EPS $1.59 vs $1.36* .
FY 2025 consensus (context): EPS 7.07*, Revenue $714.47B*; management does not guide full-year, but elevated capex and AWS margin variability may influence EPS trajectories*.

Values marked with an asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

Broad-based beat with strong execution in retail and ads, plus resilient AWS growth; the operating income beat and high-speed delivery progress are near-term positives for sentiment .
AWS remains structurally advantaged with full-stack AI offerings and large backlog, but margins will fluctuate as AI infrastructure investments ramp; capacity additions should sequentially improve supply/demand balance .
International margin inflection continues, supported by logistics productivity — a medium-term lever for consolidated margin expansion .
Ads growth (+23% Y/Y) and CTV integrations (Roku, Disney) extend optionality beyond retail, improving profit mix resiliency .
Free cash flow TTM compression reflects heavy investment cycle; management underscores FCF as a non‑GAAP focus metric with clear reconciliation .
Q3 guide implies sustained demand and execution; watch FX (+130 bps tailwind), tariff evolution, and AWS capex cadence for near-term stock drivers .
Tactical: Favor buying on any pullbacks tied to AWS margin volatility given visibility into demand/backlog and incremental capacity additions; medium-term thesis rests on retail efficiency, ads compounding, and AWS AI monetization .

Appendix: Non‑GAAP note

Amazon highlights free cash flow as a non‑GAAP measure (CFO focus); reconciliation provided in Supplemental Financial Information (Ex. 99.1) .

Citations:

Q2 2025 press release/8‑K exhibits, financials, segments, guidance .
Q1 2025 press release, prior guidance .
Q4 2024 press release (trend context) .
Q2 2025 earnings call transcript (themes, Q&A) .

AMAZON COM INC (AMZN)·Q2 2025 Earnings Summary