Executive Summary

Solid top-line acceleration with AWS-led growth and broad-based retail strength. Q3 revenue rose 13% YoY to $180.169B, exceeding S&P Global consensus, and diluted EPS was $1.95, also well above consensus; operating income of $17.4B included $4.3B in special charges (FTC settlement and severance), implying $21.7B ex-charges .
AWS re-accelerated to 20.2% YoY growth ($33.006B revenue) with $11.434B operating income; management highlighted rising AI demand, Trainium adoption, and a capacity build-out of +3.8 GW over 12 months, with backlog at ~$200B by quarter end and run-rate at $132B .
Q4 2025 guide: net sales $206–$213B (+10–13% YoY including ~190 bps FX tailwind) and operating income $21–$26B (vs $21.2B in Q4’24); assumes no additional acquisitions/restructurings/legal settlements .
Likely stock reaction catalysts: AWS growth re-acceleration and capacity confidence; strong advertising momentum; robust Q4 guidance; and clarifications that large non-operating Anthropic gains boosted net income but are non-core .

What Went Well and What Went Wrong

What Went Well

AWS re-acceleration and AI pipeline: AWS grew 20.2% YoY to $33.006B with $11.434B OI; CEO cited rising demand for Bedrock, agents (AgentCore, Strands), and Trainium capacity; capacity additions (+3.8 GW LTM) and backlog ~$200B point to durable growth .
North America/International execution and speed: NA revenue +11% to $106.267B; International +14% to $40.896B (10% ex-FX); management cited improved inventory placement, faster delivery, and rural network expansion; perishable same-day grocery scaling to >1,000 cities, aiming for 2,300 by year-end .
Advertising strength: Ad revenue reached $17.703B (+24% YoY), with DSP growth and CTV partnerships (Netflix, Spotify, SiriusXM); live sports inventory traction exceeded upfront expectations .

Quote: “AWS is growing at a pace we haven’t seen since 2022… Backlog grew to $200 billion… We’ve been focused on accelerating capacity – adding more than 3.8 gigawatts in the past 12 months.” — Andy Jassy, CEO .

What Went Wrong

One-time charges pressured reported operating income: $2.5B FTC legal settlement (NA segment) and $1.8B severance reduced OI by $4.3B; absent these, OI would have been $21.7B .
North America margin compression: NA operating income fell to $4.789B (margin 4.5%) vs $5.663B in Q3’24; excluding FTC and severance, NA OI would have been $7.3B (6.9% margin), suggesting underlying strength but sensitivity to special items .
Heavy capex and depreciation headwinds: Cash capex was $34.2B in Q3 and $89.9B YTD, primarily for AWS GenAI capacity; CFO flagged depreciation pressure on AWS margins as assets enter service, with capex expected ~+$125B in 2025 and to increase in 2026 .

Financial Results

Consolidated P&L vs Prior Quarters

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$155.667	$167.702	$180.169
Operating Income ($B)	$18.405	$19.171	$17.422 (incl. $4.3B charges)
Operating Margin (%)	11.8%	11.4%	9.7%
Net Income ($B)	$17.127	$18.164	$21.187
Diluted EPS ($)	$1.59	$1.68	$1.95

Notes: Q3 operating income included $2.5B FTC settlement and $1.8B severance charges; ex-charges OI would have been $21.7B .

Actuals vs S&P Global Consensus

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue – Actual ($B)	$155.667	$167.702	$180.169
Revenue – Consensus ($B)	$155.120*	$162.093*	$177.761*
EPS – Actual ($)	$1.59	$1.68	$1.95
EPS – Consensus ($)	$1.362*	$1.321*	$1.556*

Values retrieved from S&P Global*.
Highlights: Q3 revenue and EPS both beat; Q2 and Q1 also beat on both metrics.

Segment Breakdown

Segment	Q1 2025 Revenue ($B)	Q2 2025 Revenue ($B)	Q3 2025 Revenue ($B)	Q1 2025 OI ($B)	Q2 2025 OI ($B)	Q3 2025 OI ($B)
North America	92.887	100.068	106.267	5.841	7.517	4.789
International	33.513	36.761	40.896	1.017	1.494	1.199
AWS	29.267	30.873	33.006	11.547	10.160	11.434

AWS margins (% of segment sales): Q1 39.5% , Q2 32.9% , Q3 34.6% .

KPIs and Mix

KPI	Q1 2025	Q2 2025	Q3 2025
Advertising Services Revenue ($B)	13.921	15.694	17.703
3P Seller Services Revenue ($B)	36.512	40.348	42.486
Subscription Services Revenue ($B)	11.715	12.208	12.574
Online Stores Revenue ($B)	57.407	61.485	67.407
WW Paid Units – YoY Growth (%)	8%	12%	11%
WW Seller Unit Mix (%)	61%	62%	62%
Operating Cash Flow TTM ($B)	113.903	121.137	130.691
Free Cash Flow TTM ($B)	25.925	18.184	14.788
Cash CapEx ($B)	—	31.4 (CFO)	34.2 (CFO)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($B)	Q4 2025	n/a	$206–$213; +10–13% YoY; ~+190 bps FX tailwind	New
Operating Income ($B)	Q4 2025	n/a	$21–$26 (vs $21.2 in Q4’24)	New
Assumptions	Q4 2025	n/a	No additional acquisitions/restructurings/legal settlements assumed	New
Net Sales ($B)	Q3 2025	$174–$179.5	Actual $180.169	Beat vs guide
Operating Income ($B)	Q3 2025	$15.5–$20.5	Actual $17.422 (incl. charges); $21.7 ex-charges	Above high-end ex-charges

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AWS growth & capacity	Q1: AWS +17% YoY; Nova/Bedrock expansion; Kuiper progress . Q2: AWS +17.5% YoY; supply constraints easing; backlog $195B; capex ramp; margins pressured by SBC/depreciation .	AWS +20.2% YoY; backlog ~$200B; +3.8 GW power added LTM; Trainium 2 fully subscribed; Bedrock/AgentCore/Strands momentum .	Accelerating
GenAI/Agents (AgentCore, Strands)	Q2 launched Strands & AgentCore; rising customer interest .	Strong uptake; enterprises using AgentCore; Quick Suite/Connect traction; coding IDE adoption .	Scaling up
Capex/Depreciation	Q2 cash capex $31.4B; 2025 capex heavy; margin variability expected .	Q3 cash capex $34.2B; 2025 capex ~ $125B; likely higher in 2026; AWS margin impact from depreciation .	Increasing investment
Retail speed & grocery	Q2: record speeds; rural expansion plan; perishable same-day pilot scaling .	Perishable same-day in >1,000 cities; aiming 2,300 by YE; rural access +60% last 4 months .	Expanding
Tariffs/macro	Q2: no meaningful ASP increases or demand impact yet; high uncertainty .	No new macro change cited beyond FX tailwind in Q4 guide .	Watching
Advertising/CTV/DSP	Q2: DSP deals (Roku, Disney), strong ad growth .	Ads +24%; Netflix/Spotify/SiriusXM inventory via DSP; live sports upfronts exceeded expectations .	Strengthening
Organization/headcount	—	Headcount actions are cultural/efficiency-driven; aim to be lean/flat .	Streamlining

Management Commentary

“Excluding… two special Q3 expenses: $2.5B for an FTC settlement and $1.8B for severance costs… operating income would have been over $21B.” — Andy Jassy .
“AWS revenue… $33B, up 20.2% YoY… annualized run rate of $132B… Expect AWS operating margins to fluctuate over time, driven by investments.” — Brian Olsavsky .
“We’ve been focused on accelerating capacity… adding more than 3.8 gigawatts in the past 12 months… backlog grew to $200 billion.” — Andy Jassy .
“Advertising revenue was $17.7B, and growth accelerated for the third consecutive quarter… DSP is growing really quickly… partnerships with Netflix, Spotify, SiriusXM.” — Management .

Q&A Highlights

AWS capacity and Trainium: Capacity ramping (+3.8 GW LTM; +1 GW expected in Q4); Trainium 2 fully subscribed and multi-billion dollar business; Trainium 3 preview by YE with broader customer base .
Groceries and format: Perishable same-day is a “game changer”; >$100B GMV grocery business even excluding Whole Foods/Fresh; DAU/retention improving as service expands to 1,000 cities, targeting 2,300 by YE .
Headcount and culture: Recent reductions are to flatten organization and increase ownership/speed; not primarily AI- or finance-driven .
Robotics/automation: >1M robots; continued investment to improve safety, productivity, speed, and cost to serve .
Agentic commerce: Long-term positive; current third-party agent UX lacking (personalization/pricing/delivery accuracy), but partnerships likely as experience improves .
Advertising mix: Broad-based growth across offerings; DSP momentum aided by feature parity and premium CTV supply (Roku, Netflix, Spotify, SiriusXM) .

Estimates Context

Q3 2025 beats: Revenue $180.169B vs $177.761B consensus; EPS $1.95 vs $1.556 consensus (both beats)* .
Q2 2025 beats: Revenue $167.702B vs $162.093B*; EPS $1.68 vs $1.321* (beats) .
Q1 2025 beats: Revenue $155.667B vs $155.120B*; EPS $1.59 vs $1.362* (beats) .

Values retrieved from S&P Global*. Management noted that ex-charges, Q3 operating income exceeded the high end of guidance by $1.2B, which may drive upward estimate revisions for AWS growth and consolidated margins into Q4 .

Key Takeaways for Investors

AWS growth re-accelerating with large AI tailwinds and capacity build-out; backlog and capex support multi-year revenue durability despite near-term margin variability from depreciation .
Underlying retail profitability resilient; NA margin impacted by one-time FTC/severance, but ex-charges trajectory remains favorable with continued speed and cost improvements .
Advertising is a second engine of profit growth; DSP plus premium CTV supply (Netflix/Spotify/SiriusXM) expanding TAM and performance attribution .
Q4 guide solid (+10–13% YoY) with higher OI range vs Q4’24; FX tailwind noted; setup into holidays appears constructive .
Anthropic-related non-operating gains boosted net income; investors should focus on operating income and AWS KPIs for core performance .
Capex intensity is high (~$125B in 2025; likely higher 2026) to meet AI demand; long-term ROIC case hinges on monetizing Trainium/Bedrock/agents and maintaining share of cloud migrations .
Watch items: timing/magnitude of AWS capacity additions, Trainium 3 ramp, depreciation cadence on margins, perishable grocery adoption/retention, and ad revenue sustainment across Prime Video live sports .

Citations:

Q3 2025 8-K press release and financials:
Q3 2025 earnings call transcript:
Alternate Q3 transcript for redundancy/quotes:
Q2 2025 8-K and call:
Q1 2025 8-K:

AMAZON COM INC (AMZN)·Q3 2025 Earnings Summary