Amazon tops Q2 estimates with $167.7B in revenue, $18.2B in profits; AWS up 17% to $30.9B

Amazon beat estimates for its second-quarter earnings with $167.7 billion in revenue, up 13% year-over-year, and earnings per share of $1.68, up from $1.26 in the year-ago period. Net income was $18.2 billion, up from $13.5 billion last year.

Wall Street expected $162.1 billion in revenue, and earnings per share of $1.33.

Despite topping expectations, Amazon shares were down more than 3% in after-hours trading.

The results provide a snapshot of Amazon’s business as the company invests heavily in its cloud computing business to fuel AI-related efforts and navigates economic headwinds within its retail division.

Amazon Web Services reported $30.9 billion in revenue for Q2, up 17.5% year-over-year — in line with analyst estimates.

• The company makes most of its operating profits from AWS — about $10.2 billion in the second quarter, more than half Amazon’s total operating income of $19.2 billion.
• Google and Microsoft also reported strong results for their respective cloud units this month.
• Amazon said earlier this year it expects to increase capital expenditures to more than $100 billion in 2025, up from $83 billion in 2024, with a majority going toward building out capacity for AI in AWS.

Online store sales totaled $61.5 billion, up 11%.

• Analysts were watching for impact from tariffs on the company’s retail business, which still makes up the largest portion of its overall revenue.
• In its Q1 earnings report in April, Amazon added “tariff and trade policies” to a list of factors that create uncertainty in its results, joining existing risks such as inflation, interest rates, and regional labor market constraints.
• The company’s annual Prime Day sales event took place after the quarter ended, from July 8-11, so the results aren’t included in these earnings numbers.

Here’s more details from the second quarter earnings report:

Advertising: The company’s ad business brought in $15.6 billion in revenue in the quarter, up 23% from the year-ago period.

Third-party seller services: Revenue from third-party seller services was up 11% to $40.3 billion.

Shipping costs: Amazon spent $23.3 billion on shipping in Q2, up 6%.

Physical stores: The category, which includes Whole Foods and other Amazon grocery stores, posted revenue of $5.6 billion, up 7%. 

Headcount: Amazon employs 1.54 million people, up 1% year-over-year. That figure does not include seasonal and contract workers.

• Amazon’s corporate workforce will shrink in the coming years as generative AI takes hold, Jassy told employees in a company-wide memo last month.

Prime: Subscription services revenue, which includes Prime memberships, came in at $12.2 billion, up 12%. 

Guidance: The company forecasts Q3 sales of $174 to $179.5 billion — above analyst estimates of $173.2 billion. Operating income is expected to range between $15.5 billion and $20.5 billion.