Amazon continues to anchor its e-commerce platform on broader selection, lower prices, cost efficiency, and faster delivery. It is also highly bullish on AI. The overall business is supported by its higher-margin AWS segment. Meanwhile, the international business is showing strong profit progression, and the North America segment continues to gain operating leverage from logistics investments.
| Financial indicators | Q2 2024 (US$ million) | Q2 2025 (US$ million) | Percentage change |
| Revenue | 147,977 | 167,702 | +13.3% |
| North America | 90,033 | 100,068 | +11.1% |
| International | 31,663 | 36,761 | +16.1% |
| AWS | 26,281 | 30,873 | +17.5% |
| Operating income | 14,672 | 19,171 | +30.7% |
| North America | 5,065 | 7,517 | +48.4% |
| International | 273 | 1,494 | +447.3% |
| AWS | 9,334 | 10,160 | +8.8% |
| Net income | 13,485 | 18,164 | +34.7% |
| Operating cash flow (TTM) | 107,952 | 121,137 | +12.2% |
Amazon’s e-commerce business continues to grow as worldwide paid units grew 12% year-over-year. In Q2 2025, 62% of these units were sold by third-party sellers, which is a record high (61% in Q2 2024).
Amazon’s advertising offerings, supported by its full-funnel portfolio, enable advertisers to reach over 300 million ad-supported users in the U.S. alone. This highly engaged audience spans Prime Video, Twitch, Fire TV, and third-party sites and apps. Advertising revenue reached US$15.7 billion for the quarter, contributing to profitability in both the North America and International segments. Operating margins in these segments improved year-on-year by 190 and 320 basis points to 7.5% and 4.1%, respectively.
Amazon DSP, a demand-side platform allows advertisers to plan, activate, and measure their campaigns. It leverages trillions of Amazon’s proprietary data signals to provide advertisers with greater audience precision and effective advertising outcomes.
Amazon has struck partnerships with major streaming platforms such as Roku and Disney to sell ads on their TV shows and movies. This gives Amazon access to a vast new pool of TV viewers and leverages its unique data on shopping and viewing habits to deliver more relevant ads. The result is stronger returns for advertisers, which fuels growth in Amazon’s high-margin advertising business and further solidifies its position in digital advertising. At the same time, Amazon is rolling out early access to Alexa+, powered by generative AI, to millions of U.S. customers, with international expansion planned for 2025.
AWS segment margins fell from a record 39.5% in Q1 2025 to 32.9% in Q2 2025, pressured by higher stock-based compensation, increased depreciation, and unfavourable foreign exchange impacts. The business also remains constrained by capacity, chips, and power availability.
Capital expenditures amounted to US$31.4 billion during the quarter, driven mainly by demand for its AWS services and investment in custom silicon such as Trainium. Capex will be similar for the rest of 2025. Revenue in the upcoming quarter is expected to be between US$174 billion and US$175 billion while operating income is expected to range between US$15.5 billion and US$20.5 billion.
North America
According to research firm Profitero, Amazon has offered the lowest prices among U.S. retailers for eight consecutive years. Consumers are increasingly buying perishables and daily essentials on the platform, which now account for one out of every three units sold. As Amazon improves its cost to serve and passes on lower prices, customers return, reinforcing a virtuous cycle of growth. The company also continues to attract more sellers to its marketplace, including premium brands.
Productivity gains in the transportation network resulted in faster delivery speeds and lower costs. By restructuring its U.S. inbound network into a regional model, Amazon consolidated more packages per order, increased direct shipping from fulfilment to delivery by over 40% year-over-year, reduced average package travel distance by 12%, and lowered handling touches by nearly 15%. This has led to record-fast delivery speeds for Prime members, with same-day and next-day deliveries increasing by 30%. The company plans to expand these fast delivery options to more communities by 2025.
Amazon has deployed its one-millionth robot in its global fulfilment network and is using AI-driven traffic management systems like DeepFleet, which improves robot travel efficiency by 10%. This technology is also contributing to a safer workplace.
Despite evolving tariff pressures, customer demand has remained resilient, with no broad-based price increases. The company recorded record sales and sign-ups in the weeks leading up to Prime Day and continues to drive engagement through Prime Video’s live sports offerings.
International
International operations have shown sustained improvement in profitability, with the operating margin increasing by 320 basis points to 4.1% year-over-year. Key markets like the UK, Germany, and Japan now have similar margin profiles to the U.S., signalling potential for future profit growth. The management is seeing sustained business improvement in these markets quarter by quarter.
AWS
AWS continues to strengthen its machine learning and AI capabilities across the stack. It is developing custom hardware, with the Trainium2 chip now powering core services and supporting partners such as Anthropic. In addition, AWS has rolled out new servers featuring NVIDIA’s latest Grace Blackwell Superchips.
On the software front, the Amazon Bedrock platform is seeing strong adoption, with Anthropic’s Claude 4 being its fastest-growing model. Additionally, Amazon’s own frontier model, Nova, has become the second most popular model on the platform, offering new customisation features.
AWS is also focusing on simplifying the development of AI agents for its customers. It has released Strands, an open-source tool for building agents, and AgentCore, a secure, serverless runtime for deploying them.
AWS is introducing new AI-driven applications to expand its platform capabilities. AWS Transform, an agent designed to modernize mainframes and convert legacy code, significantly reduces migration time. Another key launch is Kiro, an agentic coding environment that has already attracted strong developer interest. Kiro enables developers to generate code using natural language, streamline workflows, and enhance security.
Key analyst questions
AWS maintains a commanding market lead, with a US$123 billion annual revenue run rate and a backlog of US$195 billion, up 25% year-on-year. The company believes the opportunity is still in its early stages and is optimistic about future acceleration, driven by enterprise cloud migration, scaling AI deployments, and increased capacity. AWS’s closest competitor is still a lot smaller.
Amazon views AI as the most significant technological transformation of our lifetime and the market in its very early stage. It is embracing this AI transformation rather than being shaped by it. The company is actively addressing concerns about falling behind by building a full-stack AI offering, which includes its custom chips like Trainium2 for better performance, and a robust platform like Amazon Bedrock for deploying models. Overall, the company is optimistic about AWS’s potential for accelerated growth, driven by a renewed push for cloud migration, the increasing deployment of AI applications, and plans to bring more capacity online. According to CEO Andrew Jassy, 85% to 90% of global on-premises IT spend is expected to migrate to the cloud in the next 10 to 15 years.
Amazon is positioning itself as the second major player in the low earth orbit satellite market, alongside Starlink. Project Kuiper aims to address the global digital divide by delivering fast, affordable broadband to 400-500 million households, enterprises, governments, and organisations. This project is seen as a strategic advantage due to its integration with the Amazon and AWS ecosystems. The company has since signed a number of contracts with several enterprise and government customers.
The fifth perspective
Amazon continues to demonstrate resilience despite tariff uncertainties, with consumers remaining highly engaged on its e-commerce platform and AWS benefiting from favourable industry tailwinds. The company’s growth outlook remains strong, supported by its operational excellence and high-margin businesses. At the same time, Amazon is investing in new growth pillars, from generative AI to global broadband, to drive its long-term trajectory.
