Amazon ad business grows 26% as Q2 rev jumps 20%, AWS posts fastest growth in 18 quarters

Amazon's advertising business grew 26% year-on-year in the second quarter as the company reported a 20% rise in net sales to $200.6 billion, while AWS recorded its fastest growth in 18 quarters, driven by strong AI demand.

“AWS is booming, growing 36.7% year-over-year in Q2—our fastest growth in 18 quarters—and our AI and Chips businesses each eclipsed run rates of more than $25 billion,” said Andy Jassy, President and CEO, Amazon. 

“In Stores, we again set record delivery speeds for Prime members in the first half of the year—over 40% more items delivered same-day or overnight, with Grocery and Everyday Essentials growing meaningfully faster than the rest of the business. And, Advertising had another strong quarter with 26% year-over-year growth.There’s a lot to be excited about, and we have much more coming for customers in the second half of the year and beyond,” he added.

Operating income increased to $27.5 billion in the second quarter, compared with $19.2 billion in second quarter 2025. North America segment operating income was $9.1 billion, compared with $7.5 billion in second quarter 2025. International segment operating income was $1.7 billion, compared with $1.5 billion in second quarter 2025. AWS segment operating income was $16.6 billion, compared with $10.2 billion in second quarter 2025.

Net income increased to $62.6 billion in the second quarter, or $5.75 per diluted share, compared with $18.2 billion, or $1.68 per diluted share, in second quarter 2025. Second quarter 2026 net income includes non-operating pre-tax other income of $53.4 billion, primarily from the company’s investments in Anthropic.

Operating cash flow increased 33% to $161.4 billion for the trailing twelve months, compared with $121.1 billion for the trailing twelve months ended June 30, 2025. Free cash flow decreased to an outflow of $7.6 billion for the trailing twelve months, driven primarily by a year-over-year increase of $66.1 billion in purchases of property and equipment, net of proceeds from sales and incentives. This increase primarily reflects investments in artificial intelligence. This compares to free cash flow inflow of $18.2 billion for the trailing twelve months ended June 30, 2025.

Amazon said its AI business within AWS has crossed a $25 billion annual revenue run rate, while its custom chips business has also surpassed the same milestone, reflecting strong enterprise demand for AI infrastructure. The company highlighted growing adoption of its Trainium AI chips by customers including Anthropic, OpenAI, Uber and Pinterest, alongside the expansion of Amazon Bedrock with foundation models from OpenAI, Anthropic, Google DeepMind and others. 

The company also unveiled a series of new AI products and services aimed at enterprise customers, including enhancements to Bedrock AgentCore, the AI-powered work assistant Amazon Quick, the Kiro coding agent, AWS DevOps Agent and new serverless infrastructure for agentic AI workloads. Amazon said it would invest $1 billion in AWS Forward Deployed Engineering, a new team that will work directly with customers to develop and deploy AI solutions. 

On the advertising front, Amazon expanded Ads Agent—its AI-powered campaign planning and optimisation tool to 11 additional countries. The company said advertisers using the tool are seeing lower cost-per-impression and cost-per-acquisition, while Alexa+, Rufus and the new Alexa for Shopping continue to drive higher engagement and shopping activity across its retail ecosystem. 

Prime Video also posted strong audience numbers during the quarter. Amazon said the premiere of Off Campus attracted 36 million global viewers in its first 12 days, while its inaugural NBA season on Prime Video delivered a peak US audience of 6.5 million for Game 7 of the Eastern Conference Semifinals. NASCAR's second season on the platform also recorded its youngest audience among broadcasters since 2017. 

Looking ahead, Amazon expects third-quarter net sales to be between $197 billion and $202 billion, representing year-on-year growth of 9% to 12%, while operating income is projected to be in the range of $22.5 billion to $26.5 billion.