Amazon Q2: Ad revenue at over $15 bn for the quarter, 23% jump from last year

Amazon’s Q2 earnings for 2025 were a study in contrast. The company beat analyst expectations on both revenue and profit, but a lukewarm outlook for the coming quarter cooled investor enthusiasm and clipped post-market trading gains.

For the quarter ending June 30, Amazon reported net sales of $167.7 billion, up nearly 13 per cent from the same period last year. Net income rose to $18.2 billion, or $1.68 per diluted share, compared to $1.26 in Q2 2024. Operating income came in at $19.2 billion, up from $7.7 billion a year ago. All three metrics outpaced Wall Street’s projections.

Amazon Web Services continued its rebound with revenue of $30.9 billion, growing 17.5 percent year-on-year. However, AWS margins narrowed to 32.9 percent, down from 35.5 percent, largely due to increased infrastructure investments and higher stock-based compensation expenses. Retail operations in North America delivered $61.5 billion in sales, an 11 percent rise, while international sales grew 16 percent to $34.5 billion, with $1.5 billion of that attributed to favorable foreign exchange.

Advertising was one of the standout performers, clocking in at over $15.6 billion for the quarter, a 23 per cent jump from last year. Other revenue streams like subscriptions and third-party seller services also posted healthy double-digit gains, reinforcing Amazon’s position as a multi-pronged revenue engine.

Amazon doubled down on AI in the quarter, highlighting its ongoing investments in generative AI products and infrastructure. CEO Andy Jassy cited growing adoption of its Bedrock platform, internal agent tools like Nova, and robotics enhancements through DeepFleet. Capex rose sharply to $31.4 billion in Q2, and the company indicated it expects full-year capital expenditures to cross $100 billion, a record high.

Despite these signals of strength, the Q3 guidance was more tempered. Amazon forecast net sales of $174 to $179.5 billion, above analyst expectations of around $173 billion. However, the company’s projected operating income of $15.5 to $20.5 billion came in a notch below market hopes, sparking a 6 to 7 percent drop in after-hours trading.

Amazon’s latest quarter signals that while the tech giant remains in a strong operating position, the costs of staying competitive in AI and cloud infrastructure are beginning to weigh on investor sentiment. For advertisers and marketers, the continued growth in retail media and AWS-backed AI tooling remains a space to watch closely.