TLDR
- Amazon shares jumped nearly 9% after Q2 earnings beat expectations on AWS and advertising growth.
- AWS revenue climbed 37% to $42.2B, marking its fastest growth in eighteen quarters for Amazon.
- Advertising revenue rose 26% to $19.8B, adding another high-margin growth driver for Amazon in Q2.
- Operating income increased 43% to $27.5B as AWS delivered most of company profit this quarter.
- Amazon guided Q3 revenue between $197B and $202B, with operating income above last year levels.
Amazon shares jumped nearly 9% in after-hours trading after the company reported stronger second-quarter results, supported by faster AWS growth, higher advertising revenue, and rising AI demand.
Amazon Revenue Tops $200 Billion
Amazon reported net sales of $200.6 billion for the second quarter, up 20% from $167.7 billion a year earlier. The result showed broad growth across cloud, online stores, advertising, and third-party seller services.
Operating income rose 43% to $27.5 billion from $19.2 billion last year. The increase came as Amazon Web Services generated stronger profit and other business lines continued expanding.
Net income rose to $62.6 billion, or $5.75 per diluted share. That compared with $18.2 billion, or $1.68 per share, in the same period last year.
The net income figure included $53.4 billion in non-operating income tied mainly to Amazon’s Anthropic investment. Operating income gave investors a clearer view of the company’s main business growth.
AWS Growth Leads Earnings Beat
Amazon Web Services revenue climbed 37% to $42.2 billion, marking its fastest growth in 18 quarters. The figure also came above analyst expectations near $40.5 billion.
AWS operating income increased 64% to $16.6 billion during the quarter. The cloud division recorded an operating margin of 39.4%, showing strong profit growth alongside rising demand.
AWS accounted for about 21% of Amazon’s total revenue. However, the cloud unit generated more than 60% of the company’s operating income.
Amazon said its AWS artificial intelligence business reached an annual revenue run rate above $25 billion. Its custom chip business also passed the same mark, with both areas growing at triple-digit rates.
The company cited multiyear computing commitments from Anthropic and OpenAI for Trainium chips. Amazon also pointed to wider adoption from companies including Uber and Pinterest.
Advertising and Guidance Add Support
Advertising revenue rose 26% to $19.8 billion, giving Amazon another high-margin growth driver outside cloud computing. Online store sales increased 15% to $70.4 billion during the quarter.
Third-party seller services revenue grew 16% to $46.8 billion. The figures showed continued growth across Amazon’s retail and marketplace businesses.
Amazon’s trailing 12-month operating cash flow increased 33% to $161.4 billion. However, free cash flow moved to an outflow of $7.6 billion from an inflow of $18.2 billion a year earlier.
The company linked the decline to higher property and equipment spending. Amazon said infrastructure investment tied to artificial intelligence increased by $66.1 billion.
For the third quarter, Amazon expects revenue between $197 billion and $202 billion. That range would represent annual growth of 9% to 12%.
Operating income is projected between $22.5 billion and $26.5 billion. The forecast compares with $17.4 billion in the same quarter last year.
Amazon stock reacted strongly as investors focused on AWS growth and advertising gains. The next focus remains cloud demand, AI spending, margins, and free cash flow recovery.
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