The market was not impressed with what it heard, particularly regarding AWS.
In pre-market trade the stock is down $18.37 (-7.85%) at $215.74.
From Investing.com, July 31 (skipping past the introductory material):
....Full transcript - Amazon.com Inc (AMZN) Q2 2025:
Conference Operator: Thank you for standing by. Good day, everyone, and welcome to the amazon.com Second Quarter twenty twenty five Financial Results Teleconference. At this time, all participants are in a listen only mode. After the presentation, we will conduct a question and answer session. Today’s call is being recorded.
And for opening remarks, I will be turning the call over to the Vice President of Investor Relations, Mr. Dave Files. Thank you, sir. Please go ahead.
Dave Files, Vice President of Investor Relations, Amazon: Hello, and welcome to our Q2 twenty twenty five financial results conference call. Joining us today to answer your questions is Andy Jassy, our CEO and Brian Lisowski, our CFO. As you listen to today’s conference call, we encourage you to have a press release in front of you, which includes our financial results as well as metrics and commentary on the quarter. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2024. Our comments and responses to your questions reflect management’s views as of today, 07/31/2025 only and will include forward looking statements.
Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today’s press release and our filings with the SEC, including our most recent annual report on Form 10 ks and subsequent filings. During this call, we may discuss certain non GAAP financial measures. In our press release, slides accompanying this webcast and our filings with the SEC, each of which is posted on our IR website. You will find additional disclosures regarding these non GAAP measures, including reconciliations of these measures with comparable GAAP measures.
Our guidance incorporates the order trends that we’ve seen to date and what we believe today to be appropriate assumptions. Our results are inherently unpredictable and may be materially affected by many factors, including fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions, tariff and trade policies, and customer demand and spending, including the impact of recessionary fears, inflation, interest rates, regional labor market constraints, world events, the rate of growth of the Internet, online commerce cloud services, and new and emerging technologies, and the various factors detailed in our filings with the SEC. Our guidance assumes, among other things, that we don’t conclude any additional business acquisitions, restructurings or legal settlements. It’s not possible to accurately predict demand for our goods and services, and therefore, our actual results could differ materially from our guidance. And now I’ll turn the call over to Andy.
Andy Jassy, CEO, Amazon: Thanks, Dave. Today, we’re reporting $167,700,000,000 in revenue, up 12% year over year, excluding the impact from foreign exchange rates. Operating income was 19,200,000,000.0 up 31% year over year and trailing twelve month free cash flow was $18,200,000,000 We saw good progress across our various customer experiences and businesses this past quarter. Starting with stores, we feel good about both the inputs and outputs of the business. At Amazon, we think of our business in terms of inputs and outputs.
Outputs are metrics like revenue or operating margin, but, of course, you can’t manage at the output level. It’s the inputs that drive the outputs. So we spend virtually all of our time internally talking about and going against inputs. The inputs that matter most to customers in our stores business are selection, low prices, and speed of delivery. We’ve taken another step forward in selection these past few months, headlined by the much requested return of Nike’s products to Amazon’s retail store.
We’ve added premium brands like Away, Aveda, Marc Jacobs fragrances, and brands from Saks and Amazon like Dolce and Gabbana, Etro, Stella McCartney, Rosetta Getty, and La Prairie. And we started expanding our very successful perishables pilot, where we offer customers perishables at the point of purchase when they’re ordering other items that will be delivered same day from our same day fulfillment nodes. We’re seeing strong customer adoption as 75% of customers who’ve used the service this year are first time shoppers for perishables on Amazon, with 20% of customers who use the service returning multiple times within their first month. Our prices continue to be low and sharp for customers. It’s one of the reasons our everyday essentials growth outpaced the rest of the business globally and represented one out of every three units sold.
It’s also why well known research firm, Perfidero, has concluded for eight years in a row that Amazon has the lowest prices of any US retailer. But perhaps the clearest outputs are the rate at which our stores business grew this past quarter and the success we saw in our recent Prime Day event. This year’s Prime Day was our biggest ever with record sales, number of items sold, and number of Prime sign ups in the three weeks leading up to the Prime Day. Customers saved billions of dollars and independent sellers, most of which are small and medium sized businesses, saw their best sales performance of any Prime Day event yet. There continues to be a lot of noise about the impact that tariffs will have on retail prices and consumption.
Much of it thus far has been wrong and misreported. As we said before, it’s impossible to know what will happen. Where will tariffs finally settle, especially China? What happens when we deplete the inventory we forward bought or that our selling partners forward deployed in advance of the tariffs going into effect? If costs end up being higher, who will absorb them?
But what we can share is what we’ve seen thus far, which is that through the first half of the year, we haven’t yet seen diminishing demand nor prices meaningfully appreciating. We also have such diversity of sellers in our marketplace, over 2,000,000 sellers in total, with differing strategies of whether to pass on higher cost to consumers that customers are advantaged shopping at Amazon because they’re more likely to find lower prices on the items they care about. Further improving delivery speed remains a key focus, and we continue to make progress. We’ve previously shared how we rearchitect our US inbound network into a regional structure, allowing us to place inventory and shift from locations closer to customers, improving speed and lowering costs. That work is delivering tangible results.
In q two, we increased the share of orders moving through direct lanes where packages go straight from fulfillment delivery without extra stops by over 40% year over year. We’ve also reduced the average distance packages traveled by 12% and lowered handling touches per unit by nearly 15%. We’ve made progress on order consolidation. With more products positioned locally, we’re able to pack more items into each box and send fewer packages per order. That has helped drive higher units per box and improved overall cost to serve.
Taken together, these improvements are making the network faster and structurally more efficient. We’ve also set another global speed record in q two, delivering to Prime members at our fastest speeds ever. In The US, we delivered 30% more items same day or next day than during the same period last year. Items customers used to pick up locally in nearby physical stores are now arriving at their door often within hours, and we’re working to further improve delivery speeds no matter where customers live. We’ve recently announced plans to expand our same day and next day delivery to tens of millions of US customers in more than 4,000 smaller cities, towns, and rural communities by the end of the year.
Today, it’s already available in more than a thousand of these communities across The US. The early response from customers in these areas have been very positive. They’re shopping more frequently and purchasing household essentials at meaningfully higher rates. Automation and robotics are also important contributors to improving cost efficiencies and driving better customer experiences over time. We deployed our one millionth robot across our global fulfillment network and unveiled innovations at our last mile innovation center, such as automated package sorting and a transformative technology that brings packages directly to employees in an ergonomic height.
We rolled out Deepfleet, our AI whose robot travel efficiency by 10%. At our scale, it’s a big deal. Deepfleet acts like a traffic management system to coordinate robots’ movements to find optimal paths and reduce bottlenecks. For customers, it means faster delivery times and lower costs. For our team members, our robots handle more of the physically demanding tasks, making our operations network even safer.
This combination of robotics and generative AI is just getting started. And while we’ve made significant progress, it’s still early with respect to what we’ll roll out in the next few years. Moving on to Amazon Ads. We’re pleased with the strong growth generating $15,700,000,000 of revenue in the quarter, growing 22% year over year. We continue to see strength across our broad portfolio of full funnel advertising offerings that in The US alone help advertisers reach an average ad support audience of more than 300,000,000 across our own properties.
These are properties like our retail marketplace, Prime Video, Twitch, and Fire TV, in live sports such as NFL, NASCAR, and the NBA, as well as third party websites and apps. Another area we’re excited about is our demand side platform or Amazon DSP. Our DSP enables advertisers to plan, activate, and measure full funnel investments. Our trillions of proprietary browsing, shopping, and streaming signals paired with extensive supply side relationships and our secure clean rooms provide advertisers the ability to optimize advertising, deliver greater precision, and drive efficient and effective advertising outcomes. And in June, we announced a momentous partnership with Roku, giving advertisers access to 80,000,000 connected TV households, the largest authenticated connected TV footprint in The US exclusively through Amazon DSP.
It’s a giant leap forward for advertisers bringing best in class planning, audience precision, and performance to TV advertising. We also announced an integration between Disney’s real time ad exchange and Amazon DSP. This collaboration allows advertisers to gain direct access to Disney’s premium inventory across platforms like Disney plus, ESPN, and Hulu, while allowing them to leverage insights from both companies. When advertisers work with Amazon, they’re not just buying ad space. They’re benefiting from exceptional programming, innovative technology, and unrivaled signals, measurement, and audience development that provides strong relevancy for consumers and return on investment for brands.
Moving on to AWS. In q two, AWS grew 17.5% year over year and now has over a 123,000,000,000 annualized revenue run rate. We continue to help organizations of all sizes accelerate their transition to the cloud, signing new agreements with companies including PepsiCo, Airbnb, Peloton, Nasdaq, London Stock Exchange, Nissan Motor, GitLab, SAP, Warner Brothers Discovery, Twelve Labs, FICO, Iberia Airlines, SK Telecom, and NatWest. In the rapidly evolving world of generative AI, AWS continues to build a large, fast growing, triple digit year over year percentage, multibillion dollar business with more demand than we have supplied for at the moment. A few points to make.
First, on the hardware side, our custom AI chip, Trainium two, is landing capacity in larger quantities and has impressively emerged as the backbone for Anthropic’s newest generation cloud models and many of our most essential offerings like Amazon Bedrock. We’ve also launched Amazon EC two instances powered by NVIDIA Grace Blackwell Superchips, AWS’ most powerful NVIDIA GPU accelerated instance. Second, in Bedrock, we’ve recently added Anthropix Cloud four, and it’s the fastest growing model ever in Bedrock. We’ve also continued to see strong adoption of Amazon Nova, our own frontier model, and it’s now the second most popular foundation model in Bedrock. New features in Nova allow customers to customize their Nova models in ways they can’t on other foundation models, allowing organizations to infuse these models with their unique expertise while optimizing for cost and speed.....
....MUCH MORE, including the analyst Q&A
