Amazon surpassed Wall Street’s revenue and earnings expectations in the second quarter, posting strong product sales growth despite evolving tariff pressures.
Net income was $18.16 billion, or $1.68 per diluted share, compared with $13.49 billion, or $1.26 per diluted share, in the second quarter of 2024, the company reported.
Analysts, cited by Yahoo Finance, on average, expected earnings per diluted share of $1.33 on revenues of $162.11 billion.
Net sales were $167.7 billion compared with $148 billion in the year-prior quarter, while product sales were $68.25 billion versus $61.57 billion. Operating income increased to $19.17 billion from $14.67 billion in the period a year earlier.
North America segment sales increased 11% year over year in the quarter to $100.1 billion, with operating income of $7.52 billion versus $5.1 billion.
Highlights of the quarter, according to Amazon, included:
- Holding the biggest Prime Day event ever, with customers saving billions of dollars and independent sellers achieving record sales.
- Announced expansion of same-day and next-day delivery to tens of millions of U.S. customers in more than 4,000 smaller cities, towns and rural communities by the end of 2025.
- Launched generative AI tools to enhance the shopping experience, including Hear the Highlights to turn product summaries and reviews into audio clips, and Enhance My Listing to keep those current and compelling.
- Introduced Vulcan, Amazon’s first robot to combine sight and touch to navigate cluttered spaces like humans do and respond when they contact something, so that no damage is done, making jobs safer and easier.
Amazon issued third quarter guidance for net sales of between $174 billion and $179.5 billion, up between 10% and 13% year over year, and operating income of between $15.5 billion and $20.5 billion, versus $17.4 billion in the year-past period.
In a conference call, Andy Jassy, Amazon president and CEO, in announcing the financial results, said tariff impacts on the company are difficult to gauge and much of the speculation has been off the market. It’s too early to understand exactly how things will proceed and where tariffs will settle. Given the circumstances, it’s also hard to say what will happen when Amazon and the company’s vendors deplete the inventory they brought forward in anticipation of tariff changes. What Amazon can share, Jassy said, is what the company has seen in the first half of the year and specifically that it hasn’t yet seen diminishing demand nor significant price appreciation.
He added that Amazon has such a diversity of marketplace sellers with differing approaches as to whether they will pass on higher costs to consumers that shoppers are likely to find lower prices on the items they care about on the company’s platform.
For Amazon, improving delivery speed is an element of business it can control and where it is making progress. The company has reengineered its system into a regional structure, allowing Amazon to place products closer to customers, improving speed and lowering costs.
On the business technology side, he added that Amazon’s combination of robotics and generative AI is increasing efficiency and, as applied in the company, is just getting started.
Jassy said, in announcing the financial results, “Our conviction that AI will change every customer experience is starting to play out as we’ve expanded Alexa+ to millions of customers, continue to see our shopping agent used by many millions of customers, launched AI models like DeepFleet that optimize productivity paths for our 1M+ robots, made it much easier for software developers to write code with Kiro, our new agentic IDE, launched Strands to make it easier to build AI agents, and released Bedrock AgentCore to enable agents to be operated securely and scalably. Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency and business growth, and I’m excited for what lies ahead.”
