Amazon beat estimates for its second quarter earnings with $167.7 billion in revenue, up 13% year-over-year, and earnings per share of $1.68.
Wall Street expected $162.1 billion in revenue, and earnings per share of $1.33.
Despite topping expectations, Amazon shares were down more than 3% in after-hours trading.
The results provide a snapshot of Amazon’s business as the company invests heavily in its cloud computing business and navigates economic headwinds within its retail division.
Amazon Web Services reported $30.8 billion in revenue for Q2, up 17% year-over-year — in line with analyst estimates.
- The company makes most of its operating profits from AWS — about $10.1 billion in the second quarter, more than half Amazon’s total operating income of $19.2 billion.
- Google and Microsoft also reported strong results for their respective cloud units this month.
- Amazon said earlier this year it expects to increase capital expenditures to more than $100 billion in 2025, up from $83 billion in 2024, with a majority going toward building out capacity for AI in AWS.
Online store sales totaled $61.4 billion, up 11%.
- Analysts were watching for impact from tariffs on the company’s retail business, which still makes up the largest portion of its overall revenue.
- In its Q1 earnings report in April, Amazon added “tariff and trade policies” to a list of factors that create uncertainty in its results, joining existing risks such as inflation, interest rates, and regional labor market constraints.
- The company’s annual Prime Day sales event took place after the quarter ended, from July 8-11, so the results aren’t included in these earnings numbers.
Here’s more details from the second quarter earnings report:
Advertising: The company’s ad business brought in $15.6 billion in revenue in the quarter, up 23% from the year-ago period.
Third-party seller services: Revenue from third-party seller services was up 11% to $40.3 billion.
Shipping costs: Amazon spent $23.3 billion on shipping in Q2, up 6%.
Physical stores: The category, which includes Whole Foods and other Amazon grocery stores, posted revenue of $5.6 billion, up 7%.
Headcount: Amazon employs 1.54 million people, up 1% year-over-year. That figure does not include seasonal and contract workers.
- Amazon is aiming for 250,000 U.S. hires during the 2024 holiday season, matching its target from the prior year.
- The company will increase the ratio of individual contributors to managers in its corporate workforce, as CEO Andy Jassy noted in a recent memo.
- Amazon’s corporate workforce will shrink in the coming years as generative AI takes hold, Jassy told employees in a company-wide memo last month.
Prime: Subscription services revenue, which includes Prime memberships, came in at $12.2 billion, up 12%.
Guidance: The company forecasts Q3 sales of $174 to $179.5 billion. Operating income is expected to range between $15.5 billion and $20.5 billion.
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