Amazon.com, Inc. (AMZN) Earnings

Management highlights

AWS growth continued to accelerate, up 28% year over year, fastest growth in 15 quarters. AWS is now a $150 billion annualized revenue run rate business. Chips business growing rapidly, annual revenue run rate over $20 billion. Stores units grew 15% year over year, grocery business growing quickly. Amazon Ads revenue up 22% year over year. Entertainment: Moviegoers flocked to Project Hail Mary. Alexa Plus early access expanded. Zoox driven nearly 2 million miles, available in Las Vegas and San Francisco. Amazon LEO gaining momentum with commercial service on track to launch, acquired Globalstar and entered agreement with Apple

Guidance

Q2 net sales expected to be between $194 billion and $199 billion. Q2 operating income expected to be between $20 billion and $24 billion. Guidance assumes Prime Day occurs in second quarter in most large geographies and third quarter in some others. Estimates year-over-year impact of foreign exchange rates as a headwind of approximately 10 basis points. Includes impact of seasonal step-up in stock-based compensation expense, cost increase related to Amazon LEO, and higher transportation costs partially offset by FBA surcharge

Segment performance

AWS: Revenue was $37.6 billion, up 28% year over year, with an annualized revenue run rate of $150 billion. AI revenue growing triple digits. Chips business growing rapidly, annual revenue run rate over $20 billion. Stores: Units grew 15% year over year. Grocery business is second-largest in US with over $150 billion gross sales in 2025. Prime Video a key pillar of Prime value proposition. Amazon Ads: Revenue $17.2 billion, up 22% year over year. North America segment: Revenue $104.1 billion, up 12% year over year. International segment: Revenue $39.8 billion, up 11% year over year excluding foreign exchange impact

Risks & headwinds

Fluctuations in foreign exchange rates and energy prices, changes in global economic and geopolitical conditions, tariff and trade policies, resource and supply volatility including for memory chips, customer demand and spending impact from recessionary fears, inflation, interest rates, regional labor market constraints, world events, rate of growth of Internet, online commerce, cloud services, new and emerging technologies. Unpredictable results due to many factors detailed in SEC filings. Difficulty accurately predicting demand for goods and services leading to potential material difference from guidance

Analyst Q&A

• Q: Across an array of announcements you have made recently with AWS and reflecting upon what you wrote in the shareholder letter, can you talk a little bit about the needed levels of investment over the next couple of years to scale compute and capacity to meet your current state of revenue backlog, and how we should be thinking about your unique approach to custom silicon and AI infrastructure that maybe positions you competitively to build that scale?

  A: We continue to see people choosing AWS for AI due to broad full-stack functionality, proximity of inference to data and applications, strong security, and unique collection of chips. Expect to invest significant capital over coming years.

• Q: One is on the accounting side—I will probably get it in the queue—but can you just give us an update on what the AWS backlog looks like and any visibility on the breadth of that backlog beyond the big labs? That is the first one. And then the second one, as you think about milestones for Rufus and agentic commerce for you in 2026, what are you most focused on making sure you accomplish on the agentic side this year just to make sure you stay at the knife’s edge of the agentic commerce offerings?

  A: AWS backlog for Q1 is $364 billion, including recent deal with Anthropic. Focus on making Rufus the best shopping assistant, with monthly active users up over 115% and engagement up 400% year over year, aiming to have it be the best shopping assistant anywhere.

• Q: On models and then one on premium chips. So on models, it looks like you might have access to the full suite of OpenAI models on Bedrock. Just wondering how big of an unlock that is and how focused you are on your own Novo model. And then second, the shareholder letter mentioned you might be able to sell racks of Trainium. Just wondering, with your capacity constraints, how are you thinking about timing of that and how big of an opportunity?

  A: Having all OpenAI models available in Bedrock is a big deal as customers want choice. Expect over time to sell racks of Trainium, balancing demand from existing customers and potential sales of racks.

• Q: I wanted to ask a little bit about Amazon LEO. Can you maybe help dimensionalize some of the revenue opportunity in the consumer and in the enterprise space over the next few years? What are the governors on the ramp? Could you talk about types of new services that you will be able to develop with the Globalstar infrastructure and the spectrum that maybe you could not address before or would take you—maybe you can get to more quickly now? And then, how expansive is the longer-term vision?

  A: Very bullish on Amazon LEO, billions of people without broadband connectivity and businesses/government assets without visibility. Launching commercial service with advantage in performance and cost. Acquisition of Globalstar for direct-to-device, optimistic about business.

• Q: I wonder, Andy, if you could please talk about how you are thinking about the increase in price for memory and storage and just the supply chain inflation we are seeing and the impact it could have on CapEx this year and potentially next year as well. And then on agentic commerce, if you could talk about how you view the opportunity with advertising.

  A: Worked closely with strategic partners on memory and storage supply, seeing enterprises accelerate cloud transformation. Believes agentic commerce will be good for advertising, with multi-turn conversations providing opportunities for relevant products and sponsored prompts.

• Q: Maybe a two-parter, if I could. Andy, first off, just wondering what you are seeing in terms of the trend between incremental AI demand from earlier adopters and larger AWS customers versus how the demand curve is shaping up across the broader enterprise base. And then at a high level, if you think about the use of AI internally across Amazon’s businesses—presumably the business overall looks very different in three or four years—maybe, Andy, if you could contextualize where you see the most opportunity for the technology internally, both in terms of product as well as driving more operating efficiency, I think that would be helpful.

  A: Seeing AI demand from early adopters and broader enterprise base, with cost avoidance and productivity projects as well as brand-new experiences. AI will have giant impact internally, reinventing customer experiences and changing how work is done