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Amazon Q2 revenue hits $200.6 billion on AI and AWS growth
Cloud business grows at fastest pace in years as AI investments power earnings jump
Seattle: Amazon’s latest quarterly results show that its AI bets are beginning to pay off in a big way. The technology giant reported record profitability for the second quarter, driven by surging growth at its cloud computing arm, strong advertising revenue and a sizeable gain from its investment in artificial intelligence company Anthropic.
Amazon reported net sales of $200.6 billion for the quarter ended June 30, up 20 per cent from $167.7 billion a year earlier. Excluding a modest foreign exchange benefit, revenue growth remained at 20 per cent.
The biggest driver was Amazon Web Services, which recorded its fastest growth in 18 quarters. Revenue climbed 37 per cent year on year to $42.2 billion, lifting its annualised revenue run rate to $169 billion. Operating income at AWS rose sharply to $16.6 billion from $10.2 billion in the corresponding quarter last year.
The strong cloud performance helped lift Amazon’s overall operating income by 43 per cent to $27.5 billion. Net income more than tripled to $62.6 billion, or $5.75 per diluted share, compared with $18.2 billion, or $1.68 per share, a year ago.
A significant portion of the earnings increase came from $53.4 billion in pre-tax non-operating income, largely reflecting gains on Amazon’s investment in Anthropic.
Growth was broad-based across Amazon’s businesses. North America generated $116.2 billion in revenue, up 16 per cent year on year, while international sales rose 15 per cent to $42.2 billion. Advertising continued to be a major growth engine, with revenue increasing 26 per cent.
Operating cash flow over the trailing 12 months climbed 33 per cent to $161.4 billion. However, free cash flow turned negative at $7.6 billion as Amazon significantly increased spending on data centres and infrastructure to support its expanding AI ambitions.
Artificial intelligence remained the company’s biggest strategic focus. Amazon said both its AI business within AWS and its custom chip operations have surpassed annual revenue run rates of $25 billion, with triple-digit growth.
Its Trainium AI chips have secured commitments from companies including Anthropic and OpenAI, alongside enterprise customers and emerging AI startups. The company also launched its Graviton5 processors, which offer improved computing performance over the previous generation.
Amazon expanded its AI platform, Bedrock, by adding new foundation models from OpenAI, Anthropic and Google DeepMind. According to the company, corporate customers spent more on Bedrock during the second quarter than in all previous quarters combined.
The company also introduced a series of new AI products, including security and software development tools, autonomous AI agents and expanded serverless computing capabilities. Amazon said it would invest $1 billion in a Forward Deployed Engineering programme that embeds AI specialists with enterprise customers.
Outside the cloud business, Amazon’s retail operations also recorded strong momentum. Prime members received more than 40 per cent more same-day or overnight deliveries during the first half of the year compared with the previous year. The company’s rapid delivery service, Amazon Now, expanded into 80 additional US towns and cities as well as new markets in Egypt.
Amazon Business reached an annualised gross sales run rate of $60 billion, while Amazon Supply Chain Services expanded its logistics network to third-party customers including Procter & Gamble and 3M.
The company also highlighted progress across its consumer and technology businesses. Amazon Pharmacy expanded same-day prescription deliveries, Prime Video attracted millions of viewers for new original programming and NBA coverage, while Project Leo moved closer to launching commercial satellite internet services after additional satellite deployments. Its autonomous vehicle unit, Zoox, also secured regulatory approval to begin charging passengers for robotaxi rides.
Looking ahead, Amazon expects third-quarter net sales of between $197 billion and $202 billion, representing growth of 9 per cent to 12 per cent, with operating income projected between $22.5 billion and $26.5 billion.
With AWS delivering its strongest growth in more than four years and AI investments translating into higher revenue and profitability, Amazon appears to be strengthening its position in both cloud computing and the rapidly evolving artificial intelligence market.
