Amazon Q2 2025 Earnings Beat Expectations but Stock Drops on Weak Q3 Outlook

Prime Highlights

Amazon reported improved Q2 2025 earnings with robust revenue expansion and profit increase.
Shares declined more than 7% on solid performance despite conservative Q3 operating income forecast.

Key Fact

Amazon operating income increased 31% versus the prior-year period to $19.2 billion in Q2 2025.
AWS revenue increased 17.5% to $30.9 billion, a little above but lagging the others.

Key Background

Amazon posted robust alternate- quarter earnings in 2025, with net deals rising 13 time-over-year to$ 167.7 billion, surpassing judges’ prospects of$ 162 billion. The establishment earned$ 1.68 per share, surpassing judges’ estimates of$ 1.32. Net income rose dramatically from$ 13.5 billion in Q2 2024 to$ 18.2 billion in Q2 2025, thanks to profit growth coupled with operating effectiveness. Operating income rose sprucely to$ 19.2 billion, a 31 time-over-year hike.

Geographically, North American revenues increased 11% to $100.1 billion with operating income of $7.5 billion. International revenues were up 16% to $36.8 billion, and international operating profit was up 448% to $1.5 billion, reflecting higher profitability outside the United States. Amazon Web Services (AWS), the company’s leading cloud business, generated $30.9 billion in revenues, a 17.5% year-over-year improvement, albeit lower than its peers such as Microsoft Azure and Google Cloud.

Amazon’s operating cash flow increased 12% per year to $121.1 billion over the last 12 months. Free cash flow declined sharply to $18.2 billion from $53 billion in the previous year as a result of huge capital investment, especially on artificial intelligence infrastructure, logistics, and data centers. CEO Andy Jassy pointed to the investments by the company in AI technology such as Alexa+, DeepFleet, Kiro, Strands, and Bedrock AgentCore to improve operations to run at their highest potential and defining future innovation.

It’s looking forward to Q3, Amazon had estimated revenue of $174 billion to $179.5 billion, topping Street expectations. But its guided operating income of $15.5 billion to $20.5 billion fell short of Street expectations, raising warning flags about AWS growth rate. That conservative guidance pushed the stock more than 7% lower after hours despite Q2 coming in strong because it reflects investors’ skepticism regarding profitability in the future.