In This Article:
Key Points
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Amazon reported revenue and earnings that beat analyst expectations in the second quarter.
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Advertising revenue beat expectations, while AWS was a bit disappointing.
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Amazon's second-quarter guidance wasn't enough to impress investors.
Here's our initial take on Amazon's (NASDAQ: AMZN) financial report.
Key Metrics
| Metric | Q1 2024 | Q1 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $143.3 billion | $155.7 billion | 9% | Beat |
| Earnings per share | $0.98 | $1.59 | 62% | Beat |
| AWS revenue | $25.0 billion | $29.3 billion | 0.17 | Missed |
| Advertising revenue | $11.8 billion | $13.9 billion | 19% | Beat |
Some Good, Some Not So Good
Amazon's stock fell after its last earnings report, and the primary reason was weak guidance for the first quarter. At the time, Amazon was calling for revenue of about $153 billion at the midpoint of its range.
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Since then, analyst expectations have increased to about $155.1 billion, and the company beat that figure, reporting 9% year-over-year revenue growth to $155.7 billion. On the bottom line, Amazon's $1.59-per-share figure handily beat the consensus.
The two most exciting components of Amazon's business, at least from a future growth perspective, are Amazon Web Services (AWS) and advertising, and these were a bit of a mixed bag. AWS grew by 17% year over year but didn't quite meet expectations. And advertising revenue was the fastest-growing part of the company, up 19% year over year and ahead of expectations.
Online sales revenue was a little sluggish, up 6% year over year, a slowdown from the 7% growth rate in the same quarter last year. Third-party-seller services revenue slowed considerably, to a 7% growth rate, compared to a 16% growth rate a year ago.
In other nonearnings news, Amazon announced the day before it reported that it will spend $4 billion by the end of 2026 to expand its rural delivery capabilities. Investors cheered this news, as faster deliveries generally mean higher order volume.
Looking ahead, Amazon expects revenue between $159 billion and $164 billion in the second quarter. This was somewhat lighter than investors had hoped to see.
Immediate Market Reaction
The initial reaction to Amazon's numbers was modestly negative. As of 4:20 p.m. ET, Amazon stock was down by about 2.5%. The combination of the AWS revenue miss and somewhat light second-quarter guidance seems to be outweighing the top- and bottom-line beats for the first quarter.