Big tech, big earnings: Amazon’s Q1 delivers across the board

Overview

Amazon began 2025 with strong top- and bottom-line growth across all major segments, including AWS, North America, and International.

CEO Andy Jassy highlighted the company’s momentum, stating: “We’re pleased with the start to 2025, especially our pace of innovation and progress in continuing to improve customer experiences. “From Alexa+ (our next generation of Alexa that’s meaningfully smarter, more capable, and takes actions for customers), to another delivery speed record for our Prime members, to our new Trainium2 chips and Bedrock model expansion that make it easier for AWS customers to train models and run inference more flexibly and cost-effectively, to our first Project Kuiper satellites successfully launching into low earth orbit in our quest to provide broadband access to hundreds of millions of households in rural areas without it today—we’re continuing to find meaningful ways to make customers’ lives easier and better every day.”

Q1 2025 vs. Q1 2024:

Net sales rose to $155.7bn (+9% YoY and +10% FX-neutral), led by growth in AWS, advertising, and subscription services, partially offset by FX headwinds.
- North America segment sales increased to $92.9bn (+8% YoY), driven by third-party seller services, advertising, and operational efficiency.
- International segment sales increased to $33.5bn (+5% YoY or 8% FX-neutral), with a strong performance in Middle East and Japan.
- AWS segment sales increased to $29.3bn (+17% YoY), with a continued demand for AI, cloud, and infrastructure solutions.
- Advertising Services revenues were $13.9bn (+18% YoY), driven by sponsored ads and retail media innovation.
- Subscription Services revenues was $11.7bn (+9% YoY), with momentum from Prime, digital video, and music subscriptions.
- Online Stores revenues were $57.4bn (+5% YoY), while Physical Stores revenues were $5.5bn (+6% YoY), a modest growth in online and offline retail categories.
- Third-Party Seller Services revenues were $36.5bn (+6% YoY), reflecting resilient seller engagement and fee-based service revenue.
Operating income grew to $18.4bn (+20% YoY), driven by AWS margin expansion and cost efficiency in core retail operations.
- North America segment operating income was $5.8bn (+17% YoY).
- International segment operating income was $1.0bn (+13% YoY).
- AWS segment operating income was $11.5bn (+23% YoY).
Operating expenses increased to $137.3bn (+7% YoY), especially the costs for technologies.
Net income reached $17.1bn (+64% YoY), boosted by operating leverage and a swing to $2.7bn in other income.
Diluted EPS was $1.59 (+62% YoY), a strong earnings growth supported by margin improvements and reduced share count.
Operating cash flow increased to $113.9bn (+15% YoY) for the trailing twelve months, while free cash flow decreased to $25.9bn (-48% YoY).
Despite a decline in FCF due to CapEx increase, Amazon maintains robust liquidity to support innovation and expansion, with $66.2bn in Cash & Equivalents.

Amazon expects Q2 net sales of $159bn-$164bn, implying 7-11% YoY growth (with ~10bps FX headwind). Operating income is forecasted between $13.0bn and $17.5bn, compared to $14.7bn in Q2 2024. Management reaffirmed confidence in AWS momentum, digital advertising expansion, and continued innovation in AI, while acknowledging macroeconomic and geopolitical uncertainties.

Even though in this case the company’s financial performance for the first quarter of 2025 was generally above analysts’ expectations, the forecasts for the next period, as well as a miss in AWS sales estimates, made investors have a negative feeling, and thus, after an increase of approximately +3% in the AMZN stock price the day before the report was published, it fell in the after-market by over -2%, the price remaining below the 50-day moving average since February, although in recent days it seemed to be following an upward slope and approaching it. At the same time, global uncertainties have caused the AMZN stock price to decrease since the beginning of this year by approximately -13.6%.