The net sales for the quarter amounted to 200.6 billion dollars, compared to 167.7 billion dollars during the corresponding period of the previous year. Operating income increased by 43 percent to 27.5 billion dollars. Net income reached 62.6 billion dollars. This figure includes a non-operating income of 53.4 billion dollars, largely attributable to the company's investments in the AI company Anthropic. The cloud service AWS showed a revenue increase of 37 percent, reaching 42.2 billion dollars.
In the official report, Amazon CEO Andy Jassy commented on the quarter's results. He stated that AWS is thriving, with year-over-year growth of 36.7 percent in the second quarter, the fastest growth in 18 quarters, and that their AI and chip businesses both exceeded a revenue run rate of over 25 billion dollars. Regarding the e-commerce business, Jassy said that they once again set records in delivery speed for Prime members during the first half of the year. He further noted that advertising had another strong quarter with year-over-year growth of 26 percent.
Market Focuses on AWS - Not E-commerce
According to American CNBC, analysts' expectations for total revenue were 196.47 billion dollars. The result thus exceeded expectations for both the whole and within the AWS segment. Market focus was largely on the cloud growth, especially after competitors such as Alphabet and Microsoft recently reported high growth figures for their respective services.
The company's revenue forecast for the third quarter landed between 197 and 202 billion dollars. This guidance was lower than expected, which Amazon explains by the fact that this year's Prime Day sale fell in June and is therefore included in the second quarter instead of the third.
Massive AI Investments
The ongoing expansion of infrastructure for AI is affecting Amazon's financial planning. The company is now raising its full-year forecast for capital expenditures from previously 200 billion to 220 billion dollars, partly due to higher costs for memory components. These investments have resulted in free cash flow turning into an outflow of 7.6 billion dollars for the last twelve months.
In a call with investors, Andy Jassy defended the investment level with reference to future customer needs. He explained that even at that amount, they will not have sufficient capacity to meet all the demand they have in 2026. He added that he believes this dynamic will also apply to 2027 and that the demand they already have for 2028 is striking.