Amazon Posts $18.2 Billion Profit Driven by Robust Retail Sales

In the face of ongoing trade tensions, Amazon revealed on Thursday that consumer spending on its platform remained unexpectedly strong, underpinning its retail segment's performance. However, its cloud computing branch experienced compressed profit margins during the quarter.

For the period from April to June, Amazon's revenue climbed to $167.7 billion, marking a 13 percent increase compared to the previous year. Net profit surged 35 percent to $18.2 billion.

Looking ahead to the third quarter ending in September, the company forecasted sales between $174 billion and $179.5 billion, with operating income projected to range from $15.5 billion to $20.5 billion. This outlook reflects Amazon’s confidence in sustained consumer demand while acknowledging variability in service delivery costs.

Amazon’s CEO highlighted the transformative impact of artificial intelligence on customer experiences, stating that the company's belief in AI’s potential is starting to materialize.

Alongside other leading technology firms, Amazon has been rapidly expanding its network of data centers—large-scale facilities hosting servers essential for cloud computing and AI services. Earlier this year, the CEO indicated that greater data center capacity could have allowed for higher cloud service sales, prompting accelerated construction efforts.

During the last quarter, Amazon invested over $31 billion in capital expenditures, nearly doubling the amount spent compared to the same period a year ago.

Amazon’s cloud segment posted $30.9 billion in sales, representing a 17.5 percent increase. Nevertheless, the division’s operating income declined to $10.2 billion due to lower profit margins, accounting for just over half of the company’s total operating profit.

The e-commerce and retail operations saw a 12 percent increase in items sold, indicating that consumer spending remained resilient despite tariffs and economic uncertainties. Direct product sales to customers grew 11 percent to $61.5 billion, while services provided to third-party sellers, including listing and fulfillment, also rose 11 percent to $40.3 billion. Physical store sales, including Whole Foods and Amazon Fresh, increased by 7 percent to $5.6 billion.

Operating profit from North America’s retail business jumped 48 percent to $7.5 billion, supported in part by strong growth in Amazon’s advertising segment, which expanded 23 percent to $15.7 billion.

The company has enhanced operational efficiency by redesigning logistics across its network of over 1,000 U.S. warehouses, positioning inventory closer to customers to reduce delivery times and costs, thereby boosting sales.

Amazon also restrained hiring growth, increasing its workforce by just 1 percent year-over-year to 1.546 million employees, maintaining tight control over expenses amid expanding business volumes.