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    AMZN
    Earnings call· Sep 2025(Q3 FY25)

    AMAZON COM INC AMZN

    Oct 30, 2025 Source

    Executive summary

    Amazon Q3 FY25 — Strong AWS Reacceleration and AI Momentum

    Amazon delivered strong Q3 FY25 results, driven by significant reacceleration in AWS revenue and robust growth in advertising. The company is heavily investing in AI, with custom silicon like Trainium gaining traction and new AI-powered features like Rufus and AgentCore showing promising early results. Despite special charges impacting operating income, Amazon remains focused on operational efficiencies, capacity expansion, and customer experience innovations, particularly in fast delivery and agentic commerce.

    Highlights

    5

    • AWS revenue reaccelerated to 20.2% year-over-year, reaching a $132 billion annualized run rate, its largest growth rate in 11 quarters.

    • AWS backlog grew to $200 billion by Q3 quarter-end, not including several unannounced new deals in October.

    • Advertising revenue grew 22% year-over-year to $17.6 billion, accelerating for the third consecutive quarter.

    • Rufus, the AI-powered shopping assistant, is on track to deliver over $10 billion in incremental annualized sales.

    • Worldwide paid units grew 11% year-over-year, with third-party seller unit mix at 62%, up 200 basis points year-over-year.

    Concerns

    2

    • Operating income was impacted by 2 special Q3 expenses: $2.5 billion for an FTC settlement and $1.8 billion for estimated severance costs.

    • AWS operating margins are impacted by increased depreciation from new data center assets placed into service for Gen AI.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full year cash CapEx
    approximately $125 billion
    high materiality
    High
    AWS power capacity
    double again
    high materiality
    High
    AWS power capacity added
    at least another 1 gigawatt
    medium materiality
    High
    Trainium2 chips for Anthropic
    more than 1 million Trainium2 chips
    medium materiality
    High
    Rural communities with same-day and next-day delivery access
    half of the total communities we plan to expand to
    low materiality
    High
    Trainium3 availability
    preview at the end of this year with much fuller volumes coming in the beginning of '26
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    North America
    Operating income includes a portion of the severance charge.
    Operating Margin: 4.5%Adjusted Operating Income (ex-FTC settlement): $7.3 billionAdjusted Operating Margin (ex-FTC settlement): 6.9%
    		$106.3 billion11%—$4.8 billion
    International
    Operating margins expanded year-over-year excluding the impact of the severance charge.
    Operating Margin: 2.9%
    		$40.9 billion10% (ex-FX)—$1.2 billion
    AWS
    Driven by strong growth across both AI and core services and more capacity. Operating income reflects continued growth and focus on driving efficiencies, but margins are impacted by depreciation from Gen AI investments.
    Annualized Revenue Run Rate: $132 billionGrowth Acceleration: 270 basis points compared to last quarter
    		$33 billion20.2%—$11.4 billion

    Operational metrics

    43
    Worldwide revenue
    $180.2 billion12% increase year-over-year (ex-FX)
    Q3 FY25
    Worldwide operating income
    $17.4 billion
    Q3 FY25

    Would have been $21.7 billion excluding special charges, $1.2 billion above high end of guidance range.

    FTC settlement charge
    $2.5 billion
    Q3 FY25

    Reduced operating income.

    Severance costs
    $1.8 billion
    Q3 FY25

    Related to role eliminations, reduced operating income.

    Worldwide paid units
    11%year-over-year
    Q3 FY25
    Worldwide third-party seller unit mix
    62%up 200 basis points from Q3 of last year
    Q3 FY25

    More than 1.3 million sellers used generative AI capabilities for listings.

    U.S. inbound lead time reduction
    nearly 4 dayscompared to last year
    Q3 FY25

    Allows for more efficient inventory purchasing and benefits working capital.

    Rufus active customers
    250 million
    this year

    AI-powered shopping assistant.

    Rufus monthly users growth
    140%year-over-year
    Q3 FY25
    Rufus interactions growth
    210%year-over-year
    Q3 FY25
    Rufus shopping trip purchase likelihood
    60% more likely
    Q3 FY25

    Customers using Rufus during a shopping trip.

    Rufus incremental annualized sales
    over $10 billion
    annualized

    On track to deliver.

    AI-powered audio feature usage
    almost 3 million minutes
    Q3 FY25

    Combines product summaries and reviews.

    Amazon Lens monthly users
    Tens of millions
    monthly

    AI-powered visual search tool.

    Amazon Ads revenue
    $17.6 billion22% year-over-year
    Q3 FY25

    Strong growth across broad portfolio.

    Amazon Ads U.S. ad-supported audience
    over $300 million
    Q3 FY25

    Average ad-supported audience.

    NBA on Prime opening night doubleheader viewers
    1.25 milliondouble-digit increase over last season on cable
    opening night
    Alexa+ customer engagement
    2x more
    Q3 FY25

    Alexa+ customers are talking to Alexa 2x more than classic Alexa experience, with much longer interactions.

    Alexa+ and Fire TV usage rate
    2.5x
    Q3 FY25

    Rate of classic usage.

    Alexa+ natural conversation for audio content
    4x more
    Q3 FY25
    Alexa+ photo engagement
    4x more
    Q3 FY25
    Alexa+ shopping conversations ending in purchase
    4x more
    Q3 FY25
    Project Kuiper satellites in space
    more than 150
    Q3 FY25
    Project Kuiper speeds in test
    over 1 gigabit per second
    Q3 FY25

    With enterprise-grade customer terminal.

    AWS power capacity added
    3.8 gigawatts
    past 12 months

    More than any other cloud provider.

    AWS power capacity vs 2022
    doublevs 2022
    Q3 FY25
    Trainium2 revenue growth
    150%quarter-over-quarter
    Q3 FY25

    Trainium2 is a multibillion-dollar business.

    AgentCore SDK downloads
    over 1 million
    Q3 FY25
    Transform manual effort saved
    700,000 hours
    year-to-date
    Transform lines of code processed (Thomson Reuters)
    1.5 million lines per month
    Q3 FY25

    Moving from Windows to open source alternatives.

    Transform mainframe code analyzed
    nearly 1 billion lines
    Q3 FY25

    As customers move mainframe applications to the cloud.

    Quick Suite time savings on complex tasks
    80%+
    Q3 FY25
    Quick Suite cost savings
    90%+
    Q3 FY25
    Amazon Connect annualized revenue run rate
    $1 billion
    annualized
    Amazon Connect customer interactions handled by AI
    12 billion minutes
    last year
    Stores selection increase
    14%since last quarter
    Q3 FY25

    From popular brands.

    Everyday Essentials growth
    nearly twice as fastas the rest of the business
    year-to-date
    Perishable groceries cities/towns
    1,000
    Q3 FY25

    Customers can shop fresh groceries alongside millions of Amazon.com products with free same-day delivery.

    Add to delivery button usage
    80 million times
    since launch

    Allows customers to add items to previously scheduled orders.

    Rural delivery network investment
    over $4 billion
    Q3 FY25

    To expand rural delivery network.

    Rural communities with same-day/next-day access increase
    60%
    Q3 FY25

    Reaching roughly half of total communities planned for expansion by year-end.

    Cash CapEx
    $34.2 billion
    Q3 FY25

    Primarily relates to AWS investments for AI and core services, custom silicon, and tech infrastructure for North America and international segments.

    Net income
    $21.2 billion
    Q3 FY25

    Investment activity not related to Amazon's ongoing operations, included in nonoperating income.

    Industry KPIs

    5
    MetricValueDetails
    Segment revenue mixNorth America: $106.3 billion; International: $40.9 billion; AWS: $33 billionUSD
    Ai cloud revenue backlog$33 billionUSD
    Advertising revenue take rate$17.6 billionUSD
    Subscription membership program2x more
    Operating income EBIT and adjusted EBITDA$17.4 billionUSD

    Product announcements

    2
    ProductTypeDetails
    Project Kuiper Satellitesmilestone
    Zoox Robotaxisexpansion

    Deals & partnerships

    5
    Federal Trade Commission (FTC)Legal settlement$2.5 billion

    Settlement related to a legal matter with the FTC.

    NetflixAdvertising inventory access

    Providing advertisers using Amazon DSP with direct access to Netflix's premium ad inventory.

    SpotifyAdvertising inventory access

    Providing advertisers with direct programmatic access to a global audience of more than 400 million monthly ad-supported listeners.

    SiriusXMAdvertising inventory access

    Brands can reach 160 million monthly digital listeners across services like Pandora and SoundCloud.

    AnthropicInvestment

    Investment activity not related to Amazon's ongoing operations.

    Risks & headwinds

    6
    FTC legal settlementQ3 FY25

    $2.5 billion charge

    Mitigation: Legal settlement has been reached.

    Severance costsQ3 FY25

    $1.8 billion charge

    Mitigation: Related to role eliminations for organizational efficiency and to operate as a leaner, flatter, faster-moving organization.

    AWS operating margin fluctuationongoing

    Impacted by increased depreciation

    Mitigation: Driven by the level of investments in Gen AI capacity; management expects fluctuations but aims for sustained progress over the long term.

    Industry bottleneck in power for AI capacityongoing

    Industry-wide challenge

    Mitigation: Amazon is aggressively adding power capacity (3.8 GW in last 12 months, 1 GW+ in Q4, doubling by 2027).

    Complexity of building AI agentscurrent

    Still harder than it should be

    Mitigation: AWS launched Strands (open source) and AgentCore (infrastructure building blocks) to simplify and secure agent development and deployment.

    Customer experience for third-party agentscurrent

    Lack of personalization, shopping history, frequently wrong delivery estimates and prices

    Mitigation: Amazon is working to improve the customer experience and exchange value for potential partnerships with third-party agents.

    What to watch in Q4 FY25

    5

    AWS Power Capacity Added

    Q4 this year
    Current3.8 gigawatts (last 12 months)
    TargetAt least another 1 gigawatt

    Why it matters

    Critical for supporting growing AI and core services demand and maintaining AWS's competitive advantage.

    In the last quarter of this year alone, we expect to add at least another 1 gigawatt of power.

    Q&A highlights

    6

    How are capacity levels for AWS, especially for AI workloads, and what is the demand for Trainium outside of major customers?

    Jassy confirmed significant capacity additions (3.8 GW in last year, 1 GW+ in Q4, doubling by 2027) and high monetization. Trainium2 is fully subscribed, a multibillion-dollar business growing 150% QoQ, with Anthropic using 500k chips (scaling to 1M). Trainium3, expected end of year with fuller volumes in '26, is anticipated to be 30-40% more price-performant, attracting broad customer interest.

    “Trainium3 should preview at the end of this year with much fuller volumes coming in the beginning of '26, we have a lot of customers, both very large, and I'll call it, medium-sized who're quite interested in Trainium3.”

    asked by Justin Post · answered by Andrew Jassy

    2 min read5 chapters

    Detailed Narrative

    01

    AWS Momentum and AI Leadership

    AWS reaccelerated to 20.2% YoY growth, driven by broad infrastructure functionality and AI innovation. The company is heavily investing in AI building blocks like SageMaker, Bedrock, Strands, and AgentCore, with AgentCore's SDK downloaded over 1 million times. AWS is also developing its own agents like Kiro (coding), Transform (migration), and Quick Suite (business AI), showing significant time and cost savings for customers.

    02

    Capacity Expansion for AI

    Amazon is aggressively expanding its power and data center capacity, adding over 3.8 gigawatts in the past 12 months and expecting another 1 gigawatt in Q4. Project Rainier, a massive AI compute cluster with nearly 500,000 Trainium2 chips, is online and being used by Anthropic, with plans to scale to over 1 million chips. Trainium2 is a multibillion-dollar business, growing 150% QoQ, and Trainium3 is expected to offer 40% better price performance.

    03

    Stores Innovation and Fast Delivery

    The stores team continues to focus on selection, low prices, and convenience, adding 14% more selection since last quarter. Everyday Essentials is growing nearly twice as fast as the rest of the business. Amazon is rolling out 3-hour delivery in select U.S. cities and expanding its rural delivery network with a $4 billion commitment, increasing access to same-day/next-day delivery by 60% in rural communities.

    04

    AI in Retail and Advertising

    AI is rapidly integrated into retail, with Rufus, the AI-powered shopping assistant, used by 250 million active customers and on track to deliver over $10 billion in incremental annualized sales. Amazon Lens, an AI visual search tool, is used by tens of millions monthly. Advertising revenue grew 22% YoY to $17.6 billion, benefiting from a full-funnel offering, partnerships (Roku, Netflix, Spotify, SiriusXM), and AI-powered creative tools.

    05

    Grocery Strategy and Headcount Philosophy

    Amazon's grocery business, including Whole Foods and perishables, is a significant focus, with the ability to combine fresh groceries with Amazon.com products for same-day delivery in over 1,000 cities. The company views this as a "game changer" for customer habits. Recent headcount adjustments were driven by a cultural commitment to operate as a lean, flat, and fast-moving organization, rather than purely financial or AI-driven reasons.

    AI-generated summary of the company’s earnings call. Not investment advice.