Amazon advertising grew 26% to $US19.8 billion in the June quarter, faster than the online retailer's main business.
Overall net sales increased 20% to $US200.6 billion. Growing faster was Amazon’s cloud business, AWS, where sales increased 37% to $US42.2 billion.
Amazon expanded its Ads Agent, an AI tool for planning, launching and managing advertising campaigns, to 11 new countries.
The company says advertisers using Ads Agent see 8% lower cost-per-impression and 6% lower cost-per-acquisition.
“AWS is booming, growing 36.7% year-over-year in Q2—our fastest growth in 18 quarters—and our AI and Chips businesses each eclipsed run rates of more than $25 billion,” said CEO Andy Jassy.
“In Stores, we again set record delivery speeds for Prime members in the first half of the year—over 40% more items delivered same-day or overnight, with Grocery and Everyday Essentials growing meaningfully faster than the rest of the business.
“And, Advertising had another strong quarter with 26% year-over-year growth. There’s a lot to be excited about, and we have much more coming for customers in the second half of the year and beyond.”
Emarketer principal analyst Sky Canaves said Prime Day’s move to June guaranteed a much larger topline, and Amazon beat expectations while improving margins, offsetting the pressures of the tentpole event and record delivery speeds thanks to a substantial bump in ad revenues from the shift.
“But the US consumer remains cautious as shoppers make more purchases but spend less on each item, and Amazon’s sales of grocery and essentials are growing meaningfully faster than the rest of the ecommerce business,” said Canaves.
"AWS is booming and clearly the headline story for Q2, but it’s coming at a cost: free cash flow has gone into negative territory for the first time in more than three years, long-term debt has doubled since the end of 2025, and capex spending is likely to end up well above the previous estimate of $200 billion for the year.
“Investors may be unlikely to blink, however, given the accelerating pace of AWS revenue growth and strict cost controls in other areas."
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