Amazon: A Strong Third Quarter with AWS and Advertising Leading the Charge
Highlights
- Revenue: $180.2B (+12% YoY)
- Operating income: $17.4B (would be over $21B without special expenses)
- AWS revenue: $33B (+20.2% YoY)
- AWS backlog: $200B
- Advertising revenue: $17.7B (+22% YoY)
- Trailing 12-month free cash flow: $14.8B
- Net income: $21.2B
Amazon's third quarter of 2025 presented a compelling showcase of the company's diverse growth avenues, driven largely by the stellar performance of AWS and advertising segments.
Revenue and Operating Income Surges
Amazon reported a robust $180.2 billion in revenue, reflecting a 12% year-over-year increase. The operating income was $17.4 billion, although without the impact of a Federal Trade Commission settlement and severance costs, it would have surpassed $21 billion. This highlights the underlying strength of Amazon's operations despite such significant financial impacts.
AWS: A Beacon of Growth
The Amazon Web Services (AWS) segment emerged as a key performer with revenues hitting $33 billion, marking a reacceleration with a 20.2% increase year-over-year. AWS's backlog swelled to a substantial $200 billion, indicating strong future performance prospects. This surge is attributed to increased demand for AI and core services, suggesting Amazon is successfully capitalizing on the cloud and AI expansions.
Advertising Momentum Continues
Advertising revenues also displayed impressive growth, climbing to $17.7 billion—a 22% rise from the previous year. This reflects Amazon's effective scaling of its advertising services, tapping into a massive ad-supported audience base and strategic partnerships with platforms like Netflix and Spotify, bolstering its ad ecosystem significantly.
Cash Flow and Investments
Amazon achieved a trailing 12-month free cash flow of $14.8 billion, underscoring strong cash generation capabilities amidst significant investments in AWS infrastructure and custom silicon development. This financial leverage enables Amazon to continue investing in its growth sectors aggressively.
In conclusion, Amazon's Q3 2025 results underscore its strategic balance of growth and investment across critical segments, positioning it effectively amidst evolving market dynamics and technological advancements.