Amazon Q1 Earnings Update!
Exploding AI Capex, while AWS and Advertising show strength!
The first quarter of 2025 has been quite volatile for the markets, and Amazon is no different!
After the madness of the “Liberation Day” tariffs, the AMZN 0.00%↑ fell 13% in just a few days, but has since recovered as some tariffs were postponed and additional exceptions were announced.
Overall, Amazon’s stock has fallen 20% since February, when Trump started his Trade War with his North American neighbors, Mexico and Canada, as investors continue to reassess how trade tensions will affect the company.
In Q1 2025, Amazon’s revenue grew by 8.6% to $155.7B, whilst EBIT grew 20.2% to $18.4B and net income grew 64.2% to $17.1B.
However, investors were not reassured by this earnings report, so the stock went down 3.2%!
In this article, I will look at Amazon’s Q1 2025 results, if you want a more detailed analysis of the business, read my Amazon Investment Case!
Let’s look into the report and see what investors didn’t like!
1. Online and Physical Stores
2. 3P Services
3. Advertising
4. Subscriptions
5. AWS
6. Consolidated Financials
7. Valuation
8. Conclusion
1. Online and Physical Stores
Under these segments, Amazon reports its direct, first-party sales on Amazon.com and physical sales from Whole Foods, Amazon Go, and other brick-and-mortar stores.
While large in terms of revenue, these 2 segments don’t contribute much to the profitability of the company and are slow growers.
Revenue from online stores grew 5% Y/Y to $57.4B. FX-neutral (FXN) growth was 6%. This was a deceleration from 8% in Q4 and 7% in Q2024!