Amazon’s first quarter results met market expectations for revenue, with non-GAAP earnings per share surpassing Wall Street estimates. Management identified continued efficiency improvements in its fulfillment network and robust adoption of advertising services as key contributors to profit growth. CEO Andy Jassy highlighted increased customer engagement during global deal events and pointed to the rapid scaling of Amazon’s everyday essentials category, citing its growing importance in consumer shopping habits. The company also emphasized operational gains from regionalizing its fulfillment network and deploying new inbound architectures to lower delivery costs. "We delivered more items in the same day or next day in Q1 than any other quarter in our history," Jassy stated.
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Amazon (AMZN) Q1 CY2025 Highlights:
- Revenue: $155.7 billion vs analyst estimates of $155 billion (in line)
- Operating Profit (GAAP): $18.41 billion vs analyst estimates of $17.52 billion (5% beat)
- EPS (GAAP): $1.59 vs analyst estimates of $1.36 (17.2% beat)
- North America Revenue: $92.89 billion vs analyst estimates of $92.53 billion (small beat)
- AWS Revenue: $29.27 billion vs analyst estimates of $29.38 billion (small miss)
- North America Operating Profit: $5.84 billion vs analyst estimates of $6.01 billion (2.9% miss)
- AWS Operating Profit: $11.55 billion vs analyst estimates of $10.43 billion (10.7% beat)
- Operating Margin: 11.8%, up from 10.7% in the same quarter last year
- Market Capitalization: $2.28 trillion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Amazon’s Q1 Earnings Call
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Ross Sandler (Barclays) asked about AWS’s capacity to meet AI demand, to which CEO Andy Jassy responded that as new capacity is brought online, it is quickly consumed, and supply chain constraints are expected to ease over the year.
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Eric Sheridan (Goldman Sachs) questioned Amazon’s strategic priorities amid tariff uncertainty. Jassy emphasized the focus on broad selection, low prices, and fast delivery, while CFO Brian Olsavsky noted that some Q1 inventory costs were linked to tariff preparedness.
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Justin Post (Bank of America) inquired about the lumpiness in AWS revenue growth and its comparison to competitors. Jassy explained that enterprise migration cycles and unpredictable adoption of AI applications contribute to variable growth rates.
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Doug Anmuth (J.P. Morgan) asked about drivers of AWS margin performance and Alexa+ adoption. Olsavsky cited cost optimization and efficiency gains in AWS, while Jassy highlighted Alexa+’s ability to perform complex, action-oriented tasks as a differentiator.
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Brian Nowak (Morgan Stanley) requested insight on operational focus for peak retail periods under tariff uncertainty. Jassy mentioned helping sellers manage inventory levels and maintaining diversity among third-party sellers to support low prices and selection.
Catalysts in Upcoming Quarters
In the quarters ahead, our team will watch closely for (1) the pace of generative AI and cloud adoption within AWS as new capacity comes online, (2) margin performance in retail as supply chain automation and rural delivery initiatives progress, and (3) the impact of evolving tariff policies on inventory management and pricing. The effectiveness of Amazon’s advertising expansion and the adoption of Alexa+ will also be essential indicators for the company’s growth trajectory.
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