Amazon (AMZN) delivered an impressive Q1 2025, marked by robust revenue growth, expanding margins, and strong profitability, underscoring continued momentum across its diverse business lines. Total net sales rose 9% year-over-year to $155.7 billion, or 10% excluding FX impacts, driven by strength in both products and services. Profitability surged, with net income climbing 64% to $17.1 billion, while operating income rose 20% to $18.4 billion, boosting the operating margin to 11.8%, up from 10.7% a year ago. Diluted EPS increased to $1.59, up from $0.98 in Q1 2024.

Segment results reflected broad-based strength. In North America, net sales grew 8% to $92.9 billion, with operating income up 17% to $5.8 billion, fueled by increased unit volume, third-party seller momentum, and growth in advertising and subscriptions. The International segment posted a 5% increase in sales to $33.5 billion, and operating income rose 13% to $1.0 billion, despite a $1.0 billion FX headwind. AWS continued to be a standout performer, with net sales up 17% to $29.3 billion and operating income rising 22% to $11.5 billion, supported by higher customer usage and a positive FX tailwind.

The company's shift toward services was evident, with net service sales rising 11% to $91.7 billion, outpacing the 3% growth in product sales. Notably, third-party seller services reached $36.5 billion, and advertising grew to $13.9 billion, continuing its trajectory as a high-margin contributor. AWS now operates at a $115 billion annualized run rate, and management highlighted growing demand for generative AI solutions, including investments in Tranium2 chips and new foundation models like Amazon Nova.

Operational efficiency also improved, with worldwide paid units rising 11% YoY in Q4 2024 and third-party sellers accounting for a record 62% of those units. Amazon delivered over 9 billion Prime orders same- or next-day in 2024, and delivery speeds for U.S. Prime members rose more than 65% YoY in Q4. These gains are supported by ongoing regionalization, automation, and robotics within the fulfillment network, which also contributed to lower per-unit transportation costs despite a 4% YoY increase in global shipping expenses.

On the cash flow front, Amazon reported trailing twelve-month (TTM) operating cash flow of $115.9 billion, up 36% YoY, and free cash flow of $38.2 billion, bolstered by disciplined capital management. Investments remain elevated, with TTM purchases of property and equipment up 61% to $77.7 billion, as the company prioritizes AWS infrastructure and AI capabilities. As of March 31, 2025, Amazon held $94.6 billion in cash and marketable securities.

Looking ahead, Amazon projects Q2 2025 revenue of $151.0–$155.5 billion, representing 5%–9% YoY growth, factoring in a $2.1 billion FX headwind and a $1.5 billion leap year benefit in the prior year. Expected operating income ranges from $14.0–$18.0 billion, reflecting sustained investment in high-growth areas, particularly AI.

Overall, Amazon’s Q1 results reflect a business firing on all cylinders, with AWS and advertising leading profitability, strong customer engagement, and continued execution on strategic priorities in AI, logistics, and cloud. Despite FX pressures and near-term investment cycles, the company’s financial strength and operational discipline position it well for long-term growth.