The Amazon’s second quarter advertising company charged $156.94! Third-party sellers face profit challenges

The Amazon recently issued its financial report for the second quarter of 2025, with a net sales volume of $167.7 billion, an increase of 13 per cent over the same period, with a share of $1.68 per share. Business profits are expected to range from $15.5 billion to $20.5 billion this quarter, and, according to StreetAccount, analysts had previously projected business profits at $19.48 billion.

Advertising services performed particularly well, with revenues of $15,694 million, an increase of 23 per cent over the same period, continuing the growth trend of more than 20 per cent over multiple quarters. Not only did it exceed the expected $14.9 billion on Wall Street, but it also further consolidated the position of the Amazon as the third largest global digital advertising platform, after Google and Meta.

The increase in advertising revenues is mainly due to the continued strength of the Amazon ‘ s full-source advertising strategy. The introduction of advertising by Prime Vidio, the collaboration with Roku and the strong demand for advertising of sponsored products have significantly increased the profitability of advertising. Andy Jassy, Chief Executive Officer, noted at the Press conference that the growth in advertising had been facilitated by the high level of participation of users of shopping and media platforms, particularly on Prime Vidio Channels, and that 25 per cent of the current media subscriptions had activated the platform from the Amazon.

The Amazon cloud computing sector, AWS, achieved income of $30,873 million during the quarter, an increase of 17.5 per cent over the same period, slightly higher than the analyst’s expected $30.8 billion, or 18 per cent of the company’s total revenue. However, the AWS operating profit margin was 32.9 per cent, down significantly from 39.5 per cent in the first quarter, which was nearly two years lower.

The decline in profitability is mainly the result of high corporate capital expenditure on AI infrastructure. Capital expenditure is projected to reach $105 billion in the Amazon in 2025, the bulk of which is for the construction of the AWS data centre in support of AI. During the financial teleconference, Jassi mentioned that AWS faced bottlenecks in the supply of electricity and the procurement of chips, which may need to be addressed over several quarters. Nevertheless, AWS maintains global cloud computing market leadership, adding new customers such as PepsiCo, Airbnb and introducing AI products such as the AgentCore and Amazon Nova models, demonstrating their long-term potential in the AI area.

Income from third-party sellers for services reached $40,348 million in the current quarter, an increase of 10 per cent over the same period, lower than the growth rate of advertising and AWS. This operation includes commission, performance (FBA) and distribution costs charged by the Amazon to third-party vendors. While third-party sellers contribute more than 60 per cent of the Amazon, the continued rise in FBA and advertising costs has significantly reduced the margin of profit for sellers.

As a result of Trump ‘ s trade policy, tariff costs have become a new challenge for third-party sellers. According to Jassi, the Amazon seller community is diverse and some of the sellers may not be able to fully transfer tariff costs to consumers, but overall profitability remains under pressure. The Amazon has reduced some of its costs by optimizing its compliance network, but there is still insufficient support for vendors.

Amazon projects sales for the third quarter of the year at $174 billion to $1795 billion, higher than the analyst ‘ s projection of $173.2 billion. Projected operating income ranges from $15.5 billion to $20.5 billion.