Amazon reported that the AI and chips business generated by the AWS B2B operation drove sales in the second quarter, along with significant gains in product revenues, as the company previewed a formula to pass some of its $600 million in IEEPA tariff refunds directly to customers.
Net income was $62.65 billion, or $5.75 per diluted share, versus $18.16 billion, or $1.68 per diluted share, in the prior-year quarter. Net income in the period includes non-operating pre-tax other income of $53.4 billion, Amazon maintained, primarily because of an investment in AI developer Anthropic.
An analyst consensus estimate published by Zacks Investment Research called for earnings per diluted share of $1.81 and revenues of $196.85 billion
Net sales were $200.61 billion versus $167.7 billion in the year-before quarter, the company noted, while product sales were $77.6 billion versus $68.25 billion.
Operating income was $27.46 billion in the quarter compared with $19.17 billion in the year-previous period.
North America segment sales advanced 16% in the quarter year-over-year to $116.18 billion, while operating income came in at $9.12 billion versus $7.52 billion.
Amazon issued third-quarter guidance for net sales of between $197 billion and $202 billion, and operating income between $22.5 billion and $26.5 billion.
In a conference call, Brian Olsavsky, Amazon CFO, said the $600 million in International Emergency Economic Powers Act tariff refunds the Amazon North America business is entitled to receive are positioning the company to return some duties paid to customers. However, he said Amazon had absorbed much of the IEEPA tariff cost itself, and many of its suppliers were importers of record for their goods and paid duties themselves, so not everything paid out in levies was reflected in customer transactions.
“We’ve identified a limited set of circumstances where we can trace that we passed specific import charges on to customers,” Olsavsky said. “When we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them. Otherwise, like other large retailers, we’ll utilize refunds to continue to invest in low prices for customers.”
When it comes to artificial intelligence, Amazon isn’t just advancing by selling more AI products and services to other businesses. In the conference call, Andy Jassy, Amazon president and CEO, made the point that more of the company’s shoppers are discovering products through its agentic and conversational functions, including in Alexa+ and Alexa for Shopping.
In announcing the financial results, Jassy said, “AWS is booming, growing 36.7% year-over-year in Q2, our fastest growth in 18 quarters, and our AI and chips businesses each eclipsed run rates of more than $25 billion. In stores, we again set record delivery speeds for Prime members in the first half of the year: over 40% more items delivered same-day or overnight, with grocery and everyday essentials growing meaningfully faster than the rest of the business. And, advertising had another strong quarter with 26% year-over-year growth. There’s a lot to be excited about, and we have much more coming for customers in the second half of the year and beyond.”
