Amazon released its third-quarter 2025 earnings, revealing strong growth in its cloud and advertising divisions while continuing to ramp investment in artificial intelligence infrastructure. As reported by Adweek, Amazon’s advertising revenue jumped 24% year-on-year, reaching $17.7 billion.
Key Financial Highlights
- Total net sales hit $180.2 billion, up about 13% compared to the same quarter last year
- Amazon Web Services (AWS) reported $33 billion in revenue, up 20% year-on-year, its fastest growth rate since 2022.
- AWS now has an annualized revenue run-rate of approximately $132 billion
- Free cash flow dropped sharply, down ~69% to $14.8 billion, reflecting heavy investment in AI and infrastructure.
- Severance costs tied to job cuts were approximately $1.8 billion as Amazon began reducing around 14,000 corporate positions this quarter.
Advertising Business Gains Momentum
Amazon’s ads business continues to become a more important growth driver. Key points:
- The company noted major deals with partners such as Netflix, Spotify, and SiriusXM, bolstering its reach across streaming and audio platforms.
- CEO Andy Jassy described “agentic commerce” (AI-driven shopping experiences) as a major opportunity ahead, suggesting that Amazon expects AI to deepen consumer-shopping interactions online.
AWS and AI Infrastructure: The Engine Room
AWS remains at the heart of Amazon’s long-term strategy, especially as it expands its AI infrastructure. Notable developments:
- AWS growth re-accelerated to 20% year-on-year.
- Jassy noted that demand for AWS capacity still exceeds supply, with power and chip constraints cited as bottlenecks.
- Amazon is doubling down on generative AI, viewing it as a path to growth beyond cloud alone. While AWS remains the core, Amazon’s internal AI projects are gaining scale.
Strategic Takeaways for Brands, Advertisers and Tech Partners
- For advertisers: Amazon’s strong ad growth signals the expanding importance of retail-media and commerce-driven advertising. Brands that tie into Amazon’s ecosystem may gain from improved targeting and measurement.
- For agencies and media planners: The surge in AWS and ad business suggests Amazon is becoming more central not just to commerce, but to cloud and advertising infrastructure.
- For tech and infrastructure partners: The capacity strain at AWS and increased infrastructure investment show that Amazon expects large-scale AI workloads ahead.
- For the market: Amazon’s results affirm that cloud plus commerce plus advertising remains a potent mix.
What It Means
Retail media on Amazon continues to scale, giving brands richer targeting and measurement. AWS remains a core engine for AI adoption, with capacity expansions indicating sustained demand. The near-term watch items are ad margin leverage, AWS supply constraints, and the pace of AI feature rollouts.
