Advertising emerges as a key profit driver alongside cloud growth, even as retail faces macro pressures.
Amazon posted strong results for the third quarter of 2025, driven by robust gains in advertising and cloud computing, offsetting softness in retail operations ahead of the holiday season. Advertising revenue climbed 24% year-on-year to $17.7 billion, marking one of Amazon’s fastest-growing business segments.
The performance underscores how Amazon’s ad business has evolved into a major profit engine, complementing its core retail and AWS segments. CEO Andy Jassy noted during the earnings call that the company sees “multiple areas for continued growth,” including advertising and retail, signaling an increased strategic focus on high-margin ad operations.
Amazon Web Services (AWS) also delivered strong results, with revenue rising 20% YoY-its fastest pace in nearly three years-helping offset slower e-commerce momentum caused by weak consumer sentiment and rising fulfillment costs.
For the quarter ended September 30, 2025:
- Total net sales: $180.2 billion, up 13% YoY
- Operating income: $17.4 billion, including a $2.5 billion regulatory settlement and $1.8 billion in severance costs
- Q4 guidance: Net sales projected between $206–$213 billion, slightly above market expectations
Why Advertising Matters
Amazon’s ad business offers strong margin advantages and leverages the company’s vast shopper data for retail media dominance. With retail growth slowing, advertising diversification provides resilience and incremental profitability.
Looking Ahead
Advertising and AWS will continue to anchor Amazon’s growth story into 2026. Investors will track ad revenue growth, margin expansion, and new monetisation formats across streaming, devices, and in-store placements – as Amazon leans further into its high-margin advertising ecosystem.
