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Amazon (AMZN) came out with quarterly earnings of $1.95 per share, beating the Zacks Consensus Estimate of $1.58 per share. This compares to earnings of $1.43 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +23.42%. A quarter ago, it was expected that this online retailer would post earnings of $1.33 per share when it actually produced earnings of $1.68, delivering a surprise of +26.32%.Over the last four quarters, the company ...

Cash Flow and Investments - Operating cash flow for Q3 2025 was $35.5 billion, an increase from $26.0 billion in Q3 2024, driven by higher net income and improved working capital management [111]. - Cash capital expenditures for Q3 2025 were $34.2 billion, up from $21.3 billion in Q3 2024, primarily reflecting investments in technology infrastructure and fulfillment network capacity [112]. - The company expects to invest an additional $1.4 billion in a convertible note in Q4 2025, following a $1.3 billion investment in Q2 2025 [113]. - Cash provided by investing activities was $(26.1) billion for Q3 2025, compared to $(16.9) billion in Q3 2024, with significant variability due to marketable securities transactions [112]. - As of September 30, 2025, cash, cash equivalents, and marketable securities totaled $94.2 billion, with $20.4 billion held in foreign currencies [110]. - The company anticipates using cash on hand to settle the FTC lawsuit, indicating potential future cash flow impacts [111]. - The company has no outstanding borrowings under its unsecured revolving credit facilities as of September 30, 2025, indicating strong liquidity [115]. Tax and Regulatory Environment - The effective tax rate is expected to decrease significantly in 2025 due to the 2025 Tax Act, which reinstates 100% accelerated depreciation deductions [117]. - The company is subject to various tax controversies that could materially affect operating results or cash flows [109]. Sales and Revenue - Net sales for Q3 2025 reached $180.2 billion, a 13% increase year-over-year, with North America contributing $106.3 billion and AWS $33.0 billion [123][124][127]. - International sales grew by 14% in Q3 2025, totaling $40.9 billion, with foreign exchange rates contributing an increase of $1.5 billion [126]. - Changes in foreign exchange rates increased net sales by $1.5 billion for Q3 2025 and $1.6 billion for the nine months ended September 30, 2025 [123][126]. - International segment net sales accounted for 23% of consolidated revenues in Q3 2025, with a positive impact of $1.5 billion from foreign exchange rate fluctuations compared to Q3 2024 [160]. Operating Expenses - Total operating expenses for Q3 2025 were $162.7 billion, reflecting a 15% increase year-over-year, with cost of sales rising by 10% [128]. - Fulfillment costs increased by 12% in Q3 2025, totaling $27.7 billion, influenced by sales growth and investments in the fulfillment network [134]. - Technology and infrastructure costs rose by 30% in Q3 2025, amounting to $29.0 billion, primarily due to increased infrastructure spending [136][137]. - Sales and marketing expenses increased by 10% in Q3 2025, totaling $11.7 billion, driven by higher advertising costs [140]. - General and administrative costs for Q3 2025 were $2.9 billion, reflecting an increase primarily due to severance costs [142]. Operating Income - Operating income for Q3 2025 was $17.4 billion, with a nine-month total of $55.0 billion, reflecting charges of $2.5 billion for a lawsuit settlement and $1.8 billion in severance costs [144]. - North America operating income decreased in Q3 2025 due to increased operating and shipping costs, despite higher unit and advertising sales; however, it increased for the nine months ended September 30, 2025, primarily due to increased unit sales [145]. - International operating income decreased in Q3 2025 due to higher shipping and fulfillment costs, but increased for the nine months ended September 30, 2025, driven by higher unit and advertising sales [146]. - AWS operating income increased in Q3 2025 due to higher sales, offset by technology infrastructure spending and severance costs; this trend continued for the nine months ended September 30, 2025 [147][148]. Other Income and Tax Provisions - Interest income was $1.1 billion in Q3 2025, with a nine-month total of $3.3 billion, primarily due to a higher average balance of invested funds [149]. - Other income increased to $10.2 billion in Q3 2025 and $14.1 billion for the nine months ended September 30, 2025, mainly from adjustments related to investments in Anthropic [151]. - The income tax provision for the nine months ended September 30, 2025, was $14.1 billion, including $354 million of net discrete tax expense related to gains from investments in Anthropic [152]. Cash Flow Forecast - Free cash flow for the trailing twelve months ended September 30, 2025, was $14.8 billion, down from $47.7 billion in the prior year, reflecting increased capital expenditures [154]. - Guidance for Q4 2025 anticipates net sales between $206.0 billion and $213.0 billion, representing a growth of 10% to 13% compared to Q4 2024, with expected operating income between $21.0 billion and $26.0 billion [157]. Investment Valuations - As of September 30, 2025, the recorded value in equity, equity warrant, and convertible debt investments in public and private companies was $46.9 billion [163]. - Equity and equity warrant investments in publicly traded companies amounted to $4.8 billion, including the investment in Rivian, and are recorded at fair value [163]. - Equity warrant investments in private companies are recorded at fair value, with adjustments made for observable price changes or impairments [163]. - The available-for-sale convertible debt investments in private companies, primarily related to Anthropic, are also recorded at fair value [163]. - Valuations of private companies are complex due to the lack of readily available market data [163]. - Current global economic conditions contribute to additional uncertainty in market valuations [163]. - Market sensitivities are considered impractical under the current economic conditions [163].

Financial Data and Key Metrics Changes - The company reported revenue of $180.2 billion for Q3 2025, representing a 12% year-over-year increase, excluding foreign exchange impacts [6][25] - Operating income was $17.4 billion, which would have exceeded $21 billion without two special expenses totaling $4.3 billion [6][26] - Trailing 12-month free cash flow stood at $14.8 billion [6] Business Line Data and Key Metrics Changes - AWS revenue reached $33 billion, growing 20.2% year-over-year, marking the largest growth rate in 11 quarters [6][30] - North America segment revenue was $106.3 billion, an 11% increase year-over-year, while the International segment revenue was $40.9 billion, up 10% year-over-year [26] - Worldwide paid units grew by 11% year-over-year, with third-party seller unit mix increasing to 62% [27] Market Data and Key Metrics Changes - AWS backlog grew to $200 billion by the end of Q3, not including unannounced deals in October [8] - Amazon Ads generated $17.6 billion in revenue, growing 22% year-over-year [19][30] Company Strategy and Development Direction - The company is focused on expanding its AWS capabilities, particularly in AI and core services, with significant investments in infrastructure and custom silicon [15][32] - The grocery business is evolving with a strong emphasis on perishables and same-day delivery, aiming to change consumer habits [56] - The company is committed to enhancing its advertising offerings and leveraging partnerships to expand its reach [21][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in AWS's growth trajectory, citing strong demand for AI workloads and infrastructure [6][31] - The company is preparing for the peak holiday season, emphasizing its commitment to customer experience [33] - Management acknowledged the importance of maintaining a lean organizational structure to foster innovation and speed [57] Other Important Information - The company has invested over $4 billion to expand its rural delivery network, increasing access to same-day and next-day delivery [18] - The introduction of AI-powered tools like Rufus and AgentCore is expected to enhance customer engagement and streamline operations [19][74] Q&A Session Summary Question: AWS capacity levels and Trainium demand - Management highlighted significant capacity additions, with 3.8 GW added in the last year and expectations to double capacity by 2027 [37] Question: Trainium positioning versus third-party chips - Management emphasized the importance of multiple chip options and the competitive advantages of Trainium in terms of price performance [43][45] Question: Project Rainier architecture and differentiation - Management described Project Rainier as a large-scale infrastructure feat that leverages Trainium chips for enhanced performance [49] Question: Grocery business and perishable delivery - Management noted that the grocery business has surpassed $100 billion in gross merchandising sales, with a focus on same-day delivery for perishables [52][56] Question: Future headcount and AI efficiencies - Management clarified that recent headcount changes were driven by cultural considerations rather than financial or AI efficiencies [57] Question: Robotics and automation opportunities - Management confirmed ongoing investments in robotics to improve safety, productivity, and customer experience [61][62] Question: Agentic commerce and customer service - Management expressed excitement about the potential of agentic commerce to enhance the online shopping experience [65][68] Question: AWS growth drivers and advertising contributions - Management indicated that both core infrastructure and AI workloads are driving AWS growth, with strong performance across advertising offerings [72][78]

Financial Data and Key Metrics Changes - The company reported revenue of $180.2 billion for Q3 2025, representing a 12% year-over-year increase, excluding foreign exchange impacts [6][25] - Operating income was $17.4 billion, which would have exceeded $21 billion without two special expenses totaling $4.3 billion [6][26] - Trailing 12-month free cash flow stood at $14.8 billion [6] Business Line Data and Key Metrics Changes - AWS revenue reached $33 billion, up 20.2% year-over-year, marking the largest growth rate in 11 quarters [6][31] - North America segment revenue was $106.3 billion, an 11% increase year-over-year, while international segment revenue was $40.9 billion, a 10% increase year-over-year [26] - Worldwide paid units grew by 11% year-over-year, with third-party seller unit mix increasing to 62% [27][28] Market Data and Key Metrics Changes - AWS backlog grew to $200 billion by the end of Q3, not including several unannounced deals in October [8] - The advertising segment generated $17.6 billion in revenue, growing 22% year-over-year [19][31] Company Strategy and Development Direction - The company is focused on expanding AWS capabilities, particularly in AI and core services, with significant investments in infrastructure and custom silicon [15][33] - The grocery business is evolving with a strong emphasis on perishables and same-day delivery, aiming to change consumer habits [16][55] - The company is committed to enhancing its advertising offerings and leveraging partnerships to expand its reach [20][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in AWS's growth trajectory, citing strong demand for AI workloads and infrastructure [6][31] - The company is preparing for a busy Q4, anticipating high demand for AWS and innovations in AI-powered experiences [24][34] - Management emphasized the importance of maintaining a lean organizational structure to foster agility and innovation [57][58] Other Important Information - The company has committed over $4 billion to expand its rural delivery network, increasing access to same-day and next-day delivery [18] - The introduction of AI-powered tools like Rufus and AgentCore is expected to enhance customer experience and operational efficiency [18][74] Q&A Session Summary Question: AWS capacity levels and Trainium demand - Management highlighted significant capacity additions, with 3.8 gigawatts added in the last year and expectations to double capacity by 2027 [39] - Trainium 2 is fully subscribed, with strong demand from both large and medium-sized customers [40][41] Question: Trainium positioning versus third-party chips - Management confirmed the intention to maintain multiple chip options, emphasizing the advantages of Trainium in price performance [45][46] Question: Project Rainier architecture and differentiation - Project Rainier is designed for large-scale AI workloads, showcasing AWS's infrastructure capabilities and performance advantages [50] Question: Grocery business and perishable delivery - The grocery business has surpassed $100 billion in gross merchandising sales, with a focus on expanding same-day delivery for perishables [53][56] Question: Robotics and automation in operations - The company has over a million robots in its fulfillment network, with ongoing investments to enhance safety, productivity, and speed [61][62] Question: Agentic commerce future - Management expressed excitement about the potential of agentic commerce to enhance customer experiences and drive online shopping growth [65][68]

Financial Data and Key Metrics Changes - The company reported revenue of $180.2 billion for Q3 2025, representing a 12% year-over-year increase, excluding foreign exchange impacts [5][22] - Operating income was $17.4 billion, which would have exceeded $21 billion without two special expenses totaling $4.3 billion [5][23] - Trailing 12-month free cash flow stood at $14.8 billion [5] Business Line Data and Key Metrics Changes - AWS revenue grew by 20.2% year-over-year, marking the largest growth rate in 11 quarters, with an annualized revenue run rate of $132 billion [5][29] - North America segment revenue reached $106.3 billion, an 11% increase year-over-year, while the International segment revenue was $40.9 billion, up 10% year-over-year [23] - Advertising revenue was $17.6 billion, growing 22% year-over-year [18][28] Market Data and Key Metrics Changes - The backlog for AWS grew to $200 billion by the end of Q3, not including several unannounced deals in October [6] - Worldwide paid units increased by 11% year-over-year, indicating strong customer engagement [24] Company Strategy and Development Direction - The company is focused on expanding its AWS capabilities, particularly in AI and core services, and plans to double its overall capacity by the end of 2027 [33][14] - The company is committed to enhancing its grocery business through innovations like same-day delivery for perishables, which has significantly increased customer engagement [15][45] - The company is investing over $4 billion to expand its rural delivery network, aiming to improve service in underserved areas [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of AWS and the demand for AI services, highlighting the importance of Trainium chips for future scalability [5][35] - The company anticipates continued strong performance in the advertising sector, driven by its full-funnel advertising approach [58] - Management emphasized the need for a lean organizational structure to maintain agility and innovation in a rapidly changing market [46] Other Important Information - The company has made significant investments in robotics and automation, with over a million robots in its fulfillment network, aimed at improving efficiency and safety [48] - The company is exploring agentic commerce, which could enhance the online shopping experience through AI-driven solutions [50][52] Q&A Session Summary Question: AWS capacity levels and Trainium demand - Management indicated that AWS has added significant capacity, with 3.8 gigawatts in the last year and expects to double capacity by 2027, with strong demand for Trainium chips [33][35] Question: Trainium positioning versus third-party chips - Management acknowledged the importance of multiple chip options and highlighted the strong performance of Trainium, which is 30-40% more price-efficient than competitors [37][38] Question: Grocery business and same-day delivery - Management reported over $100 billion in gross merchandising sales in the grocery sector and emphasized the success of same-day delivery for perishables [42][45] Question: Future headcount and AI efficiencies - Management clarified that recent headcount changes were not primarily driven by financial or AI considerations but aimed at improving organizational efficiency and decision-making [46] Question: Robotics and automation investment - Management confirmed ongoing investments in robotics to enhance productivity and safety within fulfillment operations [48] Question: Agentic commerce and customer experience - Management expressed excitement about the potential of agentic commerce to improve online shopping experiences and indicated ongoing efforts to enhance customer interactions [50][52]

In mid-September, I wrote an analysis of Amazon.com, Inc. ( AMZN ) called “The Next To Join The $3 Trillion Club.” The rationale was, and remains, quite simple. Amazon is one of the best-positioned companies in trends such as cloud, AI, andEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to reach out for collabora ...

Core Insights - Amazon's recent performance has exceeded expectations, particularly in its AWS segment, which has shown a 17% year-over-year growth, indicating operational improvements and market resilience [6][7][8] - The company's operating margin has improved significantly, reaching 12%, which reflects effective management and strategic positioning [1][8] - Despite being a laggard compared to the S&P 500 and NASDAQ 100, Amazon is now positioned to catch up, as it has cleared previous highs in stock performance [3][10][13] AWS Performance - AWS has demonstrated faster-than-expected growth, alleviating concerns about competition from Google and Microsoft [5][7] - The cloud segment's growth is crucial for Amazon, especially in the context of ongoing discussions about AI and its market implications [4][5] - AWS maintains a larger market share compared to its competitors, despite their faster growth rates [7] Advertising Business - Amazon's advertising segment has been a significant contributor to its margins, but there are concerns about future pressures from competitors like OpenAI [8][9] - The potential increase in Prime subscription fees in 2026 could provide additional revenue streams, enhancing operational efficiencies [6] Market Positioning - Amazon's stock has underperformed relative to broader market indices over the past four years, with a 30% increase compared to the S&P's 100% and NASDAQ's 150% [10][12] - The current market dynamics suggest a potential for Amazon to regain some of its lost ground, as it is now seen as a better performer following recent earnings [10][13]

Drug trafficking down Brazil's Amazon has surged in recent years. This is because gangs have expanded into the Amazon and in response to increased surveillance along Brazil's southern border. In Arizona state, cocaine seizures have tripled in 2 years as the government increases river inspections.This is only a fraction of the amount of drugs coming down the river according to officials and experts. And this is because cocaine production in neighboring Colombia and Peru continues to break records and smuggle ...

Welcome back to Market on Close. I'm Sam Vardis on the floor of the New York Stock Exchange alongside Marley Caden in our Chicago headquarters. So, let's welcome in Andy Wong who's the managing partner running me Capital Management.Thanks so much for your time, Andy. So, we've got these Amazon earnings. The numbers looked good, a beat on the top and bottom line, but it really was that 33 billion on AWS that seemed to get the stock off to the races.Yeah, I think that this is exactly the kind of report Amazon ...