Amazon Revenue Climbs 20% to $200.6bn, Operating Income Reaches $27.5bn

July 31, 2026
By Mintesinot Nigussie

Amazon reported a sharp increase in second-quarter revenue as its cloud computing business accelerated, with sales rising 20 percent year on year to 200.6bn US dollars and operating income climbing to 27.5bn US dollars. The company's Amazon Web Services (AWS) division was the main growth driver, recording a 37 percent increase in sales to 42.2bn US dollars during the quarter ended June 30, 2026. The cloud unit's operating income more than doubled its contribution from the previous year, reaching 16.6bn US dollars compared with 10.2bn US dollars in the second quarter of 2025.

AWS growth reached its fastest pace in 18 quarters as demand for artificial intelligence infrastructure boosted spending on cloud services. Amazon said its AI business and chips business each surpassed annual revenue run rates of 25bn US dollars, reflecting the growing role of artificial intelligence workloads in cloud computing demand. The company’s North America segment reported sales of 116.2bn US dollars, up 16 percent from a year earlier, while international sales increased 15 percent to 42.2bn US dollars. Advertising revenue also continued its expansion, growing 26 percent year on year, according to Chief Executive Andy Jassy.

Net income surged to 62.6bn US dollars, or 5.75 US dollars per diluted share, compared with 18.2bn US dollars, or 1.68 US dollars per share, a year earlier. The increase was largely driven by a 53.4bn US dollars pre-tax gain from Amazon’s investments in artificial intelligence company Anthropic, which was recorded as non-operating income. "AWS is booming, growing 36.7 percent year-over-year in Q2—our fastest growth in 18 quarters," Jassy said. He added that Amazon’s AI and chips businesses had each exceeded 25bn US dollars annual revenue run rates.

Despite strong profitability, Amazon’s investment push into artificial intelligence weighed on free cash flow. Free cash flow turned negative at 7.6bn US dollars over the 12 months ended June 30, 2026, compared with an inflow of 18.2bn US dollars a year earlier, as capital expenditure increased by 66.1bn US dollars, largely reflecting investment in AI infrastructure. Operating cash flow, however, rose 33 percent to 161.4bn US dollars over the same period, compared with 121.1bn US dollars a year earlier.

Amazon has expanded its AI infrastructure through AWS products including Trainium chips, Amazon Bedrock foundation model services and AI agent development tools. The company said leading AI firms, including Anthropic and OpenAI, had made multi-year commitments to its AI infrastructure. The company also continued expanding its retail and logistics operations. Same-day and overnight deliveries increased by more than 40 percent for Prime members during the first half of the year, while Amazon Business reached an annualised gross sales rate of 60bn US dollars. For the third quarter, Amazon expects net sales between 197bn US dollars and 202bn US dollars, representing growth of between nine percent and 12 percent compared with the same period last year. Operating income is forecast between 22.5bn US dollars and 26.5bn US dollars, compared with 17.4bn US dollars in the third quarter of 2025.

Source: FSX Business News