Thank you for standing by. Good day, everyone. Welcome to Amazon. Com. First quarter, 2025 financial conference. At this time, all participants are on the line. After the presentation, we will now take questions and answers. Today’s call is being recorded. And for opening remarks, I will turn the call over to the vice president of investments, Mr. David Files. Thank you. Please go ahead. Hello, and welcome to our 2025 financial results conference call. Today’s questions and answers will be on the audio and video. And by mobile, the audio phone. As you listen to today’s conference call, we encourage you to have our press release for you, which includes our financial results, the Wall Street commentary on the quarter, and our thoughts on why today. Welcome to our second quarter financial measures. Now, press release, financial company’s quarterly financials, the yes, the inclusion of new equipment and forms and data analysis filings. During this call, we made discussion on data financial measures, and our press release, financial company’s quarterly financials, the yes, the inclusion of new equipment and forms and data analysis filings. During this call, we made discussion on data financial measures, and our press release, financial company’s quarterly financials, the yes, the inclusion of new equipment and forms and data analysis filings. Our guidance for the quarter ends with today, and we believe today to be a pro forma version. Our results are inherently predictable and may be materially affected by many factors, including fluctuations in foreign exchange and energy prices, changes in global economic conditions, tariff trade policies, resource supply volatility, including currency shifts, and customer spending, including impact on stationary spheres, inflation, interest rates, regional market trends, world events, the regulatory environment on online commerce services, and new emerging technologies, and various factors detailed in the financials, the yes, the. Our guidance is among the best that we don’t include any additional factors, which could materially affect our results. It’s not possible to accurately predict the financial results and therefore our results could differ materially from guidance. And now I’ll turn the call over to you. Thanks, Dave. Reporting $1.155 billion in revenue, up 17% year over year. Excluding the $2.9 billion favorable impact from foreign exchange, net sales increased 15%. Operating income was $2.39 billion. Q1 was a strong quarter for Amazon, starting with AWS, growth continued to accelerate, up 28% year over year. The sales growth rate increased 15 quarters, up $2 billion quarterly. The quarter’s Q1 AWS revenue increased. AWS now $150 billion annualized revenue run rate is very unusual for business growths that base this quarter. The last time we saw growth at this clip, AWS was roughly half this size. We’ve never seen technology growth rapidly this high. Amazon’s already leader and continues to choose AWS for AI. The quarter growth perspective three years after AWS launch, the first 58 billion dollars revenue run rate. The first three years of this AI AWS’s AI revenue run rate is over $15 billion nearly 260 times larger. There are several reasons customers choose AWS for AI. First, we build broader capabilities than others. That includes model building with SageMaker, which reduces training time by up to 40%. High performance inference with the leading selection of frontier models better, which saw 170% growth in customer spend quarter over quarter. And processed more tokens than Q1 and all prior years combined. We started to make OpenAI models available better. Yesterday we added OpenAI’s GPT-5.4 model with 5.5 million. Yesterday we also started the preview of Amazon Bedrock managed agents powered by OpenAI. The stable environment environment enables any organization to build generative applications and increase production scale. We believe that model agents applications will be stable. This new technology will rapidly accelerate AI adoption. OpenAI says the already seeing impressive demand for new product and we’re seeing heavy customer interest as well. Most of value companies rely for AI will be agents. And AWS customers can build agents with appropriate data and trends, which is being downloaded more than 25 million times across three months, more downloads quarter over quarter. Customers can deploy agents with enterprise scale security reliability with agent core, which is being used to deploy agents frequently every 10 seconds. We also offer tiered agents for coding, software migrations, business operations, and knowledge workers and heroes transform and connect. And they continue to resonate with customers. The number of developers using Q1 more than doubled quarter over quarter and enterprise customers usage increased nearly 10x. Customers use transform to save over 1.56 million hours of manual effort migrating and modernizing their workflows. The number of new customers using Q1 grew more than 4 times quarter over quarter, and we just now see one of our best top apps today. Very compelling is the inquiry email calendars, local files, several other applications used every day. The file import and creation, or even summarizing information, management, and composing sent information, others. These agents highlight or automatically do work that you use to do yourself. You can easily keep refining preferences and create advanced knowledgeable ZAI agents. Automatically learn from your actions to become more personalized over time. Whatever enterprise customers just told us, we can just improve how we work. It’s less demanding. Second, another reason customers continue to use AWS is that they expand the use of AI. They want their enterprise AI and other applications and data, and much more of it’s AI than AWS in any place else. Third, the customers expand their AI uses. They also want to consume additional AI services and choose AWS because we build the broadest and most capable core offerings by wide margin. We offer thousands of features across compute, storage, databases, analytics, security, more. And garner consistently recognized the AWS leadership for cross domain value addition areas. Fourth, AWS is the strongest computing operational performance in AI and infrastructure providers. Startups, enterprises, governments continue to choose AWS as the foundation for their most critical workflows. The other reason even more customers are choosing AWS and just in last quarter’s call, we’ve now new agreements with OpenAI and Dropbox, Nvidia, Uber, US Bank, Fox, Southwest Airlines, Walmart, Bloomberg, CBS, AT&T, Nokia, Funnel, National Geographic Society, PG4 many more. Our ship business continues to grow rapidly as larger and more large scale. We saw nearly 40% quarter over quarter growth in Q1 and our annual revenue run rate is now over $1 billion and growing triple-digit percentages year over year. But this is more massive size. Our ship business was the number one business for ship deliveries this year at AWS and other parties and other leading chip companies too. Our annual revenue run rate would be $15 billion. As best we can tell, our customer service business is now one of the top three data center ship businesses in the world. The speed with which we got here is extraordinary. And we have a, for customers, we’ve recently shared very large multi-year multi-gigabyte agreements with the two leading AI labs in the world and Dropbox OpenAI. As well as increasing number of companies like Uber betting on training, and we now have over $2.25 billion in revenue commitments for training. Training two ships have about 30% better price performance than comparable GPUs. And as orders were sold out, training three, which starts shipping at start of 2026 and is 30 to 40% more price performance than training two, is nearly fully subscribed. And much training four, which is still about 18 months from broad availability, has already been reserved. Amazon Bedrock, which is used expansively by over 125,000 customers, runs most of the enterprise training. Almost 80% of the Fortune 100 companies using Bedrock. We also just now have been committed to using 10 million of rapid cores. Rapid cores are industry leading CPU chips, which allows massive run the CPU-intensive workflows behind generative AI with the performance and efficiency near scale. AI is commonly seen as CPU storage, but the rise of generative workflows, real-time reasoning, generation, reinforcement learning, multi-step task construction, driving massive CPU demand as well. As AI systems shift from answering questions to taking actions, as post-training inference scale up to two requires whole table CPU’s. As more mature workflows, which deliver up to 40% better price performance in any other AI-based processors, and now used by 90% of the top 1,000 easy customers, nobody has better set ships across AI CPU workflows than AWS with training and rapid cores. And we’re usually well positioned for the AI expansion where early stages are experiencing. Other largest number of AI chips we’re bringing in training, we continue to have deep partners with Nvidia. We’ve been expected to continue orders of substantial quantities. We’ll be partners for as long as I can foresee. All these customers want to run Nvidia AWS, and we will also have very large chips in ourselves. Customers always want choice. It always mature and always will be true. Different companies will offer different benefits for customers, and the uniquely strong price performance of training offers is compelling to external and internal customers for scale. We expect training will save us tens of billions of dollars of capex each year, and provides several hundred bases for our operating margin advantage for service providers. Finally, we continue to be confident in long-term capex investment spending. The AWS capex we intend to spend in 2026 much of which will be installed in two years. We have high confidence that we monetize well as we already have customer commitments for substantial portions, and we will continue operating margin and normalise it. And we’ve been sharing the faster AWS grows,Thanks, Andy. Let’s start with our top line. Revenue was $1,151.5 billion, a 15% increase year over year, excluding the $108.5 billion impact of foreign exchange. Global operating income was $23.9 billion, with an operating margin of 13.1%, our highest operating margin ever. Cross sales segment revenue was $49.8 billion, an increase of 12% year over year. International segment revenue was $144.1 billion, an increase of 11% year over year, excluding the impact of foreign exchange. For seamless shopping, as per foreign language, one, including our big screen sale, we also saw particularly strong performance for third-party sellers, foreign importers, traders, 200-plus actions and competitive pricing. As sellers saw strong sales growth Q1, particularly in US, as well as Europe and Brazil, where we recently lowered sellers fees. We’re seeing investments in sellers for innovation and internal growth business. Prime continues to see larger growth and more value members receive from the program. Prime Video is a seller with prime members’ retention and port driver of new member acquisition. Investments in original exclusives content and live sports, combined with third-party partner titles, offer the best selection of premium video content. In addition to delivering compelling value to members advertisers and partners, Prime Video’s large and profitable business is on track. Sales, just to name a few, the business profitability. The Americas segment operating income was $8.3 billion dollars, with an operating margin of 7.9%. International segment operating income was $1.4 billion dollars, with an operating margin of 3.6%. We expect the settlement net performance Q1 to improve our operating net work. Overall, you know, growth of 15% continues to help pay our cost of sales settlement net work. As our shipping costs grew 12% year over year, and fulfillment status grew 9% year over year, those on the fact still basis. As our network efficiency improves, we’re able to lower our service and improve the customer experience, while the same lowering our costs serve. We have seen meaningful improvements to further enhance productivity across global settlement networks, all with continuing to raise the delivery speed. We’ll keep optimizing inventory management, shorten distribution, reduce track to package, and improve consolidation rates. Along with efforts to improve our automation, which will improve our operations’ predictiveness, our latest generation technology is operating at a steady step change in efficiency, which is pulling in new and existing facilities. All of you us large format settlements are launched in 2026, or have the latest generation technology. We’re seeing positive results with increased safety, higher productivity, and lower costs serve. Revenue was $1.75 billion dollars, and gross sellers is $185.2 billion, a 28% year over year, driven by core and AI services. We continue to see customers increase cloud migration and scale use AWS core services. Customers see the full benefits of AI, our sellers and transition cloud. We also see strong correlation between AI spend and core growth. Customers spend more AI, we see corresponding demand increase and core. We expect to increase our time as customers move more AI workloads into cloud, and see demand for core services. Our AI revenue grew triple digits year over year, bringing more capacity online to meet high customer demand, while also driving meaningful gains across our sales base. Our AI operating team year traction customers and better and business conditions growth in 2025 with delivery for action improvements in premium to two to two. As we mature the AWS for core and premium users, our generation gains directly translate into more capacity to serve customers. AWS operating income was $1.22 billion dollars, and sales growth was $1.02 billion dollars Q1. Compared to last year, the AWS generation AI has invested for strong customer demand. We continue to make significant investments in AI, as we believe massive opportunities with potential growth long-term revenue and success. Our AI revenue surged 40% year over year, and the AI operating team traction customers and better business conditions growth in 2025. Prime was used to be $194 billion dollars and $199 billion dollars. We estimate year year impact change just foreign exchange rates and currencies, which we expect to head into the approximately ten basis points in the quarter. Q2 operating income is expected to be between $20 billion dollars and $24 billion dollars, we continue to strong sales traction to Q2, and our management team guidance. First, the monthly impact versus seasonal staffing staff and staff compensation spend to Q2 driven by timing of annual compensation cycle. Second, within the Americas segment, we expect the year over year crossing increase of $1 billion dollars related Amazon Leo. As we manufacture more satellite and preparations for service offering, Amazon Leo’s powerful services on track to launch Q3, and we expect to be impactful in certain costs and Q4, including production launch costs. Third, we expect to see higher transaction costs related to inflation, which is partially offset by recently implemented fuel and logistics cost rate surcharge. Our flexible world teams across the company are working to decrease customers, we’re meeting customers driving even better customer experience, which is only available way to create lasting value for us. With that, let’s move on to questions. Thank you. Let’s move on now. Open call for questions. We ask each caller to please make yourself one question. Thank you. If you’d like to ask a question, please press star one on your keypad. We ask when you put your question, put it in the end to provide optimal quality. Once again, to initiate a question, please press star then one on your telephone. At this time, please hold while we pull for questions. And the first question comes from Ryan Sheridan with Goldman Sachs. Please proceed with your question. Thanks for taking the question. I’m in the year of revenue. Thank you. Thank you. Thanks for taking the question. I’m one of the accounting guy. I probably get it. You can just give us the the the the backlog. Why do any any visibility on the backlog beyond the backlog? That’s the first one. And the second one is you sort of think about miles for for revenue and then the commerce for you in 2026. What are you most excited about making sure you accomplish on the digital commerce offering? Yeah, the backlog. The backlog for Q1 is around $64 billion dollars. That’s not include the recent deal we announced with Amazon for over $100 billion. This reasonable business well, not just one customer to customers. The HJ Commerce miles still question. You know, we are very bullish on HJ Commerce. We’ll go ahead. I think it’s going to be very good for customers and long term. I think it’s good for us too. And you can see some of that focus from us in in what we’re building with Rufus. If you haven’t checked Rufus, it’s really just naturally grew over last year, and we have a lot of customers using it. I mentioned earlier the the monthly active users up over 150% Rufus in each month over 40% year over year. And you know, I think, uh, well, well, I think there will be we’ll do a lot of work with third-party horizontal agents try make customers’ experience better. And by the way, I do think that my experience way to stay within what we saw in the early days of surge engines and try to improve business commerce. You know, it’s uh it never been a giant part of the overall trade commerce business, but over the years it’s gotten better. And what you see with HJ Commerce is just small fraction of what we see with surge engines. For all the experience just hasn’t gotten great with third-party horizontal agents yet. They they’re not able to get the pricing right, the product information right, and have any personalization. They’re shopping history, and so we we do want to see that get better with third-party horizontal agents. We have conversations with all those folks try make that better and find something that works for customers and all the companies. And that would be interesting over time. With HJ Commerce, choose use I have this thing that is going to go into particular retailer that you like to do business with, you like to shop from. If they have great HJ shopping assistant, you know, often start there because we’re doing your shopping. It’s easier to and they have better product information, better information about what the customers like you are buying. You can do the best shopping just how you’re accustomed to shopping and making some major changes work better. So, you know, that’s what we’re aiming to make Rufus be is where we’re aiming to have a better shopping assistant anywhere. And I think we’re on that. Thank you. The next question comes from Ryan Justin Post. Thank you, Mark. Please proceed with your question. Thank you. I asked for one models and one on training. So, models looks like you might have access to the full available models on the rock. Just wondering how how big of a model that is, and how how big is maybe one on your model, and then second, how about the letter? Maybe a little smaller. Of training, just wondering, you know, with the capacity and training about that, and how big of an opportunity? Thank you. Yeah, models question. I think that we’re going to have all the open AI models available on the rock is a big deal, a big deal for customers. Yeah, we we have, we obviously have very large amount of AI being done on the rock. The models we have, um, and the strategy, um, and these all, um, you know, all the othersCommercially, we’ve got, you know, we’ve got another launch. We have over two hundred fifty satellites in space. We launched this year commercially. It will be one of two offerings on the current technology edge. And I think we will have meaningful advancements for many. I think will be two times better on the downloading than just all turns about six times better on the uploading performance than just all turns. I think we will have a cost advantage for customers, and then for the government and the enterprises. And we talk a lot about we’ve already signed agreements with many of them, though we have launched the third commercially. You know, the latest of which was with the Airlines coming and we have their fleet starting in twenty twenty eight. When you talk about another really big part of what matters, they’re going to want to take this off of the satellite constellation. And they’re going to want to store the cloud. And they’re going to want to do analytics. And they’re going to want to do AI. And just the combination of Leo with the leading cloud world, they do well is very compelling to enterprises and the government. So, you know, I think the only, you know, today, as we’re talking about this growing business, we we have to have the constellation in space. We have over twenty launches planned this year. We have over thirty launches planned in twenty twenty seven, but I think the business has changed to be very large. You know, many billion dollar revenue business, and I think has characteristics that are meant to be well and as capital-intensive. We’re going to be making a lot of capital and cash early years for us to get the leverage, the long period time. So, I like to see capital and turn investing capital characteristics business and medium to long term. Yeah, and the last thing I’ll say about it is, you know, your question about global star. You know, increasingly, we’re finding with with consumers and enterprises, governments that they don’t like have any periods where they don’t have connectivity. It just affects whatever customers are and they they’re going to even metropolitan areas. We all have certain parts of highways where you know or or roads where you can’t get connectivity or you’re hiking or skiing, and so increasingly we see very large demand for consumers to have direct device. And that was really the impetus for acquisitions of global star. They have a useful and scalable spectrum that requires provide direct device. We also really like the satellite know how that we get and part of that merger with global star and then also afford us the opportunity to build deeper relationships with Apple, who’s going to use our direct device for their iPhones and for their watches. So, very optimistic about the business. And next question comes from the line of Colin Sebastian with Baird. Please proceed with your question. Oh, thanks very much. Thank you, my question. One of Andy’s questions about, you know, how do you think about the increasing price for memory storage and the supply chain influencing the things that companies have and gaps this year and potentially next year as well, and on the general, is it about how do you use the opportunity with advertising and knowing that we can be the top in the um available time, but for advertising opportunities, how do you use that as agents would be the one taking action? Um, good shot. Thanks a lot. So, on memory storage and supply chain, I think everybody knows the cost of the components for two memory storage. Getting it where just enough, enough for the amount of demand. We have worked very closely with our strategic partners. We saw this trend happening early, you know, in the middle of the latter part of last year. We worked with our strategic suppliers to get, you know, significant amounts of supply. And so we’re working very closely with them. I think it’s been very successful. I think we’ve done a good job making sure that we’re not capacity constrained. We’re watching very closely. You one of the interesting things that we see right now with the change in price and in supply on things like memory is that is the further impetus pushing companies to have enterprises invest into the cloud. It’s the cause of meaningful part of the suppliers of providers ties and their very large customers, which providers are. And so we have seen a number of conversations we’ve had with enterprises for many months where it’s just slower in getting the transformation plans to the products. So rapidly, just as we have a lot more supply than what others have. So the interesting thing about all over time, we have, you know, we’re we’re doing our best to kind of to have the supply we need keep the cost in the right spot, but we’ll see how that continues evolve. And I think on the gigantic commerce and how that impacts advertising, I actually believe that we’re going to we’re going to like this for advertising. I think it’s going to be good for customers and going to be good for our business. I think first of all, the first thing to remember is the way that advertising has built tools and it’s themselves making so much easier to do advertising. You know, if you look at small, medium-sized businesses, they have to take, you know, we must to do creative, the right audience. All that is just it’s so much faster and so much easier because we’re advertising. And you know, we’re having to take much more spend and much money building the creative. So I think it’s going to be a lot more advertising advertisers with the rise of advertising AI. And if you look at the gigantic commerce experiences, if you look at these gigantic experiences, they tend to be multi-turn conversations where you know interacting with one person getting answers, you you find that asking questions, you’re answering questions, asking you questions on what you want. And you know, in that process of having multi-turns, there are multiple opportunities to serve relevant products to customers. You know, many of which will be organic, some which will be sponsored, and you know, it also gives rise to opportunities like sponsored products. So one of the interesting things that has been very successful for customers in our stores been when they ask certain questions, we give them a number of suggestions that are all creative, AI, and we we you know we got pretty good. Also, having sponsored products and making questions and products and making easy for people to dig deeper into what they’re interested. So I actually believe that that advertising will do well with the gigantic commerce. Thank you. And our final question comes from the line of Colin Sebastian with Baird. Please proceed with your question. Oh, thanks very much. I could ask me maybe a two-part very quick one. And you first off just wondering where you’re seeing internal trends coming from the AI demand for early adopters and larger, bigger customers versus maybe how the demand for the shaping of the broader enterprise base and then at a high level, if you think about the use of AI internally across Amazon’s business presumably those are all going to be different and different areas. Maybe maybe Andy, can can talk us through where you see the most opportunity for technology internally within the products as well as maybe driving more operating efficiency. I think that would be helpful. Thank you. Yeah, so on the, um, what we see in the AI demand for early adopters versus broader enterprise base, it, I think it’s no secret that you’ve got, you know, the AI labs spending incredible amounts of, um, of money on compute, deploying and compute those AI sides, the course side, and the models they’re building, and the the companies that have successful, um, generative applications are certainly spending a lot. And you know, several those labs, but we also see quite a bit of enterprise adoption usage of AI. That you know, as I’ve said before, the largest absolute place that we see enterprises having success in projects in, you know, around, um, cost savings and productivity. These things like automating customer service, business processes, automation, things like that. But the number of projects that we’re working with across enterprises and that we’re now starting to come to production around brand new experiences, trying to figure out how to revamp their current experiences, but using different AI to be smarter, also very significant. So we’re we’re seeing the adoption of those things on the use of AI internally. Uh, you know, in for our businesses, I think that, you know, the surest first summer I can give you, Colin, is that I do not see at least in any of our businesses or any of the ways that we do, where we’re not going to have chain impact on what we do. You know, I think, uh, you know, I’ve always had the belief that while you add incrementally to a lot of your existing customer experiences, different gigantic AI experiences, I really believe that you know, in the in the fullest time, I know that three years from now, five years from now, or maybe sooner too, that all of these customer experiences we do, we know are going to be completely invented. And they’re going to have different interfaces. They’re going to have different ways people interact with them. They’re going to people want to have dialogue with them. And so I think it means that you have to look, you know, tricky for if you have an existing business that’s doing well, but you have to look at every single one of your customer experiences, and you have to be a carver for yours. That team thinking new about what would future customer experience look like if you start from scratch today? And if you have all the technologies like AI available to you when you start, and that is what we’re doing every single one of our experiences. And if I, you know, I have a chance to be involved with some of those, and they’re just really exciting. And you know, their experiences have made it。
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