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Key Points
Amazon (NASDAQ: AMZN) reported that its North America segment sales grew by just 8% year-over-year in Q2 2025, while international segment revenue increased by only 5%. The company’s core commerce revenue, which excludes advertising and subscription revenue, grew around 5% to 6%. Despite net sales reaching $126 billion in Q1 2025, Amazon’s operating profit was only $6.8 billion, representing a margin of 5.4%.
In contrast, Amazon’s advertising revenue surged 18% year-over-year to $13.9 billion in Q1 2025, positioning it as one of the largest digital advertising platforms globally. This high-margin business is expected to contribute more substantially to Amazon’s profitability over time compared to its maturing retail segment.
As competition intensifies from low-cost challengers like Temu and Shein, investors will want to monitor Amazon’s ability to sustain growth and improve margins in its commerce segment while leveraging its advertising capabilities as a significant growth engine.
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