Amazon Q1 Earnings Beat, But Soft Q2 Guidance Amid Tariff Concerns

Published • 1 May 2025 at 10:52 PM

Amazon exceeds Q1 earnings estimates but lowers Q2 guidance, citing tariffs and trade concerns. — Amazon beats Q1 earnings expectations with $1.59 per share, but issues cautious Q2 outlook.

CNBC

Amazon posted stronger-than-expected Q1 earnings, reporting $1.59 per share on $155.67 billion in revenue, beating analyst forecasts. However, the company issued soft guidance for Q2, citing “tariffs and trade policies” along with recession concerns as key factors behind its cautious outlook. Amazon expects Q2 revenue between $159 billion and $164 billion, below Wall Street's $160.9 billion consensus. Operating income guidance also came in below expectations. Amazon Web Services (AWS) revenue slightly missed at $29.3 billion, and while AWS grew 17% year-over-year, it marked a third straight quarter of underperformance. Advertising, however, was a standout, with a 19% rise to $13.92 billion. CEO Andy Jassy emphasized the complexity of navigating Trump’s shifting tariff strategy, which has led to price hikes and spending cuts by some third-party sellers who rely on Chinese manufacturing. Amazon, which faced backlash over reports it might display tariff costs to consumers, clarified it only considered doing so for its discount storefront. Despite uncertainty, Jassy said Amazon’s vast seller base and low-price focus could help it weather tariff impacts better than competitors. The company’s net income jumped to $17.13 billion from $10.43 billion a year earlier, reflecting efforts to boost profit through cost cuts and operational efficiency.

Key Highlights

Earnings Beat: Amazon posted $1.59 per share on $155.67 billion in revenue, exceeding analyst expectations.
Q2 Guidance: The company issued soft guidance for Q2, projecting revenue between $159B and $164B, below Wall Street's consensus of $160.9B.
Recession and Tariffs: Cited tariffs and trade policies as well as recession concerns as reasons for the cautious outlook.
AWS Performance: AWS revenue slightly missed expectations at $29.3 billion, growing 17% year-over-year, but marking its third consecutive quarter of underperformance.
Advertising Growth: Advertising revenue rose 19% to $13.92 billion, standing out as a strong performer.
CEO's Remarks: Andy Jassy noted challenges from shifting tariff strategies under the Trump administration, which caused price hikes and spending cuts for third-party sellers.
Clarification on Tariffs: Amazon clarified it only considered passing tariff costs on to consumers for its discount storefront.
Profit Growth: Net income jumped to $17.13 billion, up from $10.43 billion in Q1 2024, due to cost-cutting and operational efficiency.
Outlook: Despite uncertainties, Jassy emphasized Amazon’s strong seller base and low-price focus as key factors for weathering the impacts better than competitors.