Q2 2026 Amazon.com Inc Earnings Call Transcript
Key Points
- Amazon.com Inc (AMZN) reported a strong Q2 2026 with revenue of $200.6 billion, up 20% year-over-year, and operating income of $27.5 billion, up 43% year-over-year.
- AWS revenue growth accelerated for the fifth straight quarter, reaching 36.7% year-over-year, with an annualized run rate of $169 billion and a backlog of $496 billion growing triple digits.
- AWS operating margin expanded to 39% in Q2, up 650 basis points year-over-year, driven by efficiency gains and capacity optimization.
- Amazon's AI and chips businesses are booming, with annual revenue run rates exceeding $25 billion each, growing triple digits, and strong adoption from major AI labs like Anthropic and OpenAI.
- The company is seeing strong momentum in its grocery and everyday essentials business, with perishable customer growth up 50% since the start of the year and same-day delivery expanding to 2,300 cities.
- Amazon's advertising business grew 26% year-over-year to $19.8 billion, with strong engagement in Prime Video ads and live sports, and AI-powered tools like Ads Agent improving advertiser performance.
- The company raised its 2026 CapEx guidance to $220 billion, reflecting strong demand and a clear path to significant returns on investment in AI and data centers.
- Amazon's new initiatives, such as Amazon Quick and AWS Continuum, are gaining traction with enterprise customers, positioning the company for future growth in agentic AI and security solutions.
- Amazon.com Inc (AMZN) faces significant cost pressures from higher memory chip prices and transportation costs, including fuel inflation and linehaul rates, which could impact margins.
- The company's Q3 2026 revenue guidance of $197-202 billion implies a sequential deceleration in growth, partly due to the timing shift of Prime Day into Q2, creating noise in financial modeling.
- Amazon's heavy CapEx investment of $220 billion in 2026 is expected to create free cash flow headwinds in the short term, as data centers are built before they can be monetized.
- The company acknowledges that it will not have enough capacity to meet all demand in 2026 and 2027, potentially limiting growth opportunities in the near term.
- Tariff-related refunds of $600 million in Q2 were a one-time benefit, and the company largely absorbed tariff costs rather than passing them on to customers, which could pressure profitability.
- Foreign exchange rates are expected to have an unfavorable impact of approximately 80 basis points on Q3 revenue growth, adding to headwinds.
- The company faces uncertainty in the AI market, with the potential for lower margins on AI workloads, although management remains optimistic about long-term returns.
- Amazon's reliance on third-party suppliers for memory and other components exposes it to supply chain volatility and price inflation, which could affect future costs.
Thank you for standing by. Good day, everyone, and welcome to the Amazon.com quarter two 2026 financial results teleconference. (Operator Instructions) Today's call is being recorded.
And for opening remarks, I will be turning the call over to the Vice President of Investor Relations, Mr. Dave Fildes. Thank you, sir.
Hello, and welcome to our Q2 2026 Financial Results Conference Call. Joining us today to answer your questions is Andy Jassy, our CEO; and Brian Olsavsky, our CFO. As you listen to today's conference call, we encourage you to have our press release in front of you, which includes our financial results as well as metrics and commentary on the quarter.
Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2025. Our comments and responses to your questions reflect management's views as of today, July 30, 2026 only, and will include forward-looking statements. Actual results may differ materially.
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