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By Tyler Wallis · August 1, 2025 · Curated by George's Blog
Amazon’s Q2 2025 earnings just dropped, and they tell a clear story.
Revenue is up. Profit is up. AI is everywhere.
But if you’re a brand selling on Amazon, the real story lies between the lines.
Here’s what stood out:
AI is no longer a side note. It’s the center of Amazon’s strategy.
Amazon mentioned “AI” 20 times in this report, double last quarter.
From voice-enabled shopping tools (“Hear the Highlights”) to new seller features (“Enhance My Listing”) to warehouse robotics powered by DeepFleet, this wasn’t just about innovation. It was a signal. Amazon wants to be the operating system for agent-based commerce.
Fast delivery is expanding again, this time in small-town America.
Same-day and next-day Prime delivery will reach over 4,000 rural and mid-market cities by year-end. That’s great for conversion if you’re using FBA and holding the Prime badge. If you’re not, expect to fall behind as Amazon chases the WMT physical store reach.
Premium brands are moving in.
Nike, Away, Aveda, Marc Jacobs. All building storefronts.
Amazon is making it clear that the platform isn’t just for resellers and challengers anymore. It’s actively courting established names, and they’re saying yes.
Now, what Amazon didn’t say but matters:
There was no mention of easing pressure on 3P sellers. Despite rising ad costs and FBA fees, seller support didn’t earn a line.
Free cash flow dropped 66% year over year. That’s not a typo. Most of it is being poured into AI infrastructure and logistics. The long-term bet may pay off, but it’s clear we’re in the AI investment frenzy phase. Monetization is trailing spend.
AWS revenue grew, but margins fell from 39.5% to 32.9%. That could be an early sign that AI infrastructure is weighing on cloud profitability.
The takeaway for brands?
You can’t win on Amazon today using last year’s playbook.
Success now depends on SKU-level margin control, ad strategies built for rising CPCs, fast shipping, and AI-fluent content.
Amazon is raising the stakes. It’s still worth playing, but only if you know exactly how to win.