#Amazon's Q1 earnings beat expectations, but shareholders are bracing for a difficult year. Here's the full analysis 👇

🟢 Q1-2025 Results:
↳ Net Sales grew to $155.7bn (+9% / +$12.4bn YoY)
↳ Operating Income rose to $18.4bn (+20% / +$3.1bn YoY)
↳ Advertising grew to $13.9bn (+19% / +$2.1bn YoY)

🔮 Q2 Guidance
- Net Sales expected to reach $159 bn - $164 bn (+7% to +11% YoY)
- Operating Income predicted to grow to $13 bn - $17.5 bn

🔎 Analysis
Despite solid Q1 earnings, U.S. tariffs are testing Amazon’s business model. With shoppers stockpiling goods and suppliers putting shipments on hold, empty shelves risk the company's 2025 earnings outlook.

Yes, Amazon is a diversified tech company – but only to a certain extent:

69% of Amazon's Net Sales originate from the US with nearly 80% of growth driven by Retail, Ads, and 3P Seller Services. All of which rely on steady consumer demand to keep the Flywheel turning.

But Amazon wouldn't be Amazon if it didn't prepare for this changing landscape.

Here are 5 trends you need to know about:

𝟭- 𝗧𝗵𝗲 𝗲𝗻𝗱𝗶𝗻𝗴 𝗽𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗰𝘆𝗰𝗹𝗲
The end of the pandemic marked the beginning of Amazon's current profit cycle. Now that brands are passing tariff-led price increases to consumers, stimulating growth will return into focus.

With J.P. Morgan predicting a 60% chance of a global recession in 2025, it's clear that top line has become Amazon's biggest worry.

𝟮- 𝗣𝗿𝗶𝗺𝗲 𝗗𝗮𝘆
Tentpole events like Prime Day secure Amazon's competitive advantage and offer shoppers products at 'old' prices. And while brands will participate in Prime Day, they won't overstretch themselves amid an uncertain tariff landscape.

Extending Prime Day to a 4-day event already suggests that Amazon is panic mode. Could we even see a longer Fall Prime event?

𝟯- 𝗠𝗼𝗻𝗲𝘁𝗶𝘀𝗶𝗻𝗴 𝗔𝗜
The company recently launched 'Buy for Me' – a service allowing shoppers to purchase products through an AI agent off-site. Expect data from these transactions to be monetised and offered to advertisers as early as Q4.

𝟰- 𝗕𝗿𝗮𝗻𝗱𝘀 𝗺𝗼𝘃𝗲 𝗯𝗮𝗰𝗸 𝗶𝗻𝘁𝗼 𝗳𝗼𝗰𝘂𝘀
Amid the current tariff woes, Amazon is refocusing on branded assortment to secure availability of category-critical selection. It's doing so via direct negotiations with brands, but also renewed invitations to Vendor Central.

Even brands like Adidas and Under Armour have recently emerged on Amazon's discount storefront 'Haul', signalling a focus shift back towards brands.

𝟱- 𝗟𝗼𝗴𝗶𝘀𝘁𝗶𝗰𝘀 𝗮𝘀 𝗻𝗲𝘄 𝗽𝗿𝗼𝗳𝗶𝘁 𝗯𝗮𝗰𝗸𝗯𝗼𝗻𝗲
Current expansion efforts at Amazon Shipping and LTL for Amazon Freight promise profitable returns.

Both offer higher margins for Amazon and partnerships with brands willing to share cost savings. 1P Vendors should pay close attention here and renegotiate their freight terms accordingly.

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What's your take on Amazon's Q1 results?