Amazon.com, Inc.

Thank you for standing by. Good day, everyone, and welcome to the Amazon.com Third Quarter 2025 Financial Results Teleconference. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. 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 Files. Thank you, sir. Please go ahead.

Hello, and welcome to our Q3 2025 Financial Results Conference Call. Joining us today to answer your questions is Andy Jassy, our CEO, and Brian Olsowski, 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 2024. Our comments and responses to your questions reflect management's views as of today, October 30th, 2025 only, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. During this call, we may discuss certain non-GAAP financial measures in our press release, slides accompanying this webcast, and our filings with the SEC. each of which is posted on our IR website. You will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. Our guidance incorporates the order trends that we've seen to date and what we believe today to be appropriate assumptions. Our results are inherently unpredictable and may be materially affected by many factors, including fluctuations in foreign exchange rates, changes in global, economic, and geopolitical conditions, tariff and trade policies and customer demand and spending including the impact of recessionary fears inflation interest rates regional labor market constraints world events the rate of growth of the internet online commerce cloud services and new and emerging technologies and the various factors detailed in our filings of the sec our guidance assumes among other things that we don't conclude any additional business acquisitions restructurings or legal settlements it's not possible to accurately predict demand for our goods and services, and therefore our actual results could differ materially from our guidance. And now I'll turn the call over to Andy.

Thanks, Dave. We saw strong growth across our business in Q3, and we're reporting $180.2 billion in revenue, up 12% year over year, excluding the impact from foreign exchange rates. Operating income was $17.4 billion, but would have been over $21 billion if not for two special Q3 expenses. $2.5 billion for an FTC settlement, and $1.8 billion for estimated severance costs. Trailing 12-month free cash flow was $14.8 billion. I'll start with AWS. AWS is growing at a pace we haven't seen since 2022, re-accelerating to 20.2% year-over-year, our largest growth rate in 11 quarters. It's worth remembering that year-over-year percentage growth is a relative term. It's very different having 20% year-over-year growth on a $132 billion annualized run rate than to have a higher percentage growth rate on a meaningfully smaller annual revenue, which is the case with our competitors. Backlog grew to $200 billion by Q3 quarter end and doesn't include several unannounced new deals in October, which together are more than our total deal volume for all of Q3. AWS is gaining momentum. Customers want to be running their core and AI workloads in AWS, given its stronger functionality, security, and operational performance. And the scale I see in front of us gives me significant confidence in what lies ahead. I'll share a little more detail on why. It starts with AWS having much broader infrastructure functionality. Startups, enterprises, and governments want to move their production workloads to the place that has the broadest and deepest array of capabilities. AWS has more services and deeper features within those services than anybody else and continues to innovate at a rapid clip. These are key building blocks for anything that customers want to create, and they're a big part of why Gartner has named AWS leader in its strategic cloud platform services magic quadrant for 15 consecutive years. We're bringing the same building block approach to AI. SageMaker makes it much simpler for companies to build and deploy their own foundation models Bedrock gives customers leading selection of foundation models and superior price performance to deploy inference into their next-generation applications. A lot of the future value companies will get from AI will be in the form of agents. AWS is heavily investing in this area and well-positioned to be a leader. Companies will both create their own agents and use agents from other companies. For those building their own, it's been harder to build than it should be. It's why we launched Strands, to make it much easier to create agents from any foundation model that builders desire. For companies who successfully built agents, they've hesitated putting them into production because they lack secure, scalable runtime services or memory or observability built specifically for agents. It's why we launched AgentCorp, a set of infrastructure building blocks that allow builders to deploy secure, scalable agents. Ericsson used AgentCore to deliver AI agents across their workforce. Sony used it to build an agentic AI platform with enterprise-level security, observability, and scalability. And Cohere Health is using AgentCore to deploy agents that will reduce medical review times by up to 30% to 40%. AgentCore's SDK has already been downloaded over a million times, and our builders are excited about it. It's an enabler. Companies will also use others' agents. And AWS continues to build many of the agents we believe builders will use in the future. For coding, we've recently opened up our agentic coding IDE called Kiro. More than 100,000 developers jumped into Kiro in just the first few days of preview, and that number has more than doubled since. It's processed trillions of tokens thus far, weekly actives are growing fast, and developers love its unique spec and tool calling capabilities. For migration and transformation, we offer an agent called Transform. Year-to-date, customers have already used it to save 700,000 hours of manual effort, the equivalent of 335 developer years of work. For example, Thomson Reuters used it to transform 1.5 million lines of code per month, moving from Windows to open source alternatives and completing tasks four times faster than with other migration tools. Customers have also already used Transform to analyze nearly a billion lines of mainframe code as they move mainframe applications to the cloud. For business customers, we've recently launched QuickSleep to bring a consumer AI-like experience to work, making it easy to find insights, conduct deep research, automate tasks, visualize data, and take actions. We've already seen users turn months-long projects into days, get 80% plus time savings on complex tasks, and realize 90% plus cost savings. And for contact centers, we offer Amazon Connect, which creates a more personalized and efficient experience for contact center agents, managers, and their customers. Connect has recently crested a billion dollar annualized revenue run rate, with 12 billion minutes of customer interactions being handled by AI in the last year, and is being used by large enterprises like Capital One, Toyota, American Airlines, and Ryanair. These are real practical results for customers, and there are many more examples like them. Because of its advantage capabilities, security, operational performance, and customer focus, AWS continues to earn most of the big enterprise and government transformations to the cloud. As a result, AWS is where the preponderance of companies' data and workloads reside, and part of why most companies want to run AI in AWS. To enable customers to do so, we need to have the requisite capacity, and we've been focused on accelerating capacity the last several months, adding more than 3.8 gigawatts of power in the past 12 months, more than any other cloud provider. To put that into perspective, we're now double the power capacity that AWS was in 2022, and we're on track to double again by 2027. In the last quarter of this year alone, we expect to add at least another one gigawatt of power. This capacity consists of power, data center, and chips, primarily our custom silicon, Tranium, and NVIDIA. We've recently brought Project Rainier online, our massive AI compute cluster spanning multiple U.S. data centers and containing nearly 500,000 of our Tranium-2 chips. Anthropic is using it now to build and deploy its industry-leading AI model, Cloud, which we expect to be on more than 1 million Tranium-2 chips by year-end. Tranium 2 continues to see strong adoption, is fully subscribed, and is now a multi-billion dollar business that grew 150% quarter over quarter. Today, Tranium is being used by a small number of very large customers, but we expect to accommodate more customers starting with Tranium 3. We're building Bedrock to be the biggest inference engine in the world, and in the long run, believe Bedrock could be as big a business for AWS as EC2. and the majority of token usage in Amazon Bedrock is already running on Tranium. We're also continuing to work closely with chip partners like NVIDIA, with whom we continue to order very significant amounts, as well as with AMD and Intel. These are very important partners with whom we expect to keep growing our relationships over time. You're going to see us continue to be very aggressive investing in capacity because we see the demand. As fast as we're adding capacity right now, we're monetizing it. It's still quite early and represents an unusual opportunity for customers in AWS. I'll now turn to stores, where the team continues to deliver and innovate for customers across our key priorities, selection, low prices, and convenience, particularly fast delivery. We're offering 14% more selection since last quarter from popular brands like the North Face and Charlotte Tilbury, and we've added hundreds of thousands of items from popular brands this year. Everyday Essentials continues to grow quickly, and year-to-date is growing nearly twice as fast as the rest of the business. We continue to make it easier for customers to order low-price perishable groceries from Amazon, and customers in more than 1,000 cities and towns now can shop fresh groceries alongside millions of Amazon.com products with free same-day delivery. This is a game-changer for customers who can now order milk alongside electronics, check out with one cart, and have everything delivered to their doorstep within hours. The team also invented a new add to delivery button that lets customers add items to previously scheduled orders, and it's been used more than 80 million times since launch, and it's just launched. It's an example of one of those seemingly simple but powerful innovations that make customers' lives easier. We remain committed to staying sharp on price and meeting or beating prices of other major retailers. In July, we had our biggest Prime Day event ever, with customers saving billions of dollars across more than 35 categories. We continue to break records on speed. We're on track to deliver at our fastest speeds ever for Prime members globally once again this year, and we've started rolling out three-hour delivery in select U.S. cities. We're also continuing to invest in infrastructure to speed up rural deliveries and serve more customers in more communities. That includes committing over $4 billion to expand our rural delivery network across the US. These are small towns where people want fast delivery, but where other companies have been backing out and reducing service. In contrast, we've already increased the number of rural communities with access to our same day and next day delivery by 60%, reaching roughly half of the total communities we plan to expand to by the end of the year. The storage team is also innovating rapidly with AI. For example, Rufus, our AI-powered shopping assistant, has had 250 million active customers this year, with monthly users up 140% year over year, interactions up 210% year over year, and customers using Rufus during a shopping trip being 60% more likely to complete a purchase. Rufus is on track to deliver over $10 billion in incremental annualized sales. Here are the highlights. Our generative AI-powered audio feature that combines product summaries and reviews to make shopping easier has expanded from hundreds of products at launch to millions of products, and millions of customers have used it, streaming almost 3 million minutes. And Amazon Lens, an AI-powered visual search tool that lets customers find products with their phone's camera, a screenshot, or a barcode, now includes Lens Live, which instantly scans products and shows real-time matches in a swipeable carousel. Tens of millions of customers are using Amazon Lens each month. Moving on to Amazon ads, we're pleased with the continued strong growth, generating $17.6 billion of revenue in the quarter and growing 22% year over year. We see strength across our broad portfolio of full-funnel advertising offerings that helps advertisers reach an average ad-supported audience of more than 300 million in the US alone. We also continue to be excited about our demand-side platform, Amazon DSP, which lets advertisers plan, activate, and measure full-funnel investments. Last quarter, I mentioned our partnership with Roku, and we've built on that with a partnership with Netflix. providing advertisers using Amazon DSP with direct access to Netflix's premium ad inventory. We announced integrations with Spotify and SiriusXM. With Spotify, we provide advertisers with direct programmatic access to a global audience of more than 400 million monthly ad-supported listeners. And with SiriusXM, brands can reach 160 million monthly digital listeners across services like Pandora and SoundCloud. And we're excited about the advertising opportunity around Prime Video Live Sports. Live Sports got a lot of interest from advertisers in upfront negotiations for 2025-26, and we exceeded our own expectations for upfront commitments with significant growth across the board. Finally, we're continuing to innovate for advertisers with AI. For example, in September, we announced an agentic AI tool in Creative Studio that plans and executes the entire creative process in a matter of hours instead of weeks. We're also inventing and seeing strong momentum in several other areas, and I'll mention just a few. In Prime Video Live Sports, NBA on Prime tipped off last week, and our opening night doubleheader averaged 1.25 million viewers in the U.S., a double-digit increase over last season on cable. You'll see us bring the same constant innovation here that we brought to our NFL broadcasts. We're adding golf with the Masters in 2026 and a new skins competition with the PGA Tour on Black Friday this year. And we've added Peacock and Fox One to Prime Video's add-on subscription offering of over 100 channels in the U.S. We continue to be energized by the response to Alexa Plus. Compared to what we call the classic Alexa experience, Alexa Plus customers are talking to Alexa two times more Those interactions are much longer, and they're covering a broader range of topics. They're using Alexa Plus on Fire TV at 2.5 times the rate of classic, using natural conversation to discover audio content four times more, engaging with photos four times more, and customers are completing four times more shopping conversations that end in a purchase. We've expanded the number of Project Kuiper satellites in space to more than 150, and delivered over 1 gigabit per second speeds and tests with our enterprise-grade customer terminal, the first commercial phased array we know of to clear that threshold. Finally, Zoox robotaxis are available to riders in Las Vegas, and we've announced Washington, D.C. as the eighth testing location. We're excited for these to continue rolling out to more riders. G4 is one of our busiest and most energizing times of the year. And we're excited about the continued demand for AWS, the innovations we'll announce at reInvent in December, the positive customer response to our AI-powered experiences, all the gifts we'll be delivering throughout the holiday season, and a lot more. Thanks in advance to our teammates around the world who are gearing up to deliver for customers once again. With that, I'll turn it over to Brian for a financial update.