AMZN • 10-Q • Q3 2025 • Positive

Amazon's AWS Growth Accelerates to 20% as International Markets Show Renewed Strength

October 31, 2025 • 1 min read

TL;DR

Amazon delivered strong Q3 2025 performance with revenue growing 13% YoY to $180.2B, driven by accelerating AWS growth of 20% and international segment expansion of 14%. Core North America business maintained steady 11% growth while AWS reached $33B in quarterly revenue, now comprising 18% of total sales. International markets showed particular strength despite FX headwinds, suggesting successful penetration in key regions. The company faces mounting legal challenges across multiple jurisdiction

Financial Performance Overview: Revenue growth accelerated to 13% YoY in Q3, up from 11% in Q2, with all segments showing improved momentum. AWS delivered standout performance at 20% growth, marking its fastest pace in six quarters. International revenue grew 14% despite 400bps FX headwind, indicating strong underlying demand. North America maintained double-digit growth at 11% while improving operating leverage. The revenue mix continues shifting toward higher-margin AWS services, now representing 18% of total sales versus 17% year ago.
Strategic Initiatives and Operational Changes: Amazon is aggressively investing in AI capabilities across AWS and retail operations while defending against antitrust challenges. The company paid a €1.13B fine to Italian authorities (later reduced to €752M) related to marketplace practices. Management's focus on fast shipping and price competitiveness in retail appears to be driving volume growth, though potentially at the expense of margins. AWS's emphasis on AI services and enterprise migration tools suggests confidence in maintaining cloud leadership despite intensifying competition.
Market Position and Competitive Dynamics: Multiple antitrust cases allege monopolistic practices in online retail and marketplace services, particularly around pricing and vendor relationships. The company faces class action certification in multiple jurisdictions including the US and UK. Despite regulatory pressure, Amazon continues gaining market share in e-commerce and cloud computing through aggressive pricing and service expansion. Third-party seller services show particular strength, indicating the marketplace flywheel remains robust.
Operational Efficiency and Profitability: Foreign exchange volatility created a 100bp headwind to international growth, though underlying performance remains strong at 10% constant currency growth. North America segment demonstrates improved operating leverage as investments in fulfillment optimization yield returns. AWS maintains industry-leading margins despite intense price competition. The company's continued investment in fast shipping capabilities suggests confidence in long-term profitability improvements through scale.
Growth Catalysts and Material Risks: Near-term growth drivers include AI services expansion in AWS, international market penetration, and advertising revenue acceleration. Key risks center on antitrust litigation outcomes, with potential forced changes to core business practices. Macroeconomic factors including inflation and interest rates create uncertainty around consumer spending and cloud migration timing. Management cites AI adoption and continued e-commerce penetration as primary medium-term opportunities.

Revenue

$180.2B ( YoY, QoQ) with AWS at $33.0B ( YoY)

↑ +13%

Aws Revenue

$33.0B ( YoY, QoQ) representing of total sales

↑ +20%

International

$40.9B ( YoY, constant currency)

↑ +14%

North America

$106.3B ( YoY) maintaining steady growth

↑ +11%

Growth Indicators

YoY (accelerating from in Q2)

↑ 20%

International Constant Currency ↑10% YoY (vs 14% reported)

Key Risks

Antitrust litigation seeking billions in damages and structural remedies
FX volatility creating 400bp headwind to international growth
Macroeconomic uncertainty affecting consumer spending and cloud migration
Regulatory challenges to marketplace practices in multiple jurisdictions

Key Opportunities

AI services expansion driving AWS growth acceleration
International market penetration showing strong underlying demand
Advertising services scaling rapidly across global markets
Operating leverage improvements in North America retail

Bottom Line

Amazon's Q3 results demonstrate accelerating momentum across core businesses while highlighting mounting regulatory challenges. AWS's return to 20% growth suggests successful execution in cloud services despite intense competition. The shift toward higher-margin services continues, though regulatory risks could impact key business practices. International expansion shows promise despite FX headwinds. Key metrics to watch include AWS growth sustainability, regulatory case progression, and operating leverage in retail segments.