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Detailed Earnings Analysis:

Amazon AMZN 0.00%↑ .

Earnings Snapshot:

Reddit RDDT 0.00%↑ .

↗️$200.61B rev (+19.6% YoY, +10.5% QoQ) beat est by 2.1%

↗️Operating Margin (13.7%, +2.3 PPs YoY)🟢

↘️FCF Margin ( -1.1%, -1.2 PPs YoY)🟡

↗️Net Margin (31.2%, +20.4 PPs YoY)

↗️EPS $5.75 beat est by 215.9%🟢

AWS

↗️AWS Revenue $42.2B rev (+36.8% YoY)🟢

↗️Operating Margin (39.4%, +6.4 PPs YoY)

Revenue by Category

➡️Net product sales $77.6B rev (+13.7% YoY)🟡

↗️Net service sales $123.0B rev (+23.7% YoY)🟢

Revenue by Segment

➡️Online stores $70.4B rev (+14.6% YoY)🟡

➡️Physical stores $5.8B rev (+3.6% YoY)🟡

➡️Third-party seller $46.8B rev (+15.9% YoY)🟡

↗️Advertising $19.8B rev (+26.2% YoY)🟢

➡️Subscription $13.7B rev (+12.5% YoY)🟡

↗️AWS $42.2B rev (+36.8% YoY)🟢

↗️Other $1.8B rev (+22.0% YoY)

Operating expenses

↘️S&M/Revenue 5.8% (-1.0 PPs YoY)

↗️R&D/Revenue 16.5% (+0.3 PPs YoY)

↘️G&A/Revenue 1.4% (-0.4 PPs YoY)

Dilution

↗️SBC/rev 3%, +0.8 PPs QoQ

↘️Basic shares up 1.2% YoY, -0.1 PPs QoQ

↗️Diluted shares up 0.9% YoY, +0.1 PPs QoQ🟢

Guidance

↘️Q3’26 $197.0 - $202.0B guide (+10.7% YoY) missed est by -2.4%🔴

🟢Positive

Revenue rose 19.6% YoY to $200.6 billion, beating est by 2.1%.
Operating margin +2.3 percentage points to 13.7%, supported by AWS growth and lower S&M and G&A intensity.
AWS revenue rose +36.8% YoY to $42.2 billion, fifth consecutive acceleration quarter, and fastest growth in 18 quarters.
AWS operating margin increased 39.4%, +6.4 percentage points YoY.
AWS backlog reached $496 billion.
Advertising rev increased +26.2% YoY to $19.8 billion. Sponsored AI prompts delivered 48% higher conversion and 21% greater spending.
Custom-chip Tranium revenue $25 billion annual run rate, supported by multi-year Trainium commitments from OpenAI and Anthropic.
Same-day and overnight deliveries increased +40%, while perishables customers grew 50% since January.
Alexa for Shopping reached 350+ million users, with interactions rising 5x YoY.

🟡Neutral

Online Stores revenue grew +14.6%, third-party seller services +15.9%, subscriptions +12.5%, and product sales +13.7%.
Prime Day timing supported Q2, but creates a headwind for Q3.
Amazon raised 2026 robotics deployment (Cardinal and Sparrow robotic arms expected to more than double).
Amazon Leo approached 400 satellites, but current revenue remains limited.
R&D increased to 16.5% of revenue, reflecting heavier investment in AI, chips, robotics and infrastructure.
Diluted shares increased +0.9% YoY, and SBC reached 3% of revenue.

🔴Negative

FCF margin declined -1.2 PPs YoY to negative 1.1%.
2026 CapEx guidance increased from $200 billion to $220 billion, driven by memory inflation and AWS capacity expansion.
Q3 revenue guidance of $197 billion to $202 billion, missed estimates by 2.4%.
Q3 operating income implies 11% sequential decline.
Q2 profitability included about $1.2 billion of tariff refunds and energy-contract accounting benefits.
Fuel inflation, higher transport rates and driver shortages increased fulfillment costs.

Overall, this was a strong quarter for $AMZN, and shares rose +9.55% after ER. Main focus should remain on AWS revenue growth, which became the primary growth driver for the company. AWS growth accelerated to +36.8% YoY, while AWS - largest cloud platform. AWS operating margin also increased to 39.4%.

AWS backlog grew at a triple-digit rate, suggesting continued strong revenue growth ahead. Growth is being supported by successful product adoption. Bedrock Agents now supports identity, secure, memory, and monitoring, while Kiro usage tripled and reduces cost by 50% compared with competing coding agents.

Amazon Q can now manage email, calendars, files, and it integrates with Salesforce, Jira, Teams, Slack and ServiceNow. Amazon added 16 new AWS integrations in Q2, including Adobe, Moody’s, and Snowflake.

Amazon is also successfully developing its custom-chip Trainium, which has reached $25 billion ARR. Anthropic and OpenAI signed multi-year, multi-gigawatt Trainium commitments. Amazon is also considering selling Trainium to third-party data centers, not only using it internally in AWS.

Revenue growth accelerated across other segments as well, although part of this improvement came from the timing shift of Prime Day. It provided a tailwind in Q2 but will become a headwind for Q3.

Advertising revenue growth also accelerated to +26% YoY, supported by Sponsored Products and Prime Video. AI-powered shopping also became a growth driver for advertising revenue, advertisers using Ads Agent achieved 8% lower cost per impression and 6% lower acquisition cost.

Online Stores revenue growth accelerated to +15% YoY, supported by same-day and overnight delivery, which increased + 40% during the first half of 2026. Alexa for Shopping users spent more than 40% extra per order.

Q3 revenue guidance came below analyst expectations by 2.4%. Prime Day timing is expected to reduce Q3 growth by almost 400 basis points, while foreign exchange adds an additional 80 basis point headwind.

Management also expects lower operating margins and raised 2026 CapEx guidance by 10% compared with the outlook provided during last quarter’s conference call. Management expected lower operating margin due to rising memory costs and higher fuel prices.

Management noted that data centers require investment around two years before monetization but then can operate for more than 30 years. Management believes current CapEx investments will pressure free cash flow in the near term but strengthen Amazon’s competitive advantages and increase cash flow in the long term.

Amazon Leo and Zoox are promising early-stage projects, and Amazon Leo has approached 400 satellites in orbit.

I believe management’s position is justified, and I remain positive on higher CapEx which will support future growth, and results are already becoming visible through accelerating AWS growth and record AWS net new ARR in Q2.

Reddit’s Revenue Grew 61% and Operating Margin More Than Doubled — So Why Did the Stock Fall?

RDDT delivered strong quarter, revenue increased +61.1% YoY, beating estimate by 10%, EPS reached $1.25 vs $0.95 est.

Gross margin expanded +0.5 PPs to 91.3%. Operating margin rose from 13.5% in Q2 2025 to 28.8%. Net margin expanding to 31.4.

Advertising is accounting 94.7% of total revenue, Advertising revenue growth +63.9% YoY.

Reddit Max is becoming important part of the ad platform, Max revenue grew +150%, and advertiser adoption increased more than 60% QoQ.

But, monetization is growing faster than audience growth.

Global daily active users increased +18%, and U.S. DAUq grew only +5.8%. Global ARPU increased +37.8%, with U.S. ARPU rising +50.6%.

Global growth is concerning and search referrals weakened.

Q3 guidance strong, revenue is expected at $860 – 870M, above est $829M. Revenue growth will slowing to +48% YoY.

RDDT trades at 9.3x EV/Sales and 30.5x forward PE.

Amazon Earnings & Reddit Q2 2026 Snapshot

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