Thanks, Dave. Today we're reporting $165.7 billion in revenue, up 10% year-over-year, excluding the impact from foreign exchange rates. Operating income is $18.4 billion up 20% year-over-year and trailing 12 month free cash flow is $25.9 billion. We're pleased with our continued business progress, but more importantly with our pace of innovation and additional improvement in our customer experiences. In our stores business, we once again saw strong consumer resonance in our continued work on selection value and shipping speed. Our broad selection offers customers choice across their shopping journeys. We welcome well-known brands such as Oura Rings, Michael Kors, and The Ordinary, as well as a new shopping experience with Saks that offers a refined luxury assortment of fashion and beauty items from brands like Dolce&Gabbana, Balmain, Erdem, Giambattista Valli, and Jason Wu Collection. As always, we're working to keep prices low. And with this being an uncertain moment for consumers, it's even more important than it typically is. In Q1, we held deal events worldwide to help customers save over $500 million across the Big Spring Sale in the U.S. and Canada, Spring Deal Days in Europe, and Ramadan/Eid Sale events in Egypt, Saudi Arabia, Turkey, and UAE. Prime members will have more opportunities to save throughout the year including at our eleventh Prime Day event in July. Over the past few years, we've made significant progress in making our fulfillment network more efficient and cost effective. We've shared many times that an important turning point was regionalizing our national fulfillment network into regional hubs. By stocking items closer to where customers live, we're able to deliver more orders faster often in fewer packages and at lower delivery costs. The next challenge was getting as many items as possible into these regional nodes. Our inbound network which is how we get items to each fulfillment center hadn't been architected to leverage this new regionalization structure. So, we redesigned it and just rolled out a new inbound architecture that expands the share of products that we can place in each fulfillment center improving delivery speeds and lowering our cost to serve. In the first quarter, we once again set new delivery speed records with our fastest delivery ever for Prime members around the world and we delivered more items in the same day or next day in Q1 than any other quarter in our history. Looking ahead, we'll continue to refine our newly redesigned inbound network, build out our same day delivery sites and add additional robotics and automation throughout our buildings. You'll also see us expand the number of delivery stations that we have in rural areas of the U.S. So, we can get items to people who live in less densely populated areas much more quickly.
I thought I'd share a few thoughts on the prospect of heightened tariffs on our stores business. Obviously none of us knows exactly where tariffs will settle or when. We haven't seen any attenuation of demand yet. To some extent, we've seen some heightened buying in certain categories that may indicate stocking up in advance of any potential tariff impact. We also have not seen the average selling price of retail items appreciably go up yet.
Some of this reflects some forward buying we did in our first-party selling and some of that reflects some advanced inbounding our third-party sellers have done, but a fair amount of this is that most sellers just haven't changed pricing yet. Again, this could change depending on where tariffs settle. Amazon is not uniquely susceptible to tariffs.
As it relates to China, retailers who aren't buying directly from China are typically buying from companies who themselves are buying from China, marking these items up, rebranding and selling to U.S. Consumers. These retailers are buying the product at a higher price than Chinese sellers selling directly to U.S. consumers in our marketplace. So, the total tariff will be higher for these retailers than for China Direct Sellers.
It's also sometimes easy to forget what Amazon sells. We're not mostly selling high average selling price items, but we certainly sell a bunch. In the first quarter, our Everyday Essentials grew more than twice as fast as the rest of our business and represented one out of every three units sold in the U.S. and Amazon. Even if you exclude Whole Foods Market and Amazon Fresh, Amazon is one of the largest grocers in the U.S. with over $100 billion in gross sales last year. People are buying a lot of their everyday essentials at Amazon.
We also have extremely large selection, hundreds of millions of unique SKUs, which means we're often able to weather challenging conditions better than others. When there are periods of discontinuity, substantial unexpected product trends emerge. Think about the pandemic, when items like masks and hand sanitizer became big sellers. When you have the broadest selection like we do and 2 million plus global sellers like we do, you're better positioned to help customers find whatever items matter to them at lower price points than elsewhere. Finally, when there are uncertain environments, customers tend to choose the provider they trust most. Given our really broad selection, low pricing and speedy delivery, we have emerged from these uncertain areas with more relative market segment share than we started and better set up for the future. I'm optimistic this could happen again.
Moving to a few words on Amazon Ads, we're working hard to be the best place for brands of all sizes to grow their business. We are pleased with the strong growth on a very large base generating $13.9 billion of revenue in the quarter and growing 19% year-over-year. We're seeing strength across our broad portfolio of full funnel advertising offerings that help advertisers reach an average ad supported audience of more than 275 million in the U.S. alone. This includes our top of funnel efforts to drive brand awareness to bottom of funnel offerings where we measure outcomes at the point of conversion. Amazon Ads provides brands with tools to reach targeted audiences in our own entertainment properties such as Prime Video, Twitch and IMDB, in live sports such as NFL, NBA and NASCAR, audio content such as Amazon Music and Wondery and of course in our store as well as many other external sites such as Pinterest and BuzzFeed. All of our audience and measurement capabilities work for the ads we deliver across premium third party publishers through Amazon DSP and our secure clean rooms provide advertisers the ability to analyze data, produce core marketing metrics and understand how their marketing performs across various channels. We continue to see a lot of opportunity to further expand our full funnel capabilities for brands.
AWS grew 17% year-over-year in Q1 and now sits at a $117 billion annualized revenue run rate. We continue to help organizations of all sizes accelerate their move to the cloud, helping to modernize their infrastructure, lower costs and speed up innovation. We signed new AWS agreements with companies including Adobe, Uber, Nasdaq, Ericsson, Fujitsu, Cargill, Mitsubishi Electric Corporation, General Dynamics Information Technology, GE Vernova, Booz Allen Hamilton, NextEra Energy, Publicis Sapient, Elastic, Netsmart, and many others. It's useful to remember that more than 85% of the global IT spend is still on premises, so not in the Cloud yet. It seems pretty straightforward to me that this equation will flip in the next 10 to 20 years. Before this generation of AI, we thought AWS had the chance to ultimately be a multi $100 billion revenue run rate business.
We now think it could be even larger. If you believe your mission is to make customers' lives easier and better every day and you believe that every customer experience will be reinvented with AI, you're going to invest very aggressively in AI and that's what we're doing. You can see that in the thousand plus AI applications we're building across Amazon. You can see that with our next generation of Alexa named Alexa+. You can see that in how we're using AI in our fulfillment network, robotics, shopping, Prime Video and advertising experiences. And you can see that in the building blocks AWS is constructing for external and internal builders to build their own AI solutions. We're not dabbling here. We're very intentionally giving builders the broadest possible capabilities at every level of the AI stack cost effectively to use AI expansively across their businesses. At the bottom layer for those building models, our new custom AI chip Trainium 2 is starting to lay in capacity in larger quantities with significant appeal and demand. While we offer customers the ability to do AI in multiple chip providers and will for as long as I can proceed, customers doing AI at any significant scale realize that it can get expensive quickly.
So, the 30% to 40% better price performance that Trainium 2 offers versus other GPU based instances is compelling. For AI to be as successful as we believe it can be, the price of inference needs to come down significantly. We consider this part of our mission and responsibility to help make it so.
At the middle layer for those wanting to leverage frontier models to build Generative AI apps, Amazon Bedrock is our fully managed service that offers a choice of high performing foundation models with the most compelling set of features that make it easy to build high quality Generative AI applications. We continue to iterate quickly on Bedrock adding Anthropic's Claude 3.7 Sonnet hybrid reasoning model, their most intelligent model to date and Meta's Llama 4 family of models. We were also the first cloud service provider to make DeepSeek R1 and Mistral AI's Pixtral Large generally available as a fully managed model. And of course, we offer our own Amazon Nova state-of-the-art foundation models in Bedrock with the latest premier model launching yesterday. They deliver frontier intelligence and industry leading price performance and we have thousands of customers already using them including Slack, Siemens, Sumo Logic, Coinbase, FanDuel, Glean, and Blue Origin. A few weeks ago, we released the Amazon Nova Sonic, the new speech-to-speech foundation model that enables developers to build voice-based AI applications that are highly accurate, expressive, and human-like. Nova Sonic has lower word error rates and higher win rates over other comparable models for speech interactions.
The technology was also abuzz by the potential of agents. To-date virtually all the agentic use cases have been of the question-answer variety. Our intention is for agents to perform wide-ranging complex, multi-step tasks by organizing a trip for setting the right temperature or music ambience in your house for dinner guests, or handling complex IT tasks to increase business productivity. There haven't been action-oriented agents like this until Alexa+. It was a technology to build these agents a still quite primitive and accurate, and requires constant human supervision. We just released a research preview of Amazon Nova Act, a new AI model trained to perform actions within a web browser, and it enables developers to breakdown complex workflows into reliable atomic commands like search, or checkout, or answer questions about the stream. It also enables them to add more detailed instructions to these commands, where needed, like don't accept the insurance upsell. Nova Act aims to move the current state-of-the-art accuracy of multi-step agentic actions from 30% to 60%, to 90-plus percent with the right set of building blocks to build these action-oriented agents. And the very top of the stack of the applications, this past quarter Q, the most capable generative AI assistance for accelerating software development, and leveraging your own data, plus a lightening-fast new agentic coding experience within the command line interface that could execute complex workflows autonomously. Customers are loving this. We also made generally available Give That Dudo with Amazon Q, enabling AI agents to assist multi-step tasks such as new feature development, code-based upgrades, or Java 8 and 11, while also offering code review and unit testing, all within the same familiar Give That platform. Our AI business has a multibillion dollar annual revenue run rate, continues to grow triple-digit year-over-year percentages, and is still in its very early days. While there is good reason for the high optimism about AI, I conclude my AWS comments with the reminder that there's still so much on-premises infrastructure yet to be moved to the cloud. Infrastructure modernization is much less actually to talk about the AI. The fundamental to any company's technology and invention capabilities to develop their productivity is speed and cost structure. If a company is to realize the full potential of AI, they are going to need their infrastructure and data in the cloud. I want to briefly mention a few other items.
As I've referenced a couple of times, in Q1, we introduced Alexa+. Our next-generation of Alexa personal assistant was meaningfully smarter and more capable than our prior self, can both answer virtually any question and to take actions, and is free with Prime or available to non-Prime customers for $99 a month. We are just starting to roll this out in the U.S., and we'll be expanding to additional countries later this year. People are really liking Alexa+ thus far. We are excited and honored to be part of a joint venture that will be creating next-generation of the esteemed James Bond film franchise. We recently named the producer Amy Pascal and David Heyman to produce the next James Bond movie. Additionally, just a couple of days ago, Project Kuiper reached a significant milestone by launching our first satellite into orbit, with more being launched soon, and we expect to begin offering service to customers later this year. I'm proud of what our teams around the world have delivered. We are excited about what we are inventing and working on, as we speak. And with that, I'll turn it over to Brian for our financial update.