Walmart's Ad Business Grows 38%, Company Raises Annual Outlook

Reporting its quarterly results, Walmart raised its full-year sales and earnings outlook, boosted by strong e-commerce growth, higher profitability and $2.9 billion in tariff refunds. Global advertising revenue grew 38% during the quarter, while U.S. growth at its retail media network, Walmart Connect (retail media — advertising a retailer sells on its own platform), reached 43% excluding Vizio. Total revenue came in at $187.9 billion, marking 5.9% year-over-year growth and beating S&P Capital IQ's forecast of $186.8 billion.

The company's advertising and integrated-platform strategy is playing a decisive role in its growth. Earlier this month, Walmart completed its acquisition of self-serve connected TV (CTV — television viewed via internet streaming) platform Vibe.co, a deal worth roughly $1.4 billion that, together with its 2024 acquisition of Vizio, positions the company as a serious challenger to Amazon in the streaming TV advertising market. Amazon's advertising business generated $76 billion in revenue over the past 12 months.

According to CFO John David Rainey, advertising growth is significantly outpacing e-commerce growth, giving the company further room to expand its profit margin. In June, at the Cannes festival, Walmart unveiled a concept for a unified global commerce system bringing together in-store experience, e-commerce, its marketplace, off-platform media, membership and CTV.

The company is also actively expanding its artificial intelligence capabilities: customers who shop through its AI shopping assistant, Sparky, spend 40% more per order than other shoppers, while the number of Sparky users has grown 70% year-over-year. At the same time, leadership acknowledged challenges such as U.S. tariffs and changes to Medicare drug pricing policy, which caused a 125-basis-point drag on comparable sales — though this impact was largely confined to the top line and did not materially hurt profit margins.