Walmart’s U.S. advertising unit, Walmart Connect, boosted the retailer’s revenue by 30% year-on-year in the second quarter of fiscal 2025, according to an earnings release. The company’s global advertising business, which includes India-based Flipkart, grew 26% year-on-year. Walmart does not disclose specific advertising revenue figures but has said the business generates billions annually.
Marketplace sellers, smaller and emerging brands that sell their goods through Walmart, were a boon for Connect during the period. Ad revenue generated from this category increased nearly 50%, Walmart CEO Doug McMillon said on a conference call with investors to discuss the results.
“Our newer businesses such as marketplace, advertising and membership are also helping to diversify our earnings and strengthen the resilience of our business model,” McMillon said in a statement accompanying the earnings.
Connect has been working this year to expand the number of places where its advertising partners can buy media. In-store and offsite channels have been key priorities for the retail media network.
More and more ads are appearing on self-checkout screens, on TV shelves, at taste stations and on Walmart’s store radios as the retailer looks to better monetize its sizable brick-and-mortar presence. Offsite, Connect has struck deals with publishers like Disney to use its own shopper data to better target and measure ads on connected TV. Earlier this year, Walmart acquired smart TV maker Vizio for $2.3 billion, strengthening its position in video advertising.
Walmart’s e-commerce business also grew at a healthy pace in the second quarter, potentially boosting on-site advertising or campaigns running on Walmart-owned properties. Walmart has a big lead among retail media networks when it comes to generating on-site advertising impressions, according to third-party analysis. Global e-commerce sales, which are reported separately, rose 21% year over year and made an “outsized contribution” to the results, CFO John David Rainey said on the investor call.
The earnings report impressed Wall Street overall, beating revenue forecasts while Walmart raised its full-year guidance. Comparable sales in the U.S. rose 4.2%, while consolidated revenue rose 4.8% to $169.3 billion. Advertising and membership growth combined to account for over 50% of the quarter’s operating profit growth, Rainey said.
“For this to work, we have to get the fundamentals really good, but at the same time continue to be comfortable with the faster-growing, higher-margin parts of our business that you all see changing the face of our financials,” Rainey said.
