EARNINGS REVIEW
Amazon, 2025 Q4 Earnings Results
Historical quarterly report · Results and outlook reflect information available at the time of that release. Actual results from later quarters have not been incorporated into the outlook.
AWS growth accelerated to 24% and operating income increased, but the large 2026 investment plan made the pace of cash recovery a key issue to assess.
Assessment · The direction of growth is favorable, but investment requirements have also risen sharply. AWS growth alone does not prove investment returns; simultaneous improvement in cash flow, utilization of new capacity and profitability would strengthen the investment thesis.
Key management and company statements
Earnings release · Excerpt from the original“we expect to invest about $200 billion in capital expenditures across Amazon in 2026”Meaning · Amazon expects to invest approximately 200 B$ in total company capital expenditure in 2026.
Context · This is a company-wide investment plan, not AWS-only investment or committed spending.
Original statement ↗01 Revenue, operating income and results versus expectations
Year over year · revenue 187.792 → 213.386 B$ (+13.6% · +25.594 B$), operating income 21.203 → 24.977 B$ (+17.8% · +3.774 B$).
Quarter over quarter · revenue 180.169 → 213.386 B$ (+18.4% · +33.217 B$), operating income 17.422 → 24.977 B$ (+43.4% · +7.555 B$), operating margin 9.7% → 11.7% (+2.0%p).
AWS revenue was 35.579 B$, up 6.793 B$ year over year. According to the company, North America revenue grew 10% and International revenue grew 17%; International growth included currency effects.
Results versus previous guidance
Revenue guidance 206.000~213.000 B$ → actual 213.386 B$. 0.386 B$ above the high end.
02 Earnings sustainability · From operating income to net income
Operating income included 1.100 B$ for Italian tax disputes and litigation settlements, 0.730 B$ of estimated severance costs and 0.610 B$ of asset impairments mainly related to physical stores. The company presented operating income excluding these items of approximately 27.400 B$.
AWS operating income was approximately 12.500 B$, up from approximately 10.600 B$ a year earlier. Changes in consolidated net income should be distinguished from AWS operating performance.
- Operating income
- 24.977 B$
- Net non-operating income
- 1.628 B$
- Income tax expense
- −4.946 B$
- After-tax equity-method income/loss
- −0.467 B$
- Consolidated net income
- 21.192 B$
Net income of 21.192 B$ in the existing quarterly dataset is on a consolidated basis.
03 Cash flow quality · Net income → OCF → FCF
Quarterly net cash CapEx was 38.469 B$, calculated by subtracting asset-sale proceeds and incentive recoveries of 1.053 B$ from gross equipment purchases of 39.522 B$. Quarterly FCF and annual FCF of 11.200 B$ in the release cover different periods.
- Consolidated net income
- 21.192 B$
- Total net adjustments for noncash items, working capital and other items¹
- 33.267 B$
- Operating cash flow
- 54.459 B$
- Cash CapEx
- −38.469 B$
- FCF
- 15.990 B$
¹ Total net adjustments calculated as OCF−net income. This is not a single disclosed line item; it combines noncash items, working capital, classification differences and other adjustments.
FCF versus previous quarter · 1.297 → 15.990 B$, 14.693 B$ improvement.
04 Financial capacity · Net debt and payment obligations
Previous-quarter net cash · 2025-09-30
Cash and current investments 94.197 / Debt 54.959 B$
Current-quarter net cash · 2025-12-31
Cash and current investments 123.029 / Debt 68.851 B$
Net debt improved by 14.940 B$ from the previous quarter. The carrying amount of current debt is 3.203 B$. It may differ from the principal maturity schedule.
The year-end cash balance reflects financing and investment timing as well as operating cash generation. Leases and equipment purchase commitments should be checked separately from debt in the net cash table.
Common definition · Cash and current investments = cash equivalents + current investments and deposits. Debt = carrying amount of interest-bearing borrowings (current + noncurrent), excluding separately reported lease liabilities. This differs from total liabilities of 406.977 B$. Restricted cash, noncurrent securities and noncurrent deposits are excluded from cash and current investments.
05 Investment, capital allocation and cash returns
The company-wide 2026 CapEx plan is approximately 200.000 B$. It targets opportunities across multiple businesses, including AI, chips, robotics and low-Earth-orbit satellites, so the entire amount is not classified as AWS investment.
This quarter, cash CapEx/revenue is 18.0% and FCF/revenue is 7.5%. These ratios should not be used as a simple ranking of companies with different business models and FCF definitions.
06 Next-quarter and full-year outlook: implications
YoY +11.5%~+14.7% · QoQ −18.7%~−16.3%. Revenue comparison bases are 155.667 B$ for the year-earlier corresponding quarter and 213.386 B$ for this quarter. Growth rates are calculated from the original amounts.
Next-quarter operating income guidance is 16.500~21.500 B$. This includes an approximately 1.000 B$ year-over-year increase in Amazon Leo costs and investment in international quick commerce and price competitiveness.
RPO / Backlog
QoQ 200.000 → 244.000 B$ (+22.0% · +44.000 B$).
YoY 177.000 → 244.000 B$ (+37.9% · +67.000 B$).
Amounts committed under long-term customer contracts, mainly AWS, that have not yet been recognized as revenue; not Amazon’s entire order backlog · Contract balances are not equivalent to confirmed next-quarter revenue or cash inflows. RPO scope differs across companies.
RPO disclosure ↗Quarterly results · CY-aligned presentation
Amounts in B$. Based on the CY-aligned year of this report, the table shows all 4 quarters of the preceding year and the current year to date. Each fiscal quarter is assigned to the CY quarter with the greatest overlap in actual reporting dates, alongside its original FY/CY quarter and start/end dates. Amounts have not been recalculated into actual calendar quarters.
| CY alignment | 2024 · 4 quarters | 2025 · 4 quarters | Change this quarter | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Metric | 2024 total4-quarter totalBalances are period-end | 1Q2024 Q124-01-01 ~24-03-31 | 2Q2024 Q224-04-01 ~24-06-30 | 3Q2024 Q324-07-01 ~24-09-30 | 4Q2024 Q424-10-01 ~24-12-31 | 2025 total4-quarter totalBalances are period-end | 1Q2025 Q125-01-01 ~25-03-31 | 2Q2025 Q225-04-01 ~25-06-30 | 3Q2025 Q325-07-01 ~25-09-30 | 4Q2025 Q425-10-01 ~25-12-31 | QoQvs 2025 Q3 | YoYvs 2024 Q4 |
| Revenue | 637.959 | 143.313 | 147.977 | 158.877 | 187.792 | 716.924 | 155.667 | 167.702 | 180.169 | 213.386 | +18.4%+33.217 B$ | +13.6%+25.594 B$ |
| Operating income | 68.593 | 15.307 | 14.672 | 17.411 | 21.203 | 79.975 | 18.405 | 19.171 | 17.422 | 24.977 | +43.4%+7.555 B$ | +17.8%+3.774 B$ |
| Operating margin | 10.8% | 10.7% | 9.9% | 11.0% | 11.3% | 11.2% | 11.8% | 11.4% | 9.7% | 11.7% | +2.0%p | +0.4%p |
| FCF | 38.219 | 5.054 | 8.888 | 4.693 | 19.584 | 11.194 | −7.240 | 1.147 | 1.297 | 15.990 | +14.693 B$ | −3.594 B$ |
| Operating cash flow | 115.877 | 18.989 | 25.281 | 25.971 | 45.636 | 139.514 | 17.015 | 32.515 | 35.525 | 54.459 | +53.3%+18.934 B$ | +19.3%+8.823 B$ |
| Cash CapEx | 77.658 | 13.935 | 16.393 | 21.278 | 26.052 | 128.320 | 24.255 | 31.368 | 34.228 | 38.469 | +12.4%+4.241 B$ | +47.7%+12.417 B$ |
| Net cash | 43.411 | 18.542 | 26.698 | 27.825 | 43.411 | 54.178 | 36.101 | 37.284 | 39.238 | 54.178 | +14.940 B$ | +10.767 B$ |
| Cash and current investments | 101.202 | 85.074 | 89.092 | 88.051 | 101.202 | 123.029 | 94.565 | 93.180 | 94.197 | 123.029 | +30.6%+28.832 B$ | +21.6%+21.827 B$ |
| Debt | 57.791 | 66.532 | 62.394 | 60.226 | 57.791 | 68.851 | 58.464 | 55.896 | 54.959 | 68.851 | +25.3%+13.892 B$ | +19.1%+11.060 B$ |
Indented rows are components or reference items for the parent metric. Net cash = cash and current investments − debt. Depending on the company definition, FCF may include additional adjustments such as lease principal and therefore differ from operating cash flow − cash CapEx. See the cash flow discussion for the detailed definition.
Annual totals and year-to-date totals appear before each year’s quarters. Revenue, earnings and cash flow are sums of quarterly figures; margin is total operating income ÷ total revenue; net cash, cash and debt are balances at the end of the last quarter. Do not treat totals covering different lengths of time as directly comparable annual figures.
Net cash = cash and current investments − debt. A negative figure indicates net debt. Changes in FCF and net cash are shown as absolute amounts in B$. Quarterly figures have not been adjusted to force reconciliation with disclosed annual totals.
Comparison bases, calculation methods and quarterly sources
Calculation and presentation · Amounts in B$. Figures disclosed in millions of US dollars are divided by 1,000 without altering the source values. Where only cumulative cash flows are available, the previous cumulative period within the same fiscal year is deducted. YoY, QoQ and margins are calculated using amounts before display rounding. Earnings changes from negative or 0 bases are expressed as profit/loss transitions and absolute amounts.
Opinions and outlook · Management quotations include original excerpts and their translations. Quotations not identified as earnings-call transcripts come from earnings releases. Interpretations and implications are the author’s judgments. No numerical probability of achieving a target is assigned without quantitative verification.