AMZN Internet Retail
Amazon.com, Inc.
Amazon runs online and physical stores, a marketplace for third-party sellers, advertising, Prime subscriptions, and Amazon Web Services (AWS), the cloud business that produces most of its operating profit. FY2025 net sales rose 12% to $716.9 billion and operating income to $80.0 billion, of which AWS contributed $45.6 billion on $128.7 billion of sales. Capital spending reached about $132 billion. In 2026 Amazon agreed to invest up to $50 billion in OpenAI alongside an AWS cloud deal with it, and to acquire satellite operator Globalstar to add direct-to-device service to its Amazon Leo satellite network.
Last updated
Analysis last edited: October 7, 2026 · Financial data fetched: October 7, 2026 12:08 (SEC EDGAR) · Source 10-K filed: February 6, 2026
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
01
Company profile
- Legal name
- AMAZON COM INC
- Headquarters
- SEATTLE, WA
- Incorporated in
- Delaware
- Fiscal year end
- 12/31
- Exchange & ticker
- NASDAQ: AMZN
- Industry
- Internet Retail
- CIK
- 1018724
Workforce (as of FY2025 year-end)
Employees
1,576,000
Source: Form 10-K (FY2025) cover page and business description
02
Earnings calendar
When the company reports each quarter: the quarter-end date, the day results were released, and when the 10-Q or 10-K was filed.
Next report
Q3 FY2026
Quarter end: September 2026. In past years, Q3 results were released 26–31 days after quarter end (Oct 30, 2025; Oct 31, 2024; Oct 26, 2023). No date has been announced in the sources this site uses.
Reporting pattern
- Fiscal year ends around December 31.
- Reports four times a year: three quarterly reports (10-Q) and an annual report (10-K) for Q4.
- Earnings releases came 26–37 days after quarter end over the last 12 quarters.
| Quarter | Quarter ended | Earnings release (8-K) | Report filed (10-Q / 10-K) |
|---|---|---|---|
| Q2 FY2026 | Jun 30, 2026 | Jul 30, 2026 (+30 days) | Jul 31, 2026 10-Q (+31 days) |
| Q1 FY2026 | Mar 31, 2026 | Apr 29, 2026 (+29 days) | Apr 30, 2026 10-Q (+30 days) |
| Q4 FY2025 | Dec 31, 2025 | Feb 5, 2026 (+36 days) | Feb 6, 2026 10-K (+37 days) |
| Q3 FY2025 | Sep 30, 2025 | Oct 30, 2025 (+30 days) | Oct 31, 2025 10-Q (+31 days) |
| Q2 FY2025 | Jun 30, 2025 | Jul 31, 2025 (+31 days) | Aug 1, 2025 10-Q (+32 days) |
| Q1 FY2025 | Mar 31, 2025 | May 1, 2025 (+31 days) | May 2, 2025 10-Q (+32 days) |
| Q4 FY2024 | Dec 31, 2024 | Feb 6, 2025 (+37 days) | Feb 7, 2025 10-K (+38 days) |
| Q3 FY2024 | Sep 30, 2024 | Oct 31, 2024 (+31 days) | Nov 1, 2024 10-Q (+32 days) |
| Q2 FY2024 | Jun 30, 2024 | Aug 1, 2024 (+32 days) | Aug 2, 2024 10-Q (+33 days) |
| Q1 FY2024 | Mar 31, 2024 | Apr 30, 2024 (+30 days) | May 1, 2024 10-Q (+31 days) |
| Q4 FY2023 | Dec 31, 2023 | Feb 1, 2024 (+32 days) | Feb 2, 2024 10-K (+33 days) |
| Q3 FY2023 | Sep 30, 2023 | Oct 26, 2023 (+26 days) | Oct 27, 2023 10-Q (+27 days) |
Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. Fiscal years are labeled by the calendar year in which they end.
03
Flagship products & services
Stores
Online and physical stores
Examples: Consumable and durable goods, books, video, games, music, software; physical store sales
$291.8B of 2025 sales (online stores $269.3B, physical stores $22.6B).
Stores
Marketplace services
Examples: Commissions and related fulfillment and shipping fees
$172.2B of 2025 sales.
Stores
Advertising and Prime
Examples: Sponsored ads, display and video advertising; Prime memberships, digital video, music, audiobooks, e-books
$118.3B combined.
AWS
Cloud services
Examples: Compute, storage, databases, AI services
$128.7B of 2025 sales.
Other
Amazon Leo
Examples: Low Earth orbit satellite network
Expanding with the planned Globalstar acquisition.
Figures are from the FY2025 Form 10-K; Amazon Leo details are from the April 2026 Globalstar press release.
04
Recent strategic focus
FY2025 developments from the 10-K, and 2026 deals from 8-Ks.
OpenAI investment
$15.0B in Series C preferred stock plus a commitment of up to $35.0B more, alongside an AWS commercial arrangement with OpenAI.
Source: 8-K filed 2026-02-27
Globalstar acquisition
Globalstar holders can elect $90.00 in cash or 0.3210 Amazon shares (capped at $90.00) per share, with cash capped at 40% of shares; closing is expected in 2027.
Source: 8-K filed 2026-04-14
Charges in 2025
Operating income included a $2.5B FTC settlement charge and $2.7B of estimated severance for planned role eliminations.
Source: Form 10-K (FY2025) MD&A
Capex ÷ D&A (FY2025)
2.00x
Well above depreciation — expansion-stage investment
formulacapital expenditures ÷ depreciation & amortization
e.g.$131,819M ÷ $65,756M = 2.00x
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
Where the money goes, over time
Unit: $M. Capex went from $61.05B in FY2021 to $131.82B in FY2025
- Capex
formulacapital expenditures ÷ depreciation & amortization
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
05
Key figures at a glance
FY2021–FY2025, 5 years.
Revenue (FY2025)
$716.92B
As reported in the 10-K
Revenue CAGR (4 years)
+11.1%▲favorable
formula(last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1
e.g.($716,924M ÷ $469,822M) ^ (1÷4) − 1 = 11.1%
termsCAGR · ^ (exponent) · Revenue (net sales)
Operating margin (FY2025)
11.2%▲favorable
+5.9pt vs. 4 years ago
formulaoperating income ÷ revenue × 100
e.g.$79,975M ÷ $716,924M × 100 = 11.2%
ROE (FY2025)
22.3%▲favorable
5-year average: 17.3%
As reported in the 10-K
P/B (FY2025 end)
6.03x
formulaP/E × EPS ÷ BVPS (= period-end share price ÷ book value per share)
e.g.32.2x × $7.17 ÷ $38.31 = 6.03x
Period-end (fiscal year-end) value, not today's P/B
EV/EBITDA (FY2025 end)
17.0x
formula(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)
e.g.($2,500,197M + $69,291M − $86,810M) ÷ ($79,975M + $65,756M) = 17.0x
termsEV/EBITDA · Market capitalization · Interest-bearing debt · EBITDA · Depreciation & amortization (D&A)
Period-end (fiscal year-end) value, not today's multiple
- ▲
Revenue grew +11.1% a year over 4 years (strong growth)
From $469.82B in FY2021 to $716.92B in FY2025. The annualized rate (CAGR) makes it possible to compare growth pace across companies of different sizes.
- ▲
Operating margin improved: 5.3% → 11.2%
How much operating profit is left per $100 of revenue. It moved +5.9 points over 4 years — pricing power, cost control, and product mix all show up here.
- ▲
Equity ratio is 50.2% (a high level of financial stability)
The share of total assets funded by equity rather than debt. 50%+ is often read as low bankruptcy risk, though the right level varies by industry (real estate and leasing run lower, for instance).
- ―
Free cash flow was positive in 3 of 5 years
Operating cash flow minus capital expenditures: the cash left over after funding the business’s own investment, available for dividends, buybacks, acquisitions, or debt paydown. A negative year can mean heavy investment, or weak core earnings — worth distinguishing.
- ▲
ROE averaged 17.3% over 5 years (latest: 22.3%)
How much profit was generated on shareholders’ equity. Roughly 10%+ is often cited as solid for a U.S. company, though this varies a lot by industry and capital intensity.
06
Business model
North America
Retail sales of consumer products (including from third-party sellers), advertising, and subscriptions through North America-focused online and physical stores.
01 what it draws on
Inputs & resources
- Fulfillment and delivery network
- Third-party sellers
- About 1.58 million employees company-wide
02 what it does
Activities
- Selling products online and in stores
- Fulfilling and delivering orders
- Selling advertising
03 who it serves
Customers
- Consumers, sellers, and advertisers
04 how money comes in
How it earns
- Product sales
- Seller fees and commissions
- Advertising and Prime subscriptions
North America: how it makes money
- Net sales $426.3B (+10%) and operating income $29.6B in FY2025.
International
The same retail, marketplace, advertising, and subscription businesses outside North America.
01 what it draws on
Inputs & resources
- International fulfillment network
02 what it does
Activities
- Online retail and marketplace operations
03 who it serves
Customers
- Consumers, sellers, and advertisers outside North America
04 how money comes in
How it earns
- Product sales, seller fees, advertising, subscriptions
International: how it makes money
- Net sales $161.9B (+13%) and operating income $4.75B in FY2025.
Amazon Web Services (AWS)
Cloud computing, storage, database, analytics, machine learning, and other services for startups, enterprises, governments, and academic institutions.
01 what it draws on
Inputs & resources
- Data centers and AI chips
- Capital spending of about $132B company-wide in 2025
02 what it does
Activities
- Selling compute, storage, and AI services
03 who it serves
Customers
- Businesses, governments, and developers; OpenAI under a 2026 commercial arrangement
04 how money comes in
How it earns
- Usage-based and committed cloud contracts
Amazon Web Services (AWS): how it makes money
- Net sales $128.7B (+20%) and operating income $45.6B in FY2025 — about 57% of total operating income on 18% of sales.
Revenue by segment (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue, margin = segment profit ÷ segment revenue × 100
North America
426,305 (59%)profit 29,619 · margin 6.9%
International
161,894 (23%)profit 4,750 · margin 2.9%
AWS
128,725 (18%)profit 45,606 · margin 35.4%
Source: Form 10-K (FY2025) — MD&A and Note on segment information Profit is segment operating income.
07
Where it earns
Many U.S.-listed companies earn most of their revenue outside the U.S. — this breaks down revenue by country/region so it's clear where the business actually makes its money.
Largest market (FY2025)
United States — 68% of revenue
Revenue by country / region (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
United States
489,657 (68%)Germany
45,900 (6%)United Kingdom
43,212 (6%)Japan
30,688 (4%)Rest of world
107,467 (15%)
Source: Form 10-K (FY2025) — Note on segment information Net sales attributed to countries.
08
Contract structure
Short-term or spot sales carry different earnings quality than long-term or auto-renewing contracts — this shows how the company actually contracts with its customers.
Most retail revenue is one-off purchases; third-party seller services are commissions and fulfillment fees; Prime and other subscriptions recur monthly or annually; AWS bills mostly by usage, with some committed contracts. Net sales by type are shown below.
- Spot / one-off transaction
Online and physical store sales
$291.8B (41% of FY2025 net sales)
Typical term: Per purchase
Third-party seller services
$172.2B (24%)
Typical term: Commissions and fulfillment and shipping fees
Advertising services
$68.6B (10%)
Typical term: Sponsored ads, display, and video
Grew 22% in 2025.
Subscription services
$49.6B (7%)
Typical term: Annual and monthly Prime and other subscriptions
AWS
$128.7B (18%)
Typical term: Cloud services
Source: Form 10-K (FY2025) — Note on net sales by groups of similar products and services
09
Alliances & capital ties
Equity stakes, joint ventures, and strategic partnerships disclosed across the 10-K, 8-Ks, and proxy statement.
Capital tie / equity stake
OpenAI
February 2026: Amazon agreed to buy $15.0B of OpenAI Series C preferred stock (scheduled for March 31, 2026) and committed up to $35.0B more by December 31, 2028, required upon OpenAI milestones or a U.S. listing. Affiliates also signed a commercial arrangement for AWS cloud services to OpenAI and a collaboration making OpenAI-model services available to Amazon and on AWS.
Source: Form 8-K (filed 2026-02-27)
Capital tie / equity stake
Anthropic
Amazon invested $5.3B in Anthropic convertible notes from Q3 2023 to Q4 2024, parts of which were converted to nonvoting preferred stock in 2025. Valuation gains on this investment were the main source of Amazon's $15.2B of other income in 2025.
Source: Form 10-K (FY2025) — MD&A and Note on financial instruments
Business partnership
Apple
April 2026: an agreement for Amazon Leo to power satellite services, including Emergency SOS via satellite, for supported iPhone and Apple Watch models.
Source: Globalstar acquisition press release (Exhibit 99.1, 8-K filed 2026-04-14)
Capital tie / equity stake
Rivian
Amazon holds an equity investment in Rivian Automotive; its marketable securities loss was the main cause of Amazon's $(2.3)B net other expense in 2024.
Source: Form 10-K (FY2025) — MD&A
10
Customers & suppliers
Who the company sells to and buys from. Companies rarely name either, so named counterparties come only from the company's own filings and press releases; otherwise this lists the concentration figures the 10-K discloses.
Customers
Consumers, third-party sellers, advertisers, content creators, and businesses and governments using AWS.
Named by the company
- OpenAI — AWS cloud services under a commercial arrangement signed February 2026.Form 8-K (filed 2026-02-27)
What the filings disclose
- The U.S. accounted for $489.7B of 2025 net sales; Germany, the U.K., and Japan were the largest other countries. (Form 10-K (FY2025), segment note)
Suppliers
Product vendors, third-party sellers, delivery partners, and suppliers of servers, chips, and data center equipment.
Named by the company
None named in the 10-K or the company’s press releases.
11
Competitors & peers
Competitors the 10-K names, and the peer group the company itself chose in its proxy statement. Nothing here is this site's own pick.
Amazon's 10-K describes intense competition across geographies and industries — physical, e-commerce, and omnichannel retailers; e-commerce services; web and infrastructure computing; devices; digital content; advertising; grocery; healthcare; communications; and transportation — without naming companies.
Competitors named in the 10-K
Amazon's 10-K doesn't name competitors.
Peer group the company chose
Companies in 2025 compensation benchmarking, from the proxy statement. Peers are companies the board considers comparable — for example when setting executive pay — not necessarily direct competitors.
Amazon didn't engage a compensation consultant in 2025; its committee reviewed survey data for retail, internet, technology, and media companies, including those listed here.
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12
M&A history
Companies acquired over the last five years, plus older large acquisitions that still anchor a current business — what each was bought to do, and what happened afterward. From the 10-K, 8-Ks, and the company's press releases.
Amazon's largest recent deals are investments and acquisitions tied to AI and connectivity.
Pending (agreed Apr 2026)
Globalstar
$90.00 per share in cash or 0.3210 Amazon shares (value capped at $90.00); cash elections capped at 40% of shares
A satellite operator with satellites, radio spectrum, and operations expertise.
- Stated purpose (company)
- To let Amazon Leo add direct-to-device services so mobile network operators can extend coverage beyond terrestrial networks.
Expected to close in 2027, subject to regulatory approvals and Globalstar satellite milestones.
13
Five years of financials
Each chart's axis holds a single unit (never mixing dollars, %, and $/share). The table's per-period header links to the filing the numbers came from.
Revenue over time
Unit: $M
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Profit over time (operating → net)
Unit: $M
- Operating income
- Pretax income
- Net income
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Margins over time
Unit: %
- Operating margin
- Net margin
formulaoperating income ÷ revenue × 100
formulanet income attributable to the company ÷ revenue × 100
Cash flow over time
Unit: $M (below zero = cash went out)
- Operating CF
- Investing CF
- Free CF
formulacash flow from operations − capital expenditures
termsFree cash flow (FCF) · Cash flow from operations (operating CF) · Capital expenditures (capex)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Financial stability & capital efficiency
Unit: %
- Equity ratio
- ROE
formulatotal equity ÷ total assets × 100 (as reported in the 10-K)
termsStockholders’ equity · Total assets
formulanet income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)
termsNet income (attributable to the company) · Stockholders’ equity
Earnings per share (EPS) and dividend per share
Unit: $
- EPS
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
| Line item | FY202110-K on EDGAR ↗ | FY202210-K on EDGAR ↗ | FY202310-K on EDGAR ↗ | FY202410-K on EDGAR ↗ | FY202510-K on EDGAR ↗ |
|---|---|---|---|---|---|
| Income statement ($M) | |||||
| Revenue | 469,822 | 513,983 | 574,785 | 637,959 | 716,924 |
| Operating income | 24,879 | 12,248 | 36,852 | 68,593 | 79,975 |
| Pretax income | 38,151 | -5,936 | 37,557 | 68,614 | 97,311 |
| Net income (attributable) | 33,364 | -2,722 | 30,425 | 59,248 | 77,670 |
| Revenue growthcalc(this year’s revenue − last year’s revenue) ÷ last year’s revenue × 100 | — | 9.4% | 11.8% | 11.0% | 12.4% |
| Operating margincalcoperating income ÷ revenue × 100 | 5.3% | 2.4% | 6.4% | 10.8% | 11.2% |
| Net margincalcnet income attributable to the company ÷ revenue × 100 | 7.1% | -0.5% | 5.3% | 9.3% | 10.8% |
| Balance sheet ($M) | |||||
| Total assets | 420,549 | 462,675 | 527,854 | 624,894 | 818,042 |
| Total equity | 138,245 | 146,043 | 201,875 | 285,970 | 411,065 |
| Interest-bearing debtSum of short- and long-term borrowings, notes/bonds payable | 50,553 | 70,542 | 67,329 | 58,151 | 69,291 |
| Equity ratio | 32.9% | 31.6% | 38.2% | 45.8% | 50.2% |
| ROE | 24.1% | -1.9% | 17.5% | 24.3% | 22.3% |
| Cash flow ($M) | |||||
| Operating CF | 46,327 | 46,752 | 84,946 | 115,877 | 139,514 |
| Investing CF | -58,154 | -37,601 | -49,833 | -94,342 | -142,545 |
| Financing CF | 6,291 | 9,718 | -15,879 | -11,812 | 9,661 |
| Free cash flowcalccash flow from operations − capital expenditures | -14,726 | -16,893 | 32,217 | 32,878 | 7,695 |
| Cash and equivalents | 36,220 | 53,888 | 73,387 | 78,779 | 86,810 |
| Per share & other | |||||
| EPS ($) | 3.24 | -0.27 | 2.90 | 5.53 | 7.17 |
| BVPS ($) | 13.59 | 14.26 | 19.44 | 27.00 | 38.31 |
| P/E (x) | 51.5 | — | 52.4 | 39.7 | 32.2 |
| EV/EBITDA (x)calc(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization) | 29.2 | — | 18.6 | 19.2 | 17.0 |
| P/B (x)calcP/E × EPS ÷ BVPS (= period-end share price ÷ book value per share) | 12.27 | — | 7.81 | 8.13 | 6.03 |
P/B and EV/EBITDA use each period’s period-end (fiscal year-end) figures, not the current share price. Figures without a "calc" tag are as reported in the Form 10-K (five-year selected financial data and the consolidated financial statements), pulled automatically from SEC EDGAR. Where a later filing restated a prior period, the restated figure is used.
14
Is ROIC above WACC?
ROIC (the return on money invested in the business) above WACC (the cost of raising that money) means the company is creating value. WACC is an estimate, so its assumptions can be adjusted below.
ROIC (FY2025)
15.3%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
e.g.$79,975M × (1 − 21%) ÷ $412,239M × 100 = 15.3%
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
WACC (this site’s estimate)
11.08%
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
e.g.Equity weight: $2,500.2B ÷ ($2,500.2B + $69.29B) = 97.3%
e.g.Debt weight: $69.29B ÷ ($2,500.2B + $69.29B) = 2.7%
e.g.WACC: 11.3% × 97.3% + 3.3% × (1 − 21%) × 2.7% = 11.08%
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
WACC 11.08% is this site’s estimate under the assumptions below (not a figure the company has published)
- Risk-free rate
- 4%
- β
- 1.33 (price-derived adjusted beta)
- Equity risk premium
- 5.5%
- Cost of equity
- 11.32%
- Cost of debt
- 3.28%
- Effective tax rate
- 21%
- Capital structure (equity : debt)
- 97% : 3%
ROIC over time, vs. WACC
Unit: % — bars = each period's ROIC, horizontal line = latest WACC. Bars above the line are green, below are red
- ROIC (above WACC)
- ROIC (below WACC)
- WACC 11.08%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
Try different WACC assumptions
β and the equity risk premium are estimates with a real range of plausible values — move the sliders to check whether ROIC > WACC still holds. The defaults reflect 2026-09.
Initial β: 1.33 (price-derived adjusted beta. Raw β 1.49, R² 0.46, 130 weeks)
formula0.67 × β + 0.33 (β = the slope of weekly stock returns regressed on weekly market returns)
e.g.0.67 × 1.487 + 0.33 = 1.326
termsβ (beta)
Period 2024-04-12–2026-10-06, using S&P 500 ETF (SPY) as the market proxy. Source: Yahoo Finance price history.
formularisk-free rate + β × equity risk premium
e.g.4.0% + 1.33 × 5.5% = 11.3%
termsCAPM · Risk-free rate · β (beta) · Equity risk premium (market risk premium)
formulaP/E × net income ≈ period-end share price × shares outstanding (= market cap)
termsP/E · Net income (attributable to the company) · Market capitalization · Market value of equity
formulainterest expense ÷ interest-bearing debt × 100 (clamped to 0–10%; falls back to the risk-free rate if there’s no debt)
15
What the price implies (DCF)
A company's value can be written as its free cash flow divided by (cost of capital − perpetual growth). Working that backwards from the market's valuation shows how much growth the share price assumed — compared here with the company's actual past growth.
Growth the price implies (FY2025)
10.8%
Perpetual FCF growth: g = r − FCF ÷ EV = 11.1% − 0.3%
Past FCF growth (FY2021–FY2025)
—
Not computable (FCF not positive in both years)
Past revenue growth (FY2021–FY2025)
+11.1%
Compound annual rate, 4 years
Inputs (FY2025): free cash flow $7.7B (operating CF − capex); enterprise value $2,446.46B = market cap $2,500.2B + debt $69.29B − cash and short-term investments $123.03B; r = WACC of 11.1% using this page’s default assumptions (β 1.33, risk-free 4.0%, market premium 5.5%).
Try your own assumptions
V = FCF ÷ (r − g). It starts at the implied growth rate, where the theoretical value equals today’s enterprise value.
Theoretical enterprise value
$2,565B
FCF $7.7B ÷ (11.1% − 10.8%)
Theoretical ÷ actual enterprise value
1.05x
Above 1x: these assumptions value the business above the market did
How sensitive the answer is
Theoretical ÷ actual enterprise value for each combination of r and g.
| g \ r | 9.1% | 10.1% | 11.1% | 12.1% | 13.1% |
|---|---|---|---|---|---|
| 0% | 0.03x | 0.03x | 0.03x | 0.03x | 0.02x |
| 2% | 0.04x | 0.04x | 0.03x | 0.03x | 0.03x |
| 4% | 0.06x | 0.05x | 0.04x | 0.04x | 0.03x |
| 6% | 0.10x | 0.08x | 0.06x | 0.05x | 0.04x |
| 8% | 0.29x | 0.15x | 0.10x | 0.08x | 0.06x |
A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap and enterprise value use the fiscal year-end price, not today’s.
16
Earnings quality
The same reported profit can mean different things depending on whether it's backed by cash, driven by the core business, or the result of a one-off item. Four checks below.
- ✓
Operating CF ÷ net income: averages 1.98x
Profit is backed by cash coming in.
- ✓
Accrual ratio (latest): -8.6%
A small share of profit rests on accounting estimates.
- ✓
Core-earnings share (operating income ÷ pretax income): 82%
Most profit comes from core operations.
- ✓
Days sales outstanding: 26 → 34 days
No major slowdown in collecting on sales.
Operating CF vs. net income
Unit: $M — operating CF above net income means profit is backed by cash
- Operating CF
- Net income
formulacash flow from operations ÷ net income attributable to the company
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formula(net income − operating CF) ÷ average total assets × 100
termsNet income (attributable to the company) · Cash flow from operations (operating CF) · Total assets
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Profit bridge (FY2025)
Unit: $M — what moved profit from operating income to net income
- Profit (each stage)
- Pushed profit up
- Pushed profit down
formulaoperating income ÷ income before income taxes × 100
termsOperating income · Income before income taxes (pretax income)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Receivables & inventory days
Unit: days — days grow when receivables or inventory build up faster than sales
- Days sales outstanding
- Days inventory outstanding
formulaperiod-end receivables ÷ revenue × 365
formulaperiod-end inventory ÷ revenue × 365
termsInventory · Revenue (net sales)
Worked examples (latest period)
formulacash flow from operations ÷ net income attributable to the company
e.g.$139,514M ÷ $77,670M = 1.80x
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formulaoperating income ÷ income before income taxes × 100
e.g.$79,975M ÷ $97,311M × 100 = 82%
termsOperating income · Income before income taxes (pretax income)
formulaperiod-end receivables ÷ revenue × 365
e.g.$67,729M ÷ $716,924M × 365 = 34 days
17
Strengths & weaknesses
Strengths
1. AWS profitability
AWS earned $45.6B of operating income on $128.7B of sales (+20%), the majority of Amazon's operating profit.
Evidence: Form 10-K (FY2025) MD&A
2. Fast-growing advertising
Advertising services grew 22% to $68.6B in 2025.
Evidence: Form 10-K (FY2025) Note on net sales
3. Massive operating cash flow
Operating cash flow grew from $46.3B (FY2021) to $139.5B (FY2025).
Evidence: SEC EDGAR XBRL
4. Scale across businesses
Net sales of $716.9B across retail, marketplace, advertising, subscriptions, and cloud.
Evidence: Form 10-K (FY2025)
Weaknesses
1. Huge capital spending
Cash capital expenditures rose to about $132B in 2025 from $83B in 2024, leaving free cash flow of about $8B.
Evidence: SEC EDGAR XBRL
2. Thin retail margins
International earned $4.75B on $161.9B of sales (about 3%), and North America $29.6B on $426.3B (about 7%).
Evidence: Form 10-K (FY2025) MD&A
3. Earnings boosted by investment gains
Pretax income ($97.3B) exceeded operating income ($80.0B) in 2025 mainly because of a $15.2B net gain, largely from the Anthropic investment, which may not recur.
Evidence: Form 10-K (FY2025) MD&A
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What draws investors to it
Why the stock can look attractive to investors — each point paired with what has to hold for it to stay true, and the opposing view. This is this site's analysis, not a recommendation to buy or sell.
P/E (FY2025)
32.2x
Price at fiscal year-end ÷ diluted EPS
Dividend yield (FY2025)
—
Dividends per share ÷ fiscal year-end price
Payout ratio (FY2025)
—
Dividends per share ÷ diluted EPS
FCF yield (FY2025)
0.3%
(Operating CF − capex) ÷ market cap
1. AWS and AI
AWS grew 20% in 2025 and earns most of Amazon's profit; the OpenAI arrangement adds a large cloud customer.
- What has to hold
- AI demand keeps filling the data centers Amazon is building.
- The other side
- Capital spending of about $132B in 2025 left little free cash flow, and the payback isn't yet visible.
Evidence: Form 10-K (FY2025); 8-K filed 2026-02-27
2. High-margin growth inside retail
Advertising ($68.6B, +22%) and subscriptions ($49.6B) are growing faster than store sales.
- What has to hold
- Shoppers and advertisers keep using Amazon's platforms.
- The other side
- Regulators and courts are scrutinizing Amazon's marketplace practices.
Evidence: Form 10-K (FY2025)
Amazon doesn't pay a dividend. P/E and FCF yield use the FY2025 year-end share price.
19
Resilience
How well the company could absorb a bad year: its financial buffer, how its revenue and profit held up in the worst year on record, and what the 10-K says about the business's exposure to shocks. Figures and filing statements only — no overall rating.
1. Financial buffer (FY2025)
Cash & short-term investments ÷ debt due within a year
38.4x
$123.03B vs. $3.2B
Interest coverage (operating income ÷ interest expense)
35.2x
$79.98B vs. $2.27B
Free cash flow ÷ dividends paid
—
2. Worst year in the record, and the recovery
| Figure | Worst year-over-year change | Back to the prior level? |
|---|---|---|
| Revenue | No decline in the record | — |
| Operating income | -50.8% in FY2022 ($24.88B → $12.25B) | Yes, by FY2023 |
Covers only the 5 fiscal years on record (FY2021–FY2025), which may not include a full recession — the worst year here isn’t necessarily how the company would fare in a severe downturn.
3. Business resilience (from the 10-K)
Diverse income streams
Retail, marketplace fees, advertising, subscriptions, and cloud respond differently to the economy.
Source: Form 10-K (FY2025), net sales note
Liquidity
Cash and marketable securities of about $123B at year-end 2025 against about $69B of debt.
Source: SEC EDGAR XBRL
Cash flow absorbed by investment
Operating cash flow of $139.5B was almost fully consumed by capital spending in 2025.
Source: SEC EDGAR XBRL
New debt
Amazon raised new notes in 2026, including £4.25B of sterling notes in September.
Source: 8-K filed 2026-09-14
20
Risks (including geopolitical)
Starting from the 10-K's Risk Factors section, organized by category — geopolitical, currency, raw materials, regulatory, disaster, and more — with impact and likelihood assessed by this site.
Risk map
Vertical = impact on results, horizontal = likelihood. Upper right = most severe. Numbers match the list below (placement is this site’s own assessment).
Likelihood →
"Company disclosure" vs. "this site’s assessment"
The description and mitigation for each risk are this site’s summary of the 10-K’s "Risk Factors" section. Impact and likelihood are this site’s own assessment, not the company’s — where the company discloses its own likelihood assessment, that is noted in the summary.
Impact is judged from how large the affected business is relative to total revenue/profit, and from the risk’s track record of moving results in the past. Likelihood is judged from the filing’s wording and the current business environment (already occurring, or recurring).
- 1Competition & technology shift
Intense competition
- Company disclosure (summarized from the 10-K)
- Amazon competes with physical, e-commerce, and omnichannel retailers, cloud providers, device makers, media, advertising, grocery, healthcare, and logistics companies, and new well-funded entrants.
- Company’s stated mitigation
- Broad selection, price, and convenience; continuous investment.
- This site’s assessment
- Impact High / Likelihood High
- 2Law & regulation
Regulatory and legal actions
- Company disclosure (summarized from the 10-K)
- Amazon settled an FTC lawsuit in Q3 2025 with a $2.5B charge and faces antitrust cases from private litigants, state attorneys general, and regulators in several countries.
- Company’s stated mitigation
- Not stated.
- This site’s assessment
- Impact Med / Likelihood High
- 3Demand & macro
Payback on AI and infrastructure spending
- Company disclosure (summarized from the 10-K)
- Capital spending of about $132B a year must be earned back through AWS and other services.
- Company’s stated mitigation
- AWS revenue growth and committed customer contracts such as OpenAI's.
- This site’s assessment
- Impact High / Likelihood Med
- 4FX & interest rates
Investment valuation swings
- Company disclosure (summarized from the 10-K)
- Amazon held $69.1B of equity, equity warrant, and convertible debt investments at year-end 2025, whose values can swing — in 2024 the Rivian investment caused a net other loss of $2.3B.
- Company’s stated mitigation
- Not stated.
- This site’s assessment
- Impact Med / Likelihood Med
21
What to watch going forward
- AWS growth and margins against heavy capital spending.
- Funding of the OpenAI commitment and the AWS–OpenAI arrangement.
- Closing of the Globalstar acquisition (expected 2027).
- Advertising growth.
- Antitrust litigation.
22
Source documents
This page's financial figures come from the Form 10-Ks listed below. Check the original filings for full detail.
Last updated
Analysis last edited: October 7, 2026 · Financial data fetched: October 7, 2026 12:08 (SEC EDGAR) · Source 10-K filed: February 6, 2026
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
This page is this site’s own analysis based on public information, and does not represent Amazon.com, Inc.’s views. It is not a recommendation to buy or sell any security, and this site does not guarantee the accuracy of any figure or statement here. Always verify against the original source documents before making an investment decision.