Amazon.com Announces Fourth Quarter Results
Amazon delivered Q4 2025 revenue of $213.4 billion, modestly above Wall Street expectations, while GAAP EPS of $1.95 came in a cent below consensus. Net income rose to $21.2 billion, but an aggressive $200 billion 2026 capex plan spooked investors, driving the stock down roughly 10%–11% in after-hours trading.
About Amazon, Inc.
Amazon.com, Inc. (NASDAQ: AMZN) is a global leader in e‑commerce, cloud computing (AWS), digital advertising, and subscription services such as Prime. Founded in 1994 by Jeff Bezos and headquartered in Seattle, Washington, Amazon has evolved from an online bookstore into a diversified technology and logistics platform spanning retail, cloud, media, and devices. As of early February 2026, Amazon’s equity value is about $2.3–2.4 trillion in market capitalisation, placing it among the world’s most valuable public companies. The company employed roughly 1.58 million people globally as of late 2025. Based on trailing-12-month earnings, Amazon currently trades at a price‑to‑earnings ratio of around 31, with no regular cash dividend, reflecting a growth‑oriented capital allocation strategy focused on reinvesting in AWS, AI infrastructure, logistics, and new bets such as custom chips and low-Earth-orbit satellite connectivity.
Top Financial Highlights
- Amazon reported Q4 2025 net sales of $213.4 billion, reflecting 14% year-over-year growth from $187.8 billion, while FX-neutral growth was 12%, confirming resilient global demand across core businesses.
- Full-year 2025 net sales reached $716.9 billion, up 12% from $638.0 billion in 2024, driven by scale benefits in e-commerce, cloud, and advertising.
- Q4 2025 net income rose to $21.2 billion on a GAAP basis, up from $20.0 billion a year earlier, with diluted earnings per share improving to $1.95 from $1.86.
- Full-year net income rose to $77.7 billion, up from $59.0 billion in 2024, reflecting continued margin expansion and improved operating leverage.
- Q4 operating income increased to $25.0 billion, compared with $21.2 billion in Q4 2024. Excluding $2.4 billion in tax, severance, and impairment charges, operating income would have reached $27.4 billion.
- The operating margin remained stable at approximately 11.7%, broadly aligned with market expectations and unchanged from the prior year quarter, reflecting disciplined cost control despite heavy investment.
- AWS generated $35.6 billion in Q4 revenue, growing 24% year over year, marking its fastest growth rate in 13 quarters and reaffirming its central role in Amazon’s profit engine.
- Advertising revenue reached approximately $21.3 billion in Q4, up 22-23% year over year, supported by strong demand for retail media placements and Prime Video advertising inventory.
- In Q4, the North America segment revenue totalled $127.1 billion, increasing 10% year over year, highlighting steady consumer demand in Amazon’s largest market.
- International segment revenue grew to $50.7 billion, up 17% year over year, or 11% excluding foreign exchange effects, indicating improving performance across global markets.
- For the full year, segment revenues showed balanced growth: North America at $426.3 billion, up 10%; International at $161.9 billion, up 13%; and AWS at $128.7 billion, up 20%.
- Trailing twelve-month operating cash flow increased by 20% to approximately $139.5 billion, compared with about $115.0 billion in the prior period, reflecting stronger earnings and working capital efficiency.
- Free cash flow declined to $11.2 billion, primarily due to a $50.7 billion year-over-year increase in net capital expenditures, driven by AI data centres and infrastructure expansion.
- For Q1 2026, Amazon guided net sales of $173.5 billion to $178.5 billion, implying 11% to 15% year-over-year growth, with a modest foreign exchange benefit.
- Q1 2026 operating income is expected to be between $16.5 billion and $21.5 billion, compared with $18.4 billion in Q1 2025, reflecting higher costs associated with satellite operations, faster delivery initiatives, and more competitive international pricing.
- Management outlined a 2026 capital expenditure plan of approximately $200 billion, more than 50% higher than in 2025, with investments concentrated on AI infrastructure, custom silicon, robotics and automation, and low-Earth-orbit satellite networks.
Beat or Miss?
| Metric | Reported (Q4 2025) | Consensus / Expected | Difference / Analysis |
| Revenue (Net sales) | $213.4B | ~$211.5B | Beat by about $1.9B (≈0.9%); solid top‑line outperformance. |
| GAAP EPS | $1.95 | $1.96 | Miss by $0.01; essentially in line but framed as a minor EPS shortfall. |
| Operating income (GAAP) | $25.0B | ≈$24.8–25.1B | Roughly in line; slight beat vs some estimates, slight miss vs others. |
| Operating margin | 11.70% | 11.70% | Met expectations; margin stability despite heavy investment. |
| AWS revenue | $35.6B | ~$34.9B | Beat by ≈$0.7B; confirms AWS re‑acceleration. |
| North America net sales | $127.1B | ≈$127.0–127.2B | Effectively in line; strong but not a surprise. |
| International net sales | $50.7B | ~$49.7B | Beat by ≈$1.0B, highlighting improved international traction. |
| Advertising revenue | $21.3B | ~$21.2B | Slight beat; continued outperformance in retail media. |
What Leadership Is Saying?
“AWS growing 24% (our fastest growth in 13 quarters), Advertising growing 22%, Stores growing briskly across North America and International, our chips business growing triple digit percentages year-over-year—this growth is happening because we’re continuing to innovate at a rapid rate, and identify and knock down customer problems. With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low earth orbit satellites, we expect to invest about $200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital.” – CEO on strategy and long‑term investment
“Starting with our top-line financial results. Worldwide revenue was $213.4 billion, a 12% increase year-over-year, excluding the 150 basis points favorable impact of foreign exchange. In Q4, we reported worldwide operating income of $25 billion. This operating income includes three special charges, which reduced operating income by $2.4 billion. Trailing twelve-month free cash flow was $11.2 billion as we stepped up investments in AI infrastructure, including chips and data centers.” – CFO on financial performance and margins
Historical Performance
Amazon YoY: Q4 2025 vs Q4 2024
| Category | Q4 2025 | Q4 2024 | Change (%) |
| Revenue (Net sales) | $213.4B | $187.8B | +14% reported; ≈13.6% mathematically. |
| Net income | $21.2B | $20.0B | +6%. |
| Operating income | $25.0B | $21.2B | ≈+18%. |
Amazon delivered double‑digit top‑line growth on a trillion‑dollar annualised run‑rate while expanding operating income faster than revenue. Net income grew more modestly, reflecting higher interest, taxes, and the impact of one‑time charges, but overall profitability continued to improve as the company optimised its fulfilment network and mix toward higher‑margin businesses such as AWS and advertising.
Historical Performance
YoY Comparison of Competitor: Alphabet (Google’s Parent)
To contextualise Amazon’s scale and growth, the table below summarises key year‑over‑year metrics for Alphabet Inc. (Google), a major rival in cloud and digital advertising, for the quarter ended December 31, 2025 (Q4 2025), compared with Q4 2024.
| Category | Q4 2025 (Alphabet) | Q4 2024 (Alphabet) | Change (%) |
| Revenue | $113.8B | $96.5B | +18%. |
| Net income | $34.5B | $26.5B | +30%. |
| Operating income | $35.9B | $31.0B | 16% |
Alphabet is growing faster on earnings and slightly faster on revenue percentage‑wise, aided by very high cloud and search profitability, though from a smaller revenue base than Amazon. The comparison highlights that while Amazon leads on absolute sales and retail scale, competition across cloud and advertising remains intense, with peers also delivering strong double‑digit growth and high margins.
How the Market Reacted?
Despite a clear revenue beat, accelerating AWS growth, and improving profitability, equity markets focused on Amazon’s aggressive capex trajectory and slightly softer profit profile. Multiple outlets reported that shares fell roughly 10%–11% in after-hours trading following the release, extending a decline that had already started during the regular session. Investors appeared concerned that the planned $200 billion 2026 capex program, largely aimed at AI and infrastructure, could pressure free cash flow in the near term, even as management argues it will unlock substantial long‑term returns. Overall, sentiment around the quarter is best described as fundamentally bullish but tactically cautious, with strong operating momentum overshadowed by fears of an AI‑driven spending cycle and potential multiple compression.
