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What changed in Amazon's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Amazon's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+150 added−148 removedSource: 10-K (2026-02-06) vs 10-K (2025-02-07)

Top changes in Amazon's 2025 10-K

150 paragraphs added · 148 removed · 135 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

12 edited+1 added−0 removed27 unchanged
Biggest changeNg 48 Managing General Partner, AI Fund, L.P. Indra K. Nooyi 69 Former Chair and CEO, PepsiCo, Inc. Jonathan J. Rubinstein 68 Former co-CEO, Bridgewater Associates, LP Brad D. Smith 60 President, Marshall University Patricia Q. Stonesifer 68 Former President and Chief Executive Officer, Martha’s Table Wendell P. Weeks 65 Chairman and CEO, Corning Incorporated
Biggest changeHuttenlocher 67 Dean, MIT Schwarzman College of Computing Andrew Y. Ng 49 Managing General Partner, AI Fund, L.P. Indra K. Nooyi 70 Former Chair and CEO, PepsiCo, Inc. Jonathan J. Rubinstein 69 Former co-CEO, Bridgewater Associates, LP Brad D. Smith 61 President, Marshall University Patricia Q. Stonesifer 69 Former President and Chief Executive Officer, Martha’s Table Wendell P.
Our current and potential competitors include: (1) physical, e-commerce, and omnichannel retailers, publishers, vendors, distributors, manufacturers, and producers of the products we offer and sell to consumers and businesses; (2) publishers, producers, and distributors of physical, digital, and interactive media of all types and all distribution channels; (3) web search engines, comparison shopping websites, social networks, web portals, virtual assistants, and other online and app-based means of discovering, using, or acquiring goods and services, either directly or in collaboration with other retailers; (4) companies that provide e-commerce services, including website development and hosting, omnichannel sales, inventory and supply chain management, advertising, fulfillment, customer service, and payment processing; (5) companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline; (6) companies that provide information technology services or products, including on-premises or cloud-based infrastructure, tools and services relating to artificial intelligence, and other services; (7) companies that design, manufacture, market, or sell consumer electronics, communications, and other electronic devices and services; (8) companies that sell grocery products online and in physical stores; (9) companies that provide advertising services, whether in digital or other formats; and (10) providers of virtual or in-person healthcare services.
Our current and potential competitors include: (1) physical, e-commerce, and omnichannel retailers, publishers, vendors, distributors, manufacturers, and producers of the products we offer and sell to consumers and businesses; (2) publishers, producers, and distributors of physical, digital, and interactive media of all types and all distribution channels; (3) web search engines, comparison shopping websites, social networks, web portals, virtual assistants, and other online and app-based means of discovering, using, or acquiring goods and services, either directly or in collaboration with other retailers, including through artificial intelligence; (4) companies that provide e-commerce services, including website development and hosting, omnichannel sales, inventory and supply chain management, advertising, fulfillment, customer service, and payment processing; (5) companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline; (6) companies that provide information technology services or products, including on-premises or cloud-based infrastructure, tools and services relating to artificial intelligence, and other services; (7) companies that design, manufacture, market, or sell consumer electronics, communications, and other electronic devices and services; (8) companies that sell grocery products online and in physical stores; (9) companies that provide advertising services, whether in digital or other formats; and (10) providers of virtual or in-person healthcare services.
We rely on numerous and evolving initiatives to implement this objective and invent mechanisms for talent development, including competitive pay and benefits, flexible work arrangements, and skills training and educational programs such as Amazon Career Choice (education funding for eligible employees). Over 240,000 Amazon employees around the world have participated in Career Choice.
We rely on numerous and evolving initiatives to implement this objective and invent mechanisms for talent development, including competitive pay and benefits, flexible work arrangements, and skills training and educational programs such as Amazon Career Choice (education funding for eligible employees). Over 300,000 Amazon employees around the world have participated in Career Choice.
Developers and Enterprises We serve developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a broad set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
Developers and Enterprises We serve developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a broad set of on-demand technology services, including compute, storage, database, analytics, artificial intelligence and machine learning, and other services.
Human Capital Our employees are critical to our mission of being Earth’s most customer-centric company. As of December 31, 2024, we employed approximately 1,556,000 full-time and part-time employees. Additionally, we use independent contractors and temporary personnel to supplement our workforce.
Human Capital Our employees are critical to our mission of being Earth’s most customer-centric company. As of December 31, 2025, we employed approximately 1,576,000 full-time and part-time employees. Additionally, we use independent contractors and temporary personnel to supplement our workforce.
He served as our Secretary from September 2012 to January 2024, Senior Vice President and General Counsel from May 2014 to May 2023, Vice President and General Counsel from September 2012 to May 2014, and as Vice President and Associate General Counsel for Litigation and Regulatory matters from April 2002 until September 2012. 5 Table of Contents Board of Directors Name Age Position Jeffrey P.
He served as our Senior Vice President, Global Public Policy and General Counsel from May 2023 to February 2025, Secretary from September 2012 to January 2024, Senior Vice President and General Counsel from May 2014 to May 2023, Vice President and General Counsel from September 2012 to May 2014, and as Vice President and Associate General Counsel for Litigation and Regulatory matters from April 2002 until September 2012. 5 Table of Contents Board of Directors Name Age Position Jeffrey P.
Competition for qualified personnel is intense, particularly for software engineers, computer scientists, and other technical staff, and constrained labor markets have increased competition for personnel across other parts of our business. We strive to be Earth’s best employer.
Competition for qualified personnel is intense, particularly for software engineers, computer scientists, and other technical staff (including for artificial intelligence and machine learning technologies), and constrained labor markets have increased competition for personnel across other parts of our business. We strive to be Earth’s best employer.
The internet facilitates competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser-known businesses to compete against us. Each of our businesses is also subject to rapid change and the development of new business models and the entry of new and well-funded competitors.
The internet and other technologies including artificial intelligence facilitate competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser-known businesses to compete against us. Each of our businesses is also subject to rapid change and the development of new business models and the entry of new and well-funded competitors.
Herrington 58 CEO Worldwide Amazon Stores Brian T. Olsavsky 61 Senior Vice President and Chief Financial Officer Shelley L. Reynolds 60 Vice President, Worldwide Controller, and Principal Accounting Officer David A. Zapolsky 61 Senior Vice President, Global Public Policy and General Counsel Jeffrey P. Bezos. Mr. Bezos founded Amazon.com in 1994 and has served as Executive Chair since July 2021.
Herrington 59 CEO Worldwide Amazon Stores Brian T. Olsavsky 62 Senior Vice President and Chief Financial Officer Shelley L. Reynolds 61 Vice President, Worldwide Controller, and Principal Accounting Officer David A. Zapolsky 62 Senior Vice President, Chief Global Affairs & Legal Officer Jeffrey P. Bezos. Mr. Bezos founded Amazon.com in 1994 and has served as Executive Chair since July 2021.
Executive Officers and Directors The following tables set forth certain information regarding our Executive Officers and Directors as of January 29, 2025: Information About Our Executive Officers Name Age Position Jeffrey P. Bezos 61 Executive Chair Andrew R. Jassy 57 President and Chief Executive Officer Matthew S. Garman 48 CEO Amazon Web Services Douglas J.
Executive Officers and Directors The following tables set forth certain information regarding our Executive Officers and Directors as of January 28, 2026: Information About Our Executive Officers Name Age Position Jeffrey P. Bezos 62 Executive Chair Andrew R. Jassy 58 President and Chief Executive Officer Matthew S. Garman 49 CEO Amazon Web Services Douglas J.
Bezos 61 Executive Chair Andrew R. Jassy 57 President and Chief Executive Officer Keith B. Alexander 73 Former Chair and CEO of IronNet, Inc. Edith W. Cooper 63 Former Executive Vice President, Goldman Sachs Group, Inc. Jamie S. Gorelick 74 Partner, Wilmer Cutler Pickering Hale and Dorr LLP Daniel P. Huttenlocher 66 Dean, MIT Schwarzman College of Computing Andrew Y.
Bezos 62 Executive Chair Andrew R. Jassy 58 President and Chief Executive Officer Keith B. Alexander 74 Former Chair and CEO of IronNet, Inc. Edith W. Cooper 64 Former Executive Vice President, Goldman Sachs Group, Inc. Jamie S. Gorelick 75 Senior Counsel, Wilmer Cutler Pickering Hale and Dorr LLP Daniel P.
David A. Zapolsky. Mr. Zapolsky has served as Senior Vice President, Global Public Policy and General Counsel since May 2023.
David A. Zapolsky. Mr. Zapolsky has served as Senior Vice President, Chief Global Affairs & Legal Officer since February 2025.
Added
Weeks 66 Chairman, CEO, and President, Corning Incorporated

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

42 edited+3 added−3 removed108 unchanged
Biggest changeOur present and future commercial agreements, strategic alliances, and business relationships create additional risks such as: • disruption of our ongoing business, including loss of management focus on existing businesses; • impairment of other relationships; • variability in revenue and income from entering into, amending, or terminating such agreements or relationships; and • difficulty integrating under the commercial agreements. 12 Table of Contents Our Business Suffers When We Are Unsuccessful in Making, Integrating, and Maintaining Acquisitions and Investments We have acquired and invested in a number of companies, and we may in the future acquire or invest in or enter into joint ventures with additional companies.
Biggest changeOur present and future commercial agreements, strategic alliances, and business relationships create additional risks such as: • disruption of our ongoing business, including loss of management focus on existing businesses; • impairment of other relationships; • variability in revenue and income from entering into, amending, or terminating such agreements or relationships; and • difficulty integrating under the commercial agreements.
In addition to risks described elsewhere in this section, our international sales and operations are subject to a number of risks, including: • local economic and political conditions; • government regulation (such as regulation of our product and service offerings and of competition); restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs, and restrictions around the import and export of certain products, technologies, and components); nationalization; and restrictions on foreign ownership; • restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights; • business licensing or certification requirements, such as for imports, exports, web services, electronic devices, and communications services; • limitations on the repatriation and investment of funds and foreign currency exchange restrictions; • limited fulfillment and technology infrastructure; • shorter payable and longer receivable cycles and the resultant negative impact on cash flow; • laws and regulations regarding privacy, data use, data protection, data security, data localization, network security, consumer protection, payments, advertising, and restrictions on pricing or discounts; • lower levels of use of the internet; • lower levels of consumer spending and fewer opportunities for growth compared to the U.S.; • lower levels of credit card usage and increased payment risk; • difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences; • different employee/employer relationships and the existence of works councils and labor unions; • compliance with the U.S.
In addition to risks described elsewhere in this section, our international sales and operations are subject to a number of risks, including: • local economic and political conditions; • government regulation (such as regulation of our product and service offerings and of competition); restrictive governmental actions (such as trade protection or retaliatory measures, including export duties and quotas and custom duties and tariffs, and restrictions around the import and export of certain products, technologies, and components); nationalization; and restrictions on foreign ownership; • restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights; • business licensing or certification requirements, such as for imports, exports, web services, electronic devices, and communications services; • limitations on the repatriation and investment of funds and foreign currency exchange restrictions; • limited fulfillment and technology infrastructure; • shorter payable and longer receivable cycles and the resultant negative impact on cash flow; • laws and regulations regarding privacy, data use, data protection, data security, data localization, network security, consumer protection, payments, advertising, and restrictions on pricing or discounts; • lower levels of use of the internet; • lower levels of consumer spending and fewer opportunities for growth compared to the U.S.; • lower levels of credit card usage and increased payment risk; • difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences; • different employee/employer relationships and the existence of works councils and labor unions; • compliance with the U.S.
Our sales and operating results will also fluctuate for many other reasons, including due to factors described elsewhere in this section and the following: • our ability to retain and increase sales to existing customers, attract new customers, and satisfy our customers’ demands; • our ability to retain and expand our network of sellers; • our ability to offer products on favorable terms, manage inventory, and fulfill orders; • the introduction of competitive stores, websites, products, services, price decreases, or improvements; 9 Table of Contents • changes in usage or adoption rates of the internet, e-commerce, electronic devices, web services, satellite communications services, and artificial intelligence and machine learning technologies, products, and services, including outside the U.S.; • timing, effectiveness, and costs of expansion and upgrades of our systems and infrastructure; • the success of our geographic, service, and product line expansions; • the extent to which we finance, and the terms of any such financing for, our current operations and future growth; • the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results; • variations in the mix of products and services we sell; • variations in our level of merchandise and vendor returns; • the extent to which we offer fast and free delivery, continue to reduce prices worldwide, and provide additional benefits to our customers; • factors affecting our reputation or brand image (including any actual or perceived inability to achieve our goals or commitments, whether related to sustainability, customers, employees, or other topics), and public perceptions regarding our positions on social or ethical issues and our development and use of artificial intelligence, machine learning, and automation technologies, products, and services; • the extent to which we invest in technology and infrastructure, fulfillment, and other expense categories; • availability of and increases in the prices of transportation (including fuel), resources such as land, water, and energy, commodities like paper and packing supplies and hardware products, and technology infrastructure products, including as a result of inflationary pressures; • constrained labor markets, which increase our payroll costs; • the extent to which operators of the networks between our customers and our stores successfully charge fees to grant our customers unimpaired and unconstrained access to our online services; • our ability to collect amounts owed to us when they become due; • the extent to which new and existing technologies, or industry trends, restrict online advertising or affect our ability to customize advertising or otherwise tailor our product and service offerings; • the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; • the extent to which we fail to maintain our unique culture of innovation, customer obsession, and long-term thinking, which has been critical to our growth and success; • disruptions from natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks, armed hostilities, and political conflicts, including those involving China), labor or trade disputes (including restrictive governmental actions impacting us, our customers, and our third-party sellers and suppliers in China or other foreign countries), tariff policy changes, and similar events; and • potential negative impacts of climate change, including: increased operating costs due to more frequent extreme weather events or climate-related changes, such as rising temperatures and water scarcity; increased investment requirements associated with the transition to a low-carbon economy; decreased demand for our products and services as a result of changes in customer behavior; increased compliance costs due to more extensive and global regulations and third-party requirements; and reputational damage resulting from perceptions of our environmental impact.
Our sales and operating results will also fluctuate for many other reasons, including due to factors described elsewhere in this section and the following: • our ability to retain and increase sales to existing customers, attract new customers, and satisfy our customers’ demands; • our ability to retain and expand our network of sellers; • our ability to offer products on favorable terms, manage inventory, and fulfill orders; • the introduction of competitive stores, websites, products, services, price decreases, or improvements; • changes in usage or adoption rates of the internet, e-commerce, electronic devices, web services, satellite communications services, and artificial intelligence and machine learning technologies, products, and services, including outside the U.S.; • timing, effectiveness, and costs of expansion and upgrades of our systems and infrastructure; • the success of our geographic, service, and product line expansions; • the extent to which we finance, and the terms of any such financing for, our current operations and future growth; • the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results; • variations in the mix of products and services we sell; • variations in our level of merchandise and vendor returns; • the extent to which we offer fast and free delivery, continue to reduce prices worldwide, and provide additional benefits to our customers; • factors affecting our reputation or brand image (including any actual or perceived inability to achieve our goals or commitments, whether related to sustainability, customers, employees, or other topics), and public perceptions regarding our positions on social or ethical issues and our development and use of artificial intelligence, machine learning, and automation technologies, products, and services; • the extent to which we invest in technology and infrastructure, fulfillment, and other expense categories; • availability of and increases in the prices of transportation (including fuel), resources such as land, water, and energy, commodities like paper and packing supplies and hardware products, and technology infrastructure products, including as a result of inflationary pressures; • constrained labor markets, which increase our payroll costs; • the extent to which operators of networks, systems, and services between us and customers successfully divert customers from or charge fees to access our stores and service offerings; • our ability to collect amounts owed to us when they become due; • the extent to which new and existing technologies, or industry trends, restrict online advertising or affect our ability to customize advertising or otherwise tailor our product and service offerings; • the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; • the extent to which we fail to maintain our unique culture of innovation, customer obsession, and long-term thinking, which has been critical to our growth and success; • disruptions from natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks, armed hostilities, and political conflicts, including those involving China), labor or trade disputes (including restrictive governmental actions impacting us, our customers, and our third-party sellers and suppliers in China or other foreign countries), tariff policy changes (such as tariffs proposed or implemented by the U.S. and other countries and any retaliatory actions), and similar events; and 10 Table of Contents • potential negative impacts of climate change, including: increased operating costs due to more frequent extreme weather events or climate-related changes, such as rising temperatures and water scarcity; increased investment requirements associated with the transition to a low-carbon economy; decreased demand for our products and services as a result of changes in customer behavior; increased compliance costs due to more extensive and global regulations and third-party requirements; and reputational damage resulting from perceptions of our environmental impact.
Decisions by our current suppliers to limit or stop selling or licensing merchandise, content, components, or services to us on acceptable terms, or delay delivery, including as a result of one or more supplier bankruptcies due to poor economic conditions, as a result of natural or human-caused disasters (including public health crises) or geopolitical events, or for other reasons, may result in our being unable to procure alternatives from other suppliers in a timely and efficient manner and on acceptable terms, or at all.
Decisions by our current suppliers to limit or stop selling or licensing merchandise, content, components, or services to us on acceptable terms, or delay delivery, including as a result of one or more supplier bankruptcies due to poor economic conditions, natural or human-caused disasters (including public health crises), geopolitical events, labor and trade disputes, or for other reasons, may result in our being unable to procure alternatives from other suppliers in a timely and efficient manner and on acceptable terms, or at all.
Proliferation of these or similar unilateral tax measures may continue unless broader international tax reform is implemented. In addition, the European Union and other countries (including those in which we operate) have enacted or have committed to enact global minimum taxes, which may increase our tax expense.
Proliferation of these or similar unilateral tax measures may continue unless broader international tax reform is implemented. In addition, the European Union and other countries (including those in which we operate) have enacted or may enact global minimum taxes, which may increase our tax expense.
These regulations and laws cover taxation, privacy, data use, data protection, data security, data localization, network security, consumer protection, pricing, content, copyrights, distribution, transportation, communications, electronic device certification, electronic waste, energy consumption, environmental and climate-related regulation, electronic contracts 14 Table of Contents and other communications, competition, employment, trade and protectionist measures, web services, the provision of online payment services, registration, licensing, and information reporting requirements, unencumbered internet access to our services or access to our facilities, the design and operation of websites, health, safety, and sanitation standards, the characteristics, legality, and quality of products and services, product labeling, the commercial operation of unmanned aircraft systems, healthcare, and other matters.
These regulations and laws cover taxation, privacy, data use, data protection, data security, data localization, network security, consumer protection, pricing, content, copyrights, distribution, transportation, communications, electronic device certification, electronic waste, energy consumption, environmental and climate-related regulation, electronic contracts and other communications, competition, employment, trade and protectionist measures, web services, the provision of online payment services, registration, licensing, and information reporting requirements, insurance, unencumbered internet access to our services or access to our facilities, the design and operation of websites, health, safety, and sanitation standards, the characteristics, legality, and quality of products and services, product labeling, the commercial operation of unmanned aircraft systems, healthcare, and other matters.
The Variability in Our Retail Business Places Increased Strain on Our Operations Demand for our products and services can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, or unforeseeable events, such as in response to global economic conditions such as recessionary fears or rising inflation, natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), or geopolitical events.
The Variability in Our Retail Business Places Increased Strain on Our Operations Demand for our products and services can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, or unforeseeable events, such as in response to global economic conditions such as recessionary fears or rising inflation (including as a result of tariff policy changes), natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), or geopolitical events.
For example, in order to meet local ownership, regulatory licensing, and cybersecurity requirements, we provide certain technology services in China through contractual relationships with third parties that hold PRC licenses to provide services. In India, the government restricts the ownership or control of Indian companies by foreign entities involved in online multi-brand retail trading activities.
For example, in order to meet local ownership, regulatory licensing, and cybersecurity requirements, we provide 7 Table of Contents certain technology services in China through contractual relationships with third parties that hold PRC licenses to provide services. In India, the government restricts the ownership or control of Indian companies by foreign entities involved in online multi-brand retail trading activities.
In addition, new and enhanced technologies, including search, web and infrastructure computing services, practical applications of artificial intelligence and machine learning, digital content, satellites, and electronic devices continue to increase our competition. The internet facilitates competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser known businesses to compete against us.
In addition, new and enhanced technologies, including search, web and infrastructure computing services, practical applications of artificial intelligence and machine learning, digital content, satellites, and electronic devices continue to increase our competition. The internet and other technologies including artificial intelligence facilitate competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser-known businesses to compete against us.
In addition, our ability to receive inbound inventory efficiently and ship completed orders to customers also may be negatively affected by natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues, labor or trade disputes, and similar events.
In addition, our ability to receive inbound inventory efficiently and ship completed orders to customers also may be negatively affected by natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues, labor or trade disputes, tariff policy changes, and similar events.
The trading price of our common stock fluctuates significantly in response to, among other risks, the risks described elsewhere in this Item 1A, as well as: • changes in interest rates; • conditions or trends in the internet and the industry segments we operate in; • quarterly variations in operating results; • fluctuations in the stock market in general and market prices for internet-related companies in particular; • changes in financial estimates by us or decisions to increase or decrease future spending or investment levels; • changes in financial estimates and recommendations by securities analysts; • changes in our capital structure, including issuance of additional debt or equity to the public; • changes in the valuation methodology of, or performance by, other e-commerce or technology companies; and • transactions in our common stock by major investors and certain analyst reports, news, social media activity, and speculation.
The trading price of our common stock fluctuates significantly in response to, among other risks, the risks described elsewhere in this Item 1A, as well as: • changes in interest rates; • conditions or trends in the internet, other technologies including artificial intelligence, and the industry segments we operate in; • quarterly variations in operating results; • fluctuations in the stock market in general and market prices for technology-related companies in particular; • changes in financial estimates by us or decisions to increase or decrease future spending or investment levels; • changes in financial estimates and recommendations by securities analysts; • changes in our capital structure, including issuance of additional debt or equity to the public; 14 Table of Contents • changes in the valuation methodology of, or performance by, other e-commerce or technology companies; and • transactions in our common stock by major investors and certain analyst reports, news, social media activity, and speculation.
We may be 8 Table of Contents unable to prevent third parties from acquiring domain names that are similar to, infringe upon, or diminish the value of our trademarks and other proprietary rights. We are not always able to discover or determine the extent of any unauthorized use of our proprietary rights.
We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon, or diminish the value of our trademarks and other proprietary rights. We are not always able to discover or determine the extent of any unauthorized use of our proprietary rights.
For example, the Indian tax authority has asserted that tax applies to cloud services fees paid to Amazon in the U.S. We are contesting this position; however, if this matter is adversely resolved, we may be required to pay additional amounts with respect to current and prior periods and our taxes in the future could increase.
For example, the Indian tax authority has asserted that tax applies to cloud services fees paid to 16 Table of Contents Amazon in the U.S. We are contesting this position; however, if this matter is adversely resolved, we may be required to pay additional amounts with respect to current and prior periods and our taxes in the future could increase.
In addition, because China-based sellers account for significant portions of our third-party seller services and advertising revenues, and China-based suppliers provide significant portions of our components and finished goods, regulatory and trade restrictions, data protection and cybersecurity laws, economic factors, geopolitical events, security issues, or other factors negatively impacting China-based sellers and suppliers could adversely affect our operating results.
In addition, because China-based sellers account for significant portions of our third-party seller services and advertising revenues, and China-based suppliers provide significant portions of our components and finished goods, regulatory and trade restrictions, tariff policy changes and trade disputes, data protection and cybersecurity laws, economic factors, geopolitical events, security issues, or other factors negatively impacting China-based sellers and suppliers could adversely affect our operating results.
A significant portion of our expenses and investments is fixed, and we are not always able to adjust our spending quickly enough if our sales are less than expected. Our revenue growth may not be sustainable, and our percentage growth rates may decrease.
A significant portion of our expenses and investments is fixed, and we are not always able to adjust our spending quickly enough if our sales are less than expected. 9 Table of Contents Our revenue growth may not be sustainable, and our percentage growth rates may decrease.
The amount of compensation we receive under certain of our commercial agreements is partially dependent on the volume of the other company’s sales. Therefore, when the other company’s offerings are not successful, the compensation we receive may be lower than expected or the agreement may be terminated.
The amount of compensation we receive under certain of our commercial agreements is partially 12 Table of Contents dependent on the volume of the other company’s sales. Therefore, when the other company’s offerings are not successful, the compensation we receive may be lower than expected or the agreement may be terminated.
These offerings, which can present new and difficult technology challenges, may subject us to claims if customers of these offerings experience, or are otherwise impacted by, service disruptions, delays, setbacks, or failures or quality issues.
These offerings, which can present new and difficult technology challenges, may subject us to claims if customers of these offerings experience, or are otherwise impacted by, service disruptions, delays, setbacks, or failures or 6 Table of Contents quality issues.
Although we believe these structures and activities comply with existing 7 Table of Contents laws, they involve unique risks, and the PRC and India may from time to time consider and implement additional changes in their regulatory, licensing, or other requirements that could impact these structures and activities.
Although we believe these structures and activities comply with existing laws, they involve unique risks, and the PRC and India may from time to time consider and implement additional changes in their regulatory, licensing, or other requirements that could impact these structures and activities.
Failure to realize the benefits of amounts we invest in new technologies, products, or services could result in the 6 Table of Contents value of those investments being written down or written off.
Failure to realize the benefits of amounts we invest in new technologies, products, or services could result in the value of those investments being written down or written off.
Although we have developed systems and processes that are designed to protect customer data and prevent, detect, or mitigate such incidents, including systems and processes designed to reduce the impact of a security incident at a third-party vendor or customer, such measures cannot provide absolute security and may fail to operate as intended or be circumvented.
Although we have developed systems and processes that are designed to protect customer data and prevent, detect, or mitigate such incidents, including systems and processes designed to reduce the impact of a security incident at a third-party vendor or customer, such measures cannot provide absolute security and may fail to operate as intended or be circumvented, including by use of developing technologies such as artificial intelligence.
We use third-party technology and systems for a variety of reasons, including, without limitation, encryption and authentication technology, employee email, content delivery to customers, back-office support, and other functions.
We use third-party technology and systems for a variety of reasons, including, without limitation, artificial intelligence technologies, encryption and authentication technology, employee email and other communication technologies, content delivery to customers, back-office support, and other functions.
Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties; • laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and • geopolitical events, including war and terrorism.
Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties; • laws and policies of the U.S. and other jurisdictions affecting trade (such as tariff policy changes), foreign investment, loans, and taxes; and • geopolitical events, including war and terrorism.
Operating Risks Our Expansion Places a Significant Strain on our Management, Operational, Financial, and Other Resources We are continuing to rapidly and significantly expand our global operations, including increasing our product and service offerings and scaling our infrastructure to support our retail and services businesses.
Operating Risks Our Expansion Places a Significant Strain on our Management, Operational, Financial, and Other Resources We are continuing to rapidly and significantly expand our global operations, including increasing our product and service offerings, scaling our infrastructure to support our retail and services businesses (including our technology infrastructure), and adopting and utilizing artificial intelligence and machine learning technologies.
In addition, some of these contracts are subject to periodic funding approval and/or provide for termination by the government at any time, without cause.
In addition, some of these contracts are subject to periodic funding approval and/or provide for termination by the government at any time, without cause. Item 1B. Unresolved Staff Comments None.
We and our co-sourcers may be unable to adequately staff our fulfillment network and customer service centers. For example, productivity across our fulfillment network is affected by regional labor market constraints, which increase payroll costs and make it difficult to hire, train, and deploy a sufficient number of people to operate our fulfillment network as efficiently as we would like.
For example, productivity across our fulfillment network is affected by regional labor market constraints, which increase payroll costs and make it difficult to hire, train, and deploy a sufficient number of people to operate our fulfillment network as efficiently as we would like.
Similarly, we face investigations under a growing patchwork of laws and regulations governing the collection, use, and disclosure of data, the interpretation of which continues to evolve, leading to uncertainty about how regulators will view our privacy practices.
We strongly dispute these claims and intend to defend ourselves vigorously in these investigations. Similarly, we face investigations under a growing patchwork of laws and regulations governing the collection, use, and disclosure of data, the interpretation of which continues to evolve, leading to uncertainty about how regulators will view our privacy practices.
For example, we face a number of open investigations based on claims that aspects of our operations infringe competition or consumer protection rules, including aspects of Amazon’s operation of its stores, including its fulfillment network and Prime, and certain aspects of AWS’s offering of cloud services. We strongly dispute these claims and intend to defend ourselves vigorously in these investigations.
For example, we face a number of open investigations based on claims that aspects of our operations infringe competition-related or consumer protection rules or regulations, including aspects of Amazon’s operation of its stores, including its fulfillment network and Prime, and certain aspects of AWS’s offering of cloud services.
Competition for qualified personnel in the industries in which we operate, as well as senior management, has historically been intense. For example, we experience 11 Table of Contents significant competition in the technology industry, particularly for software engineers, computer scientists, and other technical staff.
Competition for qualified personnel in the industries in which we operate, as well as senior management, has historically been intense. For example, we experience significant competition in the technology industry, particularly for software engineers, computer scientists, and other technical staff (including for artificial intelligence and machine learning technologies).
Additionally, under our A-to-z Guarantee, 15 Table of Contents we may reimburse customers for certain product liability claims up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results.
Third parties who sell products using our services and stores also expose us to product liability claims. Additionally, under our A-to-z Guarantee, we may reimburse customers for certain product liability claims up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results.
We Face Significant Inventory Risk In addition to risks described elsewhere in this Item 1A relating to fulfillment network and inventory optimization by us and third parties, we are exposed to significant inventory risks that may adversely affect our operating results as a result of seasonality, new product launches, rapid changes in product cycles and pricing, defective merchandise, changes in customer demand and consumer spending patterns, changes in consumer tastes with respect to our products, spoilage, and other factors.
We could determine that such valuations have experienced impairments or other-than-temporary declines in fair value which could adversely impact our financial results. 13 Table of Contents We Face Significant Inventory Risk In addition to risks described elsewhere in this Item 1A relating to fulfillment network and inventory optimization by us and third parties, we are exposed to significant inventory risks that may adversely affect our operating results as a result of seasonality, new product launches, rapid changes in product cycles and pricing (including as a result of tariff policy changes), defective merchandise, changes in customer demand and consumer spending patterns, changes in consumer tastes with respect to our products, spoilage, and other factors.
As we continue to add fulfillment and data center capability or add new businesses with different requirements, our fulfillment and data center networks become increasingly complex and operating them becomes more challenging.
As we continue to add fulfillment and data center capability or add new businesses with different requirements, our fulfillment and data center networks become increasingly complex and operating them becomes more challenging. There can be no assurance that we will be able to operate our networks effectively.
We carry a broad selection and significant inventory levels of certain products, such as consumer electronics, and at times we are unable to sell products in sufficient quantities or to meet demand during the relevant selling seasons.
We carry a broad selection and significant inventory levels of certain products, such as consumer electronics, and at times we are unable to sell products in sufficient quantities or to meet demand during the relevant selling seasons. Any one of the inventory risk factors set forth above may adversely affect our operating results.
In addition, profitability or other intended benefits, if any, in our newer activities may not meet our expectations, and we may not be successful enough in these newer activities to recoup our investments in them, which investments are often significant.
In addition, profitability or other intended benefits, if any, in our newer activities (including development and adoption of automation, artificial intelligence, and machine learning technologies for customer and internal use), may not meet our expectations, and we may not be successful enough in these newer activities to recoup our investments in them, which investments are often significant.
Our computer and communications systems and operations in the past have been, or in the future could be, damaged or interrupted due to events such as natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks and armed hostilities), computer viruses, physical or electronic break-ins, operational failures (including from energy shortages), and similar events or disruptions.
Steps we take to add software and hardware, upgrade our systems and network infrastructure, and improve the stability and efficiency of our systems may not be sufficient to avoid system interruptions or delays that could adversely affect our operating results. 11 Table of Contents Our computer and communications systems and operations in the past have been, or in the future could be, damaged or interrupted due to events such as natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks and armed hostilities), computer viruses, physical or electronic break-ins, operational failures (including from energy shortages), and similar events or disruptions.
Any one of the inventory risk factors set forth above may adversely affect our operating results. 13 Table of Contents We Are Subject to Payments-Related Risks We accept payments using a variety of methods, including credit card, debit card, credit accounts (including promotional financing), gift cards, direct debit from a customer’s bank account, consumer invoicing, checks, and payment upon delivery.
We Are Subject to Payments-Related Risks We accept payments using a variety of methods, including credit card, debit card, credit accounts (including promotional financing), gift cards, direct debit from a customer’s bank account, consumer invoicing, checks, and payment upon delivery.
Until the final resolution of such matters, we may be exposed to losses in excess of the amount recorded, and such amounts could be material. Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material effect on our business, consolidated financial position, results of operations, or cash flows.
Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material effect on our business, consolidated financial position, results of operations, or cash flows.
We Face Risks Related to Adequately Protecting Our Intellectual Property Rights and Being Accused of Infringing Intellectual Property Rights of Third Parties We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary technology, and similar intellectual property as critical to our success, and we rely on trademark, copyright, and patent law, trade secret protection, and confidentiality and/or license agreements with our employees, customers, and others to protect our proprietary rights.
Under our A-to-z Guarantee, we may reimburse customers for payments up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results. 8 Table of Contents We Face Risks Related to Adequately Protecting Our Intellectual Property Rights and Being Accused of Infringing Intellectual Property Rights of Third Parties We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary technology, and similar intellectual property as critical to our success, and we rely on trademark, copyright, and patent law, trade secret protection, and confidentiality and/or license agreements with our employees, customers, and others to protect our proprietary rights.
Many of the risks discussed below also impact our customers, including third-party sellers, which could indirectly have a material adverse effect on us.
Many of the risks discussed below also impact our customers, including third-party sellers, which could indirectly have a material adverse effect on us. The disclosures in this section reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future.
There can be no assurance that we will be able to operate our networks effectively. 10 Table of Contents In addition, failure to optimize inventory management or staffing in our fulfillment network increases our net shipping cost by increasing the distance products are shipped and reducing the number of units per shipment or delivery.
In addition, failure to optimize inventory management or staffing in our fulfillment network increases our net shipping cost by increasing the distance products are shipped and reducing the number of units per shipment or delivery. We and our co-sourcers may be unable to adequately staff our fulfillment network and customer service centers.
The outcomes of these matters are inherently unpredictable and subject to significant uncertainties. Determining legal reserves or possible losses from such matters involves judgment and may not reflect the full range of uncertainties and unpredictable outcomes.
Determining legal reserves or possible losses from such matters involves judgment and may not reflect the full range of uncertainties and unpredictable outcomes. Until the final resolution of such matters, we may be exposed to losses in excess of the amount recorded, and such amounts could be material.
For example, we are litigating a number of matters alleging price fixing, monopolization, and consumer protection claims, including those brought by state attorneys general and the Federal Trade Commission. Any of these types of proceedings can have an adverse effect on us because of legal costs, disruption of our operations, diversion of management resources, negative publicity, and other factors.
For example, we are litigating a number of matters alleging price fixing, monopolization, and consumer protection claims, including those brought by state attorneys general and the Federal Trade Commission.
In addition, valuations supporting our acquisitions and strategic investments could change rapidly. We could determine that such valuations have experienced impairments or other-than-temporary declines in fair value which could adversely impact our financial results.
In addition, valuations supporting our acquisitions and strategic investments could change rapidly.
Removed
Under our A-to-z Guarantee, we may reimburse customers for payments up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results.
Added
References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past.
Removed
Steps we take to add software and hardware, upgrade our systems and network infrastructure, and improve the stability and efficiency of our systems may not be sufficient to avoid system interruptions or delays that could adversely affect our operating results.
Added
Our Business Suffers When We Are Unsuccessful in Making, Integrating, and Maintaining Acquisitions and Investments We have acquired and invested in a number of companies, and we may in the future acquire or invest in or enter into joint ventures with additional companies.
Removed
Third parties who sell products using our services and stores also expose us to product liability claims.
Added
Any of these types of proceedings can have an adverse effect on us 15 Table of Contents because of legal costs, disruption of our operations, diversion of management resources, negative publicity, and other factors. The outcomes of these matters are inherently unpredictable and subject to significant uncertainties.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, we use processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party technology and systems, including: technology and systems we use for encryption and authentication; employee email; content delivery to customers; back-office support; and other functions.
Biggest changeAdditionally, we use processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party technology and systems, including: artificial intelligence technologies; technology and systems we use for encryption and authentication; employee email and other communication technologies; content delivery to customers; back-office support; and other functions.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties As of December 31, 2024, we operated the following facilities (in thousands): Description of Use Leased Square Footage (1) Owned Square Footage Location Office space 29,551 9,104 North America Office space 23,771 1,802 International Physical stores (2) 23,975 707 North America Physical stores (2) 222 — International Fulfillment, data centers, and other 448,168 36,869 North America Fulfillment, data centers, and other 176,287 18,958 International Total 701,974 67,440 ___________________ (1) For leased properties, represents the total leased space excluding sub-leased space.
Biggest changeProperties As of December 31, 2025, we operated the following facilities (in thousands): Description of Use Leased Square Footage (1) Owned Square Footage Location Office space 31,028 9,160 North America Office space 26,495 1,802 International Physical stores (2) 23,932 706 North America Physical stores (2) 148 — International Fulfillment, data centers, and other 474,128 45,803 North America Fulfillment, data centers, and other 185,814 20,660 International Total 741,545 78,131 ___________________ (1) For leased properties, represents the total leased space excluding sub-leased space.
(2) This includes 618 North America and 27 International stores as of December 31, 2024. Segment Leased Square Footage (1) Owned Square Footage (1) North America 457,104 20,741 International 166,673 11,741 AWS 24,875 24,052 Total 648,652 56,534 ___________________ (1) Segment amounts exclude corporate facilities.
(2) This includes 615 North America and 8 International stores as of December 31, 2025. Segment Leased Square Footage (1) Owned Square Footage (1) North America 481,153 25,437 International 174,499 13,263 AWS 28,370 28,469 Total 684,022 67,169 ___________________ (1) Segment amounts exclude corporate facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for the Registrant’s Common Stock, Related Shareholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “AMZN.” Holders As of January 29, 2025, there were 12,135 shareholders of record of our common stock, although there is a much larger number of beneficial owners.
Biggest changeItem 5. Market for the Registrant’s Common Stock, Related Shareholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “AMZN.” Holders As of January 28, 2026, there were 12,165 shareholders of record of our common stock, although there is a much larger number of beneficial owners.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

69 edited+11 added−10 removed51 unchanged
Biggest changeFree Cash Flow Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, net of proceeds from sales and incentives.” The following is a reconciliation of free cash flow to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2023 and 2024 (in millions): Year Ended December 31, 2023 2024 Net cash provided by (used in) operating activities $ 84,946 $ 115,877 Purchases of property and equipment, net of proceeds from sales and incentives (48,133) (77,658) Free cash flow $ 36,813 $ 38,219 Net cash provided by (used in) investing activities $ (49,833) $ (94,342) Net cash provided by (used in) financing activities $ (15,879) $ (11,812) Free Cash Flow Less Principal Repayments of Finance Leases and Financing Obligations Free cash flow less principal repayments of finance leases and financing obligations is free cash flow reduced by “Principal repayments of finance leases” and “Principal repayments of financing obligations.” Principal repayments of finance leases and financing obligations approximates the actual payments of cash for our finance leases and financing obligations.
Biggest changeFree cash flow is cash flow from operations reduced by “Purchases of property and equipment, net of proceeds from sales and incentives.” The following is a reconciliation of free cash flow to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2024 and 2025 (in millions): Year Ended December 31, 2024 2025 Net cash provided by (used in) operating activities $ 115,877 $ 139,514 Purchases of property and equipment, net of proceeds from sales and incentives (77,658) (128,320) Free cash flow $ 38,219 $ 11,194 Net cash provided by (used in) investing activities $ (94,342) $ (142,545) Net cash provided by (used in) financing activities $ (11,812) $ 9,661 Free cash flow has limitations as it omits certain components of the overall cash flow statement and does not represent the residual cash flow available for discretionary expenditures.
We also expect some variability in accounts payable days over time since they are affected by several factors, including the mix of product sales, the mix of sales by third-party sellers, the mix 20 Table of Contents of suppliers, seasonality, and changes in payment and other terms over time, including the effect of balancing pricing and timing of payment terms with suppliers.
We also expect some variability in accounts payable days over 20 Table of Contents time since they are affected by several factors, including the mix of product sales, the mix of sales by third-party sellers, the mix of suppliers, seasonality, and changes in payment and other terms over time, including the effect of balancing pricing and timing of payment terms with suppliers.
For additional information about each line item addressed above, refer to Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures.” Our Annual Report on Form 10-K for the year ended December 31, 2023 includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2022 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Critical Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles of the United States (“GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes.
For additional information about each line item addressed above, refer to Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures.” Our Annual Report on Form 10-K for the year ended December 31, 2024 includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2023 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Critical Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles of the United States (“GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes.
While AWS payment 25 Table of Contents processing and related transaction costs are included in “Fulfillment,” AWS costs are primarily classified as “Technology and infrastructure.” Fulfillment costs as a percentage of net sales may vary due to several factors, such as payment processing and related transaction costs, our level of productivity and accuracy, changes in volume, size, and weight of units received and fulfilled, the extent to which third-party sellers utilize Fulfillment by Amazon services, timing of fulfillment network and physical store expansion, the extent we utilize fulfillment services provided by third parties, mix of products and services sold, and our ability to affect customer service contacts per unit by implementing improvements in our operations and enhancements to our customer self-service features.
While AWS payment processing and related transaction costs are included in “Fulfillment,” AWS costs are primarily classified as “Technology and infrastructure.” Fulfillment costs as a percentage of net sales may vary due to several factors, such as payment processing and related transaction costs, our level of productivity and accuracy, changes in volume, size, and weight of units received and fulfilled, the extent to which third-party sellers utilize Fulfillment by Amazon services, timing of fulfillment network and physical store expansion, the extent we utilize fulfillment services provided by third parties, mix of products and services sold, and our ability to affect customer service contacts per unit by implementing improvements in our operations and enhancements to our customer self-service features.
We also offer other services such as compute, storage, and database offerings, fulfillment, advertising, publishing, and digital content subscriptions. Our financial focus is on long-term, sustainable growth in free cash flows.
We also offer other services such as compute, storage, and database offerings, fulfillment, advertising, publishing, and digital content subscriptions. Our financial focus is on long-term, sustainable growth in free cash flow.
For more information on the operating expenses that impact segment operating income, see “Operating Expenses” and the descriptions of operating expense line item changes on pages 25 to 27, and “Note 10 — Segment Information” on page 65.
For more information on the operating expenses that impact segment operating income, see “Operating Expenses” and the descriptions of operating expense line item changes on pages 25 to 27, and “Note 10 — Segment Information” on page 67.
Cash provided by (used in) investing activities corresponds with cash capital expenditures, including leasehold improvements, incentives received from property and equipment vendors, proceeds from asset sales, cash outlays for 22 Table of Contents acquisitions, investments in other companies and intellectual property rights, and purchases, sales, and maturities of marketable securities.
Cash provided by (used in) investing activities corresponds with cash capital expenditures, including leasehold improvements, incentives received from property and equipment vendors, proceeds from asset sales, cash outlays for acquisitions, investments in other companies and intellectual property rights, and purchases, sales, and maturities of marketable securities.
See Item 1A of Part I, “Risk Factors.” We continually evaluate opportunities to sell additional equity or debt securities, obtain credit facilities, obtain finance and operating lease arrangements, enter into financing obligations, repurchase common stock, pay dividends, or repurchase, refinance, or otherwise restructure our debt for strategic reasons or to further strengthen our financial position.
See Item 1A of Part I, “Risk Factors.” We continually evaluate opportunities to sell additional equity or debt securities, obtain credit facilities, obtain finance and operating lease arrangements, enter into financing obligations, repurchase common stock, pay dividends, repurchase, refinance, or otherwise restructure our debt, or access capital through other financing arrangements for strategic reasons or to further strengthen our financial position.
This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product 21 Table of Contents vendors, or liquidations, and expected recoverable values of each disposition category.
This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category.
Working capital at any specific point in time is subject to many variables, including variability in demand, inventory management and category expansion, the timing of cash receipts and payments, customer and vendor payment terms, and fluctuations in foreign exchange rates.
Working capital at any specific 22 Table of Contents point in time is subject to many variables, including variability in demand, inventory management and category expansion, the timing of cash receipts and payments, customer and vendor payment terms, and fluctuations in foreign exchange rates.
The increase in operating cash flow in 2024, compared to the prior year, was due to an increase in net income (loss), excluding non-cash expenses, and changes in working capital.
The increase in operating cash flow in 2025, compared to the prior year, was due to an increase in net income (loss), excluding non-cash expenses, and changes in working capital.
These assumptions about future disposition of inventory are inherently uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future. As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of December 31, 2024, we would have recorded an additional cost of sales of approximately $365 million.
These assumptions about future disposition of inventory are inherently uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future. As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of December 31, 2025, we would have recorded an additional cost of sales of approximately $405 million.
(2) Represents the outcome that would have resulted had foreign exchange rates in the reported period been the same as those in effect in the comparable prior year period for operating results. 29 Table of Contents Guidance We provided guidance on February 6, 2025, in our earnings release furnished on Form 8-K as set forth below.
(2) Represents the outcome that would have resulted had foreign exchange rates in the reported period been the same as those in effect in the comparable prior year period for operating results. 29 Table of Contents Guidance We provided guidance on February 5, 2026, in our earnings release furnished on Form 8-K as set forth below.
Actual results and outcomes could differ materially for a variety of reasons, including, among others, fluctuations in foreign exchange rates, changes in global economic conditions and customer demand and spending, inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of claims, litigation, government investigations, and other proceedings, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, variability in demand, the degree to which we enter into, maintain, and develop commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity.
Actual results and outcomes could differ materially for a variety of reasons, including, among others, fluctuations in foreign exchange rates and energy prices, changes in global economic conditions, tariff and trade policies, resource and supply volatility, including for memory chips, and customer demand and spending, inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of claims, litigation, government investigations, and other proceedings, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, variability in demand, the degree to which we enter into, maintain, and develop commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity.
The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers. Changes in foreign exchange rates reduced North America net sales by $462 million in 2024.
The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers. Changes in foreign exchange rates reduced North America net sales by $454 million in 2025.
In measuring shareholder dilution, we include all vested and unvested stock awards outstanding, without regard to estimated forfeitures. Total shares outstanding plus outstanding stock awards were 10.8 billion and 10.9 billion as of December 31, 2023 and 2024. Our financial reporting currency is the U.S. Dollar and changes in foreign exchange rates significantly affect our reported results and consolidated trends.
In measuring shareholder dilution, we include all vested and unvested stock awards outstanding, without regard to estimated forfeitures. Total shares outstanding plus outstanding stock awards were 10.9 billion and 11.0 billion as of December 31, 2024 and 2025. Our financial reporting currency is the U.S. Dollar and changes in foreign exchange rates significantly affect our reported results and consolidated trends.
Property and equipment acquired under finance leases was $642 million and $854 million in 2023 and 2024. We had no borrowings outstanding under the two unsecured revolving credit facilities or the commercial paper programs as of December 31, 2024. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information.
Property and equipment acquired under finance leases was $854 million and $2.9 billion in 2024 and 2025. We had no borrowings outstanding under the two unsecured revolving credit facilities or the commercial paper programs as of December 31, 2025. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information.
As of December 31, 2024, cash, cash equivalents, and marketable securities held by foreign subsidiaries were $6.3 billion. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts.
As of December 31, 2025, cash, cash equivalents, and marketable securities held by foreign subsidiaries were $7.1 billion. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts.
See “Results of Operations — Non-GAAP Financial Measures” below for additional information on our non-GAAP free cash flows financial measures. We seek to reduce our variable costs per unit and work to leverage our fixed costs.
See “Results of Operations — Non-GAAP Financial Measures” below for additional information on our non-GAAP free cash flow measure. We seek to reduce our variable costs per unit and work to leverage our fixed costs.
In addition, we record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions. We recorded a provision (benefit) for income taxes of $7.1 billion and $9.3 billion in 2023 and 2024.
In addition, we record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions. We recorded a provision for income taxes of $9.3 billion and $19.1 billion in 2024 and 2025.
Free cash flows are driven primarily by increasing operating income and efficiently managing accounts receivable, inventory, accounts payable, and cash capital expenditures, including our decision to purchase or lease property and equipment.
Free cash flow is driven primarily by increasing operating income and efficiently managing accounts receivable, inventory, accounts payable, and cash capital expenditures, including our decision to purchase or lease property and equipment.
Therefore, we believe it is important to view free cash flows measures only as a complement to our entire consolidated statements of cash flows. Effect of Foreign Exchange Rates Information regarding the effect of foreign exchange rates, versus the U.S.
Therefore, we believe it is important to view free cash flow only as a complement to our entire consolidated statements of cash flows. 28 Table of Contents Effect of Foreign Exchange Rates Information regarding the effect of foreign exchange rates, versus the U.S.
Our long-term lease liabilities were $77.3 billion and $78.3 billion as of December 31, 2023 and 2024. Our long-term debt was $58.3 billion and $52.6 billion as of December 31, 2023 and 2024. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for additional information.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for additional information. Our long-term lease liabilities were $78.3 billion and $87.3 billion as of December 31, 2024 and 2025. Our long-term debt was $52.6 billion and $65.6 billion as of December 31, 2024 and 2025.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 10 — Segment Information.” Overview Macroeconomic factors, including changes in inflation and interest rates, global economic and geopolitical developments, and the development and adoption of technologies and services, including artificial intelligence, have direct and indirect impacts on our results of operations that are difficult to isolate and quantify.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 10 — Segment Information.” Overview Macroeconomic factors, including changes in inflation and interest rates, resource and supply volatility, global economic and geopolitical developments, including unpredictable shifts in global tariff and trade policies, and the development and adoption of technologies and services, including artificial intelligence, have direct and indirect impacts on our results of operations that are difficult to predict, isolate, and quantify.
Amounts held in foreign currencies were $23.5 billion and $25.5 billion as of December 31, 2023 and 2024. Our foreign currency balances include British Pounds, Canadian Dollars, Euros, Indian Rupees, and Japanese Yen. Cash provided by (used in) operating activities was $84.9 billion and $115.9 billion in 2023 and 2024.
Amounts held in foreign currencies were $25.5 billion and $29.7 billion as of December 31, 2024 and 2025. Our foreign currency balances include British Pounds, Canadian Dollars, Euros, Indian Rupees, and Japanese Yen. Cash provided by (used in) operating activities was $115.9 billion and $139.5 billion in 2024 and 2025.
For example, these measures of free cash flows do not incorporate the portion of payments representing principal reductions of debt or cash payments for business acquisitions. Additionally, our mix of property and equipment acquisitions with cash or other financing options may change over time.
For example, free cash flow does not incorporate the portion of payments representing principal reductions of debt or cash payments for business acquisitions. Additionally, our mix of property and equipment acquisitions with cash or other financing options may change over time.
Changes in foreign exchange rates reduced net sales by $2.3 billion in 2024. For a discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below. North America sales increased 10% in 2024, compared to the prior year.
Changes in foreign exchange rates increased net sales by $4.4 billion in 2025. For a discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below. North America sales increased 10% in 2025, compared to the prior year.
International sales increased 9% in 2024, compared to the prior year. The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers.
International sales increased 13% in 2025, compared to the prior year. The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely 24 Table of Contents by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers.
The increase in fulfillment costs in 2024, compared to the prior year, is primarily due to increased sales and investments in our fulfillment network, partially offset by fulfillment network efficiencies. Changes in foreign exchange rates reduced fulfillment costs by $223 million in 2024.
The increase in fulfillment costs in 2025, compared to the prior year, is primarily due to increased sales and investments in our fulfillment network, partially offset by operational efficiencies. Changes in foreign exchange rates increased fulfillment costs by $609 million in 2025.
Cash provided by (used in) investing activities was $(49.8) billion and $(94.3) billion in 2023 and 2024, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures.
Cash provided by (used in) investing activities was $(94.3) billion and $(142.5) billion in 2024 and 2025, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures.
These forward-looking statements reflect Amazon.com’s expectations as of February 6, 2025, and are subject to substantial uncertainty.
These forward-looking statements reflect Amazon.com’s expectations as of February 5, 2026, and are subject to substantial uncertainty.
Cash capital expenditures were $48.1 billion, and $77.7 billion in 2023 and 2024, which primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth) and in additional capacity to support our fulfillment network. We expect cash capital expenditures to increase in 2025, primarily driven by investments in technology infrastructure.
Cash capital expenditures were $77.7 billion, and $128.3 billion in 2024 and 2025, which primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth) and in additional capacity to support our fulfillment network, both of which we expect to increase in 2026.
Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term-debt of $18.1 billion and $5.1 billion in 2023 and 2024. Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $34.0 billion and $17.0 billion in 2023 and 2024.
Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term-debt of $5.1 billion and $25.0 billion in 2024 and 2025. Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $17.0 billion and $15.3 billion in 2024 and 2025.
Included in other income (expense), net in 2023 and 2024 is a marketable equity securities valuation gain (loss) of $797 million and $(1.6) billion from our equity investment in Rivian. 27 Table of Contents Income Taxes Our effective tax rate is subject to significant variation due to several factors, including variability in our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, changes in how we do business, acquisitions, investments, developments in tax controversies, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, foreign currency gains (losses), changes in statutes, regulations, case law, and administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax benefits are not recognized.
Income Taxes Our effective tax rate is subject to significant variation due to several factors, including variability in our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, changes in how we do business, acquisitions, investments, developments in tax controversies, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, foreign currency gains (losses), changes in statutes, regulations, case law, and administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax benefits are not recognized.
Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, as well as those outlined in Item 1A of Part I, “Risk Factors.” First Quarter 2025 Guidance • Net sales are expected to be between $151.0 billion and $155.5 billion, or to grow between 5% and 9% compared with first quarter 2024.
Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates and energy prices, changes in global economic and geopolitical conditions, tariff and trade policies, resource and supply volatility, including for memory chips, and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, as well as those outlined in Item 1A of Part I, “Risk Factors.” First Quarter 2026 Guidance • Net sales are expected to be between $173.5 billion and $178.5 billion, or to grow between 11% and 15% compared with first quarter 2025.
For additional information, see Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures.” Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.
For additional information, see Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures.” Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available.
While costs associated with Amazon Prime membership benefits and other shipping offers are not included in sales and marketing expense, we view these offers as effective worldwide marketing tools, and intend to continue offering them indefinitely. 26 Table of Contents General and Administrative The decrease in general and administrative costs in 2024, compared to the prior year, is primarily due to a decrease in payroll and related expenses.
While costs associated with Amazon Prime membership benefits and other shipping offers are not included in sales and marketing expense, we view these offers as effective worldwide marketing tools, and intend to continue offering them indefinitely. 26 Table of Contents General and Administrative General and administrative costs in 2025 did not significantly change compared to the prior year.
Liquidity and Capital Resources Cash flow information is as follows (in millions): Year Ended December 31, 2023 2024 Cash provided by (used in): Operating activities $ 84,946 $ 115,877 Investing activities (49,833) (94,342) Financing activities (15,879) (11,812) Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $86.8 billion and $101.2 billion as of December 31, 2023 and 2024.
Liquidity and Capital Resources Cash flow information is as follows (in millions): Year Ended December 31, 2024 2025 Cash provided by (used in): Operating activities $ 115,877 $ 139,514 Investing activities (94,342) (142,545) Financing activities (11,812) 9,661 Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $101.2 billion and $123.0 billion as of December 31, 2024 and 2025.
To the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels shifts, we would expect to see a corresponding change in our marketing costs.
Our marketing costs are largely variable, based on growth in sales and changes in rates. To the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels shifts, we would expect to see a corresponding change in our marketing costs.
Operating Expenses Information about operating expenses is as follows (in millions): Year Ended December 31, 2023 2024 Operating Expenses: Cost of sales $ 304,739 $ 326,288 Fulfillment 90,619 98,505 Technology and infrastructure 85,622 88,544 Sales and marketing 44,370 43,907 General and administrative 11,816 11,359 Other operating expense (income), net 767 763 Total operating expenses $ 537,933 $ 569,366 Year-over-year Percentage Growth (Decline): Cost of sales 6 % 7 % Fulfillment 7 9 Technology and infrastructure 17 3 Sales and marketing 5 (1) General and administrative (1) (4) Other operating expense (income), net (39) (1) Percent of Net Sales: Cost of sales 53.0 % 51.1 % Fulfillment 15.8 15.4 Technology and infrastructure 14.9 13.9 Sales and marketing 7.7 6.9 General and administrative 2.1 1.8 Other operating expense (income), net 0.1 0.1 Cost of Sales Cost of sales primarily consists of the purchase price of consumer products, inbound and outbound shipping costs, including costs related to sortation and delivery centers and where we are the transportation service provider, and digital media content costs where we record revenue gross, including video and music.
Operating Expenses Information about operating expenses is as follows (in millions): Year Ended December 31, 2024 2025 Operating Expenses: Cost of sales $ 326,288 $ 356,414 Fulfillment 98,505 109,074 Technology and infrastructure 88,544 108,521 Sales and marketing 43,907 47,129 General and administrative 11,359 11,172 Other operating expense (income), net 763 4,639 Total operating expenses $ 569,366 $ 636,949 Year-over-year Percentage Growth (Decline): Cost of sales 7 % 9 % Fulfillment 9 11 Technology and infrastructure 3 23 Sales and marketing (1) 7 General and administrative (4) (2) Other operating expense (income), net (1) 508 Percent of Net Sales: Cost of sales 51.1 % 49.7 % Fulfillment 15.4 15.2 Technology and infrastructure 13.9 15.1 Sales and marketing 6.9 6.6 General and administrative 1.8 1.6 Other operating expense (income), net 0.1 0.6 Cost of Sales Cost of sales primarily consists of the purchase price of consumer products, inbound and outbound shipping costs, including costs related to sortation and delivery centers and where we are the transportation service provider, and digital media content costs where we record revenue gross, including video and music.
Shipping costs were $89.5 billion and $95.8 billion in 2023 and 2024. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of sales upon sale of products to our customers.
Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of sales upon sale of products to our customers.
Our technology and infrastructure investment and capital spending projects often support a variety of product and service offerings due to geographic expansion and the cross-functionality of our systems and operations. We expect spending in technology and infrastructure to increase over time as we continue to add employees and infrastructure. These costs are allocated to segments based on usage.
Our technology and infrastructure investment and capital spending projects often support a variety of product and service offerings due to geographic expansion and the cross-functionality of our systems and operations. We expect spending in technology and infrastructure to increase over time as we continue to add infrastructure and employees, including to support our artificial intelligence and machine learning initiatives.
Product sales represent revenue from the sale of products and related shipping fees and digital media content where we record revenue gross. Service sales primarily represent third-party seller fees, which includes commissions and any related fulfillment and shipping fees, AWS sales, advertising services, Amazon Prime membership fees, and certain digital media content subscriptions.
Service sales primarily represent third-party seller fees, which includes commissions and any related fulfillment and shipping fees, AWS sales, advertising services, Amazon Prime membership fees, and certain digital media content subscriptions.
Net sales information is as follows (in millions): Year Ended December 31, 2023 2024 Net Sales: North America $ 352,828 $ 387,497 International 131,200 142,906 AWS 90,757 107,556 Consolidated $ 574,785 $ 637,959 Year-over-year Percentage Growth: North America 12 % 10 % International 11 9 AWS 13 19 Consolidated 12 11 Year-over-year Percentage Growth, excluding the effect of foreign exchange rates: North America 12 % 10 % International 11 10 AWS 13 19 Consolidated 12 11 Net Sales Mix: North America 61 % 61 % International 23 22 AWS 16 17 Consolidated 100 % 100 % Sales increased 11% in 2024, compared to the prior year.
Net sales information is as follows (in millions): Year Ended December 31, 2024 2025 Net Sales: North America $ 387,497 $ 426,305 International 142,906 161,894 AWS 107,556 128,725 Consolidated $ 637,959 $ 716,924 Year-over-year Percentage Growth: North America 10 % 10 % International 9 13 AWS 19 20 Consolidated 11 12 Year-over-year Percentage Growth, excluding the effect of foreign exchange rates: North America 10 % 10 % International 10 10 AWS 19 20 Consolidated 11 12 Net Sales Mix: North America 61 % 59 % International 22 23 AWS 17 18 Consolidated 100 % 100 % Sales increased 12% in 2025, compared to the prior year.
Changes in foreign exchange rates reduced International net sales by $1.8 billion in 2024. 24 Table of Contents AWS sales increased 19% in 2024, compared to the prior year. The sales growth primarily reflects increased customer usage, partially offset by pricing changes primarily driven by long-term customer contracts.
Changes in foreign exchange rates increased International net sales by $4.9 billion in 2025. AWS sales increased 20% in 2025, compared to the prior year. The sales growth primarily reflects increased customer usage, partially offset by pricing changes primarily driven by long-term customer contracts.
The increase in cost of sales in 2024, compared to the prior year, is primarily due to increased product and shipping costs resulting from increased sales, partially offset by fulfillment network efficiencies, including lower transportation costs. Changes in foreign exchange rates reduced cost of sales by $1.7 billion in 2024.
The increase in cost of sales in 2025, compared to the prior year, is primarily due to increased product and shipping costs resulting from increased sales, partially offset by operational efficiencies. Changes in foreign exchange rates increased cost of sales by $2.8 billion in 2025. Shipping costs were $95.8 billion and $102.7 billion in 2024 and 2025.
The International operating income in 2024, as compared to the operating loss in the prior year, is primarily due to increased unit sales and increased advertising sales, partially offset by increased shipping and fulfillment costs. Changes in foreign exchange rates did not significantly impact operating income in 2024.
The increase in International operating income in 2025, compared to the prior year, is primarily due to increased unit sales and increased advertising sales, partially offset by increased fulfillment and shipping costs. Changes in foreign exchange rates positively impacted operating income by $903 million in 2025.
The increase in North America operating income in 2024, compared to the prior year, is primarily due to increased unit sales and increased advertising sales, partially offset by increased fulfillment and shipping costs.
The increase in North America operating income in 2025, compared to the prior year, is primarily due to increased unit sales and increased advertising sales, partially offset by increased fulfillment, technology and infrastructure, shipping, and other operating costs. Changes in foreign exchange rates negatively impacted operating income by $204 million in 2025.
Interest expense was $3.2 billion and $2.4 billion in 2023 and 2024 and was primarily related to debt and finance leases. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for additional information.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for additional information. Other Income (Expense), Net Other income (expense), net was $(2.3) billion and $15.2 billion during 2024 and 2025.
Dollar is as follows (in millions): Year Ended December 31, 2023 Year Ended December 31, 2024 As Reported Exchange Rate Effect (1) At Prior Year Rates (2) As Reported Exchange Rate Effect (1) At Prior Year Rates (2) Net sales $ 574,785 $ 71 $ 574,856 $ 637,959 $ 2,335 $ 640,294 Operating expenses 537,933 531 538,464 569,366 2,466 571,832 Operating income 36,852 (460) 36,392 68,593 (131) 68,462 ___________________ (1) Represents the change in reported amounts resulting from changes in foreign exchange rates from those in effect in the comparable prior year period for operating results.
Dollar is as follows (in millions): Year Ended December 31, 2024 Year Ended December 31, 2025 As Reported Exchange Rate Effect (1) At Prior Year Rates (2) As Reported Exchange Rate Effect (1) At Prior Year Rates (2) Net sales $ 637,959 $ 2,335 $ 640,294 $ 716,924 $ (4,409) $ 712,515 Operating expenses 569,366 2,466 571,832 636,949 (4,051) 632,898 Operating income 68,593 (131) 68,462 79,975 (358) 79,617 ___________________ (1) Represents the change in reported amounts resulting from changes in foreign exchange rates from those in effect in the comparable prior year period for operating results.
We direct customers to our stores primarily through a number of marketing channels, such as our sponsored search, third-party customer referrals, social and online advertising, television advertising, and other initiatives. Our marketing costs are largely variable, based on growth in sales and changes in rates.
Sales and Marketing Sales and marketing costs include advertising and payroll and related expenses for personnel engaged in marketing and selling activities, including sales commissions related to AWS. We direct customers to our stores primarily through a number of marketing channels, such as our sponsored search, third-party customer referrals, social and online advertising, television advertising, and other initiatives.
Operating Income (Loss) Operating income (loss) by segment is as follows (in millions): Year Ended December 31, 2023 2024 Operating Income (Loss) North America $ 14,877 $ 24,967 International (2,656) 3,792 AWS 24,631 39,834 Consolidated $ 36,852 $ 68,593 Operating income was $36.9 billion and $68.6 billion for 2023 and 2024.
Operating Income Operating income by segment is as follows (in millions): Year Ended December 31, 2024 2025 Operating Income North America $ 24,967 $ 29,619 International 3,792 4,750 AWS 39,834 45,606 Consolidated $ 68,593 $ 79,975 Operating income was $68.6 billion and $80.0 billion for 2024 and 2025.
We expect spending in technology and infrastructure will increase over time as we add computer scientists, designers, software and hardware engineers, and merchandising employees. Our technology and infrastructure investment and capital spending projects often support a variety of product and service offerings due to geographic expansion and the cross-functionality of our systems and operations.
Our technology and infrastructure investment and capital spending projects often support a variety of product and service offerings due to geographic expansion and the cross-functionality of our systems and operations.
Inventories Inventories, consisting of products available for sale, are primarily accounted for using the first-in first-out method, and are valued at the lower of cost and net realizable value.
Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions. 21 Table of Contents Inventories Inventories, consisting of products available for sale, are primarily accounted for using the first-in first-out method, and are valued at the lower of cost and net realizable value.
These could affect customer demand for our products and services, our ability to predict growth needs, expenses, and the benefits we gain from new technologies. We expect some or all of them to continue to impact our operations into Q1 2025. Net Sales Net sales include product and service sales.
These could affect customer demand for our products and services, our ability to forecast growth needs, expenses, and benefits from new technologies. Further, we expect to continue making additional investments in our artificial intelligence initiatives. We expect some or all of these factors to continue to impact our results of operations into Q1 2026.
Costs to operate our AWS segment are primarily classified as “Technology and infrastructure” as we leverage a shared infrastructure that supports both our internal technology requirements and external sales to AWS customers.
Costs to operate our AWS segment are primarily classified as “Technology and infrastructure” as we leverage a shared infrastructure that supports both our internal technology requirements and external sales to AWS customers. 25 Table of Contents Fulfillment Fulfillment costs primarily consist of those costs incurred in operating and staffing our North America and International fulfillment centers, physical stores, and customer service centers and payment processing costs.
The decrease in sales and marketing costs in 2024, compared to the prior year, is primarily due to decreased payroll and related expenses for personnel engaged in marketing and selling activities, partially offset by increased advertising expenses. Changes in foreign exchange rates reduced sales and marketing costs by $263 million in 2024.
The increase in sales and marketing costs in 2025, compared to the prior year, is primarily due to increased third-party advertising expenses. Changes in foreign exchange rates increased sales and marketing costs by $283 million in 2025.
We generally invest our excess cash in investment grade short- to intermediate-term marketable debt securities and AAA-rated money market funds. Our interest income corresponds with the average balance of invested funds based on the prevailing rates, which vary depending on the geographies and currencies in which they are invested.
Interest Income and Expense Our interest income was $4.7 billion and $4.4 billion during 2024 and 2025, primarily due to a decrease in prevailing rates, offset by a higher average balance of invested funds. We generally invest our excess cash in investment grade short- to intermediate-term marketable debt securities and AAA-rated money market funds.
Changes in foreign exchange rates reduced technology and infrastructure costs by $244 million in 2024. We currently expense the majority of the costs associated with the development of our satellite network for global broadband service (including production, launch, and payroll costs, and launch services deposits upon launch).
We currently expense the majority of the costs associated with the development of our satellite network for global broadband service (including production, launch, and payroll costs, and launch services deposits upon launch). We will capitalize certain of these costs once the service achieves commercial viability, including sales to customers.
The increase in AWS operating income in 2024, compared to the prior year, is primarily due to increased sales, decreased payroll and related expenses, and a reduction in depreciation and amortization expense from our change in the estimated useful lives of our servers, partially offset by spending on technology infrastructure that was primarily driven by additional investments to support AWS business growth.
The increase in AWS operating income in 2025, compared to the prior year, is primarily due to increased sales, partially offset by spending on technology infrastructure that was primarily driven by additional investments to support AWS business growth. Changes in foreign exchange rates negatively impacted operating income by $341 million in 2025.
Other Income (Expense), Net Other income (expense), net was $938 million and $(2.3) billion during 2023 and 2024. The primary components of other income (expense), net are related to equity securities valuations and adjustments, equity warrant valuations, and foreign currency.
The primary components of other income (expense), net are related to equity securities valuations and adjustments, equity warrant valuations, foreign currency, and reclassification adjustments for gains (losses) on available-for-sale debt securities. The net loss of $(2.3) billion in 2024 is primarily from the marketable securities loss from our equity investment in Rivian Automotive, Inc. (“Rivian”).
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 9 — Income Taxes” for additional information. Non-GAAP Financial Measures Regulation G, Conditions for Use of Non-GAAP Financial Measures, and other SEC regulations define and prescribe the conditions for use of certain non-GAAP financial information.
Non-GAAP Financial Measures Regulation G, Conditions for Use of Non-GAAP Financial Measures, and other SEC regulations define and prescribe the conditions for use of certain non-GAAP financial information. Free cash flow and the effect of foreign exchange rates on our consolidated statements of operations meet the definition of non-GAAP financial measures.
We made cash payments, net of acquired cash, related to acquisition and other investment activity of $5.8 billion and $7.1 billion in 2023 and 2024. We funded the acquisition of 1Life Healthcare, Inc. (One Medical) in 2023 with cash on hand. In Q3 2023, we invested $1.25 billion in a convertible note from Anthropic, PBC.
We made cash payments, net of acquired cash, related to acquisition and other investment activity of $7.1 billion and $3.8 billion in 2024 and 2025, which primarily reflect investments in convertible notes from Anthropic, PBC (“Anthropic”), including $2.7 billion we invested in 2025. Cash provided by (used in) financing activities was $(11.8) billion and $9.7 billion in 2024 and 2025.
Other Operating Expense (Income), Net Other operating expense (income), net was $767 million and $763 million during 2023 and 2024, and was primarily related to asset impairments and the amortization of intangible assets.
Other Operating Expense (Income), Net Other operating expense (income), net was $763 million and $4.6 billion during 2024 and 2025.
(federal and state) and foreign income taxes (net of refunds) totaled $11.2 billion and $12.3 billion for 2023 and 2024. As of December 31, 2023 and 2024, restricted cash, cash equivalents, and marketable securities were $503 million and $3.5 billion.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 9 — Income Taxes” for additional cash taxes paid information. As of December 31, 2024 and 2025, restricted cash, cash equivalents, and marketable securities were $3.5 billion and $3.3 billion.
Also, as a reminder, in first quarter 2024 the impact from Leap Year added approximately $1.5 billion in net sales. • Operating income is expected to be between $14.0 billion and $18.0 billion, compared with $15.3 billion in first quarter 2024. • This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded. 30 Table of Contents
This guidance includes approximately $1 billion of higher year-over-year Amazon Leo costs as we scale in 2026, as well as investment in quick commerce and even sharper prices in our international stores business. • This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded. 30 Table of Contents
Our measures of free cash flows and the effect of foreign exchange rates on our consolidated statements of operations meet the definition of non-GAAP financial measures. We provide multiple measures of free cash flows because we believe these measures provide additional perspective on the impact of acquiring property and equipment with cash and through finance leases and financing obligations.
Free Cash Flow Our financial focus is on long-term, sustainable growth in free cash flow. We provide a free cash flow measure because we believe it provides additional perspective on the impact of acquiring property and equipment with cash.
Changes in foreign exchange rates positively impacted operating income by $240 million in 2024. Interest Income and Expense Our interest income was $2.9 billion and $4.7 billion during 2023 and 2024, primarily due to a higher average balance of invested funds at prevailing rates.
Our interest income corresponds with the average balance of invested funds based on the prevailing rates, which vary depending on the geographies and currencies in which they are invested. Interest expense was $2.4 billion and $2.3 billion in 2024 and 2025 and was primarily related to debt and finance leases.
Our U.S. taxable income is reduced by accelerated depreciation deductions and increased by the impact of capitalized research and development expenses. U.S. tax rules provide for enhanced accelerated depreciation deductions by allowing us to expense a portion of qualified property, primarily equipment. These enhanced deductions are scheduled to phase out annually from 2023 through 2026.
Our U.S. taxable income is reduced by accelerated depreciation deductions and the resulting U.S. tax liability is reduced by tax credits, primarily related to the U.S. federal research and development credit.
Removed
In Q1 2024, we invested $2.75 billion in a second convertible note. In Q4 2024, we entered into an agreement and invested $1.3 billion in a third convertible note, and will invest an additional $2.7 billion by Q4 2025. Cash provided by (used in) financing activities was $(15.9) billion and $(11.8) billion in 2023 and 2024.
Added
We expect spending in technology and infrastructure will increase over time, which can negatively impact short-term free cash flow, as we add infrastructure and employees, including to support our artificial intelligence and machine learning initiatives, to support long-term growth.
Removed
Our federal tax provision included accelerated depreciation deductions for 2022, 2023, and 2024. Additionally, effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes, which delays the deductibility of these expenses. Cash paid for U.S.
Added
The One Big Beautiful Bill Act of 2025 (the “2025 Tax Act”) made changes to the U.S. corporate income tax, including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025 and immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025.
Removed
Fulfillment Fulfillment costs primarily consist of those costs incurred in operating and staffing our North America and International fulfillment centers, physical stores, and customer service centers and payment processing costs.
Added
The 2025 Tax Act significantly decreased our cash taxes in 2025. Cash paid for U.S. (federal and state) and foreign income taxes (net of refunds) totaled $12.3 billion and $8.3 billion for 2024 and 2025. We expect the 2025 Tax Act to have a similar effect on our cash taxes in 2026.
Removed
The increase in technology and infrastructure costs in 2024, compared to the prior year, is primarily due to an increase in spending on infrastructure, partially offset by decreased payroll and related costs associated with technical teams responsible for expanding our existing products and services and initiatives to introduce new products and service offerings and a reduction in depreciation and amortization expense from our change in the estimated useful life of our servers.
Added
Net Sales Net sales include product and service sales. Product sales represent revenue from the sale of products and related shipping fees and digital media content where we record revenue gross.
Removed
We will capitalize certain of these costs once the service achieves commercial viability, including sales to customers. Sales and Marketing Sales and marketing costs include advertising and payroll and related expenses for personnel engaged in marketing and selling activities, including sales commissions related to AWS.
Added
These costs are allocated to segments based on usage. The increase in technology and infrastructure costs in 2025, compared to the prior year, is primarily due to an increase in spending on infrastructure, including depreciation and amortization. Changes in foreign exchange rates increased technology and infrastructure costs by $312 million in 2025.
Removed
The following is a reconciliation of free cash flow less principal repayments of finance leases and financing obligations to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2023 and 2024 (in millions): Year Ended December 31, 2023 2024 Net cash provided by (used in) operating activities $ 84,946 $ 115,877 Purchases of property and equipment, net of proceeds from sales and incentives (48,133) (77,658) Free cash flow 36,813 38,219 Principal repayments of finance leases (4,384) (2,043) Principal repayments of financing obligations (271) (669) Free cash flow less principal repayments of finance leases and financing obligations $ 32,158 $ 35,507 Net cash provided by (used in) investing activities $ (49,833) $ (94,342) Net cash provided by (used in) financing activities $ (15,879) $ (11,812) 28 Table of Contents Free Cash Flow Less Equipment Finance Leases and Principal Repayments of All Other Finance Leases and Financing Obligations Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations is free cash flow reduced by equipment acquired under finance leases, which is included in “Property and equipment acquired under finance leases, net of remeasurements and modifications,” principal repayments of all other finance lease liabilities, which is included in “Principal repayments of finance leases,” and “Principal repayments of financing obligations.” All other finance lease liabilities and financing obligations consists of property.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table provides information about our cash equivalents and marketable debt securities, including principal cash flows by expected maturity and the related weighted-average interest rates as of December 31, 2024 (in millions, except percentages): 2025 2026 2027 2028 2029 Thereafter Total Estimated Fair Value as of December 31, 2024 Money market funds $ 28,282 $ — $ — $ — $ — $ — $ 28,282 $ 28,282 Weighted average interest rate 4.42 % — % — % — % — % — % 4.42 % Corporate debt securities 47,908 1,779 1,086 311 55 — 51,139 50,912 Weighted average interest rate 4.65 % 3.48 % 4.49 % 4.65 % 4.83 % — % 4.60 % U.S. government and agency securities 1,986 928 215 65 50 213 3,457 3,401 Weighted average interest rate 3.95 % 2.92 % 3.83 % 2.72 % 2.57 % 2.04 % 3.51 % Asset-backed securities 450 262 195 226 188 220 1,541 1,523 Weighted average interest rate 3.19 % 4.74 % 4.59 % 4.84 % 3.29 % 3.40 % 3.92 % Foreign government and agency securities 151 2 27 — — — 180 177 Weighted average interest rate 4.50 % 4.60 % 4.31 % — % — % — % 4.48 % Other debt securities 44 8 8 8 — — 68 67 Weighted average interest rate 0.99 % 4.49 % 4.11 % 4.29 % — % — % 2.13 % $ 78,821 $ 2,979 $ 1,531 $ 610 $ 293 $ 433 $ 84,667 Cash equivalents and marketable debt securities $ 84,362 As of December 31, 2024, we had long-term debt with a face value of $58.0 billion, including the current portion, primarily consisting of fixed rate unsecured senior notes.
Biggest changeThe following table provides information about our cash equivalents and marketable debt securities, including principal cash flows by expected maturity and the related weighted-average interest rates as of December 31, 2025 (in millions, except percentages): 2026 2027 2028 2029 2030 Thereafter Total Estimated Fair Value as of December 31, 2025 Money market funds $ 29,046 $ — $ — $ — $ — $ — $ 29,046 $ 29,777 Weighted average interest rate 3.73 % — % — % — % — % — % 3.73 % Corporate debt securities 63,890 2,867 2,008 391 — 423 69,579 69,585 Weighted average interest rate 3.98 % 4.54 % 4.54 % 4.63 % — % 4.61 % 4.03 % U.S. government and agency securities 4,057 617 311 45 173 19 5,222 5,222 Weighted average interest rate 3.68 % 3.94 % 3.27 % 3.21 % 2.20 % 1.43 % 3.62 % Asset-backed securities 245 331 370 404 253 177 1,780 1,780 Weighted average interest rate 4.52 % 4.62 % 4.24 % 4.38 % 3.81 % 4.40 % 4.33 % Other financial instruments 109 7 9 — — 4 129 129 Weighted average interest rate 3.90 % 4.42 % 4.32 % — % — % 4.19 % 3.96 % $ 97,347 $ 3,822 $ 2,698 $ 840 $ 426 $ 623 $ 105,756 Cash equivalents and marketable debt securities $ 106,493 As of December 31, 2025, we had long-term debt with a face value of $68.8 billion, including the current portion, primarily consisting of fixed rate unsecured senior notes.
We record our equity warrant investments in private companies at fair value and adjust our equity investments in private companies for observable price changes or impairments. We record our available-for-sale convertible debt investments in private companies at fair value, which primarily relate to Anthropic, PBC.
We record our equity warrant investments in private companies at fair value and adjust our equity investments in private companies, which primarily relate to our equity investment in Anthropic, for observable price changes or impairments. We record our available-for-sale convertible debt investments in private companies at fair value, which primarily relate to Anthropic.
Based on the intercompany balances as of December 31, 2024, an assumed 5%, 10%, and 20% adverse change to foreign exchange rates would result in losses of $305 million, $605 million, and $1.2 billion, recorded to “Other income (expense), net.” See Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Effect of Foreign Exchange Rates” for additional information on the effect on reported results of changes in foreign exchange rates.
Based on the intercompany balances as of December 31, 2025, an assumed 5%, 10%, and 20% adverse change to foreign exchange rates would result in losses of $600 million, $1.2 billion, and $2.4 billion, recorded to “Other income (expense), net.” See Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Effect of Foreign Exchange Rates” for additional information on the effect on reported results of changes in foreign exchange rates.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information. 31 Table of Contents Foreign Exchange Risk During 2024, net sales from our International segment accounted for 22% of our consolidated revenues.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information. 31 Table of Contents Foreign Exchange Risk During 2025, net sales from our International segment accounted for 23% of our consolidated revenues.
For example, as a result of fluctuations in foreign exchange rates throughout the year compared to rates in effect the prior year, International segment net sales decreased by $1.8 billion in comparison with the prior year. We have foreign exchange risk related to foreign-denominated cash, cash equivalents, and marketable securities (“foreign funds”).
For example, as a result of fluctuations in foreign exchange rates throughout the year compared to rates in effect the prior year, International segment net sales increased by $4.9 billion in comparison with the prior year. We have foreign exchange risk related to foreign-denominated cash, cash equivalents, and marketable securities (“foreign funds”).
Equity Investment Risk As of December 31, 2024, our recorded value in equity, equity warrant, and convertible debt investments in public and private companies was $22.1 billion.
Equity Investment Risk As of December 31, 2025, our recorded value in equity, equity warrant, and convertible debt investments in public and private companies was $69.1 billion.
Our equity and equity warrant investments in publicly traded companies, which include our equity investment in Rivian, represent $4.6 billion of our investments as of December 31, 2024, and are recorded at fair value, which is subject to market price volatility.
Our equity and equity warrant investments in publicly traded companies, which include our equity investment in Rivian, represent $5.0 billion of our investments as of December 31, 2025, and are recorded at fair value, which is subject to market price volatility.
Based on the balance of foreign funds as of December 31, 2024, of $25.5 billion, an assumed 5%, 10%, and 20% adverse change to foreign exchange would result in declines of $1.3 billion, $2.6 billion, and $5.1 billion. We also have foreign exchange risk related to our intercompany balances denominated in various currencies.
Based on the balance of foreign funds as of December 31, 2025, of $29.7 billion, an assumed 5%, 10%, and 20% adverse change to foreign exchange would result in declines of $1.5 billion, $3.0 billion, and $5.9 billion. We also have foreign exchange risk related to our intercompany balances denominated in various currencies.

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