Amazon’s net sales rose 14% year over year to $213.386 billion in the fourth quarter of 2025, the three months ended December 31. The increase included $2.8 billion from favorable foreign-exchange movements, making growth about 12% after excluding currency effects. Operating income also rose, but trailing-twelve-month free cash flow fell to $11.2 billion as investment in property and equipment accelerated. Amazon expects capital expenditures of approximately $200 billion in 2026.
What Amazon reported for the quarter
Amazon announced its results on February 5, 2026. The $213.4 billion figure is quarterly net sales, not annual revenue: sales for the full year 2025 were $716.924 billion. The company’s reported results are in its Q4 2025 earnings release filed with the SEC.
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| Measure | Q4 2024 | Q4 2025 | Year-over-year change |
|---|---|---|---|
| Net sales | $187.792 billion | $213.386 billion | +14% reported; approximately +12% excluding foreign exchange |
| Operating income | $21.203 billion | $24.977 billion | Approximately +18% |
| Net income | $20.004 billion | $21.192 billion | Approximately +6% |
| Diluted earnings per share | — | $1.95 | Not compared here |
Revenue, operating income and net income measure different things. The 14% sales increase did not translate into 14% growth in profit: net income rose more slowly, while operating income increased faster than sales.
Where quarterly sales and operating income came from
Amazon reports three operating segments. North America remained the largest by sales; AWS generated substantially more operating income than its revenue share alone might suggest.
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| Segment | Q4 2025 sales | Sales growth | Q4 2025 operating income | Q4 2024 operating income |
|---|---|---|---|---|
| North America | $127.1 billion | 10% | $11.472 billion | $9.256 billion |
| International | $50.724 billion | 17% reported; 11% excluding foreign exchange | $1.040 billion | $1.315 billion |
| AWS | $35.579 billion | 24% | $12.465 billion | $10.632 billion |
Segment figures are from Amazon’s earnings release. International illustrates why sales growth alone does not show whether a segment became more profitable: its sales grew faster than North America’s, but its quarterly operating income declined.
AWS carries outsize weight in profit
AWS accounted for roughly 17% of Q4 sales but about half of consolidated operating income, calculated from Amazon’s reported figures. Its $12.465 billion of operating income exceeded the combined $12.512 billion from North America and International only slightly? [Correct calculation: combined = 12.512, so AWS slightly below.] AWS was nearly equal to those two segments combined. This is why cloud performance matters so much to Amazon’s overall earnings, even though AWS is smaller than North America by revenue.
AWS sales grew 24% in the quarter. For the full year, AWS sales were $128.725 billion and operating income was $45.606 billion. Continued cloud growth can support investment in data centers, AI computing, custom chips and cloud services, but serving that demand also requires substantial capital.
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North America and International have different signals
North America’s operating income rose to $11.472 billion. Amazon attributed the improvement primarily to increased unit sales and advertising revenue, partly offset by higher fulfillment, technology and infrastructure, and shipping costs, according to its 2025 Form 10-K.
International sales grew 17% as reported, or 11% after excluding currency effects, while operating income fell from $1.315 billion to $1.040 billion. The reported growth rate therefore should not be mistaken for a comparable improvement in segment profit.
Profit rose, with special charges affecting the reported result
Amazon’s official Q4 operating income was $24.977 billion. The company said it would have been approximately $27.4 billion without three identified charges: $1.1 billion related to resolution of tax disputes associated with its stores business in Italy and a lawsuit settlement, $730 million in estimated severance costs, and $610 million in asset impairments, primarily related to physical stores. The $27.4 billion is a company-disclosed figure excluding those charges, not the official reported operating-income result.
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Using reported sales and operating income, consolidated operating margin was about 11.7% in Q4 2025, compared with about 11.3% in Q4 2024. These percentages are calculations from Amazon’s reported figures, rather than separately reported company metrics.
Why cash flow fell despite higher operating cash flow
For the trailing twelve months, operating cash flow increased to $139.5 billion from $115.9 billion, while free cash flow declined to $11.2 billion from $38.2 billion. Amazon attributed the free-cash-flow reduction primarily to a $50.7 billion year-over-year increase in purchases of property and equipment, net of proceeds from sales and incentives, as reported in its 2025 Form 10-K.
Operating cash flow reflects cash generated by operations; free cash flow also accounts for capital investment. In this case, Amazon generated more operating cash, but substantially more was absorbed by spending on long-lived assets. The decline is not, by itself, evidence that operating cash generation weakened.
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What the $200 billion 2026 investment plan means
Amazon management expects capital expenditures of approximately $200 billion in 2026, citing demand for existing offerings and opportunities in AI, chips, robotics and low-Earth-orbit satellites. This is a management expectation, not a guaranteed final spending amount. For comparison, Amazon reported $128.3 billion in cash capital expenditures in 2025 and $77.7 billion in 2024 in its Form 10-K.
The planned increase points to a major build-out rather than routine upkeep. Data centers and computing capacity can help AWS serve cloud and AI workloads; custom silicon may support those services; other investment areas include fulfillment capacity, robotics and satellite connectivity. The potential benefit is capacity for future sales and services. The trade-off is that capital spending can weigh on free cash flow and, as assets enter service, raise depreciation costs. The returns depend on how successfully Amazon uses the added capacity and monetizes demand.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Amazon’s revenue is more than retail merchandise
Amazon’s net sales combine product sales and service sales; they are not the gross value of every item sold through its marketplace. Product sales include products, related shipping fees and certain digital media content recorded gross. Service sales include third-party seller fees and commissions, fulfillment and shipping fees, AWS, advertising, Prime memberships and certain digital-media subscriptions, as described in the 2025 Form 10-K.
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That mix helps explain why Amazon’s results cannot be read as a simple measure of retail demand. Cloud, advertising, subscriptions and marketplace services contribute alongside direct product sales. CEO Andy Jassy said advertising sales grew 22% year over year in Q4 in his earnings commentary included with the earnings release.
Full-year results show growth across all three segments
| Segment | 2024 sales | 2025 sales | 2025 year-over-year growth |
|---|---|---|---|
| North America | $387.497 billion | $426.305 billion | 10% |
| International | $142.906 billion | $161.894 billion | 13% |
| AWS | $107.556 billion | $128.725 billion | 20% |
| Consolidated net sales | $637.959 billion | $716.924 billion | 12% |
Full-year operating income rose to $79.975 billion from $68.593 billion, while net income rose to $77.670 billion from $59.248 billion. The annual segment and consolidated figures are reported in Amazon’s 2025 Form 10-K.
How to read the result
- Growth: Sales expanded across North America, International and AWS, with AWS growing fastest among the three segments in Q4.
- Profitability: Consolidated operating income and operating margin increased, though International operating income declined and net income grew more slowly than sales.
- Investment: Higher operating cash flow did not prevent free cash flow from falling because spending on property and equipment rose sharply.
- Execution: The expected 2026 capital budget could expand capacity for cloud, AI and other businesses; whether that spending earns adequate returns remains uncertain.
The quarter was therefore strong on sales and operating income, but not an uncomplicated growth story. AWS and advertising helped broaden the business beyond retail, while the scale of planned investment makes cash conversion and the returns on new infrastructure central to judging what comes next. The reported figures do not establish that AI alone caused Amazon’s revenue growth.
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