Amazon FY2025 Earnings: A Record $77.7B Profit — and AWS Now Generates 57% of It

Amazon.com closed out fiscal year 2025 with $716.9 billion in net sales (+12.4% year over year) and a record $77.7 billion in net income — up 31.1% from FY2024's $59.2 billion. That headline growth rate is misleading in an interesting way: operating income, the cleaner measure of the actual business, grew a still-strong but much more modest 16.6% to $80.0 billion. The gap between those two numbers is a single $15.2 billion non-operating gain, driven mostly by a markup on Amazon's private-company equity stakes. Strip that out and FY2025 was a very good, not extraordinary, year — except at AWS, which grew 19.7% to $128.7 billion in revenue and now throws off 57% of the entire company's operating income on just 18% of its revenue.

The Headline Numbers​

Amazon reports on a calendar fiscal year. For the twelve months ended December 31, 2025:

Every operating line moved in the right direction: gross margin expanded 140 basis points as advertising and AWS — both far higher-margin than the retail core — kept growing faster than the overall business, and operating margin crossed 11% for the first time in the five fiscal years covered by this ledger. That's a genuinely strong operating year on its own.

But net income grew almost twice as fast as operating income, and the reason is not operational. Amazon's FY2025 "Other income (expense), net" line came in at a $15.2 billion gain, up from a $2.3 billion loss the year before — a $17.5 billion swing. Of that $15.2 billion, $7.7 billion is described in the filing as "upward adjustments on private-company equity investments" and another $5.6 billion is a reclassification gain on available-for-sale debt securities. Amazon doesn't name the investee in its 10-K, but the company's largest disclosed private stake is in the AI lab Anthropic, in which Amazon has committed up to $8 billion since 2023 — a markup on that position is the most plausible single driver of the $7.7 billion line. None of this is fabricated profit; mark-to-market gains on real equity stakes are real economic value. But it is volatile, non-operating value, and treating the 31% net-income growth rate as a read on the retail-and-cloud business would overstate how much better FY2025 actually was.

Revenue Deep Dive: One Segment Carries the Profit​

Amazon reports three segments — North America, International, and AWS:

AWS ($128.7B, +19.7%) grew faster than either retail segment for the second straight year — its clearest re-acceleration since the 2022–2023 cloud-spending slowdown — at a 35.4% operating margin ($45.6B operating income on $128.7B revenue). That margin is actually down from 37.0% in FY2024, the first AWS margin compression since FY2023, as depreciation from the FY2025 capex ramp begins hitting AWS's cost base faster than revenue growth can offset it. AWS is still 18.0% of Amazon's total net sales and 57.0% of its total operating income. That concentration is the single most important fact about Amazon's profit and loss statement: the company's growth-and-margin story is increasingly an AWS story, with retail as the (much larger, much thinner-margin) revenue base underneath it — and the segment funding that story is now seeing its own margin absorb the cost of the buildout.

North America ($426.3B, +10.0%) delivered operating-income growth (+18.6%) well ahead of revenue growth, expanding operating margin from 6.4% to 6.9%. Advertising is the quiet driver here: Amazon's disaggregated revenue disclosure shows advertising services at $68.6 billion for FY2025, growing faster than the retail core and carrying software-like margins, embedded almost entirely within the North America and International segment totals rather than broken out on its own.

International ($161.9B, +13.3%) grew faster than North America for the third straight year and extended its return to profitability, with operating margin ticking up from 2.7% to 2.9%. The real turnaround happened a year earlier — International swung from a 2.0% operating loss in FY2023 to a 2.7% profit in FY2024 — and FY2025 is the segment holding those gains rather than a fresh inflection. It remains Amazon's thinnest-margin segment by a wide margin, a reminder that non-U.S. retail operations are still years behind North America's fulfillment-cost discipline.

The Margin Story​

Margins across the last four fiscal years show a business steadily working fixed-cost leverage:

Operating margin has nearly quintupled in three years, from 2.4% in FY2022 (the year Amazon over-built fulfillment capacity coming out of the pandemic, then had to absorb the excess) to 11.2% in FY2025. Cost of sales grew slower than revenue in every one of the last three years — the fulfillment-network right-sizing that began in 2023 is still paying down. Net margin's climb tracks operating margin closely except in FY2022, when a $16.8 billion mark-to-market loss on Amazon's Rivian Automotive stake (the electric-vehicle maker Amazon holds a large equity stake in) pushed the company to its only net loss year in the five fiscal years covered by this ledger, and again in FY2025, when the direction flipped and non-operating gains pushed net margin above operating margin. The Rivian and private-equity positions are the same mechanism working in opposite directions three years apart — a useful reminder that Amazon's "Other income (expense), net" line is genuinely volatile and shouldn't be read as a trend.

How Much of the Record Profit Is Real?​

FY2025's $77.7 billion net income is Amazon's largest ever, comfortably ahead of FY2024's $59.2 billion. The question worth asking before taking the 31.1% growth rate at face value: how much of that $18.4 billion increase is retail-and-cloud performance, and how much is the equity markup?

In dollar terms, the operating business is still the majority of the story: $11.4 billion of the $18.4 billion increase (62%) came from higher operating income, which itself grew a solid 16.6%. The remaining $7.0 billion (38%) is the after-tax contribution of the equity markup — a pre-tax swing of $17.5 billion in the "Other income (expense), net" line, most of it eaten by Amazon's provision for income taxes more than doubling, from $9.3 billion to $19.1 billion. What makes the growth rate comparison (31.1% net income vs. 16.6% operating income) so lopsided isn't that the equity swing is the majority driver — it isn't — it's that a $7.0 billion after-tax swing lands on a much smaller base (net income) than the $11.4 billion operating gain lands on (operating income), so it moves the percentage far more than its dollar share implies. Read net income growth as "a strong 16.6% operating year plus a real but unrepeatable equity tailwind," not as a 31% run rate to extrapolate into FY2026.

Tracking a $717B Company in Plain Text​

Double-entry accounting forces every dollar to reconcile — revenue can't appear without an offsetting claim clearing somewhere, and a $15.2 billion "other income" gain has to actually balance against a real asset revaluation rather than floating in a footnote. We modeled Amazon's complete FY2021–FY2025 income statements and balance sheets in plain-text Beancount, in MUSD (millions of USD).

Here is the FY2025 income statement exactly as it sits in the ledger. Beancount convention: Income accounts carry negative (credit) balances, Expenses carry positive (debit) balances:

; FY2025 Income Statement — fiscal year ended December 31, 2025
; 1 MUSD = USD 1,000,000  |  All figures in millions USD
; Check: -716924 + (-12143) + 356414 + 109074 + 108521 + 58301 + 19087 + 77670 = 0 ✓
 
2025-12-31 * "Amazon.com, Inc." "FY2025 Income Statement"
  Income:Revenue                          -716924 MUSD  ; net sales (credit)
  Income:OtherNet                          -12143 MUSD  ; net other income (credit): incl. $15,229M other income/expense
  Expenses:CostOfRevenue                   356414 MUSD  ; cost of sales (debit)
  Expenses:Fulfillment                     109074 MUSD  ; fulfillment (debit)
  Expenses:ResearchAndDevelopment          108521 MUSD  ; technology and infrastructure (debit)
  Expenses:SellingGeneralAdministrative     58301 MUSD  ; sales & marketing + G&A (debit)
  Expenses:IncomeTax                        19087 MUSD  ; provision for income taxes (debit)
  Equity:Adjustments                        77670 MUSD  ; net income offset (RE set by balance assertion)

Note the dedicated Expenses:Fulfillment account — unlike Microsoft or most software companies, fulfillment is Amazon's second-largest cost line after cost of sales itself ($109.1 billion in FY2025), so it gets its own line in the chart of accounts rather than being folded into a generic SG&A bucket.

The balance sheet is maintained through pad + balance directives that auto-fill the gap between modeled line items and verified totals from the 10-K:

; Balance Sheet — December 31, 2025
2025-12-30 pad Assets:NonCurrent:PropertyPlantEquipment  Equity:Adjustments
2025-12-31 balance Assets:NonCurrent:PropertyPlantEquipment 357025 MUSD  ; $357.0B
 
2025-12-30 pad Liabilities:NonCurrent:LongTermDebt        Equity:Adjustments
2025-12-31 balance Liabilities:NonCurrent:LongTermDebt   -65648 MUSD
 
2025-12-30 pad Equity:RetainedEarnings                    Equity:Adjustments
2025-12-31 balance Equity:RetainedEarnings              -250536 MUSD

The single most important number on that balance sheet is property and equipment, net: $357.0 billion, up from $252.7 billion a year earlier — a $104.4 billion increase in a single year, funded by cash purchases of property and equipment that hit $131.8 billion in FY2025 (up 58.8% from $83.0 billion in FY2024, which was itself up roughly 57% from $52.7 billion in FY2023). That's the AI-and-data-center buildout landing directly on the balance sheet, and it is the capital that AWS's 35.4% operating margin and 19.7% growth rate are supposed to earn a return on over the next several years.

Five years of Amazon's financial history — FY2021 through FY2025 — fits in a few hundred lines of plain text. The complete ledger is open and auditable:

The Five-Year Arc: From Pandemic Overbuild to Record Margins​

The arc is a textbook overbuild-and-recover cycle. Amazon roughly doubled its fulfillment and delivery footprint during 2020–2021 to meet pandemic-era demand, then spent FY2022 absorbing the excess capacity — operating margin cratered to 2.4% and the company posted its only annual net loss of the decade, compounded by the $16.8 billion Rivian mark-to-market loss. FY2023 and FY2024 were the recovery: revenue kept compounding while cost discipline caught up, and operating margin rebuilt to double digits by FY2024. FY2025 is the first year of a new cycle — the fulfillment-network story has essentially finished playing out, and PP&E growth ($104.4 billion added in one year, more than the entire asset base of most Fortune 500 companies) is now overwhelmingly an AWS/AI capacity story rather than a warehouse-and-delivery-van story. Total assets nearly doubled over five years, from $420.5 billion to $818.0 billion.

The Verdict: Bull vs. Bear​

The Bull Case:

• Operating margin has nearly quintupled since the FY2022 trough (2.4% → 11.2%), and every year since has expanded further — the fulfillment-network overbuild is fully digested, not still being worked off
• AWS grew 19.7% in FY2025, its fastest growth rate in three years, and even after its FY2025 margin dip still runs at 35.4% operating margin, generating 57% of total company operating income from just 18% of revenue — the highest-margin, fastest-growing large segment in the five years this ledger covers
• Advertising revenue reached $68.6 billion in FY2025, a third profit pool with software-like margins growing inside the retail segments, largely uncorrelated with AWS capacity constraints
• North America segment operating margin grew by more than half from FY2023 to FY2025 (roughly 4.2% to 6.9%), showing the retail core itself is still improving, not just being subsidized by AWS
• The $131.8 billion FY2025 capex is being deployed into a segment (AWS) that is currently supply-constrained, not demand-constrained — capacity coming online typically converts directly to revenue within a year or two rather than sitting idle

The Bear Case:

• Even though operating income drove most (62%) of FY2025's net-income growth in dollar terms, the remaining 38% — a non-operating equity markup Amazon doesn't control — is what pushed the growth rate from a 16.6% operating year to a 31.1% net-income headline; investors extrapolating the 31% figure into FY2026 are working from an inflated base
• AWS's operating margin compressed for the first time since FY2023 (37.0% → 35.4%), a sign the FY2025 capex ramp is already showing up as depreciation in AWS's own cost base before the corresponding revenue has fully caught up
• The $131.8 billion capex ramp (+58.8% YoY, on top of +57% the year before) is now 18.4% of revenue, up from 9.2% just two years earlier — the highest capital intensity of any year this ledger covers — with no guarantee that AWS demand growth holds at 19.7%+ if the broader AI capex cycle cools
• International segment operating margin, while improving, is still only 2.9% — a fraction of North America's 6.9% and nowhere close to AWS's 35.4% — meaning a large and growing share of revenue still earns thin returns
• Amazon's "Other income (expense), net" line swung $32.0 billion across FY2022 to FY2025 (from a $16.8B loss to a $15.2B gain), driven by equity marks Amazon doesn't control and can't forecast — the same mechanism that inflated FY2025's profit could just as easily reverse it in a down market for AI/private-company valuations
• Fulfillment costs alone were $109.1 billion in FY2025, larger than the entire revenue of all but a handful of global companies — any reacceleration in delivery-network investment (new speed commitments, drone/robotics rollout, international expansion) could reopen the FY2022-style margin compression

Our Take: FY2025 was a genuinely strong operating year for Amazon — operating income up 16.6%, operating margin at 11.2%, its highest in the five years this ledger covers, and AWS re-accelerating to nearly 20% growth even as its own margin absorbs the first hit of depreciation from the capex ramp. But the headline 31% net-income growth rate overstates that story by nearly two-to-one, because a $7.0 billion after-tax equity markup landed on the comparatively small net-income base and moved its growth rate far more than the same dollars would move operating income. The company to underwrite for FY2026 is the one with 11% operating margins and an AWS segment throwing off 57% of profit on 18% of revenue funded by a $131.8 billion capex bet — not the one that grew net income 31%. If AWS holds its re-acceleration and the capex converts to revenue on schedule instead of just compressing AWS margin further, Amazon's operating-margin trajectory alone is enough of a story without needing the equity gains to carry it.