AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · The operated infrastructure, integrated seller fulfillment, purchase-volume rebate mechanism and sustained service revenues jointly support a structural scale advantage. Its competitor-relative magnitude is not measured.
durability · 2/4 · Multiple years of ecosystem growth support persistence, but rapidly rising commitments and realized equipment replacement costs limit confidence in durable economic benefits.
customer dependency · 2/4 · Seller fulfillment integration and AWS/Prime prepayments support continuing customer relationships indirectly. They do not establish exclusivity, material switching penalties or customer-level dependence.
erosion resilience · 2/4 · Operating growth through first-half 2026 demonstrates resilience, weighed against realized regulatory charges, technology replacement costs and growing investment needs. Possible competitive threats are not treated as realized share losses.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · — · Revenue growth does not separate pricing from volume or mix. Management's focus on lowering prices is a strategy statement, without disclosed realized price changes or fee yields sufficient to grade observed pricing.
retention · 2/4 · Growing seller-service, subscription and AWS revenues, plus AWS/Prime prepayments, support continuing demand indirectly. New customers, usage and prices are not separated from repeat demand; no retention rate is inferred.
margin resilience · 3/4 · Operating income grew faster than sales across 2023–2025 and first-half 2026 despite rising infrastructure expenses and 2025 charges. This demonstrates operating resilience, without proving pricing caused it. Q2 2026 also benefited from a $640 million tariff refund.
contractual freedom · 2/4 · Seller programs monetize several fee structures, but unilateral repricing rights are undisclosed. Certain government customers have funding and termination rights, providing actual evidence of limits on contractual security. The scope of those contracts is unquantified.
Predictability89
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 1.12
- Positive FCF years (%)
- 60.00
- FCF margin volatility (pp)
- 3.84
Financial strength56
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 24.07
- Debt / FCF (x)
- 8.95
- Net debt / operating income (x)
- -0.22
- Interest coverage (x)
- 35.17
- Current ratio (x)
- 1.05
Capital allocation76
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 24.88
- 3-year average dilution (%)
- 1.51
- 3-year average SBC / revenue (%)
- 3.45
- cashConversionGrade
- 43.50
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash generation increased, but 2025 free cash flow fell sharply and trailing-twelve-month net property purchases exceeded operating cash flow by June 2026. Increased borrowing, investment outlays, commitments and continuing stock compensation make the record mixed; returns on the latest spending remain unproven.
incentive alignment · 3/4 · Existing executive compensation relies primarily on long-term time-vested equity, with no named-executive equity grants in 2025 and forfeiture of unvested equity on departure. This provides meaningful shareholder exposure, although awards lack discrete operating performance conditions and complete ownership amounts are absent.
execution · 3/4 · Broad service-revenue growth, improved results across all three segments in 2023–2025 and further first-half 2026 operating growth demonstrate strong execution. Assessment uses aggregate operating outcomes rather than direct customer retention evidence; new investment returns remain unresolved.
governance · 2/4 · Equal voting rights, annual elections and independent committees are concrete shareholder protections. The realized FTC settlement tempers confidence in oversight effectiveness; structural protections alone do not establish exceptional governance.
Evidence
17 Table of Contents Item 2. Properties 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.
Item 2, Properties: operated facilities at December 31, 2025 · Filed 06/02/2026
Third-party seller services - We offer programs that enable sellers to sell their products in our stores, and fulfill orders using our services.
Revenue recognition: third-party seller services · Filed 06/02/2026
Volume rebates typically depend on reaching minimum purchase thresholds.
Accounting policies: volume rebate purchase thresholds · Filed 06/02/2026
Information on reportable segments and reconciliation to consolidated net income is as follows (in millions): Year Ended December 31, 2023 2024 2025 North America Net sales $ 352,828 $ 387,497 $ 426,305 Operating expenses 337,951 362,530 396,686 Operating income $ 14,877 $ 24,967 $ 29,619 International Net sales $ 131,200 $ 142,906 $ 161,894 Operating expenses 133,856 139,114 157,144 Operating income (loss) $ (2,656) $ 3,792 $ 4,750 AWS Net sales $ 90,757 $ 107,556 $ 128,725 Operating expenses 66,126 67,722 83,119 Operating income $ 24,631 $ 39,834 $ 45,606 Consolidated Net sales $ 574,785 $ 637,959 $ 716,924 Operating expenses 537,933 569,366 636,949 Operating income 36,852 68,593 79,975 Total non-operating income 705 21 17,336 Provision for income taxes (7,120) (9,265) (19,087) Equity-method investment activity, net of tax (12) (101) (554) Net income $ 30,425 $ 59,248 $ 77,670 68 Table of Contents Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions): Year Ended December 31, 2023 2024 2025 Net Sales: Online stores (1) $ 231,872 $ 247,029 $ 269,287 Physical stores (2) 20,030 21,215 22,561 Third-party seller services (3) 140,053 156,146 172,162 Advertising services (4) 46,906 56,214 68,635 Subscription services (5) 40,209 44,374 49,619 AWS 90,757 107,556 128,725 Other (6) 4,958 5,425 5,935 Consolidated $ 574,785 $ 637,959 $ 716,924 ___________________ (1)Includes product sales and digital media content where we record revenue gross.
Note 10, Segment Information: 2023–2025 segment results and service revenues · Filed 06/02/2026
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.
Risk factors: fixed expenses and investments · Filed 06/02/2026
CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Three Months Ended June 30, Six Months Ended June 30, Twelve Months Ended June 30, 2025 2026 2025 2026 2025 2026 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 69,893 $ 104,692 $ 82,312 $ 90,106 $ 71,673 $ 61,453 OPERATING ACTIVITIES: Net income 18,164 62,647 35,291 92,902 70,623 135,281 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other 15,227 19,988 29,489 38,933 58,562 75,200 Stock-based compensation 6,534 6,038 10,223 10,070 20,551 19,314 Non-operating expense (income), net (1,258) (53,381) (4,075) (69,013) (4,702) (79,818) Deferred income taxes 11 17,691 518 30,489 (2,407) 41,441 Changes in operating assets and liabilities: Inventories (4,054) (1,818) (5,276) (196) (5,851) 2,078 Accounts receivable, net and other (1,125) (8,204) 122 (13,954) (4,602) (21,409) Other assets (2,971) (4,717) (6,373) (8,528) (15,100) (17,787) Accounts payable 7,058 9,442 (1,985) 705 6,264 13,921 Accrued expenses and other (4,952) (2,018) (9,013) (10,063) (4,842) (6,069) Unearned revenue (119) (281) 609 74 2,641 (749) Net cash provided by (used in) operating activities 32,515 45,387 49,530 71,419 121,137 161,403 INVESTING ACTIVITIES: Purchases of property and equipment (32,183) (54,208) (57,202) (98,411) (107,656) (173,028) Proceeds from property and equipment sales and incentives 815 1,132 1,579 2,101 4,703 4,021 Acquisitions, net of cash acquired, non-marketable investments, and other, net (1,700) (24,359) (1,652) (39,767) (4,809) (41,956) Sales and maturities of marketable securities 11,441 24,196 19,178 41,882 30,924 67,090 Purchases of marketable securities (17,797) (26,006) (31,130) (49,262) (46,731) (72,902) Net cash provided by (used in) investing activities (39,424) (79,245) (69,227) (143,457) (123,569) (216,775) FINANCING ACTIVITIES: Proceeds from short-term debt, and other 2,093 9,368 3,908 15,386 8,187 20,798 Repayments of short-term debt, and other (1,392) (9,573) (3,474) (15,682) (7,901) (20,634) Proceeds from long-term debt — 13,557 746 66,998 746 81,925 Repayments of long-term debt (2,751) (2,752) (2,751) (2,752) (7,434) (5,022) Principal repayments of finance leases (411) (395) (821) (863) (1,556) (1,599) Principal repayments of financing obligations (78) (59) (194) (174) (694) (308) Net cash provided by (used in) financing activities (2,539) 10,146 (2,586) 62,913 (8,652) 75,160 Foreign currency effect on cash, cash equivalents, and restricted cash 1,008 (53) 1,424 (54) 864 (314) Net increase (decrease) in cash, cash equivalents, and restricted cash (8,440) (23,765) (20,859) (9,179) (10,220) 19,474 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $ 61,453 $ 80,927 $ 61,453 $ 80,927 $ 61,453 $ 80,927 See accompanying notes to consolidated financial statements.
Unaudited consolidated statements of cash flows through June 30, 2026 · Filed 31/07/2026
Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2025 2026 2025 2026 Operating lease cost $ 3,426 $ 4,118 $ 6,666 $ 8,035 Finance lease cost: Amortization of lease assets 827 692 1,700 1,425 Interest on lease liabilities 72 108 143 209 Finance lease cost 899 800 1,843 1,634 Variable lease cost 659 718 1,355 1,460 Total lease cost $ 4,984 $ 5,636 $ 9,864 $ 11,129 Other information about lease amounts recognized in our consolidated financial statements is as follows: December 31, 2025 June 30, 2026 Weighted-average remaining lease term – operating leases 10.0 years 10.0 years Weighted-average remaining lease term – finance leases 12.6 years 12.6 years Weighted-average discount rate – operating leases 3.7 % 3.9 % Weighted-average discount rate – finance leases 3.4 % 3.6 % 13 Table of Contents Our lease liabilities were as follows (in millions): December 31, 2025 Operating Leases Finance Leases Total Gross lease liabilities $ 106,914 $ 14,917 $ 121,831 Less: imputed interest (17,662) (2,631) (20,293) Present value of lease liabilities 89,252 12,286 101,538 Less: current portion of lease liabilities (12,655) (1,544) (14,199) Total long-term lease liabilities $ 76,597 $ 10,742 $ 87,339 June 30, 2026 Operating Leases Finance Leases Total Gross lease liabilities $ 116,350 $ 16,660 $ 133,010 Less: imputed interest (20,030) (3,209) (23,239) Present value of lease liabilities 96,320 13,451 109,771 Less: current portion of lease liabilities (13,745) (1,688) (15,433) Total long-term lease liabilities $ 82,575 $ 11,763 $ 94,338 14 Table of Contents Note 4 — COMMITMENTS AND CONTINGENCIES Commitments The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of June 30, 2026 (in millions): Six Months Ended December 31, Year Ended December 31, 2026 2027 2028 2029 2030 Thereafter Total Long-term debt principal and interest $ 2,361 $ 14,060 $ 17,087 $ 13,528 $ 11,112 $ 162,161 $ 220,309 Operating lease liabilities 9,336 14,765 13,924 12,599 11,269 54,457 116,350 Finance lease liabilities, including interest 1,088 1,775 1,885 1,482 1,269 9,161 16,660 Financing obligations, including interest (1) 352 682 694 706 720 7,916 11,070 Leases not yet commenced 4,018 11,732 9,278 9,483 9,227 93,476 137,214 Unconditional purchase obligations (2) 23,452 33,026 9,326 7,961 7,659 48,641 130,065 Other commitments (3) 2,145 2,044 1,212 1,008 963 10,994 18,366 Total commitments $ 42,752 $ 78,084 $ 53,406 $ 46,767 $ 42,219 $ 386,806 $ 650,034 ___________________ (1)Includes non-cancellable financing obligations for fulfillment network and data center facilities.
Notes 3 and 4: lease liabilities and contractual commitments at June 30, 2026 · Filed 31/07/2026
The effect of this change in estimate for the year ended December 31, 2025, based on servers and networking equipment that were included in “Property and equipment, net” as of December 31, 2024 and those acquired during the year ended December 31, 2025, was an increase in depreciation and amortization expense of $1.4 billion and a reduction in net income of $1.0 billion, or $0.10 per basic share and $0.10 per diluted share, which primarily impacted our AWS segment.
Accounting estimates: realized effect of shorter equipment useful lives in 2025 · Filed 06/02/2026
Advertising services - We provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.
Revenue recognition: advertising services · Filed 06/02/2026
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.
Business, Competition: current and potential competitor categories · Filed 06/02/2026
Some of the cases include allegations that Amazon has a monopoly in markets for online superstores, marketplace services, or intermediation services and that we unlawfully engage in anticompetitive practices relating to our pricing policies, selection of the Featured Offers, use of seller data, advertising practices, the structure of Prime, and promotion of our own products on our website.
Commitments and contingencies: allegations concerning marketplace practices · Filed 31/07/2026
Operating income for 2025 includes charges of $2.5 billion we recorded in Q3 2025 related to the settlement of a lawsuit with the FTC and $2.7 billion, of which $1.8 billion was recorded in Q3 2025, of estimated severance costs primarily related to planned role eliminations.
Results of operations: 2025 FTC settlement and severance charges · Filed 06/02/2026
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2026 2025 2026 Net product sales $ 68,246 $ 77,602 $ 132,216 $ 148,906 Net service sales 99,456 123,004 191,153 233,219 Total net sales 167,702 200,606 323,369 382,125 Operating expenses: Cost of sales 80,809 95,778 157,785 183,241 Fulfillment 25,976 29,633 50,569 56,922 Technology and infrastructure 27,166 33,158 50,160 62,725 Sales and marketing 11,416 11,698 21,179 22,012 General and administrative 2,965 2,788 5,593 5,375 Other operating expense (income), net 199 90 507 537 Total operating expenses 148,531 173,145 285,793 330,812 Operating income 19,171 27,461 37,576 51,313 Interest income 1,085 1,295 2,151 2,430 Interest expense (516) (1,314) (1,057) (2,114) Other income (expense), net 1,117 53,415 3,866 69,062 Total non-operating income 1,686 53,396 4,960 69,378 Income before income taxes 20,857 80,857 42,536 120,691 Provision for income taxes (2,678) (18,199) (7,231) (27,759) Equity-method investment activity, net of tax (15) (11) (14) (30) Net income $ 18,164 $ 62,647 $ 35,291 $ 92,902 Basic earnings per share $ 1.71 $ 5.82 $ 3.32 $ 8.64 Diluted earnings per share $ 1.68 $ 5.75 $ 3.27 $ 8.53 Weighted-average shares used in computation of earnings per share: Basic 10,637 10,769 10,620 10,756 Diluted 10,806 10,903 10,800 10,889 See accompanying notes to consolidated financial statements.
Unaudited consolidated statements of operations: first-half 2026 results · Filed 31/07/2026
Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships.
Revenue accounting: AWS and Prime prepayments · Filed 31/07/2026
To increase sales of products and services, we focus on improving all aspects of the customer experience, including lowering prices, improving availability, offering faster delivery and performance times, increasing selection, producing original content, increasing product categories and service offerings, expanding product information, improving ease of use, improving reliability, and earning customer trust.
Management overview: customer experience and pricing strategy · Filed 06/02/2026
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.
Risk factors: funding approval and termination rights in certain government contracts · Filed 31/07/2026
We earn fixed fees, a percentage of sales, per-unit activity fees, interest, or some combination thereof, for our seller programs.
Business: seller-program fee structures · Filed 06/02/2026
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.
Non-GAAP financial measures: 2024–2025 free cash flow reconciliation · Filed 06/02/2026
28 TABLE OF CONTENTS Why We Recommend You Support This Proposal • Our compensation is simple, transparent, and strongly aligns our executives’ compensation with the returns we deliver to shareholders: ✓ Our named executive officers’ compensation consists primarily of periodic grants of time-vested RSUs subject to long-term vesting requirements that assume a fixed annual increase in the stock price, so that compensation is negatively impacted if our stock price is flat or declines; ✓ The Leadership Development and Compensation Committee did not grant any equity awards to our CEO or any of our named executives during 2025 and has not granted our CEO an award since 2021.
Executive compensation overview: existing award structure and 2025 grant decisions · Filed 09/04/2026
• We do not tie cash or equity compensation to one or a few discrete performance goals and believe performance goals would undermine our focus on innovation and quick adaptation.
Executive compensation overview: absence of discrete performance goals · Filed 09/04/2026
If an executive terminates employment or retires, all unvested equity is forfeited.
Executive compensation: forfeiture of unvested equity on departure · Filed 09/04/2026
TABLE OF CONTENTS Corporate Governance Highlights • We have a single class of common stock with equal voting rights, such that one share equals one vote.
Corporate governance highlights: equal voting rights · Filed 09/04/2026
• We have a declassified board, meaning all of our directors are elected annually.
Corporate governance highlights: annual director elections · Filed 09/04/2026
The Board has established an Audit Committee, a Leadership Development and Compensation Committee, a Nominating and Corporate Governance Committee, and a Security Committee, each of which is comprised entirely of directors who meet the applicable independence requirements of the Nasdaq rules.
Board meetings and committees: independent committee membership · Filed 09/04/2026
During Q2 2026, we received approximately $640 million of tariff refunds under the International Emergency Economic Powers Act (“IEEPA”).
Accounting disclosures: Q2 2026 tariff refunds · Filed 31/07/2026
These tariff refunds were primarily recorded as a reduction to “Cost of sales” and primarily impacted our North America segment.
Accounting disclosures: tariff refund effect on cost of sales · Filed 31/07/2026
Stock-based compensation expense is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2025 2026 2025 2026 Cost of sales $ 250 $ 208 $ 398 $ 379 Fulfillment 880 764 1,377 1,365 Technology and infrastructure 3,655 3,701 5,715 5,987 Sales and marketing 1,207 845 1,860 1,508 General and administrative 542 520 873 831 Total stock-based compensation expense $ 6,534 $ 6,038 $ 10,223 $ 10,070 The following table summarizes our restricted stock unit activity for the six months ended June 30, 2026 (in millions): Number of Units Weighted-Average Grant-Date Fair Value Outstanding as of December 31, 2025 222.5 $ 178 Units granted 98.4 218 Units vested (52.0) 162 Units forfeited (24.5) 181 Outstanding as of June 30, 2026 244.4 197 Scheduled vesting for outstanding restricted stock units as of June 30, 2026, is as follows (in millions): Six Months Ended December 31, Year Ended December 31, 2026 2027 2028 2029 2030 Thereafter Total Scheduled vesting — restricted stock units 53.2 100.3 61.8 22.2 4.8 2.1 244.4 As of June 30, 2026, there was $24.8 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements.
Stock award activity: compensation expense, grants, vesting and unrecognized cost · Filed 31/07/2026
