Free Cash Flow Decreases Due to Investment
Amazon.com recorded double-digit revenue growth and profit expansion in its Q4 2025 and annual results. The high growth of cloud business segment AWS and stable performance of advertising and retail segments led overall results.
Amazon announced Q4 2025 (October-December) results on the 5th (local time), stating that quarterly revenue increased 14% year-on-year to $213.4 billion. Even excluding the positive impact of exchange rate changes ($2.8 billion), revenue increased 12%.
By segment, North America revenue was $127.1 billion, up 10% year-on-year, and international segment revenue was $50.7 billion, up 17%. AWS revenue was $35.6 billion, up 24% year-on-year, recording the highest growth rate.
Q4 operating income was $25.0 billion, up from $21.2 billion in the same period of the previous year. However, $2.4 billion in one-time costs were reflected, including $1.1 billion in tax dispute and litigation settlement costs related to the Italian store business, $730 million in separation costs from restructuring, and $610 million in offline store asset impairment costs. Adjusted operating income excluding these is approximately $27.4 billion.
By segment, operating income was North America $11.5 billion, International $1.0 billion, and AWS $12.5 billion. Q4 net income was $21.2 billion and diluted EPS was $1.95, exceeding the previous year ($1.86).
Annual Revenue $716.9 Billion… Free Cash Flow Decreases Due to AI Investment
On an annual basis for 2025, Amazon's revenue was $716.9 billion, up 12% year-on-year. North America revenue was $426.3 billion (+10%), international revenue was $161.9 billion (+13%), and AWS revenue was $128.7 billion (+20%).
Annual operating income was $80.0 billion, up from $68.6 billion the previous year, and net income was $77.7 billion (diluted EPS $7.17). This is a large increase from 2024 net income of $59.2 billion ($5.53).
Operating cash flow for the past 12 months was $139.5 billion, up 20%. Meanwhile, free cash flow decreased to $11.2 billion. This is the impact of capital expenditure implementation increasing $50.7 billion year-on-year, and the company explained that this investment is primarily related to AI infrastructure expansion.
AWS, AI Semiconductor, and Agentic AI Strategy Accelerating
Following the earnings announcement, Amazon disclosed major business achievements including AWS customer expansion and AI semiconductor results. AWS signed new contracts with OpenAI, Visa, the NBA, BlackRock, Salesforce, the U.S. Air Force, Adobe, and Thomson Reuters.
Proprietary AI semiconductors Trainium and Graviton surpassed $10 billion on an annualized revenue basis, and Trainium2 already has 1.4 million chips deployed, handling major inference workloads for AWS Bedrock. Trainium3 has entered mass production, and Trainium4 is scheduled for release in 2027.
Amazon is also providing more than 20 fully managed generative AI models through Bedrock, and announced the expansion of the Nova model family, AgentCore for agent development, and 'Frontier Agents' performing long-term autonomous tasks.
Retail, Prime, and Media Businesses Also Maintaining Growth
In 2025, Prime delivery speed recorded its highest ever level, with same-day delivery volume in the United States increasing approximately 70% year-on-year. Amazon expanded its ultra-fast delivery service 'Amazon Now' (within 30 minutes) to India, Mexico, UAE and other countries.
Prime Video's Thursday Night Football Season 4 recorded an average viewership of over 15 million, and NBA broadcasting and UEFA Champions League broadcasting rights extensions were also announced.
Also, AI shopping assistant 'Rufus' was used by more than 300 million customers throughout 2025, contributing to approximately $12 billion in additional revenue on an annual basis.
Q1 2026 Guidance and Investment Plans
Amazon projected Q1 2026 revenue at $173.5 billion to $178.5 billion. This corresponds to 11-15% growth compared to the same period of the previous year. Operating income guidance for the same period was presented as $16.5 billion to $21.5 billion.
CEO Andy Jassy stated that "AWS, advertising, and store businesses are growing evenly, and strong demand is confirmed in AI, semiconductors, robotics, and low-orbit satellite sectors," adding that "approximately $200 billion in capital expenditure is planned for 2026."
This result is evaluated as demonstrating that Amazon is maintaining both revenue growth and profitability improvement even in the phase of large-scale AI investment.
