Amazon
What it does
Amazon reports 3 businesses. In FY2025, North America brought in 59%, international brought in 23% and AWS brought in 18% of revenue.
By region, United States made up 68%, then Rest of world at 15%.
From Amazon.com, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2025.
Our coverage
Read it through a lens
How it makes money
Where Amazon's FY2025 revenue came from, what it cost to earn, and what was left for shareholders.
- Income
- Costs and tax
- Profit
- % = share of revenue
Source: Amazon.com, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2025 (6 Feb 2026), statement of operations, Note 10. FY2025 is the year to 31 Dec 2025. Figures as reported, in US$ millions in the tooltips and table.
Technical: gross margin was 50.3%, operating margin 11.2% and net margin 10.8%. Operating costs and cost of revenue together took 88.8% of revenue.
Plain: of every dollar of sales, about 50 cents paid for making or delivering what was sold, about 39 cents went on running and growing the business, and about 11 cents ended up as profit for shareholders.
Revenue by product
Revenue by business
Revenue by region
See the numbers
| FY2025 | US$M | % of revenue |
|---|---|---|
| Revenue | 716,924 | 100.0% |
| Cost of revenue | −356,414 | 49.7% |
| Gross profit | 360,510 | 50.3% |
| Fulfillment | −109,074 | 15.2% |
| Technology and infrastructure | −108,521 | 15.1% |
| Sales and marketing | −47,129 | 6.6% |
| General and administrative | −11,172 | 1.6% |
| Other operating expense, net | −4,639 | 0.6% |
| Operating income | 79,975 | 11.2% |
| Other income (expense), net | 17,336 | 2.4% |
| Profit before tax | 97,311 | 13.6% |
| Income tax | −19,087 | 2.7% |
| Equity-method investments, after tax | −554 | 0.1% |
| Net profit to shareholders | 77,670 | 10.8% |
- Gross profit is net sales less cost of sales. Amazon doesn't report the subtotal itself, and puts fulfilment and technology costs below it.
- Other income of US$17,336M is interest income of US$4,381M, less interest expense of US$2,274M, plus other income, net of US$15,229M.
- Amazon's share of losses from equity-method investments was US$554M after tax.
Moat rating
Wide moat
8.8 / 10
ROIC averaged 28.2% over FY2021 to FY2025, 20.9 percentage points above a 7.27% cost of capital, and beat it every year, even in FY2022 when it fell to 10.5%.
Amazon has earned more than its capital costs for five years running, even in its weakest year.
The numbers
10.0 / 10Return on invested capital against cost of capital, general retail
- Average ROIC
- 28.2%
- Average excess return
- +20.9 pp
- Years above the hurdle
- 5 of 5
Spread 10 × 60% + durability 10 × 40% = 10.0
The sources
7.6 / 10Where Amazon's advantage comes from
- 1. Brand and pricing power6 / 10
North America earned US$29.6B of operating income on US$426.3B of sales in 2025, a 6.9% margin.
Amazon's shops win on price and convenience, so the profit on each sale stays thin.
- 2. Barriers to entry7 / 10
Fulfillment cost US$109.1B and technology and infrastructure US$108.5B in 2025.
Few rivals can afford a delivery network and data centres this big, which keeps them from catching up.
- 3. Switching costs7 / 10
Subscription services, led by Prime, brought in US$49.6B. AWS customers build their systems on its services, which makes moving costly.
Prime members have already paid for free delivery, and companies on AWS would have to rebuild to leave.
- 4. Network effects8 / 10
Third-party seller services brought in US$172.2B and advertising US$68.6B: more shoppers attract more sellers, and more sellers bring more choice.
Shoppers come for the choice, sellers come for the shoppers, and both keep the other there.
- 5. Economies of scale10 / 10
Revenue of US$716.9B in 2025. AWS made US$45.6B of operating income, 57% of the total, on 18% of sales.
Amazon spreads the cost of its warehouses and data centres over more orders and customers than almost anyone, and AWS makes most of the profit.
Return on invested capital: Amazon.com, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2021; Amazon.com, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2022; Amazon.com, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2023; Amazon.com, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2024; Amazon.com, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2025. Hurdle: Aswath Damodaran, NYU Stern, Cost of capital by sector (US), data as of January 2026. Our choice of industry: most of Amazon's revenue is retail. AWS on its own would sit in a software group with a higher hurdle.
How we worked out ROIC: operating income after tax, divided by the capital invested at the start of the year. Tax is at the year's effective rate, or the 21% US federal rate where a pre-tax loss or a tax credit makes the effective rate meaningless. Invested capital is shareholders' equity plus borrowings, less cash and short-term investments, from the opening balance sheet in the same 10-K; lease liabilities are left out. This follows Damodaran's definition. The ratios are our calculation from the filed figures, not numbers the company reports. Amazon held US$6.8B of commercial paper at 31 Dec 2022 inside "accrued expenses and other" (FY2023 10-K, Note 6), so we added it to borrowings for FY2023.
Lens scores are rasinbunlover's judgment, reviewed 19 Oct 2026. A wide moat is a reason to dig deeper, not a verdict on the price. For education only. Not financial advice.
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