PART I. FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements for Q2 2025 reflect significant growth in revenue and net income, with total assets increasing to $682.2 billion, driven by investments and changes in accounting estimates for server useful lives Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash from operating activities increased to $49.5 billion, while net cash used in investing activities significantly rose to $69.2 billion, primarily due to increased property and equipment purchases Cash Flow Summary (Six Months Ended June 30) | Metric | 2024 (in millions) | 2025 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $44,270 | $49,530 | +11.9% | | Net cash used in investing activities | $(40,000) | $(69,227) | +73.1% | | Purchases of property and equipment | $(32,545) | $(57,202) | +75.8% | | Net cash used in financing activities | $(5,746) | $(2,586) | -54.9% | | Cash, cash equivalents, and restricted cash, end of period | $71,673 | $61,453 | -14.3% | Consolidated Statements of Operations For Q2 2025, total net sales increased 13.3% to $167.7 billion, with operating income growing to $19.2 billion and net income rising significantly to $18.2 billion, or $1.68 per diluted share Q2 Financial Performance (Three Months Ended June 30) | Metric | 2024 (in millions) | 2025 (in millions) | YoY Growth | | :--- | :--- | :--- | :--- | | Total Net Sales | $147,977 | $167,702 | 13.3% | | Operating Income | $14,672 | $19,171 | 30.7% | | Net Income | $13,485 | $18,164 | 34.7% | | Diluted EPS | $1.26 | $1.68 | 33.3% | Consolidated Statements of Comprehensive Income Comprehensive income for Q2 2025 increased to $21.5 billion, driven by higher net income and a significant positive impact from foreign currency translation adjustments - Foreign currency translation adjustments were a major driver of the difference between net income and comprehensive income, contributing a positive $3.3 billion in Q2 2025 versus a negative $637 million in Q2 202415 Consolidated Balance Sheets As of June 30, 2025, total assets reached $682.2 billion, primarily due to a significant rise in net property and equipment, while total stockholders' equity grew to $333.8 billion Balance Sheet Summary (in millions) | Account | Dec 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Total Assets | $624,894 | $682,170 | | Cash and cash equivalents | $78,779 | $57,741 | | Property and equipment, net | $252,665 | $297,616 | | Total Liabilities | $338,924 | $348,395 | | Long-term debt | $52,623 | $50,718 | | Total Stockholders' Equity | $285,970 | $333,775 | Notes to Consolidated Financial Statements The notes detail key accounting policies, including a change in server useful lives due to AI development, a significant gain from the Anthropic investment, and substantial AWS performance obligations, alongside tax impacts and segment performance breakdowns - Effective January 1, 2025, the company shortened the estimated useful lives of a subset of servers and networking equipment from six to five years due to the increased pace of AI and machine learning development, increasing Q2 2025 depreciation expense by $280 million, primarily impacting the AWS segment23 - A portion of the company's convertible notes in Anthropic converted to nonvoting preferred stock in Q1 2025, resulting in the recognition of a $3.3 billion gain in "Other income (expense), net" for the six months ended June 30, 20252742 - As of June 30, 2025, AWS had approximately $195 billion in performance obligations from customer contracts for future services that have not yet been recognized as revenue, with a weighted-average remaining life of 4.0 years32 - The "One Big Beautiful Bill Act of 2025" is expected to significantly decrease U.S. cash taxes in 2025 by reinstating 100% accelerated depreciation and immediate expensing of domestic R&D costs81 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management attributes Q2 2025's 13% consolidated sales growth and increased operating income to strong segment performance and AWS usage, with significant capital expenditures for infrastructure and robust liquidity, while providing Q3 2025 guidance - Cash capital expenditures were $31.4 billion in Q2 2025, a significant increase from $16.4 billion in Q2 2024, primarily reflecting investments in technology infrastructure to support AWS business growth111 - The company invested an additional $1.3 billion in convertible notes from Anthropic in Q2 2025 and plans to invest another $1.4 billion by Q4 2025111 Q3 2025 Guidance | Metric | Guidance | | :--- | :--- | | Net Sales | $174.0B - $179.5B (10% - 13% growth) | | Operating Income | $15.5B - $20.5B | Results of Operations In Q2 2025, consolidated net sales grew 13% to $167.7 billion, with all segments showing improved profitability and operating income increasing to $19.2 billion, driven by higher unit sales and AWS customer usage Q2 2025 Net Sales by Segment (in millions) | Segment | Q2 2024 | Q2 2025 | YoY Growth | YoY Growth (ex-FX) | | :--- | :--- | :--- | :--- | :--- | | North America | $90,033 | $100,068 | 11% | 11% | | International | $31,663 | $36,761 | 16% | 11% | | AWS | $26,281 | $30,873 | 17% | 17% | | Consolidated | $147,977 | $167,702 | 13% | 12% | Q2 2025 Operating Income by Segment (in millions) | Segment | Q2 2024 | Q2 2025 | Change | | :--- | :--- | :--- | :--- | | North America | $5,065 | $7,517 | +$2,452 | | International | $273 | $1,494 | +$1,221 | | AWS | $9,334 | $10,160 | +$826 | | Consolidated | $14,672 | $19,171 | +$4,499 | - Technology and infrastructure costs increased 22% YoY in Q2 2025, primarily due to higher spending on infrastructure, including depreciation, to support AWS and other initiatives124133 Liquidity and Capital Resources The company maintains strong liquidity with $93.2 billion in cash and marketable securities, supported by increased operating cash flow and significant capital expenditures for AWS infrastructure Trailing Twelve Months (TTM) Cash Flows (ended June 30) | Metric | 2024 (in millions) | 2025 (in millions) | | :--- | :--- | :--- | | Net cash from operating activities | $107,952 | $121,137 | | Purchases of property and equipment, net | $(54,979) | $(102,953) | | Free cash flow | $52,973 | $18,184 | - The company increased the size of its Commercial Paper Programs from $20.0 billion to $30.0 billion in April 2025, though no borrowings were outstanding as of June 30, 202566 Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from interest rate changes, foreign currency fluctuations, and investment valuations, with significant exposure to foreign exchange rates and volatility in its $23.2 billion equity and convertible debt portfolio - As of June 30, 2025, the company held $19.9 billion in foreign-denominated funds, where a hypothetical 10% adverse change in foreign exchange rates would result in a decline of $2.0 billion156 - The company holds $23.2 billion in equity, equity warrant, and convertible debt investments in public and private companies as of June 30, 2025, with significant holdings in Rivian and Anthropic, exposing it to equity market volatility and valuation risk158 Controls and Procedures The principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of quarter-end, with no material changes to internal control over financial reporting identified - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025159 - No changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal controls were identified during the quarter160 PART II. OTHER INFORMATION Legal Proceedings The company is involved in various claims and litigation, notably two patent infringement complaints filed in June 2025 by Xockets, Inc. against Amazon and AWS concerning the AWS Nitro System, which Amazon intends to vigorously defend - In June 2025, Xockets, Inc. filed two complaints against Amazon and AWS, alleging that certain versions of the AWS Nitro System infringe on multiple U.S. patents56 Risk Factors The company faces significant risks from intense competition, operational challenges in managing its vast networks, data security threats, and evolving legal and regulatory landscapes, including antitrust and tax liabilities - The company faces intense and increasing competition, including from new business models and well-funded competitors, particularly with the advancement of AI and machine learning165166 - Operational risks include failures to optimize the fulfillment and data center networks, which can lead to excess or insufficient capacity, and reliance on a limited number of shipping companies186190 - The company is subject to numerous government investigations and litigation concerning competition, consumer protection, and data privacy, including open investigations into its retail store operations and AWS cloud services210211 - An increasing number of jurisdictions are adopting new tax measures targeting online commerce, including revenue-based taxes and new collection obligations, which could adversely affect results214 Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - None219 Other Information In May 2025, two senior executives, Matthew S. Garman (AWS CEO) and Brian T. Olsavsky (SVP and CFO), adopted Rule 10b5-1(c) trading plans to sell company stock over specified periods ending in 2026 - AWS CEO Matthew S. Garman and CFO Brian T. Olsavsky adopted Rule 10b5-1(c) trading plans in May 2025 to sell shares of company stock222223 Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, CEO and CFO certifications, and financial statements formatted in Inline XBRL Signatures The report is duly signed on July 31, 2025, on behalf of the registrant by Shelley L. Reynolds, Vice President, Worldwide Controller, and Principal Accounting Officer
Amazon(AMZN) - 2025 Q2 - Quarterly Report