01—Abstract
Summary
Summary of the 10-Q filed October 31, 2025. Cited figures are marked; the original filing is the authoritative source.
Amazon.com Inc. (AMZN) reported strong third-quarter 2025 financial results, demonstrating continued revenue growth across its key segments.
Total net sales increased by 13% year-over-year to $180.2 billiona for the quarter, driven by robust performance in North America, International, and especially AWS, which saw a 20% increase in sales. Net income also saw a significant rise, reaching $21.2 billion compared to $15.3 billion in the prior year's quarter, reflecting improved operational efficiency and significant gains from investments, particularly in Anthropic. The company highlighted substantial investments in technology and infrastructure, particularly supporting AWS growth, which contributed to a notable increase in operating expenses in that segment.
Despite increased operating expenses, particularly due to severance costs and an FTC lawsuit settlement impacting the North America segment, Amazon's overall operating income remained stable year-over-year at $17.4 billionb, showcasing resilience and effective cost management elsewhere. The company's balance sheet remains strong, with substantial cash and marketable securities, supporting its ongoing investment in growth initiatives and potential future acquisitions.
02—Key points
Key Highlights
- Total net sales grew 13% to $180.2 billion in Q3 2025, compared to $158.9 billion in Q3 2024.
- AWS segment sales increased by 20% year-over-year to $33.0 billion, demonstrating continued strong demand for cloud services.
- Net income surged to $21.2 billion in Q3 2025, up from $15.3 billion in the prior year's quarter, boosted by investment gains.
- Operating income remained stable at $17.4 billion for Q3 2025, despite a $2.5 billion FTC lawsuit settlement and $1.8 billion in severance costs.
- Free cash flow for the trailing twelve months ended September 30, 2025, was $14.8 billion, a significant decrease from $47.7 billion in the prior year, primarily due to increased capital expenditures.
- The company reported substantial capital expenditures of $38.9 billion in Q3 2025, largely for technology infrastructure and fulfillment network expansion.
- Cash, cash equivalents, and marketable securities totaled $94.2 billion as of September 30, 2025, indicating a strong liquidity position.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Amazon.com Inc kept $0.12.
- Revenue$180.17B100.0%
- Cost of revenue−$88.67B49.2%
- Gross profit$91.50B50.8%
- Operating costs−$74.08B41.1%
- Operating income$17.42B9.7%
- Interest, other & tax$3.77B2.1%
- Net income$21.19B11.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 31, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $180.17B$158.88B | +13.4% |
| Cost of Revenue | $88.67B$80.98B | +9.5% |
| Gross Profit | $91.50B$77.90B | +17.5% |
| Operating Expenses | $162.75B$141.47B | +15.0% |
| Operating Income | $17.42B$17.41B | +0.1% |
| Net Income | $21.19B$15.33B | +38.2% |
| EPS (Basic) | $1.98$1.46 | +35.6% |
| EPS (Diluted) | $1.95$1.43 | +36.4% |
| Shares Outstanding (Basic) | 10.67B10.50B | +1.6% |
| Shares Outstanding (Diluted) | 10.85B10.73B | +1.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of Amazon's revenue growth in Q3 2025?
Amazon's revenue growth in Q3 2025 was driven by a 13% increase in total net sales to $180.2 billion. Key contributors included a 20% surge in AWS sales to $33.0 billion, strong performance in the North America segment (up 11% to $106.3 billion), and growth in the International segment (up 14% to $40.9 billion). Increased unit sales across retail, advertising sales, and subscription services were also significant factors.
How did the FTC lawsuit settlement and severance costs impact the financial results?
The company recorded a $2.5 billion charge related to the settlement of a lawsuit with the FTC and approximately $1.8 billion in estimated severance costs during Q3 2025. These charges negatively impacted operating expenses, particularly within the North America segment, but overall operating income remained stable year-over-year due to strong performance in other areas and effective expense management.
What is the outlook for capital expenditures and free cash flow?
Amazon continues to invest heavily in its infrastructure. Capital expenditures for the nine months ended September 30, 2025, were $97.1 billion, primarily for technology infrastructure and fulfillment network expansion. This significant investment led to a decrease in free cash flow to $14.8 billion for the trailing twelve months ended September 30, 2025, compared to $47.7 billion in the prior year. The company anticipates continued investment in these areas.
How did Amazon's investment in Anthropic affect its financial performance?
Amazon reported significant gains from its investments in private companies, primarily Anthropic. This contributed to a substantial increase in 'Other income (expense), net,' which rose to $10.2 billion in Q3 2025 from a net expense of $27 million in Q3 2024. These gains significantly boosted net income for the quarter.
06—Continue