Financial Analysis

ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS 2023 Acquisition Activity On February 22, 2023, we acquired 1Life Healthcare, Inc. (One Medical), for cash consideration of approximately $3.5 billion, net of cash acquired, to provide healthcare options for customers. The acquired assets primarily consist of $1.3 billion of intangible assets and $2.5 billion of goodwill, which is allocated to our North America segment. During 2023, we also completed acquisition activity for immaterial aggregate cash consideration, net of cash acquired. 2024 Acquisition Activity During 2024, we completed acquisition activity for aggregate cash consideration of $780 million, net of cash acquired. 2025 Acquisition Activity During 2025, we completed acquisition activity for immaterial aggregate cash consideration, net of cash acquired. The primary reasons for these transactions were to acquire technologies and know-how to enable Amazon to serve customers more effectively or to expand our customer base. Pro forma results of operations have not been presented because the effects of the 2025 transactions, individually and in the aggregate, were not material to our consolidated results of operations. Transaction-related costs were expensed as incurred and were not significant. Goodwill The goodwill resulting from the acquisition activity is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

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 December 31, 2025 (in millions): Year Ended December 31, 2026 2027 2028 2029 2030 Thereafter Total Long-term debt principal and interest $ 5,201 $ 11,250 $ 6,891 $ 4,993 $ 6,381 $ 73,486 $ 108,202 Operating lease liabilities 15,380 13,186 12,140 10,911 9,710 45,587 106,914 Finance lease liabilities, including interest 1,838 1,626 1,726 1,285 1,122 7,320 14,917 Financing obligations, including interest (1) 577 582 592 601 612 6,651 9,615 Leases not yet commenced 5,808 9,103 6,420 6,571 6,738 61,733 96,373 Unconditional purchase obligations (2) 19,906 8,934 7,195 6,658 6,602 35,477 84,772 Other commitments (3) 2,956 1,578 1,120 1,000 988 11,226 18,868 Total commitments $ 51,666 $ 46,259 $ 36,084 $ 32,019 $ 32,153 $ 241,480 $ 439,661 ___________________ (1) Includes non-cancellable financing obligations for fulfillment network and data center facilities. Excluding interest, current financing obligations of $312 million and $358 million are recorded within Accrued expenses and other and $7.1 billion and $7.8 billion are recorded within Other long-term liabilities as of December 31, 2024 and 2025. The weighted-average remaining term of the financing obligations was 16.1 years and 15.0 years and the weighted-average imputed interest rate was 3.1% and 2.9% as of December 31, 2 …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT As of December 31, 2025, we had $68.0 billion of unsecured senior notes outstanding (the Notes), including $15.0 billion issued in November 2025 for general corporate purposes. Our total long-term debt obligations are as follows (in millions): Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2024 December 31, 2025 2014 Notes issuance of $6.0 billion 2034 - 2044 4.80% - 4.95% 4.93% - 5.12% $ 2,750 $ 2,750 2017 Notes issuance of $17.0 billion 2027 - 2057 3.15% - 4.25% 3.25% - 4.33% 13,000 12,000 2020 Notes issuance of $10.0 billion 2027 - 2060 1.20% - 2.70% 1.26% - 2.77% 9,000 7,750 2021 Notes issuance of $18.5 billion 2026 - 2061 1.00% - 3.25% 1.14% - 3.31% 15,000 15,000 April 2022 Notes issuance of $12.8 billion 2027 - 2062 3.30% - 4.10% 3.40% - 4.15% 11,250 9,750 December 2022 Notes issuance of $8.3 billion 2027 - 2032 4.55% - 4.70% 4.61% - 4.74% 7,000 5,750 2025 Notes issuance of $15.0 billion 2028 - 2065 3.90% - 5.55% 3.99% - 5.62% 15,000 Other long-term debt 836 Total face value of long-term debt 58,000 68,836 Unamortized discount and issuance costs, net (360) (440) Less: current portion of long-term debt (5,017) (2,748) Long-term debt $ 52,623 $ 65,648 ___________________ (1) The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, December 2022, and 2025 Notes were 14.4, 15.4, 18.1, 13.2, 13.8, 4.4, and 15.6 years as of December 31, 2025. The combined weighted-average remaining life of the Notes was 14.1 years as of …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

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. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, videos, games, music, and software. These product sales include digital products sold on a transactional basis. Digital media content subscriptions that provide unlimited viewing or usage rights are included in Subscription services. (2) Includes product sales where our customers physically select items in a store. Sales to customers who order goods online for delivery or pickup at our physical stores are included in Online stores. (3) Includes commissions and any related fulfillment and shipping fees, and other third-party seller services. (4) Includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, disp …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

INCOME TAXES In 2023, 2024, and 2025, we recorded a net tax provision of $7.1 billion, $9.3 billion, and $19.1 billion. Our U.S. taxable income is reduced by accelerated depreciation deductions and the resulting U.S. tax liability is reduced by tax credits, primarily related to the U.S. federal research and development credit. Cash paid for income taxes, net of refunds, was $11.2 billion, $12.3 billion, and $8.3 billion for 2023, 2024, and 2025. The 2025 Tax Act was signed into law on July 4, 2025. The 2025 Tax Act makes changes to the U.S. corporate income tax, including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025, and immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025. For 2025, the 2025 Tax Act increased our income tax provision, primarily due to a decrease in the foreign income deduction, and significantly decreased our cash taxes. The components of cash paid for income taxes, net of refunds, are as follows (in millions): Year Ended December 31, 2023 2024 2025 U.S. Federal $ 7,435 $ 7,630 $ 2,751 U.S. State 2,070 2,450 2,125 International 1,674 2,228 3,419 Total cash taxes paid, net of refunds $ 11,179 $ 12,308 $ 8,295 Certain foreign subsidiary earnings and losses are subject to current U.S. taxation and the subsequent repatriation of those earnings is not subject to tax in the U.S. The components …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASESWe have entered into non-cancellable operating and finance leases for fulfillment network, data center, office, and physical store facilities as well as server and networking equipment, aircraft, and vehicles. Gross assets acquired under finance leases, including those where title transfers at the end of the lease, are recorded in Property and equipment, net and were $56.5 billion and $55.6 billion as of December 31, 2024 and 2025. Accumulated amortization associated with finance leases was $41.8 billion and $40.4 billion as of December 31, 2024 and 2025. Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions): Year Ended December 31, 2023 2024 2025 Operating lease cost $ 10,550 $ 11,961 $ 14,006 Finance lease cost: Amortization of lease assets 5,899 3,866 3,284 Interest on lease liabilities 304 285 312 Finance lease cost 6,203 4,151 3,596 Variable lease cost 2,165 2,465 2,694 Total lease cost $ 18,918 $ 18,577 $ 20,296 Other information about lease amounts recognized in our consolidated financial statements is as follows: December 31, 2024 December 31, 2025 Weighted-average remaining lease term operating leases 10.6 years 10.0 years Weighted-average remaining lease term finance leases 11.9 years 12.6 years Weighted-average discount rate operating leases 3.5 % 3.7 % Weighted-average discount rate finance leases 3.0 % 3.4 % Our lease liabilities were as follows (in millions): December 31, 2024 Operating Leases Finance Lea …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Accounting Pronouncements Recently Adopted In December 2023, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. We adopted this ASU for the year ended December 31, 2025 on a retroactive basis. See Note 9 Income Taxes. Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued an ASU amending existing income statement disclosure guidance, primarily requiring more detailed disclosure for expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments can be applied on either a prospective or retroactive basis. We are currently evaluating the ASU to determine its impact on our disclosures. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses Fulfillment, Technology and infrastructure, Sales and marketing, and General and administrative based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology costs recorded in Technology and infrastructure are incurred in the U.S. and are included in our North America and AWS segments. The majority of infrastructure costs recorded in Technology and infrastructure are allocated to the AWS segment based on usage. There are no internal revenue transactions between our reportable segments. Our chief operating decision maker (CODM) is our President and Chief Executive Officer. Our CODM regularly reviews consolidated net sales, consolidated operating expenses, and consolidated operating income (loss) by segment. Amounts included in consolidated operating expenses include Cost of sales, Fulfillment, Technology and infrastructure, Sales and marketing, General and administrative, and Other operating expense (income), net. Our CODM manages our business primarily by reviewing consolidated results by segment on a quarterly basis, and using those results along with forecasts and other non-financial information in our annual budgeting process. North America The North America segment primarily consists of amounts earned from retail sales of consumer products (including …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

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. Excluding interest, current financing obligations of $358 million and $415 million are recorded within Accrued expenses and other and $7.8 billion and $8.9 billion are recorded within Other long-term liabilities as of December 31, 2025 and June 30, 2026. The weighted-average remaining term of the financing obligations was 15.0 years and 14.9 years and the weighted-average imputed interest …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT As of June 30, 2026, we had $132.1 billion of unsecured senior notes outstanding (the Notes), including foreign currency-denominated Notes issued for general corporate purposes, the carrying values of which are subject to foreign exchange rate fluctuations. Our total long-term debt obligations are as follows (in millions): Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2025 June 30, 2026 2014 Notes issuance of $6.0 billion 2034 - 2044 4.80% - 4.95% 4.93% - 5.12% 2,750 2,750 2017 Notes issuance of $17.0 billion 2027 - 2057 3.15% - 4.25% 3.25% - 4.33% 12,000 12,000 2020 Notes issuance of $10.0 billion 2027 - 2060 1.20% - 2.70% 1.26% - 2.77% 7,750 7,750 2021 Notes issuance of $18.5 billion 2028 - 2061 1.65% - 3.25% 1.70% - 3.31% 15,000 12,250 April 2022 Notes issuance of $12.8 billion 2027 - 2062 3.30% - 4.10% 3.40% - 4.15% 9,750 9,750 December 2022 Notes issuance of $8.3 billion 2027 - 2032 4.55% - 4.70% 4.61% - 4.74% 5,750 5,750 2025 Notes issuance of $15.0 billion 2028 - 2065 3.90% - 5.55% 3.99% - 5.62% 15,000 15,000 March 2026 Notes issuance of $37.0 billion (2) 2028 - 2076 3.85% - 6.05% 3.96% - 6.12% 37,000 March 2026 Euro-denominated Notes issuance of 14.5 billion (3) 2028 - 2064 2.50% - 4.85% 2.59% - 4.88% 16,550 May 2026 Swiss franc-denominated Notes issuance of CHF2.8 billion 2029 - 2051 0.84% - 2.08% 0.90% - 2.10% 3,487 June 2026 Canadian Dollar-denominated Notes issuance of C$14.0 billion 2029 - 2056 3.40% - 5.00% 3.46% - 5.05% 9,853 O …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2025 2026 2025 2026 Net Sales: Online stores (1) $ 61,485 $ 70,432 $ 118,892 $ 134,686 Physical stores (2) 5,595 5,794 11,128 11,579 Third-party seller services (3) 40,348 46,780 76,860 88,358 Advertising services (4) 15,694 19,809 29,615 37,052 Subscription services (5) 12,208 13,730 23,923 27,157 AWS 30,873 42,232 60,140 79,819 Other (6) 1,499 1,829 2,811 3,474 Consolidated $ 167,702 $ 200,606 $ 323,369 $ 382,125 ____________________________ (1) Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, videos, games, music, and software. These product sales include digital products sold on a transactional basis. Digital media content subscriptions that provide unlimited viewing or usage rights are included in Subscription services. (2) Includes product sales where our customers physically select items in a store. Sales to customers who order goods online for delivery or pickup at our physical stores are included in Online stores. (3) Includes commissions and any related fulfillment and shipping fees, and other third-party seller services. (4) Includes sales of advertising services to …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

STOCKHOLDERS EQUITY Stock Repurchase Activity In March 2022, the Board of Directors authorized a program to repurchase up to $10.0 billion of our common stock, with no fixed expiration. There were no repurchases of our common stock during the six months ended June 30, 2025 or 2026. As of June 30, 2026, we have $6.1 billion remaining under the repurchase program. Stock Award Plans Employees vest in restricted stock unit awards over the corresponding service term, generally between two and five years. The majority of outstanding restricted stock unit awards are granted at the date of hire or in Q2 as part of the annual compensation review and primarily vest quarterly in the relevant compensation year. Stock Award Activity Common shares outstanding plus shares underlying outstanding stock awards totaled 11.0 billion as of December 31, 2025 and June 30, 2026. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. 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 ende …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

INCOME TAXES Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, changes in how we do business, acquisitions, investments, developments in tax controversies, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, foreign currency gains (losses), changes in statutes, regulations, case law, and administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax benefits are not recognized. Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES We have entered into non-cancellable operating and finance leases for fulfillment network, data center, office, and physical store facilities as well as server and networking equipment, aircraft, and vehicles. Gross assets acquired under finance leases, including those where title transfers at the end of the lease, are recorded in Property and equipment, net and were $55.6 billion as of December 31, 2025 and June 30, 2026. Accumulated amortization associated with finance leases was $40.4 billion and $39.8 billion as of December 31, 2025 and June 30, 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 % Our lease liabilities were as follows (in milli …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued an ASU amending existing income statement disclosure guidance, primarily requiring more detailed disclosure for expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments can be applied on either a prospective or retroactive basis. We are currently evaluating the ASU to determine its impact on our disclosures.

NewAccountingPronouncementsPolicyPolicyTextBlock

SEGMENT INFORMATION We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses Fulfillment, Technology and infrastructure, Sales and marketing, and General and administrative based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology costs recorded in Technology and infrastructure are incurred in the U.S. and are included in our North America and AWS segments. The majority of infrastructure costs recorded in Technology and infrastructure are allocated to the AWS segment based on usage. There are no internal revenue transactions between our reportable segments. Our chief operating decision maker (CODM) is our President and Chief Executive Officer. Our CODM regularly reviews consolidated net sales, consolidated operating expenses, and consolidated operating income (loss) by segment. Amounts included in consolidated operating expenses include Cost of sales, Fulfillment, Technology and infrastructure, Sales and marketing, General and administrative, and Other operating expense (income), net. Our CODM manages our business primarily by reviewing consolidated results by segment on a quarterly basis, and using those results along with forecasts and other non-financial information in our annual budgeting process. North America The North America segment primarily consists of amounts earned from retail sales of consumer products (including …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES Unaudited Interim Financial Information We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2026 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, Financial Statements and Supplementary Data, of our 2025 Annual Report on Form 10-K. Principles of Consolidation The consolidated financial statements include the accounts of Amazon.com, Inc. and its consolidated entities (collectively, the Company), consisting of its wholly-owned subsidiaries and those entities in which we have a variable interest (V …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing