Amazon 8-K

Summary

Q4 and FY2025 results with Q1 2026 and FY2026 investment outlook. Revenue and operating income grew, with AWS sales up 24% in Q4; Amazon expects to invest ≈$200B in capital expenditures in 2026. Higher property and equipment spending, primarily reflecting AI investment, drove a sharp decline in FY free cash flow.

Key Figures

• Q4 sales growth was 12% excluding a favorable $2.8B foreign-exchange impact. AWS sales rose 24% to $35.6B; North America sales rose 10% to $127.1B and International sales rose 17% to $50.7B. For FY2025, AWS sales grew 20% to $128.7B.
• Q4 operating income included $1.1B for Italian tax disputes and a lawsuit settlement, $730M in estimated severance costs, and $610M in asset impairments, primarily at physical stores. Excluding these charges, operating income would have been $27.4B.
• FY free cash flow fell as purchases of property and equipment, net of sales proceeds and incentives, increased $50.7B Y/Y, primarily reflecting AI investment. At year-end, cash and cash equivalents were $86.8B vs $78.8B; long-term debt was $65.6B vs $52.6B.

Guidance

The Q1 net-sales outlook includes an expected favorable foreign-exchange impact of 180 bp. The operating-income outlook includes ≈$1B of higher Y/Y Amazon Leo costs as the business scales, as well as quick-commerce investment and sharper pricing in International stores.

Investor Takeaways

• Watch Q1 revenue and operating income against their guided ranges; Amazon cites higher Amazon Leo costs and other investments as factors affecting operating income.
• Track 2026 capital spending and subsequent free cash flow as AI investment expands.