AMAZON COM INC

Previous wording

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding guidance, industry prospects, or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results and outcomes could differ materially for a variety of reasons, including, among others, fluctuations in foreign exchange rates, changes in global economic conditions and customer demand and spending, inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of claims, litigation, government investigations, and other proceedings, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, variability in demand, the degree to which we enter into, maintain, and develop commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity. In addition, global economic and geopolitical conditions and additional or unforeseen circumstances, developments, or events may give rise to or amplify many of these risks. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results or outcomes to differ significantly from management’s expectations, are described in greater detail in Item 1A of Part II, “Risk Factors.”

Current wording

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding guidance, industry prospects, or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results and outcomes could differ materially for a variety of reasons, including, among others, fluctuations in foreign exchange rates, changes in global economic conditions, tariff and trade policies, and customer demand and spending, inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of claims, litigation, government investigations, and other proceedings, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, variability in demand, the degree to which we enter into, maintain, and develop commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity. In addition, global economic and geopolitical conditions and additional or unforeseen circumstances, developments, or events may give rise to or amplify many of these risks. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results or outcomes to differ significantly from management’s expectations, are described in greater detail in Item 1A of Part II, “Risk Factors.”

Previous wording

Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $86.8 billion and $88.1 billion as of December 31, 2023 and September 30, 2024. Amounts held in foreign currencies were $23.5 billion and $19.5 billion as of December 31, 2023 and September 30, 2024. Our foreign currency balances include British Pounds, Canadian Dollars, Euros, Indian Rupees, and Japanese Yen.

Current wording

Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $101.2 billion and $94.6 billion as of December 31, 2024 and March 31, 2025. Amounts held in foreign currencies were $25.5 billion and $18.6 billion as of December 31, 2024 and March 31, 2025. Our foreign currency balances include British Pounds, Canadian Dollars, Euros, Indian Rupees, and Japanese Yen.

Previous wording

Cash provided by (used in) operating activities was $21.2 billion and $26.0 billion for Q3 2023 and Q3 2024, and $42.5 billion and $70.2 billion for the nine months ended September 30, 2023 and 2024. Our operating cash flows result primarily from cash received from our consumer, seller, developer, enterprise, and content creator customers, and advertisers, offset by cash payments we make for products and services, employee compensation, payment processing and related transaction costs, operating leases, and interest payments. Cash received from our customers and other activities generally corresponds to our net sales. The increase in operating cash flow for the trailing twelve months ended September 30, 2024, compared to the comparable prior year period, was due to an increase in net income, excluding non-cash expenses, and changes in working capital. Working capital at any specific point in time is subject to many variables, including variability in demand, inventory management and category expansion, the timing of cash receipts and payments, customer and vendor payment terms, and fluctuations in foreign exchange rates.

Current wording

Cash provided by (used in) operating activities was $19.0 billion and $17.0 billion for Q1 2024 and Q1 2025. Our operating cash flows result primarily from cash received from our consumer, seller, developer, enterprise, and content creator customers, and advertisers, offset by cash payments we make for products and services, employee compensation, payment processing and related transaction costs, operating leases, and interest payments. Cash received from our customers and other activities generally corresponds to our net sales. The increase in operating cash flow for the trailing twelve months ended March 31, 2025, compared to the comparable prior year period, was due to an increase in net income, excluding non-cash expenses, and changes in working capital. Working capital at any specific point in time is subject to many variables, including variability in demand, inventory management and category expansion, the timing of cash receipts and payments, customer and vendor payment terms, and fluctuations in foreign exchange rates.

Previous wording

Cash provided by (used in) investing activities corresponds with cash capital expenditures, including leasehold improvements, incentives received from property and equipment vendors, proceeds from asset sales, cash outlays for acquisitions, investments in other companies and intellectual property rights, and purchases, sales, and maturities of marketable securities. Cash provided by (used in) investing activities was $(11.8) billion and $(16.9) billion for Q3 2023 and Q3 2024, and $(37.2) billion and $(56.9) billion for the nine months ended September 30, 2023 and 2024, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures. Cash capital expenditures were $11.3 billion and $21.3 billion during Q3 2023 and Q3 2024, and $34.8 billion and $51.6 billion for the nine months ended September 30, 2023 and 2024, which primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth) and in additional capacity to support our fulfillment network. We expect cash capital expenditures to meaningfully increase in 2024, primarily driven by investments in technology infrastructure. We made cash payments, net of acquired cash, related to acquisition and other investment activity of $1.6 billion and $622 million during Q3 2023 and Q3 2024, and $5.5 billion and $4.5 billion for the nine months ended September 30, 2023 and 2024. We funded the acquisition of 1Life Healthcare, Inc. (One Medical) in 2023 with cash on hand. In Q3 2023, we invested $1.25 billion in a convertible note from Anthropic. In Q1 2024, we invested $2.75 billion in a second convertible note.

Current wording

Cash provided by (used in) investing activities corresponds with cash capital expenditures, including leasehold improvements, incentives received from property and equipment vendors, proceeds from asset sales, cash outlays for acquisitions, investments in other companies and intellectual property rights, and purchases, sales, and maturities of marketable securities. Cash provided by (used in) investing activities was $(17.9) billion and $(29.8) billion for Q1 2024 and Q1 2025, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures. Cash capital expenditures were $13.9 billion and $24.3 billion during Q1 2024 and Q1 2025, which primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth) and in additional capacity to support our fulfillment network. We expect cash capital expenditures to increase in 2025, primarily driven by investments in technology infrastructure. We made cash payments, net of acquired cash, related to acquisition and other investment activity of $3.4 billion during Q1 2024. We did not have significant acquisition and other investment activity during Q1 2025. In Q3 2023, we invested $1.25 billion in a convertible note from Anthropic, PBC. In Q1 2024, we invested $2.75 billion in a second convertible note. In Q4 2024, we entered into an agreement and invested $1.3 billion in a third convertible note, and will invest an additional $2.7 billion by Q4 2025.

Previous wording

Cash provided by (used in) financing activities was $(8.9) billion and $(2.8) billion for Q3 2023 and Q3 2024, and $(9.1) billion and $(8.5) billion for the nine months ended September 30, 2023 and 2024. Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term debt of $216 million and $1.7 billion for Q3 2023 and Q3 2024, and $17.4 billion and $2.6 billion for the nine months ended September 30, 2023 and 2024. Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $9.2 billion and $4.5 billion in Q3 2023 and Q3 2024, and $26.5 billion and $11.1 billion for the nine months ended September 30, 2023 and 2024. Property and equipment acquired under finance leases was $183 million and $186 million during Q3 2023 and Q3 2024, and $431 million and $409 million for the nine months ended September 30, 2023 and 2024.

Current wording

Cash provided by (used in) financing activities was $(1.3) billion and $(47) million for Q1 2024 and Q1 2025. Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term debt of $338 million and $2.6 billion for Q1 2024 and Q1 2025. Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $1.6 billion and $2.6 billion in Q1 2024 and Q1 2025. Property and equipment acquired under finance leases was $42 million and $54 million during Q1 2024 and Q1 2025.

Previous wording

Our U.S. taxable income is reduced by accelerated depreciation deductions and increased by the impact of capitalized research and development expenses. U.S. tax rules provide for enhanced accelerated depreciation deductions by allowing us to expense a portion of qualified property, primarily equipment. These enhanced deductions are scheduled to phase out annually from 2023 through 2026. Additionally, effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes, which delays the deductibility of these expenses. Cash paid for U.S. (federal and state) and foreign income taxes (net of refunds) totaled $2.6 billion and $2.0 billion for Q3 2023 and Q3 2024, and $7.0 billion and $8.2 billion for the nine months ended September 30, 2023 and 2024.

Current wording

Our U.S. taxable income is reduced by accelerated depreciation deductions and increased by the impact of capitalized research and development expenses. U.S. tax rules provide for enhanced accelerated depreciation deductions by allowing us to expense a portion of qualified property, primarily equipment. These enhanced deductions are scheduled to phase out annually from 2023 through 2026. Additionally, effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes, which delays the deductibility of these expenses. Cash paid for U.S. (federal and state) and foreign income taxes (net of refunds) totaled $458 million and $877 million for Q1 2024 and Q1 2025.

Previous wording

As of December 31, 2023 and September 30, 2024, restricted cash, cash equivalents, and marketable securities were $503 million and $3.6 billion. See Item 1 of Part I, “Financial Statements — Note 4 — Commitments and Contingencies” and “Financial Statements — Note 5 — Debt” for additional discussion of our principal contractual commitments, as well as our pledged assets. Additionally, we have purchase obligations and open purchase orders, including for inventory and capital expenditures, that support normal operations and are primarily due in the next twelve months. These purchase obligations and open purchase orders are generally cancellable in full or in part through the contractual provisions.

Current wording

As of December 31, 2024 and March 31, 2025, restricted cash, cash equivalents, and marketable securities were $3.5 billion and $3.7 billion. See Item 1 of Part I, “Financial Statements — Note 4 — Commitments and Contingencies” and “Financial Statements — Note 5 — Debt” for additional discussion of our principal contractual commitments, as well as our pledged assets. Additionally, we have purchase obligations and open purchase orders, including for inventory and capital expenditures, that support normal operations and are primarily due in the next twelve months. These purchase obligations and open purchase orders are generally cancellable in full or in part through the contractual provisions.

Previous wording

Macroeconomic factors, including changes in inflation and interest rates, as well as global economic and geopolitical developments, have direct and indirect impacts on our results of operations that are difficult to isolate and quantify. These may impact customer demand for our products and services and our ability to forecast spending patterns. We expect some or all of these factors to continue to impact our operations into Q4 2024.

Current wording

Macroeconomic factors, including changes in inflation and interest rates, global economic and geopolitical developments, including unpredictable shifts in global tariff and trade policies, and the development and adoption of technologies and services, including artificial intelligence, have direct and indirect impacts on our results of operations that are difficult to predict, isolate, and quantify. These could affect customer demand for our products and services, our ability to forecast growth needs, expenses, and benefits from new technologies. We expect some or all of them to continue to impact our operations into Q2 2025.

Previous wording

Sales increased 11% in Q3 2024, and 11% for the nine months ended September 30, 2024 compared to the comparable prior year periods. Changes in foreign exchange rates reduced net sales by $233 million for Q3 2024, and by $1.4 billion for the nine months ended September 30, 2024. For a discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below.

Current wording

Sales increased 9% in Q1 2025 compared to the comparable prior year period. Changes in foreign exchange rates reduced net sales by $1.4 billion for Q1 2025. For a discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below.

Previous wording

North America sales increased 9% in Q3 2024, and 10% for the nine months ended September 30, 2024 compared to the comparable prior year periods. The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers. Changes in foreign exchanges rates reduced North America net sales by $168 million for Q3 2024, and by $143 millionfor the nine months ended September 30, 2024.

Current wording

North America sales increased 8% in Q1 2025 compared to the comparable prior year period. The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers. Changes in foreign exchange rates reduced North America net sales by $413 million for Q1 2025.

Previous wording

International sales increased 12% in Q3 2024, and 9% for the nine months ended September 30, 2024 compared to the comparable prior year periods. The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers. Changes in foreign exchange rates did not significantly impact International net sales for Q3 2024, but reduced International net sales by $1.3 billion for the nine months ended September 30, 2024.

Current wording

International sales increased 5% in Q1 2025 compared to the comparable prior year period. The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers. Changes in foreign exchange rates reduced International net sales by $1.0 billion for Q1 2025.

Previous wording

AWS sales increased 19% in Q3 2024, and 18% for the nine months ended September 30, 2024 compared to the comparable prior year periods. The sales growth primarily reflects increased customer usage, partially offset by pricing changes primarily driven by long-term customer contracts.

Current wording

AWS sales increased 17% in Q1 2025 compared to the comparable prior year period. The sales growth primarily reflects increased customer usage, partially offset by pricing changes primarily driven by long-term customer contracts.

Previous wording

The increase in cost of sales in Q3 2024 and for the nine months ended September 30, 2024, compared to the comparable prior year periods, is primarily due to increased product and shipping costs resulting from increased sales, partially offset by fulfillment network efficiencies, including lower transportation costs. Changes in foreign exchange rates reduced cost of sales by $196 million for Q3 2024, and by $1.1 billion for the nine months ended September 30, 2024.

Current wording

The increase in cost of sales in Q1 2025, compared to the comparable prior year period, is primarily due to increased product and shipping costs resulting from increased sales, partially offset by fulfillment network efficiencies, including lower transportation costs. Changes in foreign exchange rates reduced cost of sales by $910 million for Q1 2025.

Previous wording

Shipping costs were $21.8 billion and $23.5 billion in Q3 2023 and Q3 2024, and $62.2 billion and $67.3 billion for the nine months ended September 30, 2023 and 2024. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of sales upon sale of products to our customers. We expect our cost of shipping to continue to increase to the extent our customers accept and use our shipping offers at an increasing rate, we use more expensive shipping methods, and we offer additional services. We seek to mitigate costs of shipping over time in part through achieving higher sales volumes, optimizing our fulfillment network, negotiating better terms with our suppliers, and achieving better operating efficiencies. We believe that offering low prices to our customers is fundamental to our future success, and one way we offer lower prices is through shipping offers.

Current wording

Shipping costs were $21.8 billion and $22.5 billion in Q1 2024 and Q1 2025. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of sales upon sale of products to our customers. We expect our cost of shipping to continue to increase to the extent our customers accept and use our shipping offers at an increasing rate, we use more expensive shipping methods, and we offer additional services. We seek to mitigate costs of shipping over time in part through achieving higher sales volumes, optimizing our fulfillment network, negotiating better terms with our suppliers, and achieving better operating efficiencies. We believe that offering low prices to our customers is fundamental to our future success, and one way we offer lower prices is through shipping offers.

Previous wording

The increase in fulfillment costs in Q3 2024 and for the nine months ended September 30, 2024 compared to the comparable prior year periods, is primarily due to increased sales and investments in our fulfillment network, partially offset by fulfillment network efficiencies. Changes in foreign exchange rates did not significantly impact fulfillment costs for Q3 2024, but reduced fulfillment costs by $127 million for the nine months ended September 30, 2024.

Current wording

The increase in fulfillment costs in Q1 2025, compared to the comparable prior year period, is primarily due to increased sales and investments in our fulfillment network, partially offset by fulfillment network efficiencies. Changes in foreign exchange rates reduced fulfillment costs by $232 million for Q1 2025.

Previous wording

We seek to invest efficiently in numerous areas of technology and infrastructure so we may continue to enhance the customer experience and improve our process efficiency through rapid technology developments, while operating at an ever increasing scale. Our technology and infrastructure investment and capital spending projects often support a variety of product and service offerings due to geographic expansion and the cross-functionality of our systems and operations. We expect spending in technology and infrastructure to increase over time as we continue to add employees and infrastructure. These costs are allocated to segments based on usage. The increase in technology and infrastructure costs in Q3 2024 and for the nine months ended September 30, 2024, compared to the comparable prior year periods, is primarily due to an increase in spending on infrastructure, partially offset by a reduction in depreciation and amortization expense from our change in the estimated useful life of our servers and decreased payroll and related costs associated with technical teams responsible for expanding our existing products and services and initiatives to introduce new products and service offerings. Changes in foreign exchange rates did not significantly impact technology and infrastructure costs for Q3 2024, but reduced technology and infrastructure costs by $166 million for the nine months ended September 30, 2024. We currently expense the majority of the costs associated with the development of our satellite network for global broadband service (including production, launch, and payroll costs, and launch services deposits upon launch). We will capitalize certain of these costs once the service achieves commercial viability, including sales to customers. See Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” of our 2023 Annual Report on Form 10-K for a discussion of how management views advances in technology and the importance of innovation.

Current wording

We seek to invest efficiently in numerous areas of technology and infrastructure so we may continue to enhance the customer experience and improve our process efficiency through rapid technology developments, while operating at an ever increasing scale. Our technology and infrastructure investment and capital spending projects often support a variety of product and service offerings due to geographic expansion and the cross-functionality of our systems and operations. We expect spending in technology and infrastructure to increase over time as we continue to add employees and infrastructure. These costs are allocated to segments based on usage. The increase in technology and infrastructure costs in Q1 2025, compared to the comparable prior year period, is primarily due to an increase in spending on infrastructure, partially offset by decreased payroll and related costs associated with technical teams responsible for expanding our existing products and services and initiatives to introduce new products and service offerings. Changes in foreign exchange rates reduced technology and infrastructure costs by $190 million for Q1 2025. We currently expense the majority of the costs associated with the development of our satellite network for global broadband service (including production, launch, and payroll costs, and launch services deposits upon launch). We will capitalize certain of these costs once the service achieves commercial viability, including sales to customers. See Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” of our 2024 Annual Report on Form 10-K for a discussion of how management views advances in technology and the importance of innovation.

Previous wording

Sales and marketing costs in Q3 2024 did not significantly change compared to the comparable prior year period. The decrease in sales and marketing costs for the nine months ended September 30, 2024, compared to the comparable prior year period, is primarily due to decreased payroll and related expenses for personnel engaged in marketing and selling activities, partially offset by increased advertising expenses. Changes in foreign exchange rates did not significantly impact sales and marketing costs for Q3 2024, but reduced sales and marketing costs by $161 million for the nine months ended September 30, 2024.

Current wording

The increase in sales and marketing costs in Q1 2025 compared to the comparable prior year period, is primarily due to increased advertising expenses, partially offset by decreased payroll and related expenses for personnel engaged in marketing and selling activities. Changes in foreign exchange rates reduced sales and marketing costs by $134 million for Q1 2025.

Previous wording

General and administrative costs in Q3 2024 did not significantly change compared to the comparable prior year period. The decrease in general and administrative costs for the nine months ended September 30, 2024, compared to the comparable prior year period, is primarily due to a decrease in payroll and related expenses.

Current wording

The decrease in general and administrative costs in Q1 2025, compared to the comparable prior year period, is primarily due to a decrease in payroll and related expenses.

Previous wording

Other operating expense (income), net was $244 million and $262 million for Q3 2023 and Q3 2024, and $613 million and $587 million for the nine months ended September 30, 2023 and 2024, and was primarily related to asset impairments and the amortization of intangible assets.

Current wording

Other operating expense (income), net was $228 million and $308 million for Q1 2024 and Q1 2025, and was primarily related to asset impairments and the amortization of intangible assets.

Previous wording

Operating income (loss) by segment is as follows (in millions):

Current wording

Operating income by segment is as follows (in millions):

Previous wording

Operating income increased from $11.2 billion in Q3 2023 to $17.4 billion in Q3 2024, and increased from $23.6 billion for the nine months ended September 30, 2023 to $47.4 billion for the nine months ended September 30, 2024. We believe that operating income is a more meaningful measure than gross profit and gross margin due to the diversity of our product categories and services.

Current wording

Operating income increased from $15.3 billion in Q1 2024 to $18.4 billion in Q1 2025. We believe that operating income is a more meaningful measure than gross profit and gross margin due to the diversity of our product categories and services. For more information on the operating expenses that impact segment operating income, see “Operating Expenses” and the descriptions of operating expense line item changes on pages 26 to 28, and “Note 8 — Segment Information” on page 18.

Previous wording

The increase in North America operating income in Q3 2024 and for the nine months ended September 30, 2024, compared to the comparable prior year periods, is primarily due to increased unit sales and increased advertising sales, partially offset by increased fulfillment and shipping costs.

Current wording

The increase in North America operating income in Q1 2025, compared to the comparable prior year period, is primarily due to increased unit sales and increased advertising sales, partially offset by increased fulfillment and shipping costs.

Previous wording

The International operating income in Q3 2024 and for the nine months ended September 30, 2024, as compared to the operating loss in the comparable prior year periods, is primarily due to increased unit sales and increased advertising sales, partially offset by increased shipping and fulfillment costs. Changes in foreign exchange rates did not significantly impact operating income for Q3 2024 or for the nine months ended September 30, 2024.

Current wording

The increase in International operating income in Q1 2025, compared to the comparable prior year period, is primarily due to increased unit sales and increased advertising sales, partially offset by increased fulfillment and shipping costs. Changes in foreign exchange rates did not significantly impact operating income for Q1 2025.

Previous wording

The increase in AWS operating income in Q3 2024 and for the nine months ended September 30, 2024, compared to the comparable prior year periods, is primarily due to increased sales, decreased payroll and related expenses, and a reduction in depreciation and amortization expense from our change in the estimated useful lives of our servers, partially offset by spending on technology infrastructure that was primarily driven by additional investments to support AWS business growth. Changes in foreign exchange rates did not significantly impact operating income for Q3 2024, but positively impacted operating income by $183 million for the nine months ended September 30, 2024.

Current wording

The increase in AWS operating income in Q1 2025, compared to the comparable prior year period, is primarily due to increased sales and decreased payroll and related expenses, partially offset by spending on technology infrastructure that was primarily driven by additional investments to support AWS business growth. Changes in foreign exchange rates positively impacted operating income by $141 million for Q1 2025.

Previous wording

Our interest income was $776 million and $1.3 billion during Q3 2023 and Q3 2024, and $2.0 billion and $3.4 billion for the nine months ended September 30, 2023 and 2024, primarily due to an increase in prevailing rates. We generally invest our excess cash in AAA-rated money market funds and investment grade short- to intermediate-term marketable debt securities. Our interest income corresponds with the average balance of invested funds based on the prevailing rates, which vary depending on the geographies and currencies in which they are invested.

Current wording

Our interest income was $993 million and $1.1 billion during Q1 2024 and Q1 2025, primarily due to a higher average balance of invested funds at prevailing rates. We generally invest our excess cash in investment grade short- to intermediate-term marketable debt securities and AAA-rated money market funds. Our interest income corresponds with the average balance of invested funds based on the prevailing rates, which vary depending on the geographies and currencies in which they are invested.

Previous wording

Interest expense was $806 million and $603 million during Q3 2023 and Q3 2024, and $2.5 billion and $1.8 billion for the nine months ended September 30, 2023 and 2024, and was primarily related to debt and finance leases. See Item 1 of Part I, “Financial Statements — Note 3 — Leases and Note 5 — Debt” for additional information.

Current wording

Interest expense was $644 million and $541 million during Q1 2024 and Q1 2025, and was primarily related to debt and finance leases. See Item 1 of Part I, “Financial Statements — Note 3 — Leases and Note 5 — Debt” for additional information.

Previous wording

Our income tax provision for the nine months ended September 30, 2023 was $4.1 billion, which included $175 million of net discrete tax expense. Our income tax provision for the nine months ended September 30, 2024 was $6.9 billion, which included $2.4 billion of net discrete tax benefits primarily attributable to excess tax benefits from stock-based compensation. See Item 1 of Part I, “Financial Statements — Note 7 — Income Taxes” for additional information.

Current wording

Our income tax provision for the three months ended March 31, 2024 was $2.5 billion, which included $558 million of net discrete tax benefits. Our income tax provision for the three months ended March 31, 2025 was $4.6 billion, which included $559 million of net discrete tax expense. See Item 1 of Part I, “Financial Statements — Note 7 — Income Taxes” for additional information.

Previous wording

Regulation G, Conditions for Use of Non-GAAP Financial Measures, and other SEC regulations define and prescribe the conditions for use of certain non-GAAP financial information. Our measures of free cash flows and the effect of foreign exchange rates on our consolidated statements of operations meet the definition of non-GAAP financial measures.

Current wording

Regulation G, Conditions for Use of Non-GAAP Financial Measures, and other SEC regulations define and prescribe the conditions for use of certain non-GAAP financial information. Free cash flow and the effect of foreign exchange rates on our consolidated statements of operations meet the definition of non-GAAP financial measures.

Previous wording

Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, net of proceeds from sales and incentives.” The following is a reconciliation of free cash flow to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for the trailing twelve months ended September 30, 2023 and 2024 (in millions):

Current wording

Our financial focus is on long-term, sustainable growth in free cash flow. We provide a free cash flow measure because we believe it provides additional perspective on the impact of acquiring property and equipment with cash. Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, net of proceeds from sales and incentives.” The following is a reconciliation of free cash flow to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for the trailing twelve months ended March 31, 2024 and 2025 (in millions):

Previous wording

All of these free cash flows measures have limitations as they omit certain components of the overall cash flow statement and do not represent the residual cash flow available for discretionary expenditures. For example, these measures of free cash flows do not incorporate the portion of payments representing principal reductions of debt or cash payments for business acquisitions. Additionally, our mix of property and equipment acquisitions with cash or other financing options may change over time. Therefore, we believe it is important to view free cash flows measures only as a complement to our entire consolidated statements of cash flows.

Current wording

Free cash flow has limitations as it omits certain components of the overall cash flow statement and does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate the portion of payments representing principal reductions of debt or cash payments for business acquisitions. Additionally, our mix of property and equipment acquisitions with cash or other financing options may change over time. Therefore, we believe it is important to view free cash flow only as a complement to our entire consolidated statements of cash flows.

Previous wording

We provided guidance on October 31, 2024, in our earnings release furnished on Form 8-K as set forth below. These forward-looking statements reflect Amazon.com’s expectations as of October 31, 2024, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, as well as those outlined in Item 1A of Part II, “Risk Factors.”

Current wording

We provided guidance on May 1, 2025, in our earnings release furnished on Form 8-K as set forth below. These forward-looking statements reflect Amazon.com’s expectations as of May 1, 2025, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions, tariff and trade policies, and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, as well as those outlined in Item 1A of Part II, “Risk Factors.”

Previous wording

•Net sales are expected to be between $181.5 billion and $188.5 billion, or to grow between 7% and 11% compared with fourth quarter 2023. This guidance anticipates an unfavorable impact of approximately 10 basis points from foreign exchange rates.

Current wording

•Net sales are expected to be between $159.0 billion and $164.0 billion, or to grow between 7% and 11% compared with second quarter 2024. This guidance anticipates an unfavorable impact of approximately 10 basis points from foreign exchange rates.

Previous wording

•Operating income is expected to be between $16.0 billion and $20.0 billion, compared with $13.2 billion in fourth quarter 2023.

Current wording

•Operating income is expected to be between $13.0 billion and $17.5 billion, compared with $14.7 billion in second quarter 2024.