AMAZON COM INC

Previous wording

Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. These assumptions about future disposition of inventory are inherently uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future. As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of June 30, 2026, we would have recorded an additional cost of sales of approximately $405 million.

Current wording

Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. These assumptions about future disposition of inventory are inherently uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future. As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of September 30, 2026, we would have recorded an additional cost of sales of approximately $445 million.

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 $123.0 billion as of December 31, 2025 and June 30, 2026. Amounts held in foreign currencies were $29.7 billion and $20.4 billion as of December 31, 2025 and June 30, 2026. 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 $123.0 billion and $114.2 billion as of December 31, 2025 and September 30, 2026. Amounts held in foreign currencies were $29.7 billion and $16.5 billion as of December 31, 2025 and September 30, 2026. 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 $32.5 billion and $45.4 billion for Q2 2025 and Q2 2026, and $49.5 billion and $71.4 billion for the six months ended June 30, 2025 and 2026. 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 June 30, 2026, compared to the comparable prior year period, was due to an increase in net income, excluding non-cash income and 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 $35.5 billion and $42.4 billion for Q3 2025 and Q3 2026, and $85.1 billion and $113.8 billion for the nine months ended September 30, 2025 and 2026. 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, 2026, compared to the comparable prior year period, was due to an increase in net income, excluding non-cash income and 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 $(39.4) billion and $(79.2) billion for Q2 2025 and Q2 2026, and $(69.2) billion and $(143.5) billion for the six months ended June 30, 2025 and 2026, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures. Cash capital expenditures were $31.4 billion and $53.1 billion during Q2 2025 and Q2 2026, and $55.6 billion and $96.3 billion for the six months ended June 30, 2025 and 2026, 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, both of which we expect to increase in 2026. We made cash payments, net of acquired cash, related to acquisition and other investment activity of $1.7 billion and $24.4 billion during Q2 2025 and Q2 2026, and $1.7 billion and $39.8 billion for the six months ended June 30, 2025 and 2026. In Q2 2025, we invested $1.3 billion in convertible notes from Anthropic. We invested $28.7 billion in OpenAI’s Series C Preferred Stock for the six months ended June 30, 2026, including $13.7 billion invested in Q2 2026. Subsequent to June 30, 2026, we funded the remaining Commitment Amount of $21.3 billion. In Q2 2026, we also invested $10.0 billion in Anthropic nonvoting preferred stock.

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 $(26.1) billion and $(113.6) billion for Q3 2025 and Q3 2026, and $(95.3) billion and $(257.1) billion for the nine months ended September 30, 2025 and 2026, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures. Cash capital expenditures were $34.2 billion and $75.9 billion during Q3 2025 and Q3 2026, and $89.9 billion and $172.2 billion for the nine months ended September 30, 2025 and 2026, 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, both of which we expect to increase in 2026. We expect cash capital expenditures to meaningfully increase in 2027, primarily driven by investments in technology infrastructure. We made cash payments, net of acquired cash, related to acquisition and other investment activity of $786 million and $24.0 billion during Q3 2025 and Q3 2026, and $2.4 billion and $63.8 billion for the nine months ended

Previous wording

Cash provided by (used in) financing activities was $(2.5) billion and $10.1 billion for Q2 2025 and Q2 2026, and $(2.6) billion and $62.9 billion for the six months ended June 30, 2025 and 2026. Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term debt of $2.1 billion and $22.9 billion for Q2 2025 and Q2 2026, and $4.7 billion and $82.4 billion for the six months ended June 30, 2025 and 2026. We expect to undertake additional financing activities in 2026. Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $4.6 billion and $12.8 billion for Q2 2025 and Q2 2026, and $7.2 billion and $19.5 billion for the six months ended June 30, 2025 and 2026. Property and equipment acquired under finance leases was $937 million and $563 million during Q2 2025 and Q2 2026, and $991 million and $2.1 billion for the six months ended June 30, 2025 and 2026.

Current wording

Cash provided by (used in) financing activities was $(44) million and $48.9 billion for Q3 2025 and Q3 2026, and $(2.6) billion and $111.8 billion for the nine months ended September 30, 2025 and 2026. Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term debt of $3.2 billion and $53.4 billion for Q3 2025 and Q3 2026, and $7.9 billion and $135.8 billion for the nine months ended September 30, 2025 and 2026. We expect to undertake additional financing activities in 2026. Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $3.3 billion and $4.5 billion for Q3 2025 and Q3 2026, and $10.5 billion and $23.9 billion for the nine months ended September 30, 2025 and 2026. Property and equipment acquired under finance leases was $977 million and $1.5 billion during Q3 2025 and Q3 2026, and $2.0 billion and $3.6 billion for the nine months ended September 30, 2025 and 2026.

Previous wording

We had no borrowings outstanding under the two unsecured revolving credit facilities or the commercial paper programs as of June 30, 2026. See Item 1 of Part I, “Financial Statements — Note 5 — Debt” for additional information.

Current wording

We had no borrowings outstanding under the two unsecured revolving credit facilities or the commercial paper programs, and $17.5 billion of borrowings outstanding under the Term Loan as of September 30, 2026. See Item 1 of Part I, “Financial Statements — Note 5 — Debt” for additional information.

Previous wording

Our U.S. taxable income is reduced by accelerated depreciation deductions and the amortization of previously capitalized research and development costs. U.S. tax rules provide for enhanced accelerated depreciation deductions by allowing the election of full expensing of qualified property, as well as various alternatives for amortizing previously capitalized research and development costs. The 2026 Notice, which applied retroactively to 2025, is expected to result in a significant decrease of 2024 and 2025 cash taxes paid. Cash paid for U.S. (federal and state) and foreign income taxes (net of refunds) totaled $4.8 billion and $2.7 billion for Q2 2025 and Q2 2026, and $5.6 billion and $4.0 billion for the six months ended June 30, 2025 and 2026.

Current wording

Our U.S. taxable income is reduced by accelerated depreciation deductions and the amortization of previously capitalized research and development costs. U.S. tax rules provide for enhanced accelerated depreciation deductions by allowing the election of full expensing of qualified property, as well as various alternatives for amortizing previously capitalized research and development costs. The 2026 Notice, which applied retroactively to 2025, is expected to result in a significant decrease of 2024 and 2025 cash taxes paid. Cash paid for U.S. (federal and state) and foreign income taxes (net of refunds) totaled $1.1 billion and $1.3 billion for Q3 2025 and Q3 2026, and $6.8 billion and $5.3 billion for the nine months ended September 30, 2025 and 2026.

Previous wording

As of December 31, 2025 and June 30, 2026, restricted cash, cash equivalents, and marketable securities were $3.3 billion and $2.7 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.

Current wording

As of December 31, 2025 and September 30, 2026, restricted cash, cash equivalents, and marketable securities were $3.3 billion and $2.9 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

Sales increased 20% in Q2 2026, and 18% for the six months ended June 30, 2026 compared to the comparable prior year periods. Changes in foreign exchange rates did not significantly impact net sales for Q2 2026, but increased net sales by $3.0 billion for the six months ended June 30, 2026. For a discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below.

Current wording

Sales increased 12% in Q3 2026, and 16% for the nine months ended September 30, 2026 compared to the comparable prior year periods. Changes in foreign exchange rates reduced net sales by $896 million for Q3 2026, and increased net sales by $2.1 billion for the nine months ended September 30, 2026. For a discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below.

Previous wording

International sales increased 15% in Q2 2026, and 17% for the six months ended June 30, 2026 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 Q2 2026, but increased International net sales by $2.4 billion for the six months ended June 30, 2026.

Current wording

North America sales increased 6% in Q3 2026, and 11% for the nine months ended September 30, 2026 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 North America net sales for Q3 2026, but increased North America net sales by $502 million for the nine months ended September 30, 2026.

Previous wording

North America sales increased 16% in Q2 2026, and 14% for the six months ended June 30, 2026 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 increased North America net sales by $139 million for Q2 2026, and by $485 million for the six months ended June 30, 2026.

Current wording

International sales increased 5% in Q3 2026, and 13% for the nine months ended September 30, 2026 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 reduced International net sales by $927 million for Q3 2026, and increased International net sales by $1.5 billionfor the nine months ended September 30, 2026.

Previous wording

AWS sales increased 37% in Q2 2026, and 33% for the six months ended June 30, 2026 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 39% in Q3 2026, and 35% for the nine months ended September 30, 2026 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.

Previous wording

The increase in cost of sales in Q2 2026 and for the six months ended June 30, 2026, compared to the comparable prior year periods, is primarily due to increased product and shipping costs resulting from increased sales, partially offset by operational efficiencies. Cost of sales in Q2 2026 includes tariff refunds received under the IEEPA. Changes in foreign exchange rates did not significantly impact cost of sales for Q2 2026, but increased cost of sales by $1.8 billion for the six months ended June 30, 2026.

Current wording

The increase in cost of sales in Q3 2026 and for the nine months ended September 30, 2026, compared to the comparable prior year periods, is primarily due to increased product and shipping costs resulting from increased sales, partially offset by operational efficiencies. Changes in foreign exchange rates reduced cost of sales by $619 million for Q3 2026, and increased cost of sales by $1.2 billion for the nine months ended September 30, 2026.

Previous wording

Shipping costs were $23.4 billion and $27.9 billion in Q2 2025 and Q2 2026, and $45.9 billion and $53.6 billion for the six months ended June 30, 2025 and 2026. 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 $25.3 billion and $28.3 billion in Q3 2025 and Q3 2026, and $71.2 billion and $81.9 billion for the nine months ended September 30, 2025 and 2026. 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 Q2 2026 and for the six months ended June 30, 2026, compared to the comparable prior year periods, is primarily due to increased sales and investments in our fulfillment network, partially offset by operational efficiencies. Changes in foreign exchange rates did not significantly impact fulfillment costs for Q2 2026, but increased fulfillment costs by $523 million for the six months ended June 30, 2026.

Current wording

The increase in fulfillment costs in Q3 2026 and for the nine months ended September 30, 2026, compared to the comparable prior year periods, is primarily due to increased sales and investments in our fulfillment network, partially offset by operational efficiencies. Changes in foreign exchange rates reduced fulfillment costs by $127 million for Q3 2026, and increased fulfillment costs by $396 million for the nine months ended September 30, 2026.

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 infrastructure and employees, including to support our artificial intelligence and machine learning initiatives. These costs are allocated to segments based on usage. The increase in technology and infrastructure costs in Q2 2026 and for the six months ended June 30, 2026, compared to the comparable prior year periods, is primarily due to an increase in spending on infrastructure, including depreciation and amortization. Changes in foreign exchange rates did not significantly impact technology and infrastructure costs for Q2 2026, but increased technology and infrastructure costs by $427 million for the six months ended June 30, 2026. Technology and infrastructure costs in Q2 2026 include net unrealized gains for energy contracts that are subject to derivative accounting, primarily related to AWS. Fair value measurements for these contracts do not impact cash flows but may be material to technology and infrastructure costs in future periods due to the duration of these contracts and volatility inherent in valuation methods. 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 2025 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 infrastructure and employees, including to support our artificial intelligence and machine learning initiatives. These costs are allocated to segments based on usage. The increase in technology and infrastructure costs in Q3 2026 and for the nine months ended September 30, 2026, compared to the comparable prior year periods, is primarily due to an increase in spending on infrastructure, including depreciation and amortization. Changes in foreign exchange rates reduced technology and infrastructure costs by $105 million for Q3 2026, and increased technology and infrastructure costs by $322 million for the nine months ended September 30, 2026. Technology and infrastructure costs include net unrealized gains and losses for energy contracts that are subject to derivative accounting, primarily related to AWS. Fair value measurements for these contracts do not impact cash flows but may be material to technology and infrastructure costs in future periods due to the duration of these contracts and volatility inherent in valuation methods. 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

Previous wording

Sales and marketing costs in Q2 2026 and for the six months ended June 30, 2026 did not significantly change compared to the comparable prior year periods. Changes in foreign exchange rates did not significantly impact sales and marketing costs for Q2 2026, but increased sales and marketing costs by $293 million for the six months ended June 30, 2026.

Current wording

Sales and marketing costs in Q3 2026 and for the nine months ended September 30, 2026 did not significantly change compared to the comparable prior year periods. Changes in foreign exchange rates did not significantly impact sales and marketing costs for Q3 2026, but increased sales and marketing costs by $268 million for the nine months ended September 30, 2026.

Previous wording

The decrease in general and administrative costs in Q2 2026 and for the six months ended June 30, 2026, compared to the comparable prior year periods, is primarily due to a decrease in payroll and related expenses.

Current wording

The decrease in general and administrative costs in Q3 2026 and for the nine months ended September 30, 2026, compared to the comparable prior year periods, is primarily due to a decrease in payroll and related expenses.

Previous wording

Other operating expense (income), net was $199 million and $90 million for Q2 2025 and Q2 2026, and $507 million and $537 million for the six months ended June 30, 2025 and 2026, and was primarily related to asset impairments and the amortization of intangible assets.

Current wording

Other operating expense (income), net was $2.9 billion and $134 million for Q3 2025 and Q3 2026, and $3.4 billion and $671 million for the nine months ended September 30, 2025 and 2026, and other than the settlement of a lawsuit for the three and nine months ended September 30, 2025, was primarily related to asset impairments and the amortization of intangible assets.

Previous wording

Operating income increased from $19.2 billion in Q2 2025 to $27.5 billion in Q2 2026, and increased from $37.6 billion for the six months ended June 30, 2025 to $51.3 billion for the six months ended June 30, 2026. 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 30 to 32, and “Note 8 — Segment Information” on page 22.

Current wording

Operating income increased from $17.4 billion in Q3 2025 to $28.1 billion in Q3 2026, and increased from $55.0 billion for the nine months ended September 30, 2025 to $79.4 billion for the nine months ended September 30, 2026. 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 31 to 33, and “Note 8 — Segment Information” on page 23.

Previous wording

The increase in North America operating income in Q2 2026 and for the six months ended June 30, 2026, compared to the comparable prior year periods, is primarily due to increased unit sales and increased advertising sales, partially offset by increased shipping, fulfillment, and technology and infrastructure costs.

Current wording

The increase in North America operating income in Q3 2026 and for the nine months ended September 30, 2026, compared to the comparable prior year periods, is primarily due to increased unit sales and increased advertising sales, partially offset by increased shipping, fulfillment, and technology and infrastructure costs.

Previous wording

The increase in International operating income in Q2 2026 and for the six months ended June 30, 2026, compared to 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 Q2 2026, but positively impacted operating income by $304 million for the six months ended June 30, 2026.

Current wording

The increase in International operating income in Q3 2026 and for the nine months ended September 30, 2026, compared to 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 negatively impacted operating income by $125 million for Q3 2026, and positively impacted operating income by $179 million for the nine months ended September 30, 2026.

Previous wording

The increase in AWS operating income in Q2 2026 and for the six months ended June 30, 2026, compared to the comparable prior year periods, is primarily due to increased sales, 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 Q2 2026, but negatively impacted operating income by $395 million for the six months ended June 30, 2026.

Current wording

The increase in AWS operating income in Q3 2026 and for the nine months ended September 30, 2026, compared to the comparable prior year periods, is primarily due to increased sales, 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 2026, but negatively impacted operating income by $330 million for the nine months ended September 30, 2026.

Previous wording

Our interest income was $1.1 billion and $1.3 billion during Q2 2025 and Q2 2026, and $2.2 billion and $2.4 billion for the six months ended June 30, 2025 and 2026, primarily due to a higher average balance of invested funds, offset by a decrease in 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.

Current wording

Our interest income was $1.1 billion and $1.2 billion during Q3 2025 and Q3 2026, and $3.3 billion and $3.6 billion for the nine months ended September 30, 2025 and 2026, primarily due to a higher average balance of invested funds, offset by a decrease in 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 $516 million and $1.3 billion during Q2 2025 and Q2 2026, and $1.1 billion and $2.1 billion for the six months ended June 30, 2025 and 2026, and was primarily related to debt, including new issuances of Notes, 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 $538 million and $1.7 billion during Q3 2025 and Q3 2026, and $1.6 billion and $3.8 billion for the nine months ended September 30, 2025 and 2026, and was primarily related to debt, including new issuances of Notes, and finance leases. See Item 1 of Part I, “Financial Statements — Note 3 — Leases and Note 5 — Debt” for additional information.

Previous wording

Other income (expense), net was $1.1 billion and $53.4 billion during Q2 2025 and Q2 2026, and $3.9 billion and $69.1 billion for the six months ended June 30, 2025 and 2026. The primary components of other income (expense), net are related to equity securities valuations and adjustments, equity warrant valuations, foreign currency, and reclassification adjustments for gains (losses) on available-for-sale debt securities. The net gain of $1.1 billion in Q2 2025 is primarily from equity warrant valuations. The net gain of $3.9 billion for the six months ended June 30, 2025 is primarily from the reclassification adjustment for the gain on available-for-sale debt securities from the portion of our convertible notes investments in Anthropic that were converted to nonvoting preferred stock during the three months ended March 31, 2025. The net gain of $53.4 billion in Q2 2026 and $69.1 billion for the six months ended June 30, 2026 is primarily from upward adjustments for observable changes in price relating to our nonvoting preferred stock in Anthropic and the reclassification adjustment for the gains on available-for-sale debt securities from the portions of our convertible notes investments in Anthropic that were converted to nonvoting preferred stock during the three months ended March 31, 2026.

Current wording

Other income (expense), net was $10.2 billion and $(703) million during Q3 2025 and Q3 2026, and $14.1 billion and $68.4 billion for the nine months ended September 30, 2025 and 2026. The primary components of other income (expense), net are related to equity securities valuations and adjustments, equity warrant valuations, foreign currency, and reclassification adjustments for gains (losses) on available-for-sale debt securities. The net gain of $10.2 billion in Q3 2025, and $14.1 billion and $68.4 billion for the nine months ended September 30, 2025 and 2026 is primarily from upward adjustments for observable changes in price relating to our nonvoting preferred stock in Anthropic and the reclassification adjustment for the gains on available-for-sale debt securities from the portions of our convertible notes investments in Anthropic that were converted to nonvoting preferred stock during Q3 2025 and the nine months ended September 30, 2025 and 2026.

Previous wording

Our income tax provision for the six months ended June 30, 2025 was $7.2 billion, which included $753 million of net discrete tax benefits primarily attributable to excess tax benefits from stock-based compensation. Our income tax provision for the six months ended June 30, 2026 was $27.8 billion, which included $15.9 billion of net discrete tax expense primarily attributable to the upward adjustments to our investments in Anthropic. See Item 1 of Part I, “Financial Statements — Note 7 — Income Taxes” for additional information.

Current wording

Our income tax provision for the nine months ended September 30, 2025 was $14.1 billion, which included $354 million of net discrete tax expense primarily attributable to the upward adjustments to our investments in Anthropic, partially offset by excess tax benefits from stock-based compensation. Our income tax provision for the nine months ended September 30, 2026 was $33.9 billion, which included $15.2 billion of net discrete tax expense primarily attributable to the upward adjustments to our investments in Anthropic. See Item 1 of Part I, “Financial Statements — Note 7 — Income Taxes” for additional information.

Previous 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.

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 non-marketable investments and business acquisitions.

Previous wording

•Net sales are expected to be between $197.0 billion and $202.0 billion, or to grow between 9% and 12% compared with third quarter 2025. Excluding the impact of Prime Day in both 2025 and 2026, third quarter 2026 year-over-year growth would be nearly 400 basis points higher. This guidance anticipates an unfavorable impact of approximately 80 basis points from foreign exchange rates.

Current wording

•Net sales are expected to be between $240.0 billion and $247.0 billion, or to grow between 12% and 16% compared with fourth quarter 2025. This guidance anticipates an unfavorable impact of approximately 60 basis points from foreign exchange rates. Advertising revenue grew 12% year-over-year excluding changes in foreign exchange rates in the third quarter 2026 impacted by timing anomalies primarily related to Prime Day (and a couple other timing factors). We expect year-over-year advertising revenue to grow in the high teens in fourth quarter 2026.

Previous wording

•Operating income is expected to be between $22.5 billion and $26.5 billion, compared with $17.4 billion in third quarter 2025.

Current wording

•Operating income is expected to be between $28.5 billion and $33.5 billion, compared with $25.0 billion in fourth quarter 2025.