What Management Said
Read the full Q4 2025 transcript ↗Our guidance incorporates the order trends that we've seen to date and what we believe today to be appropriate assumptions. Our guidance assumes, among other things, that we don't conclude any additional business acquisitions, restructurings, or legal settlements. It's not possible to accurately predict demand for our goods and services, and therefore, our actual results could differ materially from our guidance. We're reporting $213.4 billion in revenue, up 12% year-over-year, excluding the impact from foreign exchange rates.
Operating income was $25 billion, and trailing twelve-month free cash flow was $11.2 billion. We're already seeing strong demand in these areas, even in these early innings. AWS growth continued to accelerate to 24%, the fastest we've seen in 13 quarters, up $2.6 billion quarter-over-quarter and nearly $7 billion year-over-year. AWS is now a $142 billion annualized run rate business, and our chips business, inclusive of Graviton and Trainium, is now over $10 billion in annual revenue run rate, growing triple-digit percentages year-over-year.
We continue to add more incremental revenue and capacity than others and extend our leadership position. Bedrock is now a $ multi-billion-dollar annualized run rate business, and customer spend grew 60% quarter-over-quarter. Trainium2 is 30%-40% more price performant than comparable GPUs and is a multi-billion dollar annualized revenue run rate business with 100,000+ companies using it, as Trainium is the majority underpinning of Bedrock usage today. We're seeing very strong demand for Trainium3 and expect nearly all of our Trainium3 supply of chips to be committed by mid 2026.
What went well
- AWS growth accelerated again to 24% YoY (fastest in 13 quarters), reaching a $142B annualized run rate, up $2.6B QoQ and nearly $7B YoY.
- AWS operating income was $12.5B; full-year AWS operating margin was 35%, up 40bps YoY.
- Worldwide operating income was $25B and worldwide paid units grew 12%, the highest quarterly growth rate of 2025.
- North America operating income jumped to $11.5B with a 9% margin, up from 8% in Q4 2024.
- Advertising grew 22% in Q4 and added over $12B of incremental revenue across full-year 2025.
- Backlog reached $244B, up 40% YoY and ~22% QoQ; the chips business (Graviton + Trainium) surpassed a $10B annual run rate growing triple digits.
- Trainium2 landed 1.4M chips (fastest-ramping chip launch ever) with 100,000+ companies using it; Trainium3 launched with supply nearly fully committed by mid-2026.
- Full-year operating cash flow rose ~20% to ~$39.5B; added 3.99 GW of power over the trailing 12 months (1.2 GW in Q4), the most of any company in 2025.
What went wrong
- Three special charges cut operating income by $2.4B: $1.1B for Italy tax disputes/lawsuit settlement (International), $730M severance (all segments), and $610M of asset impairments primarily on physical stores (North America).
- International operating margin was just 2.1% (op income $1.0B), though it expanded YoY excluding the special charges.
- Trailing 12-month free cash flow fell further to $11.2B as CapEx scaled, with ~$200B of CapEx planned for 2026.
- Guidance flagged an ~$1B YoY North America cost increase in Q1 2026 tied to Amazon Leo satellite launches, plus heavier international stores investment.
- Management reiterated AWS operating margins will keep fluctuating given AI depreciation headwinds.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Net sales | Q1 2026 | $173.5B-$178.5B (FX ~180bps favorable) |
| Operating income | Q1 2026 | $16.5B-$21.5B |
| Total company CapEx | FY 2026 | ~$200B (predominantly AWS) |
| North America cost - Amazon Leo | Q1 2026 | ~$1B YoY cost increase (Leo satellite launches) |
| Trainium3 supply | Mid-2026 | Nearly all supply expected committed by mid-2026 |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Worldwide revenue | +12% ex-FX ($213.4B) | Strong peak-holiday quarter; 150bps favorable FX; worldwide paid units +12% (highest of 2025). |
| Worldwide operating income | n/a ($25.0B) | Included $2.4B of special charges (Italy tax/lawsuit, severance, physical-store impairments). |
| AWS revenue | +24% ($35.6B) | Fastest growth in 13 quarters, driven by both core and AI services plus 1 GW+ of added capacity; $142B run rate. |
| AWS operating income | n/a ($12.5B) | Strong top-line growth with efficiency gains (software/process optimization, custom networking, silicon); full-year margin 35% (+40bps). |
| North America operating income | n/a ($11.5B) | 9% margin, up from 8% in Q4 2024, on regionalized-network efficiency; carried part of the severance and impairment charges. |
| International operating income | n/a ($1.0B) | 2.1% margin; expanded YoY excluding the Italy tax/lawsuit and severance charges. |
| Advertising revenue | +22% (Q4) | Full-funnel approach and simplified advertiser experience; +$12B incremental revenue in FY2025. |
| Cash CapEx | n/a (~$125B FY2025) | Predominantly AWS AI and custom silicon; expected to rise to ~$200B in 2026. |
| Full-year operating cash flow | +20% (~$39.5B) | Improved operating income and working-capital changes. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| AWS growth trajectory | 20.2% YoY in Q3 2025 | 24% YoY in Q4 2025 (fastest in 13 quarters), $142B run rate | — |
| CapEx scale | ~$125B FY2025 | ~$200B planned for FY2026, predominantly AWS/AI | — |
| Custom silicon | Trainium2 fully subscribed (Q3) | 1.4M Trainium2 chips landed; Trainium3 (+40%) launched, near fully committed by mid-2026; Trainium4 in build | — |
| Backlog | $200B (Q3 2025) | $244B, up 40% YoY and ~22% QoQ | — |
| AWS power capacity | 3.8 GW added over 12 months (Q3) | 3.99 GW added over 12 months (1.2 GW in Q4); on track to double again by 2027 | — |
| New growth bets | Leo/Kuiper early (prior quarters) | Amazon Leo (20+ launches in 2026), quick commerce (Amazon Now, 30-min), Nova Forge, agents | — |
Q&A Summary
How will investors see the strong long-term ROIC through this CapEx cycle, and are there minimum free-cash-flow guardrails? (Mark Mahaney, Evercore)
Olsavsky: all capacity is being put into service immediately with a long arc of additional committed revenue/backlog; AWS full-year margin was 35% (+40bps) and will fluctuate with AI depreciation, offset by efficiencies. Jazzy: CapEx is predominantly AWS, mostly AI but also faster-than-expected core; monetized as fast as installed; AWS's forecasting track record and Trainium economics underpin confidence in strong ROIC (no explicit FCF floor given).
How is Project Rainier running after a full quarter, the 500K vs 1M chip count, and are there financial guardrails on spend? (Doug Anmuth, JPMorgan)
Jassy: Anthropic is training its next Claude on Trainium2 via Project Rainier (~500K chips, increasing), plus using Trainium2 for other workloads/APIs; Trainium is a multi-billion-dollar, fully subscribed business; Trainium3 (+40%) supply nearly committed by mid-2026 and Trainium4 (2027) already drawing strong interest; combined Trainium+Graviton is a $10B+ run rate. Framed as an extraordinarily unusual opportunity warranting aggressive investment.
How is the top-heavy AI market changing into 2026, and could you extend the OpenAI relationship? (Ross Sandler, Barclays)
Jassy: describes a 'barbelled' market - AI labs and a couple runaway apps on one end, enterprise productivity/cost-avoidance workloads on the other, with enterprise production workloads in the middle likely the largest and most durable over time. Announced a big November agreement with OpenAI and hopes to extend the partnership; this movement will involve thousands of companies, not a few.
How does agentic shopping play out for retail and on-site ads amid potential funnel compression? (Michael Morton, MoffettNathanson)
Jassy: optimistic; heavily invested in Rufus (300M users in 2025; Rufus users ~60% more likely to purchase) and will also partner with third-party horizontal agents once the experience improves (they lack shopping history and get prices/details wrong). Believes customers will often prefer a retailer's own agent given selection, price, fast delivery and trust.
What are the sources of efficiency versus areas of investment in global retail this year? (Brian Nowak, Morgan Stanley)
Jassy: investing in selection (luxury like L'Oreal and everyday essentials, now 1 of 3 units), faster delivery, perishables (same-day in thousands of cities; buyers shop ~2x more often), and quick commerce (Amazon Now/India tripling frequency). Efficiencies from expanded regionalization (8 to 10 regions), inbound improvements, more units per box, and 1M+ robots.
What is the Q4 revenue backlog and the supply/demand imbalance for AI capacity through 2026? (Eric Sheridan, Goldman Sachs)
Jassy: backlog is $244B, up 40% YoY (~22% QoQ), with broad demand across AI and core. The vast majority of capacity serves external customers; internally 1,000+ AI applications (Rufus, Alexa+, forecasting, ads, customer service). Growing 24% on $142B yet could grow faster with more supply; added 3.99 GW over 12 months (1.2 GW in Q4), doubling again by 2027.
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Reported 2026-02-05 · figures from the Amazon Com Inc Q4 2025 earnings call.
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