What changed in this filing

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Item 1. Financial Statements

2025-05-02 compared with 2024-11-01 · 149 added, 209 removed, 440 unchanged (45% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30, Twelve Months Ended

September 30,

March 31, Twelve Months Ended

2024 2025 2024 2025

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Proceeds from property and equipment sales and incentives 990 764 4,449 5,115

Acquisitions, net of cash acquired, non-marketable investments, and other ( 1,629 ) ( 622 ) ( 5,458 ) ( 4,547 ) ( 6,289 ) ( 4,928 )

Acquisitions, net of cash acquired, non-marketable investments, and other, net ( 3,354 ) 48 ( 5,680 ) ( 3,680 )

Sales and maturities of marketable securities 1,392 7,737 5,904 22,748

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2024 2023 2024

Net product sales $ 60,915 $ 63,970

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2024 2023 2024

Net income $ 10,431 $ 17,127

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Change in net unrealized gains (losses), net of tax of $( 158 ) and $( 11 )

62 167 174 944

reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $ 0 and $ 809

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Other, net of tax of $( 1 ) and $ 1

— ( 3 ) — ( 4 )

Total other comprehensive income (loss) ( 558 ) ( 880 )

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(in millions, except per share data)

December 31, 2023 September 30, 2024

December 31, 2024 March 31, 2025

Current assets:

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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 2024 Annual Report on Form 10-K.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

“Other assets” were reclassified out of “Accounts receivable, net and other” on our consolidated statements of cash flows.

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 and of which we are the primary beneficiary, including certain entities in India and certain entities that support our health care services.

Intercompany balances and transactions between consolidated entities are eliminated.

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The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes.

Estimates are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, impairment of property and equipment and operating leases, valuation and impairment of investments, self-insurance liabilities, and viewing patterns of capitalized video content.

Actual results could differ materially from these estimates.

We review the useful lives of equipment on an ongoing basis, and effective January 1, 2024 we changed our estimate of the useful lives for our servers from five to six years .

The longer useful lives are due to continuous improvements in our hardware, software, and data center designs.

The effect of this change in estimate for Q3 2024, based on servers that were included in “Property and equipment, net” as of June 30, 2024 and those acquired during the three months ended September 30, 2024, was a reduction in depreciation and amortization expense of $ 760 million and a benefit to net income of $ 598 million, or $ 0.06 per basic share and $ 0.06 per diluted share.

The effect of this change in estimate for the nine months ended September 30, 2024, based on servers that were included in “Property and equipment, net” as of December 31, 2023 and those acquired during the nine months ended September 30, 2024, was a reduction in depreciation and amortization expense of $ 2.4 billion and a benefit to net income of $ 1.9 billion, or $ 0.18 per basic share and $ 0.18 per diluted share.

We review the useful lives of equipment on an ongoing basis.

Effective January 1, 2025 we changed our estimate of the useful lives of a subset of our servers and networking equipment from six years to five years .

The shorter useful lives are due to the increased pace of technology development, particularly in the area of artificial intelligence and machine learning.

The effect of this change in estimate for Q1 2025, based on servers and networking equipment that were included in “Property and equipment, net” as of December 31, 2024 and those acquired during the three months ended March 31, 2025, was an increase in depreciation and amortization expense of $ 217 million and a reduction in net income of $ 162 million, or $ 0.02 per basic share and $ 0.02 per diluted share, which primarily impacted our AWS segment.

Supplemental Cash Flow Information

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Three Months Ended

September 30, Nine Months Ended

September 30, Twelve Months Ended

September 30,

March 31, Twelve Months Ended

2024 2025 2024 2025

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Property and equipment acquired under finance leases, net of remeasurements and modifications 42 54 676 866

Property and equipment recognized during the construction period of build-to-suit lease arrangements 93 21 308 89 618 138

Property and equipment derecognized after the construction period of build-to-suit lease arrangements, with the associated leases recognized as operating

492 — 1,212 — 3,063 162

Increase (decrease) in property and equipment acquired but not yet paid 411 3,108 801 9,736

Earnings Per Share

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2024 2023 2024

Shares used in computation of basic earnings per share 10,393 10,603

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2024 2023 2024

Marketable equity securities valuation gains (losses) $ ( 2,126 ) $ ( 138 )

Equity warrant valuation gains (losses) ( 230 ) ( 378 )

Reclassification adjustment for gains (losses) on available-for-sale debt securities ( 1 ) 3,263

Upward adjustments relating to equity investments in private companies 5 37

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Total other income (expense), net $ ( 2,673 ) $ 2,749

Included in “Other income (expense), net” is a marketable equity securities valuation gain (loss) of $ 1.2 billion and $( 348 ) million in Q3 2023 and Q3 2024, and $ 926 million and $( 1.9 ) billion for the nine months ended September 30, 2023 and 2024, from our equity investment in Rivian Automotive, Inc.

As of September 30, 2024, we held 158 million shares of Rivian’s Class A common stock, representing an approximate 16 % ownership interest, and an approximate 15 % voting interest.

We determined that we have the ability to exercise significant influence over Rivian through our equity investment, our commercial arrangement for the purchase of electric vehicles and jointly-owned intellectual property, and one of our employees serving on Rivian’s board of directors.

We elected the fair value option to account for our equity investment in Rivian, which is

included in “Marketable securities” on our consolidated balance sheets, and had a fair value of $ 3.7 billion and $ 1.8 billion as of December 31, 2023 and September 30, 2024.

Required summarized financial information of Rivian as disclosed in its most recent SEC filings is as follows (in millions):

Six Months Ended June 30,

Revenues $ 1,782 $ 2,362

Gross profit (loss) ( 947 ) ( 978 )

Loss from operations ( 2,718 ) ( 2,859 )

Net loss ( 2,544 ) ( 2,903 )

The marketable equity securities valuation gain (loss) of $( 2.1 ) billion and $( 138 ) million in Q1 2024 and Q1 2025 is primarily from our equity investment in Rivian Automotive, Inc.

The reclassification adjustment for the gain on available-for-sale debt securities of $ 3.3 billion in Q1 2025 is primarily from the portion of our convertible notes investments in Anthropic, PBC that were converted to nonvoting preferred stock during the three months ended March 31, 2025.

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.

The inventory valuation allowance, representing a write-down of inventory, was $ 3.0 billion and $ 2.7 billion as of December 31, 2023 and September 30, 2024.

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.

The inventory valuation allowance, representing a write-down of inventory, was $ 3.0 billion and $ 2.8 billion as of December 31, 2024 and March 31, 2025.

Accounts Receivable, Net and Other

Included in “Accounts receivable, net and other” on our consolidated balance sheets are receivables primarily related to customers, vendors, and sellers, as well as prepaid expenses and other current assets.

As of December 31, 2023 and September 30, 2024, customer receivables, net, were $ 34.1 billion and $ 34.6 billion, vendor receivables, net, were $ 8.5 billion and $ 8.3 billion, seller receivables, net, were $ 1.0 billion and $ 60 million, and other receivables, net, were $ 3.3 billion and $ 3.0 billion.

Seller receivables are amounts due from sellers related to our seller lending program, which provided funding to sellers primarily to procure inventory.

Prepaid expenses and other current assets were $ 5.4 billion and $ 5.8 billion as of December 31, 2023 and September 30, 2024.

Included in “Accounts receivable, net and other” on our consolidated balance sheets are receivables primarily related to customers, vendors, and prepaid expenses and other current assets.

As of December 31, 2024 and March 31, 2025, customer receivables, net, were $ 34.3 billion and $ 35.5 billion, vendor receivables, net, were $ 11.6 billion and $ 9.1 billion, and other receivables, net, were $ 3.4 billion.

Prepaid expenses and other current assets, which include amounts related to non-income taxes and satellite network launch services deposits, were $ 6.3 billion and $ 6.2 billion as of December 31, 2024 and March 31, 2025.

We currently expense satellite network launch services deposits upon launch to “Technology and infrastructure.”

We estimate losses on receivables based on expected losses, including our historical experience of actual losses.

The allowance for doubtful accounts was $ 1.7 billion and $ 1.9 billion as of December 31, 2023 and September 30, 2024.

The allowance for doubtful accounts was $ 2.0 billion as of December 31, 2024 and March 31, 2025.

Digital Video and Music Content

Included in “Other assets” on our consolidated balance sheets are the total capitalized costs of video, which is primarily released content, and music, which as of December 31, 2023 and September 30, 2024 were $ 17.4 billion and $ 19.8 billion.

Total video and music expense was $ 4.6 billion and $ 5.0 billion in Q3 2023 and Q3 2024, and $ 13.0 billion and $ 14.2 billion for the nine months ended September 30, 2023 and 2024 .

Included in “Other assets” on our consolidated balance sheets are the total capitalized costs of video, which is primarily released content, and music, which as of December 31, 2024 and March 31, 2025 were $ 19.6 billion and $ 20.3 billion.

Total video and music expense was $ 4.6 billion and $ 5.1 billion in Q1 2024 and Q1 2025 .

Unearned Revenue

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Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships.

Our total unearned revenue as of December 31, 2023 was $ 20.9 billion, of which $ 12.5 billion was recognized as revenue during the nine months ended September 30, 2024.

Included in “Other long-term liabilities” on our consolidated balance sheets was $ 5.7 billion and $ 7.0 billion of unearned revenue as of December 31, 2023 and September 30, 2024.

Our total unearned revenue as of December 31, 2024 was $ 24.6 billion, of which $ 7.0 billion was recognized as revenue during the three months ended March 31, 2025.

Included in “Other long-term liabilities” on our consolidated balance sheets was $ 6.5 billion and $ 4.9 billion of unearned revenue as of December 31, 2024 and March 31, 2025.

Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that have not yet been recognized in our consolidated financial statements.

For contracts with original terms that exceed one year, those commitments not yet recognized were approximately $ 164 billion as of September 30, 2024.

For contracts with original terms that exceed one year, those commitments not yet recognized were approximately $ 189 billion as of March 31, 2025.

The weighted-average remaining life of our long-term contracts is 4.1 years.

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Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board 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.

The ASU is effective for annual reporting periods beginning after December 15, 2024, with

early adoption permitted, and can be applied on either a prospective or retroactive basis.

We are currently evaluating the ASU to determine its impact on our income tax disclosures.

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.

The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis.

We expect to adopt the ASU on a retroactive basis.

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.

Note 2 — FINANCIAL INSTRUMENTS

Cash, Cash Equivalents, Restricted Cash, and Marketable Securities

As of December 31, 2023 and September 30, 2024, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S.

As of December 31, 2024 and March 31, 2025, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S.

and foreign government and agency securities, other investment grade securities, and marketable equity securities.

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The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):

December 31, 2023 September 30, 2024

December 31, 2024 March 31, 2025

Fair Value Cost or

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___________________

(1) The related unrealized gain (loss) recorded in “Other income (expense), net” was $ 1.2 billion and $( 145 ) million in Q3 2023 and Q3 2024, and $ 1.0 billion and $( 1.8 ) billion for the nine months ended September 30, 2023 and 2024.

(1) The related unrealized gain (loss) recorded in “Other income (expense), net” was $( 2.1 ) billion and $( 205 ) million in Q1 2024 and Q1 2025.

(2) We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable debt securities primarily as collateral for real estate, amounts due to third-party sellers in certain jurisdictions, debt, standby and trade letters of credit, and licenses of digital media content.

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See “Note 4 — Commitments and Contingencies.”

The following table summarizes the remaining contractual maturities of our cash equivalents and marketable debt securities as of September 30, 2024 (in millions):

The following table summarizes the remaining contractual maturities of our cash equivalents and marketable debt securities as of March 31, 2025 (in millions):

Cost Estimated

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Non-Marketable Investments

We hold equity warrants giving us the right to acquire stock of other companies.

As of December 31, 2023 and September 30, 2024, these warrants had a fair value of $ 2.2 billion and $ 2.4 billion, with gains and losses recognized in “Other income (expense), net” on our consolidated statements of operations.

These warrants are classified as Level 2 and 3 assets.

As of December 31, 2023 and September 30, 2024, equity investments not accounted for under the equity-method and without readily determinable fair values had a carrying value of $ 754 million and $ 886 million, with adjustments recognized in “Other income (expense), net” on our consolidated statements of operations.

In Q3 2023, we invested in a $ 1.25 billion note from Anthropic, PBC, which is convertible to equity.

In Q1 2024, we invested $ 2.75 billion in a second convertible note.

The notes are classified as available for sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive income (loss).” The notes are classified as Level 3 assets.

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.

The notes are classified as available-for-sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive income (loss).” The notes are classified as Level 3 assets, and as of December 31, 2024 had an estimated fair value of approximately $ 13.8 billion.

In making these estimates, we utilized valuation methods based on information available, including the rights and obligations of the convertible notes, other outstanding classes of securities, observable transactions such as new securities offerings, estimates of expected time to and type of liquidity events and anticipated securities offerings, and discounts for lack of marketability.

In Q1 2025, a portion of the notes were converted to nonvoting preferred stock.

As a result of conversions, a significant portion of the unrealized gain associated with the notes as of December 31, 2024 was reclassified and a gain of approximately $ 3.3 billion was recorded in “Other income (expense), net” in our consolidated statement of operations.

The investment in nonvoting preferred stock was initially recorded at its estimated fair value at the time of the conversion and will be accounted for as a

component of our equity investments in private companies not accounted for under the equity-method, with future adjustments for observable changes in prices or impairments recognized in “Other income (expense), net” on our consolidated statements of operations.

As of March 31, 2025, the estimated fair value of our convertible notes and amounts recorded for nonvoting preferred stock investments was approximately $ 13.8 billion.

We also have a commercial arrangement primarily for the provision of AWS cloud services, which includes the use of AWS chips.

All non-marketable investments are recorded within “Other assets” on our consolidated balance sheets.

As of December 31, 2024 and March 31, 2025, equity investments in private companies not accounted for under the equity-method had a carrying value of $ 989 million and $ 6.1 billion, with adjustments for observable changes in prices or impairments recognized in “Other income (expense), net” on our consolidated statements of operations.

As of December 31, 2024 and March 31, 2025, equity investments accounted for under the equity-method of accounting, including investments for which we have elected the fair value option, had a carrying value of $ 1.2 billion.

We hold equity warrants giving us the right to acquire stock of other companies.

As of December 31, 2024 and March 31, 2025, these warrants had a fair value of $ 2.7 billion and $ 1.9 billion, with gains and losses recognized in “Other income (expense), net” on our consolidated statements of operations.

These warrants are classified as Level 2 and 3 assets.

These non-marketable investments are included within “Other assets” on our consolidated balance sheets.

Certain of our investments represent a variable interest in an entity for which we do not consolidate because we are not the primary beneficiary.

Consolidated Statements of Cash Flows Reconciliation

The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statements of cash flows (in millions):

December 31, 2023 September 30, 2024

December 31, 2024 March 31, 2025

Cash and cash equivalents $ 78,779 $ 66,207

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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 $ 62.5 billion and $ 59.2 billion as of December 31, 2023 and September 30, 2024.

Accumulated amortization associated with finance leases was $ 44.7 billion and $ 43.7 billion as of December 31, 2023 and September 30, 2024.

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 $ 54.7 billion as of December 31, 2024 and March 31, 2025.

Accumulated amortization associated with finance leases was $ 41.8 billion and $ 40.6 billion as of December 31, 2024 and March 31, 2025.

Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2024 2023 2024

Three Months Ended March 31,

Operating lease cost $ 2,829 $ 3,240

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Other information about lease amounts recognized in our consolidated financial statements is as follows:

December 31, 2023 September 30, 2024

December 31, 2024 March 31, 2025

Weighted-average remaining lease term – operating leases 10.6 years 10.4 years

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Total long-term lease liabilities $ 69,050 $ 9,227 $ 78,277

September 30, 2024

March 31, 2025

Operating Leases Finance Leases Total

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Note 4 — COMMITMENTS AND CONTINGENCIES

The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of September 30, 2024 (in millions):

Three Months Ended December 31, Year Ended December 31,

The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of March 31, 2025 (in millions):

Nine Months Ended December 31, Year Ended December 31,

2025 2026 2027 2028 2029 Thereafter Total

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(1) Includes non-cancellable financing obligations for fulfillment network and data center facilities.

Excluding interest, current financing obligations of $ 271 million and $ 313 million are recorded within “Accrued expenses and other” and $ 6.6 billion and $ 7.5 billion are recorded within “Other long-term liabilities” as of December 31, 2023 and September 30, 2024.

The weighted-average remaining term of the financing obligations was 17.0 years and 16.4 years and the weighted-average imputed interest rate was 3.1 % and 2.9 % as of December 31, 2023 and September 30, 2024.

(2) Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content, procure energy, and license software that are not reflected on the consolidated balance sheets.

Excluding interest, current financing obligations of $ 312 million and $ 275 million are recorded within “Accrued expenses and other” and $ 7.1 billion are recorded within “Other long-term liabilities” as of December 31, 2024 and March 31, 2025.

The weighted-average remaining term of the financing obligations was 16.1 years and 15.8 years and the weighted-average imputed interest rate was 3.1 % as of December 31, 2024 and March 31, 2025.

(2) Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content, procure energy, acquire property and equipment, and license software that are not reflected on the consolidated balance sheets.

For those agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date.

Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified.

Renewable energy agreements based on actual generation without a fixed or minimum volume commitment are not included.

These agreements also provide the right to receive renewable energy certificates for no additional consideration.

(3) Includes asset retirement obligations, liabilities associated with digital media content agreements with initial terms greater than one year, and the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that are under construction.

Energy agreements based on actual generation without a fixed or minimum volume commitment are not included.

Our energy agreements generally provide the right to receive energy certificates for no additional consideration.

(3) Includes asset retirement obligations, the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that are under construction, and liabilities associated with digital media content agreements with initial terms greater than one year.

Excludes approximately $ 6.3 billion of income tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any.

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Legal Proceedings

The Company is involved from time to time in claims, proceedings, and litigation, including the matters described in Item 8 of Part II, “Financial Statements and Supplementary Data — Note 7 — Commitments and Contingencies — Legal Proceedings” of our 2023 Annual Report on Form 10-K and in Item 1 of Part I, “Financial Statements — Note 4 — Commitments and Contingencies — Legal Proceedings” of our Quarterly Reports on Form 10-Q for the periods ended March 31, 2024 and June 30, 2024, as supplemented by the following:

In December 2018, Kove IO, Inc.

filed a complaint against Amazon Web Services, Inc.

in the United States District Court for the Northern District of Illinois.

The complaint alleged, among other things, that Amazon S3 and DynamoDB infringe U.S.

7,814,170 and 7,103,640, each entitled “Network Distributed Tracking Wire Transfer Protocol”;

and 7,233,978, entitled “Method and Apparatus for Managing Location Information in a Network Separate from the Data to Which the Location Information Pertains.” The complaint sought an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief.

In April 2024, a jury found that Amazon infringed the asserted patents and awarded Kove $ 525 million in damages.

In August 2024, the court awarded Kove $ 148 million in pre-judgment interest.

In September 2024, we filed a notice of appeal.

We disagree with the jury’s findings and will continue to defend ourselves vigorously in this matter.

Beginning in March 2020 with Frame-Wilson v.

Amazon.com, Inc.

filed in the United States District Court for the Western District of Washington (“W.D.

Wash.”), private litigants have filed a number of cases in the U.S.

and Canada alleging, among other things, price fixing arrangements between Amazon.com, Inc.

and vendors and third-party sellers in Amazon’s stores, monopolization and attempted monopolization, and consumer protection and unjust enrichment claims.

Attorneys General for the District of Columbia and California brought similar suits in May 2021 and September 2022 in the Superior Court of the District of Columbia and the California Superior Court for the County of San Francisco, respectively.

Some of the private cases include allegations of several distinct purported classes, including consumers who purchased a product through Amazon’s stores and consumers who purchased a product offered by Amazon through another e-commerce retailer.

The complaints seek billions of dollars of alleged damages, treble damages, punitive damages, injunctive relief, civil penalties, attorneys’ fees, and costs.

The Federal Trade Commission and a number of state Attorneys General filed a similar lawsuit in September 2023 in the W.D.

alleging violations of federal antitrust and state antitrust and consumer protection laws.

That complaint alleges, among other things, that Amazon has a monopoly in markets for online superstores and marketplace services, and unlawfully maintains those monopolies through anticompetitive practices relating to our pricing policies, advertising practices, the structure of Prime, and promotion of our own products on our website.

The complaint seeks injunctive and structural relief, an unspecified amount of damages, and costs.

In May 2024, the Attorney General of Arizona filed a complaint in the Superior Court of Arizona in Maricopa County alleging that Amazon’s practices related to pricing and the Featured Offers in its stores violate state antitrust and consumer protection laws.

That complaint also seeks injunctive relief, an unspecified amount of damages, civil penalties, and costs.

Amazon’s motions to dismiss were granted in part and denied in part in Frame-Wilson in March 2022 and March 2023, De Coster v.

Amazon.com, Inc.

Wash.) in January 2023, and the California Attorney General’s lawsuit in March 2023.

All three courts dismissed claims alleging that Amazon’s pricing policies are inherently illegal and denied dismissal of claims alleging that Amazon’s pricing policies are an unlawful restraint of trade.

In August 2024, the DC Court of Appeals overturned a prior decision by the DC Superior Court dismissing the DC Attorney General’s lawsuit and that case is now proceeding.

In September 2024, the United States District Court for the W.D.

granted in part Amazon’s motion to dismiss the suit brought by the FTC and certain state Attorneys General with respect to five state law claims and denied the motion with respect to the remaining claims.

We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters.

In October 2020, Broadband iTV, Inc.

filed a complaint against Amazon.com, Inc., Amazon.com Services LLC, and Amazon Web Services, Inc.

in the United States District Court for the Western District of Texas.

The complaint alleges, among other things, that certain Amazon Prime Video features and services infringe U.S.

9,648,388, 10,546,750, and 10,536,751, each entitled “Video-On-Demand Content Delivery System for Providing Video-On-Demand Services to TV Services Subscribers”;

10,028,026, entitled “System for Addressing On-Demand TV Program Content on TV Services Platform

of a Digital TV Services Provider”;

and 9,973,825, entitled “Dynamic Adjustment of Electronic Program Guide Displays Based on Viewer Preferences for Minimizing Navigation in VOD Program Selection.” The complaint seeks an unspecified amount of damages.

In April 2022, Broadband iTV alleged in its damages report that in the event of a finding of liability Amazon could be subject to $ 166 million to $ 986 million in damages.

In September 2022, the district court granted summary judgment, holding that the patents are invalid.

In October 2022, Broadband iTV filed a notice of appeal.

In September 2024, the United States Court of Appeals for the Federal Circuit affirmed the district court’s judgment.

This decision is subject to appeal.

We dispute the allegations of wrongdoing and will continue to defend ourselves vigorously in this matter.

In May 2023, Dialect, LLC filed a complaint against Amazon.com, Inc.

and Amazon Web Services, Inc.

in the United States District Court for the Eastern District for Virginia.

The complaint alleges, among other things, that Amazon’s Alexa-enabled products and services, such as Echo devices, Fire tablets, Fire TV sticks, Fire TVs, Alexa, and Alexa Voice Services, infringe U.S.

7,693,720 and 9,031,845, each entitled “Mobile Systems and Methods for Responding to Natural Language Speech Utterance”;

8,015,006, entitled “Systems and Methods for Processing Natural Language Speech Utterances with Context-Specific Domain Agents”;

8,140,327, entitled “System and Method for Filtering and Eliminating Noise from Natural Language Utterances to Improve Speech Recognition and Parsing”;

8,195,468 and 9,495,957, each entitled “Mobile Systems and Methods of Supporting Natural Language Human-Machine Interactions”;

and 9,263,039, entitled “Systems and Methods for Responding to Natural Language Speech Utterance.” The complaint seeks an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief.

In November 2023, the court granted in part Amazon’s motion to dismiss Dialect’s complaint and dismissed the ‘845 patent from the case.

In July and August 2024, the court granted in part Amazon’s motions for summary judgment, holding that Amazon does not infringe the ‘327 patent or two claims of the ‘006 patent and that Dialect cannot recover certain alleged damages.

We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

Beginning in October 2023, Nokia Technologies Oy and related entities filed complaints alleging infringement of patents related to video-related technologies against Amazon.com, Inc.

and related entities in multiple courts in the United States, India, the United Kingdom, Germany, and Brazil, the Unified Patent Court of the European Union, and the United States International Trade Commission.

The complaints allege, among other things, that certain Amazon Prime Video services and features of Amazon devices carrying the Prime Video app infringe Nokia’s patents;

some of the complaints additionally allege infringement by Freevee, Twitch, and Amazon voice assistants.

The complaints seek, among other things, injunctive relief and, in some cases, unspecified money damages, enhanced damages, attorneys’ fees, costs, interest, and declaratory relief.

These matters are at various procedural stages, with preliminary and final injunctions issued in certain instances.

We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters.

In July 2021, the Luxembourg National Commission for Data Protection (the “CNPD”) issued a decision against Amazon Europe Core S.à r.l.

claiming that Amazon’s processing of personal data did not comply with the EU General Data Protection Regulation.

The decision imposes a fine of € 746 million and corresponding practice revisions.

In March 2025, the Luxembourg Administrative Court dismissed our appeal of the CNPD’s decision.

In April 2025, we appealed the court’s decision to the Luxembourg Administrative Court of Appeal.

We believe the CNPD’s decision to be without merit and will continue to defend ourselves vigorously in this matter.

In addition, we are regularly subject to claims, litigation, and other proceedings, including potential regulatory proceedings, involving patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, privacy and data protection, consumer protection, commercial disputes, goods and services offered by us and by third parties, and other matters.

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Note 5 — DEBT

As of September 30, 2024, we had $ 60.5 billion of unsecured senior notes outstanding (the “Notes”).

As of March 31, 2025, we had $ 58.0 billion of unsecured senior notes outstanding (the “Notes”).

Our total long-term debt obligations are as follows (in millions):

Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2023 September 30, 2024

Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2024 March 31, 2025

2014 Notes issuance of $ 6.0 billion

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4.61 % - 4.74 %

Credit Facility 682 —

Other long-term debt — 750

Total face value of long-term debt 58,000 58,750

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___________________

(1) The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, and December 2022 Notes were 10.8 , 15.5 , 16.8 , 14.4 , 13.1 , and 4.1 years as of September 30, 2024.

The combined weighted-average remaining life of the Notes was 13.1 years as of September 30, 2024.

(1) The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, and December 2022 Notes were 15.1 , 15.0 , 16.3 , 13.9 , 12.6 , and 4.4 years as of March 31, 2025.

The combined weighted-average remaining life of the Notes was 13.2 years as of March 31, 2025.

Interest on the Notes is payable semi-annually in arrears.

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We are not subject to any financial covenants under the Notes.

The estimated fair value of the Notes was approximately $ 60.6 billion and $ 55.1 billion as of December 31, 2023 and September 30, 2024, which is based on quoted prices for our debt as of those dates.

As of September 30, 2024, we have repaid outstanding borrowings and terminated the secured revolving credit facility with a lender that was secured by certain seller receivables (the “Credit Facility”).

The estimated fair value of the Notes was approximately $ 50.2 billion and $ 50.8 billion as of December 31, 2024 and March 31, 2025, which is based on quoted prices for our debt as of those dates.

As of September 30, 2024, we had repaid outstanding borrowings and terminated the secured revolving credit facility with a lender that was secured by certain seller receivables (the “Credit Facility”).

The Credit Facility bore interest based on the daily Secured Overnight Financing Rate plus 1.25 %, and had a commitment fee of up to 0.45 % on the undrawn portion.

There were $ 682 million of borrowings outstanding under the Credit Facility as of December 31, 2023, which had an interest rate of 6.6 %.

As of December 31, 2023, we had pledged $ 806 million of our cash and seller receivables as collateral for debt related to our Credit Facility.

The estimated fair value of the Credit Facility, which was based on Level 2 inputs, approximated its carrying value as of December 31, 2023.

In January 2023, we entered into an $ 8.0 billion unsecured 364-day term loan with a syndicate of lenders (the “Term Loan”), maturing in January 2024 and bearing interest at the Secured Overnight Financing Rate specified in the Term Loan plus 0.75 %.

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As of December 31, 2023, the entire amount of the Term Loan had been repaid.

As of March 31, 2025, we had U.S.

Dollar and Euro commercial paper programs (the “Commercial Paper Programs”) under which we may from time to time issue unsecured commercial paper up to a total of $ 20.0 billion (including up to € 3.0 billion) at the date of issue, with individual maturities that may vary but will not exceed 397 days from the date of issue.

There were no borrowings outstanding under the Commercial Paper Programs as of December 31, 2023 and September 30, 2024.

April 2025, we increased the size of the Commercial Paper Programs from $ 20.0 billion to $ 30.0 billion.

There were no borrowings outstanding under the Commercial Paper Programs as of December 31, 2024 and March 31, 2025.

We use the net proceeds from the issuance of commercial paper for general corporate purposes.

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The interest rate applicable to outstanding balances under the Credit Agreement is the applicable benchmark rate specified in the Credit Agreement plus 0.45 %, with a commitment fee of 0.03 % on the undrawn portion of the credit facility.

There were no borrowings outstanding under the Credit Agreement as of December 31, 2023 and September 30, 2024.

As of September 30, 2024, we had a $ 5.0 billion unsecured 364-day revolving credit facility with a syndicate of lenders (the “2023 Short-Term Credit Agreement”).

There were no borrowings outstanding under the Credit Agreement as of December 31, 2024 and March 31, 2025.

We have a $ 5.0 billion unsecured 364-day revolving credit facility with a syndicate of lenders (the “Short-Term Credit Agreement”), which matures in October 2025 and may be extended for one additional period of 364 days subject to approval by the lenders.

The interest rate applicable to outstanding balances under the Short-Term Credit Agreement is the Secured Overnight Financing Rate specified in the Short-Term Credit Agreement plus 0.45 %, with a commitment fee of 0.03 % on the undrawn portion.

There were no borrowings outstanding under the 2023 Short-Term Credit Agreement as of December 31, 2023 and September 30, 2024.

In October 2024, we replaced the 2023 Short-Term Credit

Agreement with a new $ 5.0 billion unsecured 364-day revolving credit facility with a syndicate of lenders on substantially the same terms, which matures in October 2025 and may be extended for one additional period of 364 days subject to approval by the lenders.

There were no borrowings outstanding under the Short-Term Credit Agreement as of December 31, 2024 and March 31, 2025.

We also utilize other short-term credit facilities for working capital purposes.

There were $ 147 million and $ 88 million of borrowings outstanding under these facilities as of December 31, 2023 and September 30, 2024, which were included in “Accrued expenses and other” on our consolidated balance sheets.

In addition, we had $ 8.4 billion of unused letters of credit as of September 30, 2024.

There were $ 151 million and $ 76 million of borrowings outstanding under these facilities as of December 31, 2024 and March 31, 2025, which were included in “Accrued expenses and other” on our consolidated balance sheets.

In addition, we had $ 8.6 billion of unused letters of credit as of March 31, 2025.

Note 6 — STOCKHOLDERS’ EQUITY

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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 nine months ended September 30, 2023 or 2024.

As of September 30, 2024, we have $ 6.1 billion remaining under the repurchase program.

There were no repurchases of our common stock during the three months ended March 31, 2024 or 2025.

As of March 31, 2025, we have $ 6.1 billion remaining under the repurchase program.

Stock Award Plans

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Stock Award Activity

Common shares outstanding plus shares underlying outstanding stock awards totaled 10.8 billion and 10.9 billion as of December 31, 2023 and September 30, 2024.

Common shares outstanding plus shares underlying outstanding stock awards totaled 10.9 billion as of December 31, 2024 and March 31, 2025.

These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited.

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2024 2023 2024

Cost of sales $ 174 $ 148

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Total stock-based compensation expense $ 4,961 $ 3,689

The following table summarizes our restricted stock unit activity for the nine months ended September 30, 2024 (in millions):

The following table summarizes our restricted stock unit activity for the three months ended March 31, 2025 (in millions):

Number of Units Weighted-Average

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Units forfeited ( 8.7 ) 142

Outstanding as of September 30, 2024 361.5 139

Scheduled vesting for outstanding restricted stock units as of September 30, 2024, is as follows (in millions):

Three Months Ended December 31, Year Ended December 31,

Outstanding as of March 31, 2025 263.0 148

Scheduled vesting for outstanding restricted stock units as of March 31, 2025, is as follows (in millions):

Nine Months Ended December 31, Year Ended December 31,

2025 2026 2027 2028 2029 Thereafter Total

Scheduled vesting — restricted stock units 122.9 86.7 35.9 13.9 2.2 1.4 263.0

As of September 30, 2024, there was $ 18.9 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements.

This compensation is recognized on an accelerated basis with more than half of the compensation

expected to be expensed in the next twelve months, and has a remaining weighted-average recognition period of 1.0 year.

The estimated forfeiture rate as of December 31, 2023 and September 30, 2024 was 26.1 % and 25.7 %.

As of March 31, 2025, there was $ 13.9 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements.

This compensation is recognized on an accelerated basis with more than half of the compensation expected to be expensed in the next twelve months, and has a remaining weighted-average recognition period of 1.0 year.

Changes in Stockholders’ Equity

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2024 2023 2024

Total beginning stockholders’ equity $ 201,875 $ 285,970

Beginning common stock 108 110 108 109

Stock-based compensation and issuance of employee benefit plan stock — — — 1

Ending common stock 108 110 108 110

Beginning and ending common stock 109 111

Beginning and ending treasury stock ( 7,837 ) ( 7,837 )

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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.

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.

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federal research and development credit and foreign income deduction and adversely affected by state income taxes.

In addition, valuation gains and losses from our equity investment in Rivian impact our pre-tax income and may cause variability in our effective tax rate.

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, primarily consisting of discrete tax expense related to shortfalls from stock-based compensation and approximately $ 600 million of tax benefit resulting from a change in the estimated qualifying expenditures associated with our

federal R&D credit.

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.

Cash paid for income taxes, net of refunds was $ 2.6 billion and $ 2.0 billion in Q3 2023 and Q3 2024, and $ 7.0 billion and $ 8.2 billion for the nine months ended September 30, 2023 and 2024.

As of December 31, 2023 and September 30, 2024, income tax contingencies were approximately $ 5.2 billion and $ 6.3 billion.

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.

Cash paid for income taxes, net of refunds was $ 458 million and $ 877 million in Q1 2024 and Q1 2025.

As of December 31, 2024 and March 31, 2025, income tax contingencies were approximately $ 6.5 billion and $ 6.3 billion.

Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax contingencies.

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These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating losses with respect to years under examination as well as subsequent periods.

We are also subject to taxation in various states and other foreign jurisdictions including China, France, Germany, India, Japan, Luxembourg, and the United Kingdom.

We are also subject to taxation in various states and foreign jurisdictions including China, France, Germany, India, Japan, Luxembourg, and the United Kingdom.

We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities in respect of these particular jurisdictions primarily for 2011 and thereafter.

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There are no internal revenue transactions between our reportable segments.

Our chief operating decision maker (“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 by reviewing annual forecasts and consolidated results by segment on a quarterly basis.

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2024 2023 2024

North America

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Operating expenses 31,032 32,496

Operating income (loss) $ ( 95 ) $ 1,301 $ ( 2,237 ) $ 2,477

Operating income $ 903 $ 1,017

Net sales $ 25,037 $ 29,267

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2024 2023 2024

Online stores (1) $ 54,670 $ 57,407

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(5) Includes annual and monthly fees associated with Amazon Prime memberships, as well as digital video, audiobook, digital music, e-book, and other non-AWS subscription services.

(6) Includes sales related to various other offerings, such as health care services, certain licensing and distribution of video content, and shipping services, and our co-branded credit card agreements.

(6) Includes sales related to various other offerings (such as shipping services, healthcare services, and certain licensing and distribution of video content) and our co-branded credit card agreements.

Total segment assets exclude corporate assets, such as cash and cash equivalents, marketable securities, other long-term investments, corporate facilities, goodwill and other acquired intangible assets, and tax assets.

Technology infrastructure assets are allocated among the segments based on usage, with the majority allocated to the AWS segment.

Total segment assets reconciled to consolidated amounts are as follows (in millions):

December 31, 2024 March 31, 2025

North America (1) $ 210,120 $ 210,198

International (1) 69,487 70,231

AWS (2) 155,953 179,386

Corporate 189,334 183,441

Consolidated $ 624,894 $ 643,256

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(1) North America and International segment assets primarily consist of property and equipment, operating leases, inventory, accounts receivable, and digital video and music content.

(2) AWS segment assets primarily consist of property and equipment, accounts receivable, and operating leases.

Property and equipment, net by segment is as follows (in millions):

December 31, 2024 March 31, 2025

North America $ 103,041 $ 102,301

International 25,618 26,170

AWS 110,683 130,919

Corporate 13,323 13,391

Consolidated $ 252,665 $ 272,781

Total net additions to property and equipment include technology infrastructure assets, which are allocated among the segments based on usage, with the majority allocated to the AWS segment.

Total net additions to property and equipment include the effect of non-cash activity such as property and equipment acquired but not yet paid.

Total net additions to property and equipment are as follows (in millions):

Three Months Ended

North America (1) $ 5,151 $ 5,096

International (1) 1,109 1,506

AWS (2) 7,925 20,464

Corporate 372 383

Consolidated $ 14,557 $ 27,449

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(1) Includes property and equipment added under finance leases of $ 7 million and $ 54 million in Q1 2024 and Q1 2025.

(2) Includes property and equipment added under finance leases of $ 35 million and $ 0 million in Q1 2024 and Q1 2025.

Depreciation and amortization expense on property and equipment, including corporate property and equipment, are allocated to all segments based on usage.

Total depreciation and amortization expense, by segment, is as follows (in millions):

Three Months Ended

North America $ 3,373 $ 3,530

International 1,054 1,136

AWS 2,839 4,390

Consolidated $ 7,266 $ 9,056

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements