AMAZON COM INC 10-Q

Item 1. Financial Statements AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Three Months Ended March 31, Twelve Months Ended March 31, 2025 2026 2025 2026 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 82,312 $ 90,106 $ 73,332 $ 69,893 OPERATING ACTIVITIES: Net income 17,127 30,255 65,944 90,798 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other 14,262 18,945 55,373 70,439 Stock-based compensation 3,689 4,032 20,739 19,810 Non-operating expense (income), net ( 2,817 ) ( 15,632 ) ( 3,539 ) ( 27,695 ) Deferred income taxes 507 12,798 ( 3,203 ) 23,761 Changes in operating assets and liabilities: Inventories ( 1,222 ) 1,622 ( 4,882 ) ( 158 ) Accounts receivable, net and other 1,247 ( 5,750 ) ( 5,686 ) ( 14,330 ) Other assets ( 3,402 ) ( 3,811 ) ( 15,184 ) ( 16,041 ) Accounts payable ( 9,043 ) ( 8,737 ) 5,211 11,537 Accrued expenses and other ( 4,061 ) ( 8,045 ) ( 4,037 ) ( 9,003 ) Unearned revenue 728 355 3,167 ( 587 ) Net cash provided by (used in) operating activities 17,015 26,032 113,903 148,531 INVESTING ACTIVITIES: Purchases of property and equipment ( 25,019 ) ( 44,203 ) ( 93,093 ) ( 151,003 ) Proceeds from property and equipment sales and incentives 764 969 5,115 3,704 Acquisitions, net of cash acquired, non-marketable investments, and other, net 48 ( 15,408 ) ( 3,680 ) ( 19,297 ) Sales and maturities of marketable securities 7,737 17,686 22,748 54,335 Purchases of marketable securities ( 13,333 ) ( 23,256 ) ( 37,373 ) ( 64,693 ) Net cash provided by (used in) investing activities ( 29,803 ) ( 64,212 ) ( 106,283 ) ( 176,954 ) FINANCING ACTIVITIES: Proceeds from short-term debt, and other 1,815 6,018 6,619 13,523 Repayments of short-term debt, and other ( 2,082 ) ( 6,109 ) ( 6,738 ) ( 12,453 ) Proceeds from long-term debt 746 53,441 746 68,368 Repayments of long-term debt — — ( 8,852 ) ( 5,021 ) Principal repayments of finance leases ( 410 ) ( 468 ) ( 1,683 ) ( 1,615 ) Principal repayments of financing obligations ( 116 ) ( 115 ) ( 695 ) ( 327 ) Net cash provided by (used in) financing activities ( 47 ) 52,767 ( 10,603 ) 62,475 Foreign currency effect on cash, cash equivalents, and restricted cash 416 ( 1 ) ( 456 ) 747 Net increase (decrease) in cash, cash equivalents, and restricted cash ( 12,419 ) 14,586 ( 3,439 ) 34,799 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $ 69,893 $ 104,692 $ 69,893 $ 104,692 See accompanying notes to consolidated financial statements. 3 Table of Contents AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months Ended March 31, 2025 2026 Net product sales $ 63,970 $ 71,304 Net service sales 91,697 110,215 Total net sales 155,667 181,519 Operating expenses: Cost of sales 76,976 87,463 Fulfillment 24,593 27,289 Technology and infrastructure 22,994 29,567 Sales and marketing 9,763 10,314 General and administrative 2,628 2,587 Other operating expense (income), net 308 447 Total operating expenses 137,262 157,667 Operating income 18,405 23,852 Interest income 1,066 1,135 Interest expense ( 541 ) ( 800 ) Other income (expense), net 2,749 15,647 Total non-operating income 3,274 15,982 Income before income taxes 21,679 39,834 Provision for income taxes ( 4,553 ) ( 9,560 ) Equity-method investment activity, net of tax 1 ( 19 ) Net income $ 17,127 $ 30,255 Basic earnings per share $ 1.62 $ 2.82 Diluted earnings per share $ 1.59 $ 2.78 Weighted-average shares used in computation of earnings per share: Basic 10,603 10,743 Diluted 10,793 10,874 See accompanying notes to consolidated financial statements. 4 Table of Contents AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) (unaudited) Three Months Ended March 31, 2025 2026 Net income $ 17,127 $ 30,255 Other comprehensive income (loss): Foreign currency translation adjustments, net of tax of $( 66 ) and $( 13 ) 1,535 ( 764 ) Unrealized gains (losses) on net investment hedging instruments, net of tax of $ 0 and $ 24 — ( 85 ) Available-for-sale debt securities: Change in net unrealized gains (losses), net of tax of $( 11 ) and $( 340 ) 37 826 Less: reclassification adjustments for net losses (gains) included in “Other income (expense), net,” net of tax of $ 809 and $ 1,142 ( 2,454 ) ( 3,337 ) Net change ( 2,417 ) ( 2,511 ) Other, net of tax of $ 1 and $( 2 ) 2 ( 2 ) Total other comprehensive income (loss) ( 880 ) ( 3,362 ) Comprehensive income $ 16,247 $ 26,893 See accompanying notes to consolidated financial statements. 5 Table of Contents AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) December 31, 2025 March 31, 2026 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 86,810 $ 101,816 Marketable securities 36,219 41,273 Inventories 38,325 36,534 Accounts receivable, net and other 67,729 75,532 Total current assets 229,083 255,155 Property and equipment, net 357,025 397,458 Operating leases 86,054 88,741 Goodwill 23,273 23,449 Other assets 122,607 151,827 Total assets $ 818,042 $ 916,630 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 121,909 $ 124,749 Accrued expenses and other 75,520 71,120 Unearned revenue 20,576 20,887 Total current liabilities 218,005 216,756 Long-term lease liabilities 87,339 90,814 Long-term debt 65,648 119,074 Other long-term liabilities 35,985 48,072 Commitments and contingencies (Note 4) Stockholders’ equity: Preferred stock ($ 0.01 par value; 500 shares authorized; no shares issued or outstanding) — — Common stock ($ 0.01 par value; 100,000 shares authorized; 11,246 and 11,269 shares issued; 10,731 and 10,754 shares outstanding) 112 113 Treasury stock, at cost ( 7,837 ) ( 7,837 ) Additional paid-in capital 140,024 143,979 Accumulated other comprehensive income (loss) 28,230 24,868 Retained earnings 250,536 280,791 Total stockholders’ equity 411,065 441,914 Total liabilities and stockholders’ equity $ 818,042 $ 916,630 See accompanying notes to consolidated financial statements. 6 Table of Contents AMAZON.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1 — ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES Unaudited Interim Financial Information We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2026 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. 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 2025 Annual Report on Form 10-K. 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 (“VIEs”) and of which we are the primary beneficiary, including certain entities in India and certain entities that support our healthcare services and production and distribution of video content. We are the primary beneficiary if we have the power to direct the activities of the VIE and absorb the losses or benefits that would be significant to the VIE. Intercompany balances and transactions between consolidated entities are eliminated. Use of Estimates 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, collectability of receivables, commitments and contingencies, impairment of property and equipment and operating leases, income taxes, inventory valuation, self-insurance liabilities, stock-based compensation forfeiture rates, the determination of when to capitalize certain costs relating to new products or service offerings, useful lives of equipment, valuation and impairment of investments, valuation of acquired intangibles and goodwill, valuation of derivative instruments, vendor funding, 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. Supplemental Cash Flow Information The following table shows supplemental cash flow information (in millions): Three Months Ended March 31, Twelve Months Ended March 31, 2025 2026 2025 2026 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest on debt, net of capitalized interest $ 236 $ 274 $ 1,825 $ 1,496 Cash paid for operating leases 3,562 4,315 12,571 15,791 Cash paid for interest on finance leases 71 102 284 326 Cash paid for interest on financing obligations 55 76 210 217 Cash paid for income taxes, net of refunds 877 1,323 12,727 8,741 Assets acquired under operating leases 4,321 6,239 15,992 21,848 Property and equipment acquired under finance leases, net of remeasurements and modifications 54 1,565 866 4,422 Increase (decrease) in property and equipment acquired but not yet paid 3,108 9,920 9,736 16,967 7 Table of Contents Earnings Per Share Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. The following table shows the calculation of diluted shares (in millions): Three Months Ended March 31, 2025 2026 Shares used in computation of basic earnings per share 10,603 10,743 Total dilutive effect of outstanding stock awards 190 131 Shares used in computation of diluted earnings per share 10,793 10,874 Other Income (Expense), Net Other income (expense), net is as follows (in millions): Three Months Ended March 31, 2025 2026 Marketable equity securities valuation gains (losses), net $ ( 138 ) $ ( 889 ) Equity warrant valuation gains (losses), net ( 378 ) ( 398 ) Reclassification adjustments for gains (losses) on available-for-sale debt securities, net 3,263 4,479 Upward adjustments relating to equity investments in private companies 37 12,328 Foreign currency gains (losses), net ( 2 ) 160 Other, net ( 33 ) ( 33 ) Total other income (expense), net $ 2,749 $ 15,647 The reclassification adjustments for the gains on available-for-sale debt securities of $ 3.3 billion and $ 4.5 billion in Q1 2025 and Q1 2026 are primarily from the portions of our convertible notes investments in Anthropic, PBC (“Anthropic”) that were converted to nonvoting preferred stock during Q1 2025 and Q1 2026. The upward adjustments relating to equity investments in private companies of $ 12.3 billion in Q1 2026 reflect observable changes in prices, primarily from our nonvoting preferred stock in Anthropic. Derivatives and Hedging Energy Contracts — We enter into energy contracts to secure electricity supply for our existing and future operations, some of which extend 20 years. We may make or receive net cash payments, rather than take delivery of electricity, when our consumption is less than committed quantities due to operational variability. Because we may make or receive net cash payments, these contracts are derivative instruments. These contracts are not traded on exchanges or transacted in secondary markets and are not used for trading or speculative purposes. Derivative instruments are measured at fair value each reporting period. Fair value measurements are based on valuation methods using both common factors like electricity futures prices where there are more liquid trading volumes generally for remaining contractual periods up to four to six years , forward capacity auctions, and risk-free interest rates, and a number of management assumptions for remaining contractual periods greater than four to six years where there is significantly less or no trading data such as long-dated forward commodity prices and implied volatility curves, and credit adjustments. The extent of management judgment is significant (Level 3). Fair value measurements will not impact cash flows but may be material to our statements of operations and balance sheet due to the duration of these contracts and volatility inherent in valuation methods. Generally, we can terminate our contracts by paying cash in the form of fixed penalties, such as reimbursing the counterparty for the costs of new construction incurred. Termination penalties are generally not based on fair value measurements. As of March 31, 2026, the energy contract quantities subject to derivative accounting fair value measurements were approximately 200 million megawatt-hours and the weighted-average remaining duration of these contracts is approximately 15 years, with the majority of these megawatt-hours to be delivered beyond the next nine years . The impact of these fair value measurements on our consolidated statement of operations in Q1 2025 and Q1 2026 was not significant. 8 Table of Contents Changes in fair value measurements will create unrealized gains and losses recorded within operating expenses on our statements of operations with corresponding assets (unrealized gains) and liabilities (unrealized losses) recorded on our balance sheet. Certain of our energy contracts are subject to regulatory approval and are exempt from derivative guidance until the approval is obtained. If possible, we may elect the normal purchases and normal sales (NPNS) scope exemption from derivative guidance for energy contracts where we expect to consume substantially all committed quantities. A contract that no longer meets the NPNS exemption must be measured at fair value with immediate recognition in our financial statements. Net Investment Hedges — Our March 2026 Euro-denominated Notes issuance of € 14.5 billion creates an exposure to changes in foreign exchange rates. We designated these notes as net investment hedges to mitigate foreign currency exposures related to the translation of our investments in foreign operations to U.S. dollars. Foreign currency unrealized gains and losses on these notes are included in “Accumulated other comprehensive income (loss),” a separate component of stockholders’ equity, until the foreign operations are sold or substantially liquidated, at which point these amounts and any translation adjustment of the foreign operations are reclassified to our consolidated statements of operations. Inventories 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 $ 3.3 billion and $ 2.8 billion as of December 31, 2025 and March 31, 2026. 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 prepaid expenses and other current assets. As of December 31, 2025 and March 31, 2026, customer receivables, net, were $ 40.4 billion and $ 43.3 billion, vendor receivables, net, were $ 15.9 billion and $ 16.4 billion, and other receivables, net, were $ 4.5 billion and $ 8.6 billion. Prepaid expenses and other current assets, which include amounts related to satellite network launch services deposits, were $ 6.9 billion and $ 7.2 billion as of December 31, 2025 and March 31, 2026. 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 $ 2.4 billion and $ 2.6 billion as of December 31, 2025 and March 31, 2026. 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, 2025 and March 31, 2026 were $ 21.3 billion and $ 21.5 billion. Total video and music expense was $ 5.1 billion and $ 6.0 billion in Q1 2025 and Q1 2026. Unearned Revenue Unearned revenue is recorded when payments are received or due in advance of performing our service obligations and is recognized over the service period. Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships. Our total unearned revenue as of December 31, 2025 was $ 25.0 billion, of which $ 9.4 billion was recognized as revenue during the three months ended March 31, 2026. Included in “Other long-term liabilities” on our consolidated balance sheets was $ 4.4 billion of unearned revenue as of December 31, 2025 and March 31, 2026. Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that we expect to fulfill but have not yet been recognized in our financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were approximately $ 364 billion as of March 31, 2026. The weighted-average remaining life of our long-term contracts is 5.5 years. The amount and timing of revenue recognition will be driven by customer usage and our performance in accordance with contractual obligations, which can extend beyond the original contractual duration and commitment. In Q1 2026, AWS and OpenAI Group PBC (“OpenAI”) announced an expansion of the existing $ 38.0 billion multi-year commitment and commercial arrangement with OpenAI by $ 100.0 billion over 8.0 years, which includes contractual obligations related to the performance of AWS chips. 9 Table of Contents Accounting Pronouncements Not Yet Adopted 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, 2025 and March 31, 2026, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S. government and agency securities, other investment grade securities, and marketable equity securities. Cash equivalents and marketable securities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. We measure the fair value of money market funds and certain marketable equity securities based on quoted prices in active markets for identical assets or liabilities. Other marketable securities were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. 10 Table of Contents The following table summarizes, by major investment 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, 2025 March 31, 2026 Total Estimated Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Estimated Fair Value Cash and time deposits $ 16,145 $ 14,655 $ — $ — $ 14,655 Level 1: Money market funds 29,777 35,697 — — 35,697 Equity securities (1) 3,687 2,801 Level 2: U.S. government and agency securities 5,222 4,601 2 ( 18 ) 4,585 Corporate debt securities 69,585 86,511 13 ( 29 ) 86,495 Asset-backed securities 1,780 1,711 3 ( 11 ) 1,703 Other financial instruments 129 29 — — 29 $ 126,325 $ 143,204 $ 18 $ ( 58 ) $ 145,965 Less: Restricted cash, cash equivalents, and marketable securities (2) ( 3,296 ) ( 2,876 ) Total cash, cash equivalents, and marketable securities $ 123,029 $ 143,089 ___________________ (1) The related unrealized gain (loss) recorded in “Other income (expense), net” was $( 205 ) million and $( 883 ) million in Q1 2025 and Q1 2026. (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. We classify cash, cash equivalents, and marketable debt securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 4 — Commitments and Contingencies.” The following table summarizes the remaining contractual maturities of our cash equivalents and marketable debt securities as of March 31, 2026 (in millions): Amortized Cost Estimated Fair Value Due within one year $ 119,054 $ 119,043 Due after one year through five years 8,083 8,076 Due after five years through ten years 463 461 Due after ten years 949 929 Total $ 128,549 $ 128,509 Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions. Non-Marketable Investments Anthropic — From Q3 2023 to Q4 2025, we invested $ 8.0 billion in convertible notes from Anthropic, which are classified as available-for-sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive income (loss)” and as Level 3 assets. 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 and Q1 2026, a portion of the then-outstanding notes was converted to nonvoting preferred stock. The investments in nonvoting preferred stock are initially recorded at their estimated fair value at the time of each conversion and are 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 representing Level 3 fair value measurements recognized in “Other income (expense), net” on our consolidated statements of operations. As a result of these conversions, a portion of the unrealized gain associated with the notes included in “Accumulated other comprehensive income (loss)” was 11 Table of Contents reclassified and a gain of approximately $ 3.3 billion and $ 4.5 billion was recorded in “Other income (expense), net.” In Q1 2026, we also recorded an upward adjustment of approximately $ 12.3 billion to our nonvoting preferred stock in “Other income (expense), net” to reflect observable changes in price. As of December 31, 2025 and March 31, 2026, the amounts recorded on our consolidated balance sheets for nonvoting preferred stock were approximately $ 14.8 billion and $ 32.0 billion. As of December 31, 2025 and March 31, 2026, the estimated fair value of our convertible notes recorded on our consolidated balance sheets was approximately $ 45.8 billion and $ 42.2 billion, and the associated unrealized gain included in “Accumulated other comprehensive income (loss)” was $ 39.5 billion and $ 36.3 billion. We also have a commercial arrangement primarily for the provision of AWS cloud services, which includes the use of AWS chips. Subsequent to March 31, 2026, we invested $ 5.0 billion in Anthropic nonvoting preferred stock. Additionally, we amended our commercial arrangement which is primarily for the provision of AWS cloud services and includes contractual obligations related to the performance of AWS chips. Furthermore, we entered into a financing arrangement to make available to Anthropic an aggregate facility not to exceed $ 20.0 billion that will expire 30 months after a liquidity event, as defined, such as an Anthropic initial public offering or direct listing of equity securities. At inception, there is no amount available to be drawn against and as we reach certain delivery milestones of compute capacity under the amended commercial arrangement, amounts under this facility are made available for Anthropic to draw upon at its discretion. Draws against the facility will be in the form of new Anthropic convertible notes or, after a liquidity event, Anthropic common stock, which will be issued to us in exchange for cash. We also have an option to invest up to $ 5.0 billion in Anthropic’s future equity financings which if elected would reduce the amount available under the facility by the amount exercised under the option. OpenAI — In Q1 2026, we invested $ 15.0 billion in Series C Preferred Stock of OpenAI, and we also entered into an equity commitment letter agreement (the “Letter Agreement”), pursuant to which we agreed to purchase additional shares of Series C Preferred Stock (the “Commitment Shares”) with an aggregate purchase price of $ 35.0 billion (the “Commitment Amount”). We may, in our sole discretion, elect to purchase all or any portion of the Commitment Shares at any time pursuant to the Letter Agreement. To the extent that we have not done so previously, we are obligated to purchase all remaining Commitment Shares upon the earlier to occur of (i) OpenAI meeting specified milestones, and (ii) OpenAI directly or indirectly consummating an initial public offering or direct listing of equity securities in the United States (a “Public Listing Transaction”), in each case subject to certain terms and conditions. If certain conditions are not satisfied until after a Public Listing Transaction occurs, then our purchase commitment will relate to the class of OpenAI’s common stock that is publicly traded at the same effective price per share as the Series C Preferred Stock price. The parties’ obligations under the Letter Agreement will terminate if we have not invested the Commitment Amount by December 31, 2028, which date may accelerate under certain circumstances. We account for our investment in Series C Preferred Stock and purchase commitment 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 representing Level 3 fair value measurements recognized in “Other income (expense), net” on our consolidated statements of operations. Additionally, in Q1 2026, we and an affiliate of OpenAI entered into (i) a commercial arrangement primarily for the provision of AWS cloud services, which includes the use of AWS chips, and (ii) a joint collaboration agreement pursuant to which certain services using OpenAI models will be made available to the Company and on AWS. As of December 31, 2025 and March 31, 2026, equity investments in private companies not accounted for under the equity-method, which primarily relate to nonvoting preferred stock in Anthropic and preferred stock in OpenAI, had a carrying value of $ 16.2 billion and $ 48.1 billion, with adjustments for observable changes in prices or impairments representing Level 3 fair value measurements recognized in “Other income (expense), net” on our consolidated statements of operations. As of December 31, 2025 and March 31, 2026, 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 $ 659 million and $ 923 million. We hold equity warrants giving us the right to acquire stock of other companies. As of December 31, 2025 and March 31, 2026, these warrants had a fair value of $ 2.7 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. These non-marketable investments are included within “Other assets” on our consolidated balance sheets. Certain of our investments, including our investments in Anthropic and OpenAI, represent a variable interest in an entity for which we do not consolidate because we are not the primary beneficiary. Our maximum exposure to loss is generally limited to the current carrying values of these investments and any future funding commitments. 12 Table of Contents 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, 2025 March 31, 2026 Cash and cash equivalents $ 86,810 $ 101,816 Restricted cash included in “Accounts receivable, net and other” 300 330 Restricted cash included in “Other assets” 2,996 2,546 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 90,106 $ 104,692 Note 3 — LEASES 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 $ 55.6 billion and $ 56.4 billion as of December 31, 2025 and March 31, 2026. Accumulated amortization associated with finance leases was $ 40.4 billion as of December 31, 2025 and March 31, 2026. Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions): Three Months Ended March 31, 2025 2026 Operating lease cost $ 3,240 $ 3,917 Finance lease cost: Amortization of lease assets 873 733 Interest on lease liabilities 71 101 Finance lease cost 944 834 Variable lease cost 696 742 Total lease cost $ 4,880 $ 5,493 Other information about lease amounts recognized in our consolidated financial statements is as follows: December 31, 2025 March 31, 2026 Weighted-average remaining lease term – operating leases 10.0 years 10.0 years Weighted-average remaining lease term – finance leases 12.6 years 12.8 years Weighted-average discount rate – operating leases 3.7 % 3.8 % Weighted-average discount rate – finance leases 3.4 % 3.6 % 13 Table of Contents Our lease liabilities were as follows (in millions): December 31, 2025 Operating Leases Finance Leases Total Gross lease liabilities $ 106,914 $ 14,917 $ 121,831 Less: imputed interest ( 17,662 ) ( 2,631 ) ( 20,293 ) Present value of lease liabilities 89,252 12,286 101,538 Less: current portion of lease liabilities ( 12,655 ) ( 1,544 ) ( 14,199 ) Total long-term lease liabilities $ 76,597 $ 10,742 $ 87,339 March 31, 2026 Operating Leases Finance Leases Total Gross lease liabilities $ 110,135 $ 16,496 $ 126,631 Less: imputed interest ( 18,518 ) ( 3,171 ) ( 21,689 ) Present value of lease liabilities 91,617 13,325 104,942 Less: current portion of lease liabilities ( 12,550 ) ( 1,578 ) ( 14,128 ) Total long-term lease liabilities $ 79,067 $ 11,747 $ 90,814 14 Table of Contents Note 4 — COMMITMENTS AND CONTINGENCIES Commitments The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of March 31, 2026 (in millions): Nine Months Ended December 31, Year Ended December 31, 2026 2027 2028 2029 2030 Thereafter Total Long-term debt principal and interest $ 5,937 $ 13,583 $ 16,657 $ 11,076 $ 10,710 $ 145,575 $ 203,538 Operating lease liabilities 11,746 13,867 12,934 11,597 10,369 49,622 110,135 Finance lease liabilities, including interest 1,488 1,742 1,848 1,413 1,238 8,767 16,496 Financing obligations, including interest (1) 432 627 638 648 660 7,178 10,183 Leases not yet commenced 5,135 9,617 7,215 7,296 7,292 69,792 106,347 Unconditional purchase obligations (2) 19,143 15,825 8,482 7,327 7,330 45,661 103,768 Other commitments (3) 2,608 1,804 1,171 998 967 11,265 18,813 Total commitments $ 46,489 $ 57,065 $ 48,945 $ 40,355 $ 38,566 $ 337,860 $ 569,280 ___________________ (1) Includes non-cancellable financing obligations for fulfillment network and data center facilities. Excluding interest, current financing obligations of $ 358 million and $ 340 million are recorded within “Accrued expenses and other” and $ 7.8 billion and $ 8.2 billion are recorded within “Other long-term liabilities” as of December 31, 2025 and March 31, 2026. The weighted-average remaining term of the financing obligations was 15.0 years and the weighted-average imputed interest rate was 2.9 % and 3.1 % as of December 31, 2025 and March 31, 2026. (2) Includes unconditional purchase obligations related to long-term agreements to procure energy, acquire and license digital media content, acquire property and equipment, and license software that are not reflected on the consolidated balance sheets. For those agreements with variable terms or subject to certain regulatory approvals, we do not estimate the total obligation beyond any minimum quantities and/or pricing, or termination penalties, 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. Energy agreements based on actual generation without a fixed or minimum volume commitment are not included. Certain of our energy agreements also provide the right to receive energy certificates. (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 $ 6.7 billion of income tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. On April 13, 2026, Amazon entered into a definitive merger agreement to acquire Globalstar, Inc. (“Globalstar”), a Delaware corporation, for a mix of cash and stock consideration. Under the terms of the merger agreement, prior to closing, Globalstar stockholders will elect to receive, for each share of Globalstar common stock they own, either (i) $ 90.00 in cash or (ii) 0.3210 shares of Amazon common stock (with a value capped at $ 90.00 per share). The value of the total consideration will vary based on the price of shares of Amazon common stock and the elections of Globalstar stockholders. The total consideration is also subject to (i) a proration mechanism that caps aggregate cash elections to a maximum of 40 % of total Globalstar shares, and automatically converts excess cash consideration into stock consideration on a pro rata basis and (ii) a downward adjustment of a maximum of $ 110 million in the event Globalstar does not meet certain operational milestones. As of the date of the merger agreement, the acquisition implied a value for Globalstar of approximately $ 10.9 billion, including its debt. On the date of the merger agreement, we also entered into agreements with Apple Inc. (“Apple”), Globalstar’s largest customer, to provide certain services after the acquisition and to redeem certain equity interests held by Apple in a Globalstar special purpose entity. The acquisition is expected to close in 2027, subject to the satisfaction of certain closing conditions, including receipt of regulatory approvals and Globalstar’s achievement of certain satellite replacement milestones. Other Contingencies We are disputing claims and denials of refunds or credits, and monitoring or evaluating potential claims, related to various non-income taxes (such as sales, value added, consumption, service, and similar taxes), including in jurisdictions in which we already collect and remit these taxes. These non-income tax controversies typically include (i) the taxability of products and services, including cross-border intercompany transactions, (ii) collection and withholding on transactions with 15 Table of Contents third parties, including as a result of evolving requirements imposed on marketplaces with respect to third-party sellers, and (iii) the adequacy of compliance with reporting obligations, including evolving documentation requirements. Due to the inherent complexity and uncertainty of these matters and the judicial and regulatory processes in certain jurisdictions, the final outcome of any such controversies may be materially different from our expectations. 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 2025 Annual Report on Form 10-K, as supplemented by the following: In May 2018, Rensselaer Polytechnic Institute and CF Dynamic Advances LLC filed a complaint against Amazon.com, Inc. in the United States District Court for the Northern District of New York. The complaint alleged, among other things, that “Alexa Voice Software and Alexa enabled devices” infringe U.S. Patent No. 7,177,798. The complaint sought an injunction, an unspecified amount of damages, enhanced damages , an ongoing royalty, interest, attorneys’ fees, and costs. In March 2023, the plaintiffs alleged in their damages report that in the event of a finding of liability Amazon could be subject to $ 140 million to $ 267 million in damages. In March 2024, the district court granted summary judgment ruling that the patent is invalid and dismissed the case. In April 2024, the plaintiffs filed a notice of appeal. In February 2026, 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 addition, we are regularly subject to claims, litigation, and other proceedings, including government inquiries and investigations that could lead to the foregoing and 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. The outcomes of our legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. We evaluate, on a regular basis, developments in our legal proceedings and other contingencies that could affect the amount of liability, including amounts in excess of any previous accruals and reasonably possible losses disclosed, and make adjustments and changes to our accruals and disclosures as appropriate. For the matters we disclose that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. Until the final resolution of such matters, if any of our estimates and assumptions change or prove to have been incorrect, we may experience losses in excess of the amounts recorded, which could have a material effect on our business, consolidated financial position, results of operations, or cash flows. See also “Note 7 — Income Taxes.” 16 Table of Contents Note 5 — DEBT As of March 31, 2026, we had $ 121.8 billion of unsecured senior notes outstanding (the “Notes”), including € 14.5 billion ($ 16.8 billion) and $ 37.0 billion issued in March 2026 for general corporate purposes. Our total long-term debt obligations are as follows (in millions): Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2025 March 31, 2026 2014 Notes issuance of $ 6.0 billion 2034 - 2044 4.80 % - 4.95 % 4.93 % - 5.12 % 2,750 2,750 2017 Notes issuance of $ 17.0 billion 2027 - 2057 3.15 % - 4.25 % 3.25 % - 4.33 % 12,000 12,000 2020 Notes issuance of $ 10.0 billion 2027 - 2060 1.20 % - 2.70 % 1.26 % - 2.77 % 7,750 7,750 2021 Notes issuance of $ 18.5 billion 2026 - 2061 1.00 % - 3.25 % 1.14 % - 3.31 % 15,000 15,000 April 2022 Notes issuance of $ 12.8 billion 2027 - 2062 3.30 % - 4.10 % 3.40 % - 4.15 % 9,750 9,750 December 2022 Notes issuance of $ 8.3 billion 2027 - 2032 4.55 % - 4.70 % 4.61 % - 4.74 % 5,750 5,750 2025 Notes issuance of $ 15.0 billion 2028 - 2065 3.90 % - 5.55 % 3.99 % - 5.62 % 15,000 15,000 March 2026 Notes issuance of $ 37.0 billion (2) 2028 - 2076 3.85 % - 6.05 % 3.97 % - 6.12 % — 37,000 March 2026 Euro-denominated Notes issuance of € 14.5 billion (3) 2028 - 2064 2.50 % - 4.85 % 2.59 % - 4.88 % — 16,782 Other long-term debt 836 850 Total face value of long-term debt 68,836 122,632 Unamortized discount and issuance costs, net ( 440 ) ( 726 ) Less: current portion of long-term debt ( 2,748 ) ( 2,832 ) Long-term debt $ 65,648 $ 119,074 ___________________ (1) The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, December 2022, 2025, March 2026, and March 2026 Euro-denominated Notes were 14.1 , 15.2 , 17.9 , 12.9 , 13.5 , 4.2 , 15.4 , 16.7 , and 10.3 years as of March 31, 2026. The combined weighted-average remaining life of the Notes was 14.2 years as of March 31, 2026. (2) Includes $ 2.8 billion of floating rate notes due in 2028 and 2029. Interest is calculated using the compounded Secured Overnight Financing Rate (“SOFR”) plus 0.44 % and 0.59 %, respectively, and payable quarterly in arrears. (3) Includes € 1.8 billion of floating rate notes due in 2028. Interest is calculated using Euro Interbank Offered Rate (“EURIBOR”) plus 0.35 %, payable quarterly in arrears. Interest on the Notes is primarily payable semi-annually in arrears except for the March 2026 Euro-denominated Notes for which interest is primarily payable annually in arrears. We may redeem the Notes at any time in whole, or from time to time, in part at specified redemption prices. The floating rate notes are generally not redeemable prior to maturity. We are not subject to any financial covenants under the Notes. The estimated fair value of the Notes was approximately $ 61.1 billion and $ 113.6 billion as of December 31, 2025 and March 31, 2026, which is based on quoted prices for our debt as of those dates. We have 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 $ 30.0 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, 2025 and March 31, 2026. We use the net proceeds from the issuance of commercial paper for general corporate purposes. 17 Table of Contents We have an aggregate $ 20.0 billion in unsecured revolving credit facilities with syndicates of lenders, consisting of a $ 15.0 billion facility (the “Credit Agreement”) and a $ 5.0 billion 364-day facility (the “Short-Term Credit Agreement”). The Credit Agreement has a term that extends to November 2028 and may be extended for one or more additional one-year terms subject to approval by the lenders. 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. The Short-Term Credit Agreement matures in October 2026 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 SOFR 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 Credit Agreement and the Short-Term Credit Agreement as of December 31, 2025 and March 31, 2026. We also utilize other short-term credit facilities for working capital purposes. There were $ 455 million and $ 152 million of borrowings outstanding under these facilities as of December 31, 2025 and March 31, 2026, which were included in “Accrued expenses and other” on our consolidated balance sheets. In addition, we had $ 9.4 billion of unused letters of credit as of March 31, 2026. Note 6 — STOCKHOLDERS’ EQUITY Stock Repurchase Activity 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 three months ended March 31, 2025 or 2026. As of March 31, 2026, we have $ 6.1 billion remaining under the repurchase program. Stock Award Plans Employees vest in restricted stock unit awards over the corresponding service term, generally between two and five years . The majority of outstanding restricted stock unit awards are granted at the date of hire or in Q2 as part of the annual compensation review and primarily vest quarterly in the relevant compensation year. Stock Award Activity Common shares outstanding plus shares underlying outstanding stock awards totaled 11.0 billion and 10.9 billion as of December 31, 2025 and March 31, 2026. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. Stock-based compensation expense is as follows (in millions): Three Months Ended March 31, 2025 2026 Cost of sales $ 148 $ 171 Fulfillment 497 601 Technology and infrastructure 2,060 2,286 Sales and marketing 653 663 General and administrative 331 311 Total stock-based compensation expense $ 3,689 $ 4,032 The following table summarizes our restricted stock unit activity for the three months ended March 31, 2026 (in millions): Number of Units Weighted-Average Grant-Date Fair Value Outstanding as of December 31, 2025 222.5 $ 178 Units granted 7.8 224 Units vested ( 23.3 ) 152 Units forfeited ( 11.9 ) 175 Outstanding as of March 31, 2026 195.1 183 18 Table of Contents Scheduled vesting for outstanding restricted stock units as of March 31, 2026, is as follows (in millions): Nine Months Ended December 31, Year Ended December 31, 2026 2027 2028 2029 2030 Thereafter Total Scheduled vesting — restricted stock units 83.0 67.3 31.3 11.5 1.2 0.8 195.1 As of March 31, 2026, there was $ 14.4 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 one year . Changes in Stockholders’ Equity The following table shows changes in stockholders’ equity (in millions): Three Months Ended March 31, 2025 2026 Total beginning stockholders’ equity $ 285,970 $ 411,065 Beginning common stock 111 112 Stock-based compensation and issuance of employee benefit plan stock — 1 Ending common stock 111 113 Beginning and ending treasury stock ( 7,837 ) ( 7,837 ) Beginning additional paid-in capital 120,864 140,024 Stock-based compensation and issuance of employee benefit plan stock 3,650 3,955 Ending additional paid-in capital 124,514 143,979 Beginning accumulated other comprehensive income (loss) ( 34 ) 28,230 Other comprehensive income (loss) ( 880 ) ( 3,362 ) Ending accumulated other comprehensive income (loss) ( 914 ) 24,868 Beginning retained earnings 172,866 250,536 Net income 17,127 30,255 Ending retained earnings 189,993 280,791 Total ending stockholders’ equity $ 305,867 $ 441,914 19 Table of Contents Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in “Accumulated other comprehensive income (loss)” by separate components (in millions): Three Months Ended March 31, 2025 2026 Total beginning accumulated other comprehensive income (loss), net of tax of $( 1,762 ) and $( 9,384 ) $ ( 34 ) $ 28,230 Foreign currency translation adjustments: Beginning balance, net of tax of $ 292 and $ 98 ( 6,174 ) ( 1,948 ) Foreign currency translation adjustments, net of tax of $( 66 ) and $( 13 ) 1,535 ( 764 ) Ending balance, net of tax of $ 226 and $ 85 ( 4,639 ) ( 2,712 ) Unrealized gains (losses) on net investment hedging instruments: Beginning balance, net of tax of $ 0 and $ 0 — — Change in net unrealized gains (losses), net of tax of $ 0 and $ 24 — ( 85 ) Ending balance, net of tax of $ 0 and $ 24 — ( 85 ) Unrealized gains (losses) on available-for-sale debt securities: Beginning balance, net of tax of $( 2,054 ) and $( 9,481 ) 6,139 30,170 Change in net unrealized gains (losses), net of tax of $( 11 ) and $( 340 ) 37 826 Reclassification adjustments for net losses (gains) included in “Other income (expense), net,” net of tax of $ 809 and $ 1,142 ( 2,454 ) ( 3,337 ) Ending balance, net of tax of $( 1,256 ) and $( 8,679 ) 3,722 27,659 Other: Beginning balance, net of tax of $ 0 and $( 1 ) 1 8 Other, net of tax of $ 1 and $( 2 ) 2 ( 2 ) Ending balance, net of tax of $ 1 and $( 3 ) 3 6 Total ending accumulated other comprehensive income (loss), net of tax of $( 1,029 ) and $( 8,573 ) $ ( 914 ) $ 24,868 Note 7 — INCOME TAXES Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. 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. Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. In addition, we record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions. 20 Table of Contents For 2026, we estimate that our effective tax rate will be adversely affected by state income taxes and favorably impacted by the U.S. federal research and development credit. 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. Our income tax provision for the three months ended March 31, 2026 was $ 9.6 billion, which included $ 4.1 billion of net discrete tax expense primarily attributable to the net gains from our investments in Anthropic. On February 18, 2026, the IRS issued Notice 2026-7 (the “2026 Notice”), which included guidance on the U.S. tax treatment of previously capitalized domestic research and development costs. We expect the 2026 Notice, which applied retroactively to 2025, to result in a significant decrease of 2024 and 2025 cash taxes paid. Cash paid for income taxes, net of refunds was $ 877 million and $ 1.3 billion in Q1 2025 and Q1 2026. As of December 31, 2025 and March 31, 2026, income tax contingencies were approximately $ 6.6 billion and $ 6.7 billion. Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax contingencies. Due to various factors, including the inherent complexities and uncertainties of the judicial, administrative, and regulatory processes in certain jurisdictions, the timing of the resolution of income tax controversies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next twelve months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax controversies in one or more jurisdictions. These assessments or settlements could result in changes to our contingencies related to positions on prior years’ tax filings. We are under examination, or may be subject to examination, by the Internal Revenue Service for the calendar year 2016 and thereafter. 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 foreign jurisdictions including 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. We are currently disputing tax assessments in multiple jurisdictions, including with respect to the allocation and characterization of income. In September 2022, the Luxembourg tax authority (“LTA”) denied the tax basis of certain intangible assets that we distributed from Luxembourg to the U.S. in 2021. When we are assessed by the LTA, we will need to remit taxes related to this matter. We believe the LTA’s position is without merit, we intend to defend ourselves vigorously in this matter, and we expect to recoup taxes paid. The Indian tax authority (“ITA”) has asserted that tax applies to cloud services fees paid to Amazon in the U.S. We will need to remit taxes related to this matter until it is resolved, which payments could be significant in the aggregate. We believe the ITA’s position is without merit, we are defending our position vigorously, and we expect to recoup taxes paid. If this matter is adversely resolved, we could recognize significant additional tax expense, including for taxes previously paid. Note 8 — SEGMENT INFORMATION We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses “Fulfillment,” “Technology and infrastructure,” “Sales and marketing,” and “General and administrative” based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology costs recorded in “Technology and infrastructure” are incurred in the U.S. and are included in our North America and AWS segments. The majority of infrastructure costs recorded in “Technology and infrastructure” are allocated to the AWS segment based on usage. There are no internal revenue transactions between our reportable segments. 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 The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services through North America-focused online and physical stores. This segment includes export sales from these online stores. 21 Table of Contents International The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services through internationally-focused online stores. This segment includes export sales from these internationally-focused online stores (including export sales from these online stores to customers in the U.S., Mexico, and Canada), but excludes export sales from our North America-focused online stores. AWS The AWS segment consists of amounts earned from global sales of compute, storage, database, and other services for start-ups, enterprises, government agencies, and academic institutions. Information on reportable segments and reconciliation to consolidated net income is as follows (in millions): Three Months Ended March 31, 2025 2026 North America Net sales $ 92,887 $ 104,143 Operating expenses 87,046 95,876 Operating income $ 5,841 $ 8,267 International Net sales $ 33,513 $ 39,789 Operating expenses 32,496 38,365 Operating income $ 1,017 $ 1,424 AWS Net sales $ 29,267 $ 37,587 Operating expenses 17,720 23,426 Operating income $ 11,547 $ 14,161 Consolidated Net sales $ 155,667 $ 181,519 Operating expenses 137,262 157,667 Operating income 18,405 23,852 Total non-operating income 3,274 15,982 Provision for income taxes ( 4,553 ) ( 9,560 ) Equity-method investment activity, net of tax 1 ( 19 ) Net income $ 17,127 $ 30,255 22 Table of Contents Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions): Three Months Ended March 31, 2025 2026 Net Sales: Online stores (1) $ 57,407 $ 64,254 Physical stores (2) 5,533 5,785 Third-party seller services (3) 36,512 41,578 Advertising services (4) 13,921 17,243 Subscription services (5) 11,715 13,427 AWS 29,267 37,587 Other (6) 1,312 1,645 Consolidated $ 155,667 $ 181,519 ____________________________ (1) Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, videos, games, music, and software. These product sales include digital products sold on a transactional basis. Digital media content subscriptions that provide unlimited viewing or usage rights are included in “Subscription services.” (2) Includes product sales where our customers physically select items in a store. Sales to customers who order goods online for delivery or pickup at our physical stores are included in “Online stores.” (3) Includes commissions and any related fulfillment and shipping fees, and other third-party seller services. (4) Includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. (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 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, which are included in property and equipment, net, net additions, and the depreciation and amortization expense on these assets, are allocated among the segments based on usage, with the majority allocated to the AWS segment. Usage of technology infrastructure assets by the North America and International segments, and the related allocation of total net additions, can fluctuate on a quarter-to-quarter basis, and is affected by seasonality, peak periods, new product or service offerings, and other factors. Total segment assets reconciled to consolidated amounts are as follows (in millions): December 31, 2025 March 31, 2026 North America (1) $ 235,652 $ 241,817 International (1) 81,984 81,000 AWS (2) 252,588 294,121 Corporate 247,818 299,692 Consolidated $ 818,042 $ 916,630 ___________________ (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. 23 Table of Contents Property and equipment, net by segment is as follows (in millions): December 31, 2025 March 31, 2026 North America $ 122,043 $ 129,241 International 30,632 30,899 AWS 190,055 223,056 Corporate 14,295 14,262 Consolidated $ 357,025 $ 397,458 Total net additions to property and equipment include technology infrastructure assets and 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 March 31, 2025 2026 North America (1) $ 5,096 $ 11,126 International (1) 1,506 1,727 AWS (2) 20,464 41,516 Corporate 383 388 Consolidated $ 27,449 $ 54,757 ___________________ (1) Includes property and equipment added under finance leases of $ 54 million and $ 237 million in Q1 2025 and Q1 2026. (2) Includes property and equipment added under finance leases of $ 0 million and $ 1.3 billion in Q1 2025 and Q1 2026. 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 March 31, 2025 2026 North America $ 3,530 $ 4,280 International 1,136 1,277 AWS 4,390 7,277 Consolidated $ 9,056 $ 12,834 24 Table of Contents