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October 31, 2025 • 4 min read
Amazon recently filed its quarterly report, offering a detailed look at its financial performance for the third quarter of 2025. Diving into these documents can feel overwhelming, so let's break down the key takeaways from the company's income and cash flow statements to see what’s driving the e-commerce and cloud-computing giant. You can find the full report on the SEC's website.
For the quarter ending September 30, 2025, Amazon reported impressive top-line growth, but the real story lies in where that money is coming from—and where it's being spent.
Amazon's total net sales for the third quarter hit $180.2 billion, a solid 13% increase from the $158.9 billion reported in the same quarter last year. While retail sales remain the largest component, the fastest-growing and most profitable segments continue to be its service-based offerings.
The following flow diagram provides a visual breakdown of how Amazon's revenue from this past quarter was generated and how it flowed through the company's various costs and expenses to arrive at its net income.
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Despite the strong revenue growth, Amazon's operating income—the profit from its core business operations—was essentially flat at $17.4 billion, nearly unchanged from the prior year. This signals that the costs of running the business grew just as fast as sales. The primary driver of this was a massive 30% jump in Technology and infrastructure expenses, which reached $29.0 billion. This suggests heavy investment in the backbone of its business, particularly AWS and likely new AI initiatives.
However, when we look further down the income statement, net income tells a different story, soaring to $21.2 billion from $15.3 billion a year ago. What caused this disconnect? The answer lies in "Other Income," which delivered a $10.2 billion gain this quarter. This was primarily driven by:
This is an important distinction: Amazon's core operations weren't significantly more profitable this quarter, but its investment portfolio delivered substantial, non-recurring gains that boosted the final net income figure.
Perhaps the most telling metric this quarter is free cash flow, which is the cash generated by operations minus expenditures on property and equipment. It's a key indicator of a company's financial health and its ability to invest and return capital to shareholders.
Over the last twelve months, Amazon's operating cash flow was robust, growing to $130.7 billion. However, the company is in a period of intense investment. Purchases of property and equipment (net of sales) over the same period totaled a staggering $115.9 billion, a dramatic increase from $65.0 billion in the prior twelve-month period.
As a result, free cash flow for the trailing twelve months has fallen significantly to $14.8 billion, down from $47.7 billion a year ago. This massive capital outlay, reflected in the rising technology expenses, underscores Amazon's commitment to expanding its data centers and infrastructure to support AWS and future growth in areas like artificial intelligence.
In conclusion, Amazon's Q3 2025 results paint a picture of a company enjoying healthy revenue growth while simultaneously making massive investments for the future. While its core operational profit is momentarily held in check by this spending, its high-margin segments like AWS and advertising continue to power its growth. Investors will be watching closely to see when these significant capital expenditures begin to translate into higher operating income and a rebound in free cash flow.
Last updated: October 31, 2025