Amazon Q4 sales and marketing expense rises 8.7% to $14bn as net sales climb 14%

Amazon.com, Inc. recently announced financial results for the fourth quarter ended December 31, 2025, reporting an increase in sales and marketing expense alongside double-digit growth in net sales across North America, International and AWS.

Amazon’s sales and marketing expense rose 8.7% year-on-year to $14.3 billion in the fourth quarter of 2025, compared with $13.1 billion in the same quarter of 2024. For the full year, sales and marketing expense increased 7.3% to $47.1 billion in 2025 from $43.9 billion in 2024.

In the fourth quarter, net sales increased 14% to $213.4 billion, compared with $187.8 billion in the fourth quarter of 2024. Excluding the $2.8 billion favourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 12% compared with the fourth quarter of 2024.

North America segment sales increased 10% year-over-year to $127.1 billion. International segment sales increased 17% year-over-year to $50.7 billion, or increased 11% excluding changes in foreign exchange rates. AWS segment sales increased 24% year-over-year to $35.6 billion.

Operating income increased to $25.0 billion in the fourth quarter, compared with $21.2 billion in the fourth quarter of 2024. Amazon said fourth quarter 2025 operating income includes three special charges: $1.1 billion for the resolution of tax disputes associated with its stores business in Italy, and the settlement of a lawsuit; $730 million in estimated severance costs; and $610 million in asset impairments primarily related to physical stores. Without these charges, operating income would have been $27.4 billion.

By segment, North America operating income was $11.5 billion, compared with $9.3 billion in the fourth quarter of 2024. International operating income was $1.0 billion, compared with $1.3 billion in the fourth quarter of 2024. AWS operating income was $12.5 billion, compared with $10.6 billion in the fourth quarter of 2024.

Net income increased to $21.2 billion in the fourth quarter, or $1.95 per diluted share, compared with $20.0 billion, or $1.86 per diluted share, in the fourth quarter of 2024.

For full year 2025

For the full year 2025, Amazon reported net sales increased 12% to $716.9 billion, compared with $638.0 billion in 2024. Excluding the $4.4 billion favourable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 12% compared with 2024.

North America segment sales increased 10% year-over-year to $426.3 billion. International segment sales increased 13% year-over-year to $161.9 billion, or increased 10% excluding changes in foreign exchange rates. AWS segment sales increased 20% year-over-year to $128.7 billion.

Operating income increased to $80.0 billion in 2025, compared with $68.6 billion in 2024. North America segment operating income was $29.6 billion, compared with operating income of $25.0 billion in 2024. International segment operating income was $4.7 billion, compared with an operating income of $3.8 billion in 2024. AWS segment operating income was $45.6 billion, compared with operating income of $39.8 billion in 2024.

Net income increased to $77.7 billion in 2025, or $7.17 per diluted share, compared with $59.2 billion, or $5.53 per diluted share, in 2024.

Operating cash flow increased 20% to $139.5 billion for the trailing twelve months, compared with $115.9 billion for the trailing twelve months ended December 31, 2024. Free cash flow decreased to $11.2 billion for the trailing twelve months, driven primarily by a year-over-year increase of $50.7 billion in purchases of property and equipment, net of proceeds from sales and incentives. Amazon said this increase primarily reflects investments in artificial intelligence. This compares to free cash flow of $38.2 billion for the trailing twelve months ended December 31, 2024.

Commenting on the performance, Andy Jassy, President and CEO, Amazon, said AWS grew 24% — its fastest growth in 13 quarters — while advertising grew 22%, stores grew briskly across North America and International, and the company’s chips business grew triple digit percentages year-over-year.

“With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low earth orbit satellites, we expect to invest about $200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital,” Jassy said.

Amazon also highlighted developments since its last earnings announcement, including new AWS agreements with OpenAI, Visa, the NBA, BlackRock, Perplexity, Lyft, United Airlines, DoorDash, Salesforce, U.S. Air Force, Adobe, Thomson Reuters, AT&T, S&P Global, National Bank of Canada, London Stock Exchange Group, Choice Hotels, Accenture, Indeed, HSBC, CrowdStrike, and more.