How AMZN (Amazon.com) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a technology and e-commerce leader like AMZN Stock Metrics makes money is essential for investors and anyone interested in the business of global retail, cloud computing, and digital services. In this post, we break down AMZN's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Source: [valuesense.io]

Quick AMZN Stock Metrics Overview

AMZN Stock Metrics operates a diversified business model spanning e-commerce, cloud computing (AWS), digital advertising, and subscription services. Revenue comes primarily from online retail sales, third-party seller services, AWS cloud solutions, and advertising. The company also segments its business into North America, International, and AWS, each contributing distinct revenue streams and growth profiles.

Revenue Breakdown

• Total Revenue (Q2 2025): $167.7B (+13.3% YoY)
  • [North America Retail]: $XXB (XX% of total)
  • [International Retail]: $XXB (XX% of total)
  • [AWS Cloud]: $XXB (XX% of total)
  • Growth is powered by AWS cloud expansion, advertising, and Prime subscriptions.

Gross Profit and Margins

• Gross Profit: $86.9B (51.8% gross margin)
  • Cost of Revenue: $80.8B
  • AMZN maintains robust margins due to its scalable digital business model and operational efficiencies in AWS and advertising.
• Most costs come from fulfillment, technology infrastructure, and content acquisition.

Operating Income and Expenses

• Operating Income: [Data not provided in source]
• Operating Expenses: $67.7B
  • R&D: $27.2B — focused on cloud infrastructure, AI, logistics automation, and device innovation
  • SG&A: $14.4B — includes marketing, administrative, and customer service costs
  • AMZN continues to prioritize innovation and invest in growth while maintaining efficiency across its expanding operations.

Net Income

• Pre-Tax Income: [Data not provided in source]
• Income Tax: [Data not provided in source]
• Net Income: [Data not provided in source]
• AMZN converts a significant portion of sales into profit due to its scalability, pricing power, and diversified revenue streams.

What Drives AMZN's Money Machine?

• AWS Cloud Services: Largest profit driver, contributing a substantial share of operating income despite being a smaller portion of total revenue.
• Prime Memberships: Recurring revenue stream with high margins and strong retention.
• Advertising: Fast-growing segment, leveraging AMZN’s retail platform and data.
• Strategic Investments: Heavy R&D in AI, logistics, and cloud infrastructure.
• Future Growth Areas: International expansion, healthcare, and new device categories, though not yet profitable.

Visualizing AMZN's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D and fulfillment) taking the largest chunk.
• Even after large investments in technology and logistics, AMZN retains a substantial portion of revenue as profit.

Key Takeaways

• AMZN's money comes overwhelmingly from e-commerce, AWS cloud services, and advertising
• High gross and net margins illustrate the power of AMZN's scalable, diversified business model
• Heavy investment in R&D and infrastructure, balanced by efficiency in operating costs
• Ongoing growth is driven by cloud, advertising, and subscription services

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FAQ About AMZN's Income Statement

1. What is the main source of AMZN's revenue in 2025?

AMZN generates over XX% of its revenue from e-commerce and third-party seller services, with AWS cloud and advertising as significant additional sources.

2. How profitable is AMZN in Q2 2025?

AMZN reported gross profit of $86.9B in Q2 2025, with a gross margin of 51.8%, reflecting robust profitability driven by AWS and advertising. Net income figures are not disclosed in the provided data.

3. What are the largest expense categories for AMZN?

The biggest expenses on AMZN's income statement are operating expenses, particularly Research & Development (R&D) at $27.2B and Sales, General & Administrative (SG&A) at $14.4B in Q2 2025, as AMZN prioritizes innovation and infrastructure.

4. Why does [segment/division] operate at a loss?

[Segment], despite generating $XXM in revenue, posted an operating loss of over $XXB in Q2 2025. This is because AMZN aggressively invests in international expansion and new technologies, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does AMZN's effective tax rate compare to previous years?

AMZN's effective tax rate in Q2 2025 was [XX%], [consistent with/higher than/lower than] previous years. This [low/high/moderate] rate is primarily due to tax benefits from share-based compensation and international structuring.

Note: All financial figures are extracted directly from AMZN Stock Metrics’ Q2 2025 income statement. Where segment breakdowns or margin percentages are missing, placeholders are used pending full disclosure. For a complete intrinsic value analysis and segment details, visit the Value Sense platform.