Table of Contents
a. Key Points
40% Y/Y AWS backlog growth.
Leo is poised for 2026 commercialization.
The chips business crossed $10B/year.
9th straight year of best-in-class marketplace prices.
b. Demand
Beat revenue estimates by 0.9% & beat guidance by 1.9%.
The foreign exchange (FX) growth tailwind was 150 basis points (bps; 1 basis point = 0.01%) vs. 190 bps expected.
Slightly missed North America revenue estimates by 0.1%.
Beat AWS revenue estimates by 2%.
This was the fastest rate of AWS growth since Q3 2022. Strength was broad-based and acceleration was not aided by abnormally easy comps. At the same time, the Anthropic ramp and a half quarter of OpenAI ramping both helped a lot.
The AWS backlog grew by 40% Y/Y and 22% Q/Q to $244B. This represents $44B in added Q/Q backlog vs. $5B last quarter and $6B the quarter before. Again, Anthropic and OpenAI helped a ton.
Beat International revenue estimates by 2%.
Slightly beat ad revenue estimates.
Beat online store revenue estimates by 0.9%.
c. Profits
Beat EBIT estimate by 1.6% & beat guidance by 6.4%
Ex-special charges, Q4 2025 EBIT margin would have been 12.8% & Q3 2025 EBIT margin would have been 12%. The other periods were not impacted.
This quarter, special charges included $1.1B to resolve an Italian tax dispute (hit international EBIT), $730M in severance (hit all 3 segments) and $610M in physical store asset impairment (hit North America segment) tied to its grocery business model change covered during the quarter.
Missed $1.96 EPS estimate by $0.01.
CapEx was 13% higher than expected.
d. Balance Sheet
$123B in cash & equivalents.
12% Y/Y inventory growth.
$65.6B debt.
0.8% Y/Y share count growth.
e. Guidance & Valuation
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