Amazon's past growth is incredible

Revenue 10/5/1: 21%/13%/12%
Net Income 10/5/1: 62%/29%/31%

Total Equity: 40%/34%/43%

FCF: 1.5%/-21%/-76%

First, Revenue

Revenue is the cleanest of the four metrics, no marks, no accounting weirdness, just sales. Compounding at 21% over ten years and still doing 12% last year at nearly three-quarters of a trillion dollars in size is remarkable.

And here's the thing the annual CAGR table hides: revenue growth is re-accelerating. After 12.4% in 2025, Q2 net sales grew 20% to $200.6 billion, Amazon's first $200B quarter ever. Due to the law of big numbers, it's hard for a company of this size to be accelerating the way Amazon is.

Net Income

You probably remember my earlier post on Amazon's "distorted" net income. I would say, at first glance, these numbers seem eye-poppingly good.

Compounding net income at 62% over a 10-year period is insane, but Amazon is a really wide and diverse business (not necessarily a bad thing).

Some examples of the things that have caused net income to pop in the past include:

2021 net income of $14.6 billion of the $33.36B reported was other income from the Rivian IPO mark.
2022's net income loss of -108% was due to the Rivian mark reversing (whoops).

So their net income is a little weird. 2026 is shaping up to be very good for Amazon because the nearly identical thing is happening again.

Of the $62.6B they reported in net income in Q2, $53B of it was non-operating other income from the Anthropic.

Total Equity

Total equity is growing nicely at first glance: 40% compounded over 10 years and 43% in the last year alone.

There are two things to know about it:

Amazon is a retained earnings machine. They don't pay dividends, and they're not very big on buybacks, so that means total assets are growing very quickly.
The recent acceleration is slightly distorted by how net income is flowing into the balance sheet. Net income flows into retained earnings, so the Anthropic mark lives here too.
Just important to remember as you keep looking at their balance sheet

FCF

Ah Free Cash Flow, sometimes it's the great equalizer.

Why?

Because you can't mark-to-market your way into cash flow.

Here's the biggest factors of their FCF over the past ten years:

2021 and 2022: FCF went negative. This was the great fulfillment buildout, when Amazon doubled its warehouse footprint and everyone panicked.
2023 and 2024: the buildout paid off. Record FCF of $36.8B, then $38.2B.
2025: FCF collapsed to $11.2B as capex jumped $50.7B in a single year.
Right now: negative $7.6B on a trailing twelve month basis, per the Q2 release, with capex up another $66.1B year over year.

The wild part: operating cash flow is fine. Better than fine, it grew 33% to $161.4B over the trailing twelve months. The entire collapse is capex. Amazon is choosing to light its free cash flow on fire to build AI data centers.

Other Interesting Findings

A few things that jumped out of the filings while I was in there:

Amazon's balance sheet crossed $1 trillion. Total assets went from $818B in December to $1,095.7B at the end of June. Six months.
They are borrowing to do it. Long-term debt nearly doubled in those same six months, from $65.6B to $128.9B. The AI buildout is not being funded by cash flow alone.
Guidance says the operating machine keeps humming: Q3 net sales guided to $197B to $202B (9% to 12% growth) with operating income of $22.5B to $26.5B against $17.4B a year ago.
The mark is about to get tested. Anthropic is expected to publicly file its IPO prospectus as soon as the end of this month. When it prices, the market gets to vote on the $53B that turbocharged Amazon's net income. I will be covering that one.