Amazon

Source: Amazon.xlsx · Last period: Q4 '26E

Amazon.com, Inc. (AMZN)

The world's largest e-commerce and cloud computing company, operating across online retail, physical stores, third-party marketplace services, advertising, subscription services (Prime), and cloud infrastructure (AWS).

Business Model

Amazon generates revenue through six major segments:

  • Online Stores (1P): First-party retail sales where Amazon buys and sells inventory directly. Largest revenue contributor (~50% of total) but lowest margin.
  • Third-Party Seller Services (3P): Commissions, fulfillment (FBA), and shipping fees from marketplace sellers. ~24% of revenue, growing faster than 1P.
  • AWS: Amazon Web Services — cloud infrastructure (compute, storage, database, ML). ~17% of revenue but the primary profit engine (~60%+ of operating income).
  • Advertising Services: Sponsored products, display ads, and video advertising across Amazon properties. ~9% of revenue, highest growth rate, and very high margin.
  • Subscription Services: Primarily Amazon Prime memberships plus digital subscriptions. ~7% of revenue with strong recurring characteristics.
  • Physical Stores: Whole Foods Market and Amazon Fresh/Go stores. ~3% of revenue, low growth.

Key Valuation Drivers

1. AWS growth and margins — Cloud remains the primary profit center; growth rate and operating margin expansion drive the bulk of enterprise value.

2. Advertising monetization — Fastest growing segment with near-100% incremental margins; increasingly material to consolidated profitability.

3. Retail margin expansion — Fulfillment efficiency, regional hub optimization, and 3P mix shift improving retail profitability.

4. Capital intensity — Heavy capex for data centers (AWS + AI infrastructure) and fulfillment network; FCF generation depends on capex normalization.

5. International path to profitability — International retail segment recently turned profitable; continued margin improvement is a key swing factor.

Model Flow

Revenue Summary (segment revenue breakdowns, quarterly + annual)

→ P&L Summary (gross profit, opex, operating income by segment, EBITDA, net income, EPS)

→ Balance Sheet (assets, liabilities, equity, net cash position)

→ Cash Flow Statement (operating cash flow, capex, FCF, FCF minus SBC, EBITDA)

Supporting schedules: Valuation (EV multiples, DCF), Segment Analysis (gross margin by segment), GMV Analysis (unit economics, 1P/3P mix, Prime membership), Capex & Depreciation, Debt & Interest, Working Capital, Shares Outstanding.

Currency

All figures in USD millions unless otherwise noted.

Model Coverage

  • Actuals: Q1 2022 – Q4 2025 (quarterly), 2020–2025 (annual)
  • Estimates: Q1 2026E – Q4 2026E (quarterly), 2026E (annual)
  • Extended estimates (in detailed sheets): through 2031E

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