Amazon.com Inc. (NASDAQ:AMZN)

The common-size income statement reveals significant shifts in the company’s revenue mix and profitability over the observed period. Net service sales have consistently grown as a percentage of net sales, increasing from 47.02% in March 2021 to 57.83% in December 2023, and reaching 59.31% in June 2025. Conversely, net product sales have decreased proportionally, falling from 52.98% in March 2021 to 40.69% in June 2025. Cost of sales as a percentage of net sales demonstrates volatility, peaking at -60.28% in December 2021 before generally decreasing to -51.53% in December 2023, and then increasing again to -57.83% in December 2025.

Gross Profit

Gross profit as a percentage of net sales fluctuated considerably. It began at 42.50% in March 2021, decreased to a low of 39.72% in December 2021, and then generally increased, peaking at 51.81% in June 2025. This suggests a potential improvement in the company’s ability to manage production costs relative to revenue, though this is also influenced by the changing sales mix.

Operating Expenses

Operating expenses, including fulfillment, technology and infrastructure, sales and marketing, and general and administrative expenses, have shown varying trends. Fulfillment costs remained relatively stable between -15.23% and -17.41% before decreasing to -14.45% in December 2023, and then increasing to -15.36% in September 2025. Technology and infrastructure expenses increased from -11.51% to -16.32% between March 2021 and September 2023, before decreasing to -13.78% in December 2023 and then increasing to -16.07% in September 2025. Sales and marketing expenses also exhibited an upward trend, increasing from -5.72% to -8.67% between March 2021 and September 2022, before decreasing to -6.68% in December 2023 and then increasing to -6.81% in June 2025. General and administrative expenses remained relatively stable, fluctuating between -1.83% and -2.41% before decreasing to -1.27% in December 2023 and then increasing to -1.60% in September 2025.

Operating Income

Operating income as a percentage of net sales demonstrated a significant recovery. It declined from 8.17% in March 2021 to a low of 2.52% in December 2021, then increased substantially, reaching 11.71% in December 2023 and 11.43% in June 2025. This improvement is likely attributable to both cost management and the shift towards higher-margin service sales.

Non-Operating Items & Net Income

Non-operating income (expense) experienced considerable volatility, particularly in 2021 and 2024, driven by fluctuations in other income (expense), net. Net income as a percentage of net sales mirrored the trends in operating income, declining to -3.30% in March 2022 before rising to 6.90% in December 2023 and 9.93% in December 2025. The provision for income taxes as a percentage of net sales also fluctuated, impacting the final net income figure.

Overall, the company experienced a period of adjustment between 2021 and 2023, followed by a period of improved profitability and a changing revenue composition. The increasing proportion of service sales appears to be a key driver of this improvement, alongside potential efficiencies in cost management. However, continued monitoring of operating expenses and non-operating items is warranted due to their inherent volatility.