Common-Size Income Statement
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Amazon.com Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The common-size income statement reveals significant shifts in the company’s revenue mix and profitability over the five-year period. A notable trend is the increasing contribution of service sales to net sales, while product sales steadily decrease. Simultaneously, the company demonstrates improving gross profit margins and operating income, though with some volatility influenced by non-operating items.
- Revenue Composition
- Net product sales decreased from 51.46% of net sales in 2021 to 41.32% in 2025, indicating a strategic or market-driven shift. Conversely, net service sales increased from 48.54% to 58.68% over the same period. This suggests a growing emphasis on service offerings as a revenue driver.
- Profitability – Gross Profit
- Gross profit as a percentage of net sales exhibited a consistent upward trend, rising from 42.03% in 2021 to 50.29% in 2025. This improvement suggests enhanced efficiency in managing the cost of goods sold or a shift towards higher-margin products and services.
- Operating Expenses
- Fulfillment expenses remained relatively stable, fluctuating between 15.21% and 16.40% of net sales. Technology and infrastructure expenses increased from 11.93% to 15.14%, potentially reflecting investments in cloud computing, artificial intelligence, or other technological advancements. Sales and marketing expenses decreased from 6.93% to 6.57%, while general and administrative expenses also showed a declining trend, from 1.88% to 1.56%. These reductions in operating expenses likely contributed to the improvement in operating income.
- Operating Income
- Operating income experienced substantial volatility. It increased significantly from 5.30% in 2021 to 11.16% in 2025, but dipped to a low of 2.38% in 2022. This fluctuation suggests sensitivity to external factors or internal strategic decisions impacting operational performance.
- Non-Operating Items
- Non-operating income (expense) demonstrated considerable variability, swinging from 2.82% in 2021 to -3.54% in 2022, and then to 2.42% in 2025. Significant contributors to this volatility included marketable equity securities valuation gains (losses), net, and upward adjustments relating to equity investments in private companies. These items had a substantial impact on income before income taxes.
- Net Income
- Net income as a percentage of net sales mirrored the trends observed in income before income taxes, increasing from 7.10% in 2021 to 10.83% in 2025, with a loss reported in 2022 (-0.53%). The provision for income taxes also fluctuated, impacting the final net income figure.
Overall, the company appears to be successfully transitioning towards a service-oriented revenue model while improving its core profitability. However, the influence of non-operating items introduces a degree of unpredictability to the overall financial performance.