Supermax income statements: 5 Year Analysis (2021 to Q3 2026)

Supermax's financial journey over the past five fiscal years (2021–2025) and into the latest quarters of 2026 tells the stark story of a company that soared to pandemic-era heights before being pulled down by a severe industry-wide oversupply and is now engaged in a costly, high-stakes global restructuring to navigate the new normal.

📈 The Five-Year Annual Analysis: From a Pandemic Boom to a Market Bust

Supermax's financial story is one of a dramatic reversal driven by the pandemic cycle. The company reached its zenith in fiscal year 2021, where the surge in global demand for personal protective equipment (PPE) drove revenue to an astronomical RM7.16 billion, accompanied by a staggering net income of RM3.82 billion and an extraordinary net profit margin of 53.3%. This peak quickly subsided, however, as the world began to normalize. Revenue began a multi-year collapse, falling by 62.5% in FY2022 to RM2.69 billion, and then further contracting by 69.4% in FY2023 to just RM821 million. This steep decline was due to plummeting glove prices as demand eased and the market became flooded with excess capacity from various manufacturers. The brutal impact on profitability was immediate; the company swung from huge annual profits to a net loss of RM141 million in FY2023, marking the beginning of a loss-making period that has persisted into subsequent years. The financials have not yet recovered. While revenue showed a slight rebound in FY2024 (RM646 million) and FY2025 (RM780 million), this was largely a result of low-base effects following the sharp declines of the prior two years. Throughout this period, the company has remained firmly in the red, reporting net losses of RM176 million in FY2024 and RM145 million in FY2025. These losses have been consistently driven by an industry-wide oversupply that has kept average selling prices suppressed, a situation exacerbated by a strong Malaysian Ringgit which negatively affected the value of its US dollar-denominated export sales.

📉 The Latest Five Quarters: A Strategy of Pain for Long-Term Gain

The most recent quarterly data, covering the period from Q4 FY2025 to Q3 FY2026, paints a picture of a company in a deep restructuring phase rather than merely reacting to market conditions. The negative trend has continued, with net losses of RM67 million, RM135 million, RM58 million, and RM41 million reported sequentially. While quarterly revenue has fluctuated between RM126 million and RM206 million, the consistent net losses indicate that the financial bleeding has yet to be fully stemmed. However, the underlying reasons for these ongoing losses have shifted. In the first quarter of FY2026, for example, a significant portion of the RM134.6 million net loss was a strategic, non-cash write-down of RM119.5 million related to the impairment of non-productive plants and slow-moving inventory, a clear move by management to "prune" older, inefficient assets and clean up its balance sheet. This has been part of a broader strategy to rationalize its Malaysian manufacturing base by investing in automation and robotics to improve long-term cost efficiency.

A central factor in the ongoing losses has been the substantial financial strain from starting up its new, highly automated manufacturing facility in Texas, USA. This ambitious US$1.6 billion project, announced in late 2021, is designed to be a key strategic advantage, allowing Supermax to circumvent the heavy import tariffs imposed on Chinese-made gloves and serve the world's largest healthcare market as a domestic supplier. However, the ramp-up has been slow and expensive; the plant was running at just 12.5% of its planned capacity as of early 2026, leading to structurally higher operating costs compared to its Malaysian peers. This financial drag has contributed to what has now become 15 consecutive quarters of net losses for the group since the second quarter of FY2023.

Looking ahead, management has expressed confidence in a turnaround, eyeing the second half of 2026 for a return to profitability. They are banking on the completion of validation for the Texas plant to unlock larger contracts, coupled with an optimistic outlook for higher average selling prices. To further diversify its global footprint, the company also announced a US$50 million investment to build a 2.4 billion-piece glove manufacturing facility in Brazil to tap into the growing South American healthcare market. However, sell-side analysts remain cautious, with most forecasting that losses will persist through at least FY2027. While the company is undertaking a bold, foundational restructuring, significant headwinds remain. The structural imbalance of global supply and demand is expected to only begin to correct in 2027 at the earliest. Until the Texas plant can achieve commercial scale and the industry-wide inventory destocking is complete, the full benefits of Supermax's costly pivot will likely remain on the horizon.

A summary and discussion of Hartalega’s last five years and latest five quarters of income statements (2022 to Q1 2026).

This is the summary and discussion of Hartalega’s last five years and latest five quarters of income statements.

Five-Year Financial Performance Review

Reviewing Hartalega’s financial trajectory over the past five fiscal years (FY2022 to FY2026), the core narrative is a complete cycle from demand surge, to deep correction, and then to a gradual recovery. FY2022 represented the peak of the company’s historical performance, with annual revenue reaching a record MYR 7.888 billion, gross profit at MYR 4.795 billion, and net profit at MYR 3.234 billion, translating to a net margin of 41.0%. This extraordinary growth was primarily driven by the explosive demand for gloves during the COVID-19 pandemic, which pushed average selling prices up by more than 70% and lifted capacity utilisation to historic highs. However, the rapid expansion of the industry – notably by Chinese manufacturers – combined with the swift normalisation of the pandemic, caused the supply-demand balance to deteriorate sharply within a short period.

In FY2023, the industry collapsed from its peak. Hartalega’s revenue plunged 69.45% to MYR 2.410 billion, gross profit tumbled from MYR 4.795 billion to just MYR 319 million, and the gross margin fell to 13.2%. The company recorded a net loss of MYR 235 million. This reversal was driven by a massive global oversupply of gloves, compounded by a sharp drop in ASPs – from more than USD 70 at the peak to roughly USD 27 by early 2022, and further down to USD 22 in 2023. Many producers saw capacity utilisation fall below 50%.

FY2024 marked the trough of the cycle. Revenue declined a further 23.7% to MYR 1.838 billion, gross profit was razor-thin at MYR 156 million, and the gross margin compressed further to 8.5%. However, at the net level, the company turned marginally positive with MYR 13 million, signalling the start of a bottoming process. Entering FY2025, Hartalega delivered a strong rebound. Revenue increased 40.7% year-on-year to MYR 2.586 billion, gross profit recovered to MYR 244 million, and the gross margin improved to 9.4%. Net profit reached MYR 75 million, an increase of approximately 476% year-on-year, providing a clear signal of recovery.

FY2026 was a phase of profitability-driven recovery. Although full-year revenue declined 17.4% year-on-year to MYR 2.135 billion, net profit continued to grow, reaching MYR 103 million – a 38.2% increase from FY2025. More importantly, the pre-tax profit margin expanded to 5.5% and the full-year net margin rose to 4.8%. This indicates that the company’s profitability is decoupling from top-line scale and is increasingly supported by structural improvements in operational efficiency. Management attributed this to production efficiency gains, deeper automation, and cost optimisation initiatives, with the full commissioning of Plant 9 being a key operational driver.

---

Latest Five Quarters Perspective

Looking at the quarterly data for FY2026 provides a clearer view of Hartalega’s profit recovery trajectory. From the second quarter of 2025 (Q1 FY2026) through the first quarter of 2026 (Q4 FY2026), the data shows a pattern of moderating revenue but expanding net profit.

Quarterly revenue gradually declined from MYR 612 million in Q1 FY2025 (March quarter 2025) to MYR 515 million in Q4 FY2026 (March quarter 2026). This reflects persistent ASP pressure and the translation effect of a stronger Malaysian ringgit against the US dollar. However, over the same period, net profit rose from MYR 14.5 million to MYR 40.5 million. In Q4 FY2026, net profit jumped 179% year-on-year, well above market expectations. The net margin expanded from 2.4% to 7.9%, demonstrating significant marginal profitability improvement.

The quarterly sequence (using the company’s reporting quarters, where Q1 FY2026 ended June 2025, etc.) is as follows:

• Q1 FY2025 (ended June 2024): Revenue MYR 612 million, net profit MYR 14.5 million, net margin 2.4%

• Q2 FY2025 (ended Sep 2024): Revenue MYR 553 million, net profit MYR 12.6 million, net margin 2.3%

• Q3 FY2025 (ended Dec 2024): Revenue MYR 540 million, net profit MYR 17.9 million, net margin 3.3%

• Q4 FY2025 (ended Mar 2025): Revenue MYR 527 million, net profit MYR 31.7 million, net margin 6.0%

• Q1 FY2026 (ended Jun 2025): Revenue MYR 515 million, net profit MYR 40.5 million, net margin 7.9%

The Q4 FY2025 and Q1 FY2026 results were particularly strong. Even though revenue in Q1 FY2026 fell 15.7% year-on-year (due mainly to ringgit strength and ASP pressure), net profit surged 179% to MYR 40.5 million. EBITDA grew 45% quarter-on-quarter to MYR 75 million, and the pre-tax margin expanded to 5.5%. These results were driven by strict cost control, significant operational efficiency gains from automation, and the company’s ability to raise ASPs modestly to the USD 26–28 per 1,000 pieces range.

Strengths, Risks, and Outlook

The foundation of Hartalega’s profit recovery is a combination of improving underlying demand and structural efficiency gains. Global glove demand has largely returned to pre-pandemic levels, with a structural annual growth rate of 7–9%. Hartalega’s capacity utilisation, excluding temporarily idled lines, has risen above 96%. The newly commissioned Plant 9 has an annual capacity of 4.7 billion gloves, and the company is also restarting and upgrading Plant 3 (4.5 billion pieces). Ongoing automation and digitalisation initiatives continue to reduce unit costs.

Nevertheless, significant challenges remain. The industry is still burdened by chronic overcapacity. Chinese competitors are setting up production facilities in Southeast Asia to circumvent US tariffs, and low-end glove supply from Asia and other emerging markets continues to flood the market. This keeps ASP recovery sluggish and competition intense, especially outside the US. Furthermore, the Malaysian ringgit appreciated more than 7% against the US dollar over the past year, which directly reduces reported revenue in ringgit terms – explaining part of the year-on-year revenue decline.

Analysts remain cautiously optimistic but highlight ongoing headwinds.

• TA Securities maintains a “Hold” rating, noting that competition remains intense and volume recovery will take time.

• Kenanga Research, while maintaining an “Outperform” call, lowered its FY2026 earnings forecast by approximately 26%, citing difficulty in passing through costs to customers.

• BIMB Securities explicitly notes that while global glove demand has recovered, higher volumes have not translated into higher value, as the industry continues to face excess capacity, price pressure, and a stronger ringgit.

In conclusion, Hartalega has demonstrated clear structural improvement in profitability, becoming the first among major glove makers to show a sustained margin recovery. However, whether the company can break out of the long-term ASP suppression and achieve simultaneous growth in revenue and profit remains the key variable that the market will be closely watching over the next 12 to 24 months.

A summary and discussion on Topglove's income statements for the years 2021 to Q2 2026.

The past five years at Top Glove have followed the same dramatic boom-to-bust-to-recovery path that has defined the entire glove industry, and the accompanying numbers clearly trace every twist in that journey.

1. The Five‑Year Annual Performance (FY2021 to FY2025)

The data begins at the very peak of the pandemic boom. In FY2021, Top Glove’s revenue soared to an extraordinary RM16.36 billion, driven by a 326% surge as global demand for gloves exploded and average selling prices (ASPs) skyrocketed. Net profit hit RM7.71 billion, with a gross profit margin of 67.8% and a net margin of 47.1%. That was the high‑water mark.

As the world moved past the pandemic, the descent was sharp. Revenue collapsed by 66% to RM5.57 billion in FY2022 and then more than halved again to RM2.26 billion in FY2023 as the industry was flooded with excess supply and ASPs crashed to historic lows. The company swung from huge profits to a net loss of RM925 million in FY2023 – its first full‑year loss in many years.

FY2024 was a year of stabilisation at the bottom. Revenue recovered slightly to RM2.51 billion, but net losses narrowed dramatically to RM65 million. The company was adjusting to a new, lower‑demand reality, but the worst was clearly over.

FY2025 marked the long‑awaited turning point. Revenue jumped 39% year‑on‑year to RM3.49 billion, and the company returned to net profitability with a RM105 million net profit. The recovery was driven by a 55% surge in sales volume, especially a 150% jump in the critical U.S. market, while ASPs stabilised and management implemented tighter cost controls. The improvement was broad‑based: the EBITDA margin climbed back into double digits at 11.25%, and the Group posted its first annual dividend since 2021.

From a strategic perspective, the five‑year arc is a textbook case of how an entire industry can be transformed by an exogenous shock, then left to grapple with the aftermath. Top Glove has navigated the bust by aggressively cutting costs, decommissioning unprofitable lines, and focusing on regaining market share as demand normalises.

---

2. The Latest Five Quarters (Q3 FY2025 to Q2 FY2026)

The quarterly data provides a more granular view of the recovery, showing sustained momentum as the company enters FY2026.

In Q3 FY2025, revenue was RM830 million, with net profit of RM34.8 million. Although this was down sequentially from Q2, the year‑on‑year performance was solid: net profit reversed a loss of RM60 million in Q3 FY2024, driven by a 78% quarter‑on‑quarter improvement in core earnings. The improvement came despite a temporary dip in U.S. demand and intensified competition in Europe.

The recovery then accelerated sharply in Q1 FY2026. Net profit surged more than 600% year‑on‑year to RM38.6 million, with revenue holding steady at RM884 million. The standout driver was a 17% increase in sales volume, particularly in the U.S., while operating expenses fell from RM882 million to RM843 million, helping to expand margins. The company announced it would reactivate four factories that had been idled during the downturn, a clear vote of confidence in demand.

That positive momentum carried into Q2 FY2026. Revenue rose 14% year‑on‑year to RM1.01 billion, and net profit grew to RM30.8 million. Sales volume jumped 57% year‑on‑year and 23% quarter‑on‑quarter, underscoring the strengthening demand backdrop. For the first half of FY2026 as a whole, net profit nearly doubled to RM69.3 million from RM35.8 million in the same period a year earlier, while revenue increased 6.8% to RM1.89 billion.

However, the recovery is not without headwinds. The strengthening Malaysian ringgit – which climbed more than 10% against the U.S. dollar in 2025 – has squeezed the earnings of export‑reliant glove makers, including Top Glove, in the first quarter of 2026. Additionally, analysts have warned that the sector remains fragile, with persistent oversupply, competition from Chinese producers, and tariff uncertainties continuing to weigh on margins. Some research houses have cut their core net profit estimates for 2025–2027, though Top Glove’s FY2025 performance still came in above both internal and consensus expectations.

---

3. Industry Context and Outlook

The broader Malaysian rubber glove sector remains under pressure from an oversupply that is only slowly being absorbed. Even with an 80% tariff on Chinese imports, PublicInvest cautioned in mid‑2025 that oversupply, cautious customer sentiment, and intense price competition continue to stall recovery. Other analysts note that China‑led capacity additions – especially from a major producer expanding in Vietnam and Indonesia – will keep ASPs under pressure. CIMB Securities warned that Malaysian glove makers are still not “out of the woods,” with flat volumes and stagnant ASPs expected in the second half of 2025.

Nevertheless, there are reasons for cautious optimism. The industry is projected to see 12% demand growth in 2025 to 368 billion pieces, and Top Glove has already shown it can capture that growth. The company has guided to a 70% utilisation rate by the end of FY2025, and has a pipeline of efficiency improvements and new product launches that could support further margin expansion. Management has publicly said it expects a return to near pre‑pandemic performance by 2027, and the reactivation of four factories is a concrete step in that direction.

---

Conclusion

Top Glove’s financial performance over the past five years – from the giddy heights of the pandemic boom to the crushing lows of the industry bust and now to a sustained, though still cautious, recovery – mirrors the journey of the entire rubber glove sector. The company has demonstrated resilience by slashing costs, regaining market share, and returning to profitability. Quarterly results for the first half of FY2026 show that recovery is gathering pace, supported by surging sales volumes and operational discipline. However, persistent oversupply, currency pressures, and fierce price competition mean the path ahead is not without risks. Investors will be watching closely to see whether Top Glove can maintain its momentum and deliver on its ambitious long‑term targets.

A summary and discussion of Tencent's performance over the last 5 years and the most recent 5 quarters (2021 - Q1 2026)

Here is a summary and discussion of the company's performance over the last five years and the most recent five quarters.

Executive Summary

Tencent has undergone a remarkable financial transformation over the 2021–2025 period. Following a challenging 2022 marked by revenue contraction and profit pressure, the company executed a decisive pivot toward high-quality growth, prioritizing profitability over sheer scale. Since 2023, Tencent has delivered consistent margin expansion driven by a strategic mix shift toward higher-margin revenue streams (notably advertising and enterprise services), rigorous cost discipline, and the successful integration of AI technologies across its operations. This trend has continued into 2026, with the company sustaining strong revenue growth and achieving record gross margins.

---

Five–Year Trend Analysis (2021–2025)

Top–Line Performance

Tencent's revenue experienced a modest contraction in 2022, declining by approximately 1–4% (depending on currency reporting) to around RMB 555 billion. This was a direct consequence of macroeconomic headwinds, stringent regulatory measures impacting the gaming and tech sectors, and COVID–related disruptions in China.

However, the company staged a robust recovery from 2023 onward. Revenue growth accelerated from approximately 10% in 2023 to around 14% in 2025, reaching RMB 751.8 billion. This re-acceleration was fueled by multiple engines: a strong rebound in both domestic and international gaming, explosive growth in marketing services (advertising), and resilient performance in fintech and enterprise services.

Margin Expansion: The Defining Trend

The most significant development over the five–year period was Tencent's extraordinary margin expansion. The company's gross margin climbed from roughly 43–44% in 2021–2022 to 53% in 2024, and further to an impressive 56% in 2025. This represents a gain of over 12 percentage points. This improvement was not accidental but resulted from a deliberate strategy: a shift away from lower-margin distribution businesses toward high-value proprietary services, coupled with effective control over cost of goods sold (COGS), which consistently grew at a slower pace than revenue.

Operating profit (EBIT) mirrored this trajectory, rising from a depressed level of around RMB 111 billion in 2022 to RMB 245.6 billion in 2025, with the operating margin surging from roughly 20% to nearly 33%.

Profitability and Investment Income Volatility

Reported net income exhibited significant year-on-year volatility, largely due to fluctuations in the value of Tencent's vast investment portfolio, which includes stakes in numerous public and private companies. Excluding these non-operating items, the underlying profitability of Tencent's core business has shown consistent improvement. For instance, Non-IFRS net profit grew by 41% in 2024 and a further 17% in 2025, reaching an estimated RMB 259.6 billion. This underlying metric provides a cleaner view of the operational health of the business.

R&D and Strategic Investments

A hallmark of Tencent's strategy has been its unwavering commitment to research and development, particularly in artificial intelligence. R&D expenses grew substantially, from around RMB 70 billion in 2022 to an estimated RMB 85.7 billion in 2025, an increase of over 21% year-on-year. These funds have been channeled into large language model development, AI infrastructure, and the integration of AI capabilities across all core products, from advertising algorithms to game development and cloud services.

Earnings Per Share and Shareholder Returns

Tencent actively reduced its share count through consistent buybacks over this period, creating a powerful lever for EPS growth. Diluted EPS (Non-IFRS) grew by 72% in 2024 and continued to rise in 2025. This practice has amplified the returns of profit growth for remaining shareholders.

---

Most Recent Five Quarters (Q1 2025 – Q1 2026)

Revenue Growth Remains Robust

Quarterly revenue has shown consistent, sequential growth. Each quarter in 2025 outperformed the previous one, demonstrating strong execution and broad-based demand across Tencent's service lines. Growth rates varied from 13% to 15% year-on-year, with the company sustaining high single-digit to low double-digit expansion through early 2026.

Margins Reach New Peaks

The profitability trajectory has continued to trend upwards in the most recent quarters, defying seasonal patterns. Gross margin stabilized at a high level of 56% throughout 2025 and then achieved a new milestone in Q1 2026, reaching 57%. This consistent expansion indicates that structural improvements in the business model are enduring.

Performance by Segment (Q1 2026 Highlights)

The Q1 2026 results exemplify the strength of Tencent's diversified business mix:

• Marketing Services (Advertising): Grew by an impressive 20% year-on-year to RMB 38.2 billion. This was driven by AI-powered enhancements to Tencent's ad recommendation engine and the continued expansion of its WeChat ecosystem's commercialization capabilities, including video accounts and mini-programs.

• Fintech and Business Services: Rose by 9% to RMB 59.9 billion, supported by growth in commercial payment volumes, wealth management, and a significant 20% increase in enterprise services revenue, driven by demand for AI-related cloud solutions.

• Value-Added Services (VAS): Increased by 4% to RMB 96.1 billion. This was led by international gaming revenue growth of 13% and domestic gaming growth of 6%, with evergreen titles like Honor of Kings and Peacekeeper Elite, alongside newer hits like Delta Force, continuing to perform strongly.

Profit Quality and Cash Generation

The Q1 2026 results also highlighted the high quality of Tencent's earnings. The company's Non-IFRS net profit attributable to equity holders grew by 11% year-on-year to RMB 67.9 billion, with an operating profit margin of 39% (Non-IFRS). This profitability is supported by robust cash generation, with operating cash flow reaching RMB 101.4 billion in Q1 2026, providing substantial firepower for future investments and shareholder returns.

---

Discussion and Conclusion

The five-year financial history reveals a company that has matured from a hyper-growth, low-margin gaming giant into a disciplined, highly profitable technology conglomerate. The period from 2021 to 2023 was one of strategic adjustment in response to a more regulated and uncertain domestic environment. Since 2024, Tencent has successfully emerged from that adjustment phase, demonstrating that its ecosystem of social, gaming, advertising, and enterprise services is not only resilient but also highly synergistic.

The key driver of the improved financial trajectory has been the widespread and successful application of AI. These technologies have directly enhanced ad-targeting efficiency, improved user engagement and monetization in games, and lowered the marginal cost of delivering cloud services, all of which have contributed to the consistent margin expansion seen in the latest quarters.

Looking ahead, Tencent's financial health is exceptionally strong. It maintains a leadership position in virtually all its core markets, continues to invest heavily in next-generation AI capabilities, and has demonstrated a clear ability to translate top-line growth into superior bottom-line results and shareholder returns. The primary question for the coming years is not about the sustainability of its current profitability but about the scale and pace of the next major growth horizon, likely to be driven by international gaming expansion and the commercial deployment of its AI models and products.

A summary and discussion on Alibaba's income statements for FY 2022 - FY 2026

Over the past five fiscal years (FY2022–FY2026), Alibaba has demonstrated steady revenue growth, expanding from HK$1,034.7 billion in FY2022 to HK$1,124.7 billion in FY2026, with annual increases of approximately 3–5 percent. This top-line stability reflects the resilience of its core e-commerce business and the gradual contribution from strategic initiatives such as cloud computing and international expansion. However, profitability trends have been more nuanced. Contrary to a common narrative of prolonged margin compression, net income actually grew modestly but consistently over the first three years: from HK$75.2 billion in FY2022 to HK$82.9 billion in FY2023 (up 10.3 percent), and further to HK$87.1 billion in FY2024 (up 5.0 percent). This period was not one of earnings decline but rather of slow, disciplined growth, even as Alibaba faced intense competition from rivals like Pinduoduo and Douyin (TikTok) and made heavy strategic investments in new businesses.

The inflection point came in FY2025, when net income surged 60.6 percent to HK$139.8 billion—a multi-year peak driven by a combination of cost optimization, asset divestments, and improved operational efficiency following the company’s major restructuring. This profit boom, however, proved temporary. In FY2026, net income fell by approximately 16.8 percent to HK$116.4 billion, as Alibaba aggressively reinvested its earnings into two capital-intensive priorities: quick-commerce (instant retail, primarily through Taobao Instant Commerce) and AI/cloud infrastructure. The sharp increase in SG&A expenses (up 42.9 percent in FY2026) and higher depreciation charges (up 48.5 percent) directly compressed margins, illustrating management’s deliberate choice to trade short-term profitability for long-term strategic positioning.

The latest five quarterly statements provide a granular view of this profit volatility. In the second quarter of FY2026 (September 2025 quarter), net income reached HK$46.5 billion on revenue of HK$270.8 billion, representing a strong performance. But over the next two quarters, net income collapsed to HK$22.9 billion (Q3) and then to HK$17.9 billion (Q4), even as revenue climbed to a peak of HK$312.5 billion in Q3. This divergence was driven by mounting operating costs from quick-commerce expansion and rising R&D spending on AI. Encouragingly, the most recent quarter (Q1 FY2026, ending March 2026) showed a clear rebound, with net income rising to HK$28.7 billion—a 60.5 percent increase from the prior quarter—suggesting that the initial investment drag may be easing as these new businesses begin to scale more efficiently.

Several strategic events have shaped this financial trajectory. The “1+6+N” restructuring announced in 2023 aimed to unlock value by separating Alibaba’s business units, but geopolitical tensions (particularly US chip export restrictions) forced the company to scrap the full spin-off of its cloud unit. Instead, Alibaba pivoted to simplifying its portfolio by disposing of non-core assets such as Sun Art and Intime, which helped streamline operations and generated one-off gains that boosted FY2025 earnings. More importantly, the cloud division has transformed from a cost center into a genuine growth engine: in the September 2025 quarter, cloud revenue grew 34 percent year-on-year, driven by AI-related workloads that more than doubled and now account for over 20 percent of external cloud revenue.

In conclusion, Alibaba is navigating a deliberate strategic transition. Its core e-commerce business remains stable, providing a reliable revenue foundation. However, the company is consciously reinvesting its earnings—including the windfall from FY2025—into quick-commerce and AI infrastructure, which are margin-dilutive in the near term but hold the key to future growth. Investors should therefore expect continued earnings volatility as Alibaba balances short-term profitability against long-term market leadership. The critical question is whether these large-scale investments will generate sustainable returns quickly enough to justify the current profit compression. Based on the latest quarterly rebound, there are early signs that the strategy may be starting to pay off.

A summary and discussion of Amazon’s income statement performance for years from 2021 to Q1 2026.

Here is a summary and discussion of Amazon’s income statement performance for the five fiscal years from 2021 to 2025, followed by an analysis of the most recent five quarters (Q1 2025 through Q1 2026). All figures are in USD millions.

Five-Year Annual Performance (2021–2025)

Over the past five years, Amazon has demonstrated remarkable top-line and bottom-line growth, driven by sustained e‑commerce expansion, strong cloud computing (AWS) performance, and growing advertising and subscription revenues. Total net sales increased from $469,822 million in 2021 to $716,924 million in 2025, representing a cumulative increase of 52.6%. Annual revenue growth remained consistently in double digits, ranging from 9.4% in 2022 to 12.4% in 2025, highlighting Amazon’s ability to scale even from a very large base.

Profitability improved even more dramatically. Gross profit rose from $197,478 million in 2021 to $360,510 million in 2025, with the gross profit margin expanding from 42.0% to 50.3% over the same period. This margin expansion reflects a revenue mix shift toward higher‑margin businesses such as cloud computing, digital advertising, and third‑party seller services, as well as operational efficiency gains in fulfillment and logistics.

Operating income (EBIT) fluctuated significantly, from $24,941 million in 2021 down to $13,511 million in 2022 (partly due to unusual expense items and a weaker e‑commerce environment), then rebounded sharply to $37,619 million in 2023 and $69,356 million in 2024, before reaching $84,614 million in 2025. The 2025 EBIT includes $2,908 million of unusual expenses, yet still grew 22% year‑over‑year, underscoring the underlying earnings power.

Net income followed a similar but more volatile path. After a loss of $2,722 million in 2022 (driven by mark‑to‑market losses from equity investments and operational pressures), net income recovered strongly: $30,425 million in 2023, $59,248 million in 2024, and $77,670 million in 2025. Diluted earnings per share (EPS) moved from $3.24 in 2021 to a negative $0.27 in 2022, then soared to $2.90, $5.53, and $7.17 in subsequent years. The 2025 net margin of 10.8% demonstrates Amazon’s transition from a low‑margin retailer to a high‑margin technology and services company.

EBITDA (earnings before interest, taxes, depreciation, and amortization) grew from $59,237 million in 2021 to $150,370 million in 2025, with EBITDA margin expanding from 12.6% to 21.0%. Depreciation and amortization expense increased significantly, reflecting heavy capital investment in fulfillment centers, data centers, and equipment, but operating leverage has more than offset these costs.

Latest Five Quarters (Q1 2025 – Q1 2026)

The quarterly data provides a more granular view of Amazon’s recent momentum, including the first quarter of 2026. Sales growth has been somewhat uneven but consistently positive. Starting with Q1 2025 at $155,667 million, revenue rose to $167,702 million in Q2 (+7.7% QoQ), $180,169 million in Q3 (+7.4% QoQ), and peaked at $213,386 million in Q4 2025 (+18.4% QoQ), reflecting the seasonal holiday surge. In Q1 2026, sales were $181,519 million, down 14.9% from Q4 2025 but up 16.6% year‑over‑year compared to Q1 2025, indicating a strong underlying trend.

Gross profit margins remained robust, hovering around 50% or slightly higher each quarter. In Q1 2026, gross profit was $94,056 million, representing a margin of 51.8%, an improvement from the 50.5% margin in Q1 2025.

Operating leverage is clearly visible in net income. Quarterly net income grew from $17,127 million in Q1 2025 to $18,164 million in Q2 (+6.1% QoQ), $21,187 million in Q3 (+16.6% QoQ), $21,192 million in Q4 (flat sequentially), and then jumped to $30,255 million in Q1 2026 (+42.8% QoQ and +76.6% year‑over‑year). The dramatic increase in Q1 2026 net income, despite a seasonal revenue dip, suggests a favorable mix shift, cost controls, or lower unusual expenses compared to previous quarters.

Diluted EPS followed the same pattern: $1.59 in Q1 2025, $1.68 in Q2, $1.95 in Q3, $1.95 in Q4, and $2.78 in Q1 2026. The year‑over‑year EPS growth from Q1 2025 to Q1 2026 was 74.8%, far exceeding the revenue growth of 16.6%, driven by margin expansion and potentially a lower effective tax rate (income tax in Q1 2026 was $9,560 million on pretax income of $39,834 million, an effective rate of 24.0%, compared to 21.0% in Q1 2025).

EBITDA in the latest quarter was $43,244 million, down 5.4% from Q4 2025’s $45,705 million but up 31.1% year‑over‑year from Q1 2025’s $32,975 million. The sequential decline is typical after the holiday season, but the strong annual growth indicates that Amazon’s core profitability continues to improve.

Key Takeaways and Discussion

1. Consistent revenue growth – Amazon has successfully navigated post‑pandemic normalization, inflation, and competitive pressures, maintaining double‑digit annual growth. The quarterly data shows resilience, with Q1 2026 delivering a sharp year‑over‑year increase.

2. Margin expansion is the primary value driver – Gross margin crossed 50% in 2025 and remained there in 2026. This is a structural shift, not a one‑time event, thanks to high‑margin segments (AWS, ads, subscriptions) growing faster than the core retail business. In the latest quarter, a 16.6% revenue increase translated into a 76.6% net income increase, demonstrating powerful operating leverage.

3. Profitability rebound after 2022 – The 2022 loss was an anomaly driven largely by non‑cash investment losses (in Rivian, etc.). Excluding that, Amazon’s earnings trajectory is strongly upward. The company has also controlled SG&A expenses: SG&A grew only 4.25% in 2024 and 13.9% in 2025, well below gross profit growth, indicating efficiency gains.

4. Seasonality and reinvestment – Q4 remains the strongest revenue quarter, but Q1 2026 shows that profitability can remain high even with lower sales, suggesting a higher proportion of subscription and cloud revenue, which are less seasonal. Depreciation continues to rise (from $34.3 billion in 2021 to $64.9 billion in 2025), reflecting massive capital expenditures. However, EBITDA growth comfortably outpaces depreciation, meaning cash earnings are growing even faster than net income.

5. Forward‑looking signals – The Q1 2026 results (ending March 31, 2026) are particularly encouraging. Net income of $30.3 billion annualizes to over $120 billion, implying a forward P/E multiple compression if sustained. Investors will watch whether this margin level persists into Q2 and Q3 2026. The company continues to invest in AI infrastructure and international expansion, but based on recent trends, those investments are not suppressing profitability.

In summary, Amazon has transformed from a low‑margin retailer into a high‑margin technology and services powerhouse. The last five years show consistent top‑line growth, but the story is really about profitability: gross margins up 800 basis points, net margins from negative to nearly 11%, and EPS growth of more than 120% over 2023–2025. The latest quarter suggests this momentum has carried into 2026, with net income rising far faster than revenue.