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

Saturday, 6 June 2026

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

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.
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.
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.
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.
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.

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My 18 points guide to Successfully compounding your money in Stocks

Be a good stock picker.
Think as a business owner.
Always look at value rather than the price. Do the homework.
Buy and hold is alright for selected stocks.
Compounding is your friend, get this to work its magic.
Mr. Market is there to be taken advantage of. Do not be the sucker instead. BFS;STS.
Always buy a lot when the price is low.
Never buy when the stock is overpriced.
It is alright to buy when the selected stock is at a fair price.
Phasing in or dollar cost averaging is safe for such stocks during a downtrend, unless the price is still obviously too high.
Do not time the market for such or any stocks.
By keeping to the above strategy, the returns will be delivered through the growth of the company's business.
So, when do you sell the stock? Almost never, as long as the fundamentals remain sound and the future prospects intact.
The downside risk is protected through only buying when the price is low or fairly priced.
Tactical dynamic asset allocation or rebalancing based on valuation can be employed but this sounds easier than is practical, except in extreme market situations.
Sell urgently when the company business fundamental has deteriorated irreversibly.
You may also wish to sell should the growth of the company has obviously slowed and you can reinvest into another company with greater growth potential of similar quality. However, unlike point 16, you can do so leisurely.
In conclusion, a critical key to successful investing is in your stock picking ability.

http://myinvestingnotes.blogspot.com/2012/07/my-18-points-guide-to-successfully.html

11 Lessons From Peter Lynch

Peter Lynch taught me:

1. Behind every stock is a company. Find out what it’s doing.
2. Never invest in any idea you can’t illustrate with a crayon.
3. Over the short term, there may be no correlation between the success of a company’s operations and the success of its stock. Over the long term, there’s a 100% correlation.
4. Buying stocks without studying the companies is the same as playing poker – and never looking at your cards.
5. Time is on your side when you own shares of superior companies.
6. Owning stock is like having children. Don’t get involved with more than you can handle.
7. When the insiders are buying, it’s a good sign.
8. Unless you’re a short seller, it never pays to be pessimistic.
9. A stock market decline is as predictable as a January blizzard in Colorado. If you’re prepared, it can’t hurt you.
10. Everyone has the brainpower to make money in stocks. Not everyone has the stomach.
11. Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.

Lynch’s advice had a profound effect on my stock market approach. He taught me that investment success isn’t the result of developing the right macro-economic view or deciding when to jump in or out of the market. Success is about researching companies to identify those that are likely to report positive surprises.

Capital Expenditure

A great company with a Durable Competitive Advantage will have a ratio of Capital Expenditures to Net Income of less than 25%. Less is better.

Capital Expenditures are expenses on:
- fixed assets such as equipment, property, or industrial buildings
- fixing problems with an asset
- preparing an asset to be used in business
- restoring property
- starting new businesses

A good company will have a ratio of Capital Expenditures to Net Income of less than 50%.

A great company with a Durable Competitive Advantage will have a ratio of less than 25%.

Less is better.

Benjamin Graham's 113 Wise Words

The true investor scarcely ever is forced to sell his shares, and at all times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgement."

Philip Fisher's Wise Words

"The refusal to sell at a loss, while completely natural and normal, is probably one of the most dangerous in which we can indulge ourselves in the entire investment process.

More money has probably been lost by investors holding a stock they really did not want until they could 'at least come out even' than from any other single reason. If to these actual losses are added the profits that might have been made through the proper reinvestment of these funds if such reinvestment had been made when the mistake was first realized, the cost of self-indulgence becomes truly tremendous."

(Common Stocks and Uncommon Profits)

The Ultimate Hold-versus-Sell Test

Here is the overriding primary test, followed by observations on why it is so critically important:

Knowing all that you now know and expect about the company and its stock (not what you originally believed or hoped at time of purchase), and assuming that you had available capital, and assuming that it would not cause a portfolio imbalance to do so, would you buy this stock today, at today's price?

No equivocation. Yes or no?

Answers such as maybe or probably are not acceptable since they are ways of dodging the issue. No investor probably buys a stock; they either place an order or do not.

Here is the implication of your answer to that critical test: if you did not answer with a clear affirmative, you should sell; only if you said a strong yes, are you justified to hold.

Some thoughts on Analysing Stocks (KISS)

Ideally a stock you plan to purchase should have all of the following charateristics:

• A rising trend of earnings dividends and book value per share.
• A balance sheet with less debt than other companies in its particular industry.
• A P/E ratio no higher than average.
• A dividend yield that suits your particular needs.
• A below-average dividend pay-out ratio.
• A history of earnings and dividends not pockmarked by erratic ups and downs.
• Companies whose ROE is 15 or better.
• A ratio of price to cash flow (P/CF) that is not too high when compared to other stocks in the same industry.

Margin of Safety Concept: Stocks should be bought like groceries, not like perfume

The high CAGR in the early years of the investing period, due to buying at a discount, tended to decline and approach that of the intrinsic EPS GR of the companies over a longer investment time-frame.

Chapter 20 - “Margin of Safety” as the Central Concept of Investment

A single quote by Graham on page 516 struck me:

Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

Basically, Graham is saying that most stock investors lose money because they invest in companies that seem good at a particular point in time, but are lacking the fundamentals of a long-lasting stable company.

This seems obvious on the surface, but it’s actually a great argument for thinking more carefully about your individual stock investments. If most of your losses come from buying companies that seem healthy but really aren’t, isn’t that a profound argument for carefully studying any company you might invest in?

Bullbear Buffett

Saturday, 6 June 2026

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

Five-Year Annual Performance (2021–2025)

Latest Five Quarters (Q1 2025 – Q1 2026)

Key Takeaways and Discussion

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All equity security investments present a risk of loss of capital

The Ultimate Hold-versus-Sell Test

Some thoughts on Analysing Stocks (KISS)

Benjamin Graham

Sell the losers, let the winners run.

Investment Style

Warren Buffett

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