Company DCF analysis file
Amazon DCF Analysis
An Amazon DCF needs separate retail and AWS operating cases and a cash schedule for the capacity they require. FY2025 operating profit rose, but a much larger property-investment deduction left less cash. The newer twelve-month period in the linked analysis is a different observation, not another annual column.
Revenue, expenses and profit on one annual basis
Historical Amazon consolidated comparison, $ millions: FY2024 ended 2024-12-31 and FY2025 ended 2025-12-31. These annual periods are separate from the later interim observation below.
| Measure | FY2024 | FY2025 |
|---|---|---|
| Net sales | 637,959 | 716,924 |
| Cost of sales | 326,288 | 356,414 |
| Fulfillment | 98,505 | 109,074 |
| Technology and infrastructure | 88,544 | 108,521 |
| Sales and marketing | 43,907 | 47,129 |
| General and administrative | 11,359 | 11,172 |
| Other operating expense, net | 763 | 4,639 |
| Total operating expenses | 569,366 | 636,949 |
| Operating income | 68,593 | 79,975 |
| Net income | 59,248 | 77,670 |
Source: FY2025 annual financial statements. Annual values are reported unless a row is marked derived.
Fulfillment and technology costs are not both contained in the cost-of-sales row. Using sales less cost of sales as a cash margin would leave major delivery and infrastructure expenses out. Conversely, once starting from operating income, these costs have already been expensed. Net income also includes nonoperating items and is not the same operating-profit base.
Separate the three reported operating businesses
| Reported segment sales, $ millions | FY2024 | FY2025 |
|---|---|---|
| North America | 387,497 | 426,305 |
| International | 142,906 | 161,894 |
| AWS | 107,556 | 128,725 |
Source: Annual business disclosures and financial notes. Annual values are reported unless a row is marked derived.
Retail sales can be recorded gross for Amazon-owned goods, while seller services reflect fees. A uniform sales margin can therefore change merely because the commercial mix changes. AWS capacity and retail inventory require different collection and reinvestment schedules; the segment totals provide a starting reconciliation, not a substitute for those schedules.
Reconcile reported cash before forecasting investor cash
| Measure | FY2024 | FY2025 |
|---|---|---|
| Operating cash | 115,877 | 139,514 |
| Property purchases: positive outflow | 82,999 | 131,819 |
| Property sale proceeds and incentives | 5,341 | 3,499 |
| Net property cash deduction: derived | 77,658 | 128,320 |
| Cash after that net deduction: derived | 38,219 | 11,194 |
Source: Annual cash-flow statement and related notes. Annual values are reported unless a row is marked derived.
For 2025, net property cash is 131,819 minus 3,499 = $128,320 million. Subtracting this from $139,514 million operating cash leaves $11,194 million. Finance-lease principal, acquisitions and other financing remain outside this subtotal. Those boundaries matter when comparing it with a cash figure based on gross purchases or a later trailing-twelve-month period.
The later interim period stays separate
| Observation | Period-specific evidence |
|---|---|
| Reported interim basis | Q2 2026 covers 2026-04-01 through 2026-06-30 and was released 2026-07-30. Revenue was $200,606 million in this quarter. |
| Interpretation boundary | AWS profitability and the trailing-twelve-month investment deficit remain central to the linked Amazon financial analysis. The complete annual operating-cash series is before infrastructure purchases and does not establish that every capacity commitment is internally funded. |
Source: official interim reporting. The dated quarter is not annualized here and is not added to either full-year column. Later reporting must be checked before refreshing the valuation date.
Turn the statements into a DCF operating case
An enterprise forecast starts with operating profit by business, operating taxes and the investment needed for each demand case. Add back only noncash expenses already included in profit, then model inventory, receivables and supplier payments rather than assuming their past timing repeats forever. Reconcile cash-owned and leased equipment using one lease convention; do not exclude lease investment from forecast cash while also ignoring the related claim in equity value. Stock compensation needs an explicit dilution or compensation treatment.
| Driver | Evidence to carry into the forecast | Downside condition to test |
|---|---|---|
| AWS capacity | Consumption, service margin and installation cash | Capacity payments precede revenue and utilization |
| Retail delivery | Unit contribution after fulfillment and inventory funding | Faster delivery absorbs more cash than incremental contribution |
| Seller and advertising mix | Fee revenue and its service costs, without adding merchandise value | Mix-driven sales changes are mistaken for productivity gains |
Compare AWS growth with a fixed near-term capacity-payment schedule against a slower utilization case. For retail, hold the customer-service promise explicit when testing lower fulfillment costs. Discount only a reconciled investor-cash series; sales growth and an investment-led cash deficit can coexist without establishing either a price target or a funding crisis.
Use the Amazon financial analysis for the broader operating context, the company forecast to state the operating assumptions, and the DCF calculator only after defining the investor cash stream. Keep the statement definitions, reporting dates and your own assumptions visible when comparing valuation cases.
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