AMZN — Amazon.com Inc.
- Net margin
- 11%
- ROIC
- 16%
- Owner Earnings
- $7.7B
Read as a Retail & distribution business — inventory near 5% of sales on a 50% gross margin — a thin-margin, inventory-driven model.
The record — 2016–2025
realized figures from each filing — no estimates| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | TTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $136.0B | $177.9B | $232.9B | $280.5B | $386.1B | $469.8B | $514.0B | $574.8B | $638.0B | $716.9B | $742.8B |
| Gross margin | 35% | 37% | 40% | 41% | 40% | 42% | 44% | 47% | 49% | 50% | 51% |
| Operating margin | 3.1% | 2.3% | 5.3% | 5.2% | 5.9% | 5.3% | 2.4% | 6.4% | 10.8% | 11.2% | 11.5% |
| Net income | $2.4B | $3.0B | $10.1B | $11.6B | $21.3B | $33.4B | ($2.7B) | $30.4B | $59.2B | $77.7B | $90.8B |
| EPS (diluted) | $0.24 | $0.30 | $1.00 | $1.14 | $2.09 | $3.24 | $-0.27 | $2.90 | $5.53 | $7.17 | $8.35 |
| Owner earnings | $10.5B | $6.4B | $17.3B | $21.7B | $25.9B | ($14.7B) | ($16.9B) | $32.2B | $32.9B | $7.7B | ($2.5B) |
| Owner earnings margin | 7.7% | 3.6% | 7.4% | 7.7% | 6.7% | −3.1% | −3.3% | 5.6% | 5.2% | 1.1% | −0.3% |
| ROIC | 30% | 10% | 30% | 24% | 24% | 14% | 6% | 15% | 22% | 16% | 15% |
Owner’s Scorecard
Will it survive?
- Can it pay its interest? 35.2×ComfortableOperating income $80.0B ÷ interest expense $2.3B
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient — it says solvent, not cheap.
- How heavy is the debt? 0.9×ConservativeTotal debt $68.4B ÷ operating income $80.0B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- How long is cash tied up? -51dNegative — funded by othersDSO 34 + DIO 39 − DPO 125 days
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”) — the company grows on other people's money.
Is it a good business?
- Return on invested capital 16%HighNOPAT $64.2B ÷ invested capital $392.7B (debt + equity − cash)
The rate the business earns on the money tied up in it — Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high — pair this with Owner Earnings.
- Owner Earnings (free cash) margin 1%ThinOwner Earnings $7.7B = operating cash $139.5B − capex $131.8B
What an owner could take out without starving the business. That's 1% of revenue. Treating stock comp as the real expense it is (less $19.5B of SBC) leaves ($11.8B). Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Are earnings backed by cash? 1.80×Cash-backedCash from ops $139.5B ÷ net income $77.7B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy — growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Where do the earnings go? 0%Reinvests most of itDividends + buybacks $0 ÷ Owner Earnings $7.7B
Of $7.7B Owner Earnings, $0 (0%) went back to shareholders — $0 dividends, $0 buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway — or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 2.00×ExpandingCapex $131.8B ÷ depreciation $65.8B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth — or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency — or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat — 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says — judgments, not another chart of the numbers.
- Profitable years 9 of 10
Lost money in 1 year(s) — look at what happened there before trusting the average.
- Return on capital ≥ 15% 7 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year — not one good vintage.
- Operating margin 3% → 11%
Margins are widening — pricing power intact or improving.
- Reinvestment — incremental ROIC 18%
Every extra dollar the company reinvested earned a high return — it is still compounding, not coasting on an old moat.
- Owner earnings growth +10%/yr
Free cash to owners grew about 10% a year over the record.
- Worst year 2017 · 2.3% op. margin
Stayed profitable even in its hardest year — the resilience that survives recessions.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict — the judgment is yours, and the filing is one click away.
Peers — Retail & distribution
The same business model, side by side on owner economics — compare, don't rank by a single number. ● marks best in the group.