Amazon is not losing money in 2026: it earned $77.7 billion in net income in 2025 on $716.9 billion in sales, but Prime still works as a deliberate reinvestment engine, and free cash flow has nearly vanished because of record spending. The old story, that Amazon lost $2.7 billion in 2022 and that Prime was the cause, no longer holds. What stays true is the strategy: spend heavily on shipping, streaming and now AI infrastructure so members keep coming back.
Prefer video? Watch the original version of this analysis, recorded when Amazon’s 2022 results looked weaker:
Amazon’s numbers then and now
| Metric | 2022 | 2024 | 2025 |
|---|---|---|---|
| Net sales | $514 billion | $638.0 billion | $716.9 billion |
| Net income | -$2.7 billion | $59.2 billion | $77.7 billion |
| AWS operating income | $22.8 billion | $39.8 billion | $45.6 billion |
| Capital expenditures (gross) | n/a | $83.0 billion | $131.8 billion |
| Free cash flow | n/a | $38.2 billion | $11.2 billion |
The 2022 sales, net loss and AWS operating income come from the original article. 2024 and 2025 figures are from Amazon’s reported annual results.
Was the 2022 loss a Prime problem?
No. In 2022 Amazon posted a net loss of about $2.7 billion, while retail and international operations were barely profitable or loss-making and spending stayed high. AWS earned the entire company’s operating profit that year. Since then, retail has grown into a profit source: in 2025 North America earned $29.6 billion in operating income and International $4.7 billion, against $25.0 billion and $3.8 billion in 2024.
What does Prime cost and what does Amazon earn from it?
Amazon does not publish Prime’s profit. It does report a “subscription services” line, which includes Prime, Audible, Kindle Unlimited and music. That line brought in $13.7 billion in the second quarter of 2026, up 12% from a year earlier. We estimate this annualizes to roughly $55 billion, using that single quarter times four, which is above the $35.2 billion reported for all of 2022.
The US Prime fee was raised from $119 to $139 a year in February 2022, and we found no newer increase in public reporting, so verify the current price on the Prime page before relying on it. Meanwhile Amazon added “limited advertisements” to Prime Video at the end of January 2024 and charges $2.99 a month to remove them, which turns the video catalogue into an ad business as well. Advertising services sales reached $19.8 billion in the second quarter of 2026, up 26%.
Why does Amazon still spend more on Prime than it earns directly?
Prime is a loyalty machine. Shipping speed, video, music and now Alexa+, which launched in the US in February 2026 at $19.99 a month with access included for Prime members, give people reasons to stay and buy more. The cost lands in the retail and content lines, while the payoff is more orders, more ad impressions and more marketplace fees. That is why we called Prime a controlled loss in the original article. The bigger point in 2026 is that the company now applies the same logic to AI.
The new cash burn: AI infrastructure
Capital expenditures reached $131.8 billion in 2025, up from $83.0 billion, and the trailing twelve months to June 2026 hit about $173.0 billion. Free cash flow for that period was an outflow of about $7.6 billion. AWS keeps growing: second-quarter 2026 sales were $42.2 billion, up 37%, with operating income of $16.6 billion. The profits fund the buildout, which is the same pattern as Prime at a much larger scale.
Note that Amazon’s second-quarter 2026 net income of $62.6 billion included $53.4 billion in non-operating income, mainly from its investments in Anthropic. Operating income of $27.5 billion is the cleaner measure of the underlying business.
So is it okay to lose money?
It is okay when the spending builds something competitors cannot match and the cash comes back later. Amazon’s reinvestment of Prime revenue gave it a moat in logistics. The risk now is that the AI buildout burns more cash than customers pay for. As of October 23, 2026, the stock closed at $248, and the market is betting the spending will pay off.
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FAQ
Is Amazon losing money in 2026?
No. Amazon reported $77.7 billion in net income for 2025 and $27.5 billion in operating income in the second quarter of 2026. Free cash flow is thin because of heavy spending on AI infrastructure.
Did Amazon lose money on Prime?
Amazon does not disclose Prime profit. It reports a subscription services line that brought in $13.7 billion in the second quarter of 2026, and it deliberately reinvests heavily in shipping and content.
How much does Amazon Prime cost?
The last US increase we could confirm was in February 2022, from $119 to $139 a year. Check the Prime sign-up page for the current price.
Why did Amazon lose money in 2022?
The 2022 net loss of about $2.7 billion was came alongside weak retail results and heavy spending. AWS supplied all of the operating profit that year.
What is Amazon spending its money on now?
Mostly AI and data center capacity. Gross capital expenditures were $131.8 billion in 2025, and the trailing twelve months to June 2026 reached about $173.0 billion.
Does Prime Video have ads?
Yes. Since the end of January 2024, Prime Video includes limited advertisements, and members can pay $2.99 a month to avoid them.
Last updated: October 2026.
