Risk factor changes · AMZN

What changed in Amazon's risk factors

Item 1A (Risk Factors) of Amazon's FY2025 10-K compared with its FY2024 10-K, sentence by sentence.

Newer: 10-K filed 2026-02-06 · Older: 10-K filed 2025-02-07

New in the latest 10-K 5

• The disclosures in this section reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future.
• References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past.
• There can be no assurance that we will be able to operate our networks effectively.
• Our Business Suffers When We Are Unsuccessful in Making, Integrating, and Maintaining Acquisitions and Investments We have acquired and invested in a number of companies, and we may in the future acquire or invest in or enter into joint ventures with additional companies.
• Any one of the inventory risk factors set forth above may adversely affect our operating results.

Reworded 33

Removed words are struck through; added words are highlighted.

• The internet facilitates and other technologies including artificial intelligence facilitate competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser known lesser-known businesses to compete against us.
• These offerings, which can present new and difficult technology challenges, may subject us to claims if customers of these offerings experience, or are otherwise impacted by, service disruptions, delays, setbacks, or failures or 6 Table of Contents quality issues.
• In addition, profitability or other intended benefits, if any, in our newer activities (including development and adoption of automation, artificial intelligence, and machine learning technologies for customer and internal use), may not meet our expectations, and we may not be successful enough in these newer activities to recoup our investments in them, which investments are often significant.
• Failure to realize the benefits of amounts we invest in new technologies, products, or services could result in the 6 Table of Contents value of those investments being written down or written off.
• In addition to risks described elsewhere in this section, our international sales and operations are subject to a number of risks, including: local economic and political conditions; government regulation (such as regulation of our product and service offerings and of competition); restrictive governmental actions (such as trade protection or retaliatory measures, including export duties and quotas and custom duties and tariffs, and restrictions around the import and export of certain products, technologies, and components); nationalization; and restrictions on foreign ownership; restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights; business licensing or certification requirements, such as for imports, exports, web services, electronic devices, and communications services; limitations on the repatriation and investment of funds and foreign currency exchange restrictions; limited fulfillment and technology infrastructure; shorter payable and longer receivable cycles and the resultant negative impact on cash flow; laws and regulations regarding privacy, data use, data protection, data security, data localization, network security, consumer protection, payments, advertising, and restrictions on pricing or discounts; lower levels of use of the internet; lower levels of consumer spending and fewer opportunities for growth compared to the U.S.; lower levels of credit card usage and increased payment risk; difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences; different employee/employer relationships and the existence of works councils and labor unions; compliance with the U.S.
• Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties; laws and policies of the U.S. and other jurisdictions affecting trade, trade (such as tariff policy changes), foreign investment, loans, and taxes; and geopolitical events, including war and terrorism.
• For example, in order to meet local ownership, regulatory licensing, and cybersecurity requirements, we provide 7 Table of Contents certain technology services in China through contractual relationships with third parties that hold PRC licenses to provide services.
• Although we believe these structures and activities comply with existing 7 Table of Contents laws, they involve unique risks, and the PRC and India may from time to time consider and implement additional changes in their regulatory, licensing, or other requirements that could impact these structures and activities.
• In addition, because China-based sellers account for significant portions of our third-party seller services and advertising revenues, and China-based suppliers provide significant portions of our components and finished goods, regulatory and trade restrictions, tariff policy changes and trade disputes, data protection and cybersecurity laws, economic factors, geopolitical events, security issues, or other factors negatively impacting China-based sellers and suppliers could adversely affect our operating results.
• The Variability in Our Retail Business Places Increased Strain on Our Operations Demand for our products and services can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, or unforeseeable events, such as in response to global economic conditions such as recessionary fears or rising inflation, inflation (including as a result of tariff policy changes), natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), or geopolitical events.
• Under Additionally, under our A-to-z Guarantee, we may reimburse customers for payments certain product liability claims up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results.
• Under our A-to-z Guarantee, we may reimburse customers for payments up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results. 8 Table of Contents We Face Risks Related to Adequately Protecting Our Intellectual Property Rights and Being Accused of Infringing Intellectual Property Rights of Third Parties We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary technology, and similar intellectual property as critical to our success, and we rely on trademark, copyright, and patent law, trade secret protection, and confidentiality and/or license agreements with our employees, customers, and others to protect our proprietary rights.
• We may be 8 Table of Contents unable to prevent third parties from acquiring domain names that are similar to, infringe upon, or diminish the value of our trademarks and other proprietary rights.
• Operating Risks Our Expansion Places a Significant Strain on our Management, Operational, Financial, and Other Resources We are continuing to rapidly and significantly expand our global operations, including increasing our product and service offerings and offerings, scaling our infrastructure to support our retail and services businesses. businesses (including our technology infrastructure), and adopting and utilizing artificial intelligence and machine learning technologies.
• A significant portion of our expenses and investments is fixed, and we are not always able to adjust our spending quickly enough if our sales are less than expected. 9 Table of Contents Our revenue growth may not be sustainable, and our percentage growth rates may decrease.
• Our sales and operating results will also fluctuate for many other reasons, including due to factors described elsewhere in this section and the following: our ability to retain and increase sales to existing customers, attract new customers, and satisfy our customers demands; our ability to retain and expand our network of sellers; our ability to offer products on favorable terms, manage inventory, and fulfill orders; the introduction of competitive stores, websites, products, services, price decreases, or improvements; 9 Table of Contents changes in usage or adoption rates of the internet, e-commerce, electronic devices, web services, satellite communications services, and artificial intelligence and machine learning technologies, products, and services, including outside the U.S.; timing, effectiveness, and costs of expansion and upgrades of our systems and infrastructure; the success of our geographic, service, and product line expansions; the extent to which we finance, and the terms of any such financing for, our current operations and future growth; the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results; variations in the mix of products and services we sell; variations in our level of merchandise and vendor returns; the extent to which we offer fast and free delivery, continue to reduce prices worldwide, and provide additional benefits to our customers; factors affecting our reputation or brand image (including any actual or perceived inability to achieve our goals or commitments, whether related to sustainability, customers, employees, or other topics), and public perceptions regarding our positions on social or ethical issues and our development and use of artificial intelligence, machine learning, and automation technologies, products, and services; the extent to which we invest in technology and infrastructure, fulfillment, and other expense categories; availability of and increases in the prices of transportation (including fuel), resources such as land, water, and energy, commodities like paper and packing supplies and hardware products, and technology infrastructure products, including as a result of inflationary pressures; constrained labor markets, which increase our payroll costs; the extent to which operators of the networks networks, systems, and services between our customers us and our stores customers successfully divert customers from or charge fees to grant our customers unimpaired and unconstrained access to our online services; stores and service offerings; our ability to collect amounts owed to us when they become due; the extent to which new and existing technologies, or industry trends, restrict online advertising or affect our ability to customize advertising or otherwise tailor our product and service offerings; the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; the extent to which we fail to maintain our unique culture of innovation, customer obsession, and long-term thinking, which has been critical to our growth and success; disruptions from natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks, armed hostilities, and political conflicts, including those involving China), labor or trade disputes (including restrictive governmental actions impacting us, our customers, and our third-party sellers and suppliers in China or other foreign countries), tariff policy changes, changes (such as tariffs proposed or implemented by the U.S. and other countries and any retaliatory actions), and similar events; and 10 Table of Contents potential negative impacts of climate change, including: increased operating costs due to more frequent extreme weather events or climate-related changes, such as rising temperatures and water scarcity; increased investment requirements associated with the transition to a low-carbon economy; decreased demand for our products and services as a result of changes in customer behavior; increased compliance costs due to more extensive and global regulations and third-party requirements; and reputational damage resulting from perceptions of our environmental impact.
• There can be no assurance that we will be able to operate our networks effectively. 10 Table of Contents In addition, failure to optimize inventory management or staffing in our fulfillment network increases our net shipping cost by increasing the distance products are shipped and reducing the number of units per shipment or delivery.
• In addition, our ability to receive inbound inventory efficiently and ship completed orders to customers also may be negatively affected by natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues, labor or trade disputes, tariff policy changes, and similar events.
• We use third-party technology and systems for a variety of reasons, including, without limitation, artificial intelligence technologies, encryption and authentication technology, employee email, email and other communication technologies, content delivery to customers, back-office support, and other functions.
• Although we have developed systems and processes that are designed to protect customer data and prevent, detect, or mitigate such incidents, including systems and processes designed to reduce the impact of a security incident at a third-party vendor or customer, such measures cannot provide absolute security and may fail to operate as intended or be circumvented. circumvented, including by use of developing technologies such as artificial intelligence.
• Steps we take to add software and hardware, upgrade our systems and network infrastructure, and improve the stability and efficiency of our systems may not be sufficient to avoid system interruptions or delays that could adversely affect our operating results. 11 Table of Contents Our computer and communications systems and operations in the past have been, or in the future could be, damaged or interrupted due to events such as natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks and armed hostilities), computer viruses, physical or electronic break-ins, operational failures (including from energy shortages), and similar events or disruptions.
• For example, we experience 11 Table of Contents significant competition in the technology industry, particularly for software engineers, computer scientists, and other technical staff. staff (including for artificial intelligence and machine learning technologies).
• Decisions by our current suppliers to limit or stop selling or licensing merchandise, content, components, or services to us on acceptable terms, or delay delivery, including as a result of one or more supplier bankruptcies due to poor economic conditions, as a result of natural or human-caused disasters (including public health crises) or crises), geopolitical events, labor and trade disputes, or for other reasons, may result in our being unable to procure alternatives from other suppliers in a timely and efficient manner and on acceptable terms, or at all.
• The amount of compensation we receive under certain of our commercial agreements is partially 12 Table of Contents dependent on the volume of the other company s sales.
• Our present and future commercial agreements, strategic alliances, and business relationships create additional risks such as: disruption of our ongoing business, including loss of management focus on existing businesses; impairment of other relationships; variability in revenue and income from entering into, amending, or terminating such agreements or relationships; and difficulty integrating under the commercial agreements. 12 Table of Contents Our Business Suffers When We Are Unsuccessful in Making, Integrating, and Maintaining Acquisitions and Investments We have acquired and invested in a number of companies, and we may in the future acquire or invest in or enter into joint ventures with additional companies.
• We could determine that such valuations have experienced impairments or other-than-temporary declines in fair value which could adversely impact our financial results. 13 Table of Contents We Face Significant Inventory Risk In addition to risks described elsewhere in this Item 1A relating to fulfillment network and inventory optimization by us and third parties, we are exposed to significant inventory risks that may adversely affect our operating results as a result of seasonality, new product launches, rapid changes in product cycles and pricing, pricing (including as a result of tariff policy changes), defective merchandise, changes in customer demand and consumer spending patterns, changes in consumer tastes with respect to our products, spoilage, and other factors.
• Any one of the inventory risk factors set forth above may adversely affect our operating results. 13 Table of Contents We Are Subject to Payments-Related Risks We accept payments using a variety of methods, including credit card, debit card, credit accounts (including promotional financing), gift cards, direct debit from a customer s bank account, consumer invoicing, checks, and payment upon delivery.
• The trading price of our common stock fluctuates significantly in response to, among other risks, the risks described elsewhere in this Item 1A, as well as: changes in interest rates; conditions or trends in the internet internet, other technologies including artificial intelligence, and the industry segments we operate in; quarterly variations in operating results; fluctuations in the stock market in general and market prices for internet-related technology-related companies in particular; changes in financial estimates by us or decisions to increase or decrease future spending or investment levels; changes in financial estimates and recommendations by securities analysts; changes in our capital structure, including issuance of additional debt or equity to the public; 14 Table of Contents changes in the valuation methodology of, or performance by, other e-commerce or technology companies; and transactions in our common stock by major investors and certain analyst reports, news, social media activity, and speculation.
• These regulations and laws cover taxation, privacy, data use, data protection, data security, data localization, network security, consumer protection, pricing, content, copyrights, distribution, transportation, communications, electronic device certification, electronic waste, energy consumption, environmental and climate-related regulation, electronic contracts 14 Table of Contents and other communications, competition, employment, trade and protectionist measures, web services, the provision of online payment services, registration, licensing, and information reporting requirements, insurance, unencumbered internet access to our services or access to our facilities, the design and operation of websites, health, safety, and sanitation standards, the characteristics, legality, and quality of products and services, product labeling, the commercial operation of unmanned aircraft systems, healthcare, and other matters.
• For example, we face a number of open investigations based on claims that aspects of our operations infringe competition competition-related or consumer protection rules, rules or regulations, including aspects of Amazon s operation of its stores, including its fulfillment network and Prime, and certain aspects of AWS s offering of cloud services.
• Any of these types of proceedings can have an adverse effect on us 15 Table of Contents because of legal costs, disruption of our operations, diversion of management resources, negative publicity, and other factors.
• In addition, the European Union and other countries (including those in which we operate) have enacted or have committed to may enact global minimum taxes, which may increase our tax expense.
• For example, the Indian tax authority has asserted that tax applies to cloud services fees paid to 16 Table of Contents Amazon in the U.S.

Removed since the previous 10-K 4

• Our revenue growth may not be sustainable, and our percentage growth rates may decrease.
• Steps we take to add software and hardware, upgrade our systems and network infrastructure, and improve the stability and efficiency of our systems may not be sufficient to avoid system interruptions or delays that could adversely affect our operating results.
• We could determine that such valuations have experienced impairments or other-than-temporary declines in fair value which could adversely impact our financial results.
• Additionally, under our A-to-z Guarantee, 15 Table of Contents we may reimburse customers for certain product liability claims up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results.

Source: SEC EDGAR filings, compared sentence by sentence by EdgarStack. Sentence matching is automated and may pair or split passages imperfectly; check the linked filings before relying on any passage. A software tool, not financial advice. Not affiliated with the U.S. Securities and Exchange Commission.