Amazon disclosed this itself, in its own release, in one sentence [1]:
"Second quarter 2026 net income includes non-operating pre-tax other income of $53.4 billion, primarily from our investments in Anthropic."
Pre-tax income for the quarter was $80,857 million. The Anthropic gain is 66.1 percent of it [1].
Net income came in at $62,647 million against $18,164 million a year earlier, and diluted earnings per share at $5.75. Strip the non-operating gain and tax the remainder at Amazon's own effective rate of 22.51 percent and you get roughly $21.3 billion, or about $1.95 a share. That last figure is our computation using a blended rate, not an Amazon disclosure.
The number that describes the business
Free cash flow, which Amazon reports on a trailing-twelve-month basis, is negative $7,604 million. A year ago it was positive $18,184 million [1].
It reconciles to the dollar: operating cash flow of $161,403 million less net capital expenditure of $169,007 million.
The series behind it has one direction [1]:
| Quarters ago | TTM free cash flow |
|---|---|
| Five | $25,925M |
| Four | $18,184M |
| Three | $14,788M |
| Two | $11,194M |
| One | $1,232M |
| Latest | -$7,604M |
Five consecutive falls, and this quarter it crossed zero. Net capital expenditure rose $66,054 million year on year, with second-quarter capex alone up 68.4 percent [1].
A second gain, larger still, that never touched earnings
Comprehensive income was $104,066 million, not $62.6 billion [1].
The gap is a further $41,988 million net of tax of unrealised gains on available-for-sale debt securities, which ran through other comprehensive income rather than the income statement. The figures reconcile exactly: 62,647 plus 41,419 equals 104,066.
Amazon does not say what those securities are, and this piece does not guess.
One more line worth noticing: deferred taxes jumped to $17,691 million from $11 million while cash taxes actually paid fell to $2,655 million from $4,761 million [1]. The tax on the gain is deferred, not paid.
What is genuinely strong
The operating business had a good quarter and it deserves saying plainly.
Net sales rose 19.62 percent to $200,606 million. Operating income rose 43.24 percent to $27,461 million. AWS grew 36.79 percent with its operating margin up 645 basis points to 39.36 percent. Headcount rose by 49,000 to 1,595,000 [1].
Andy Jassy: "AWS is booming, growing 36.7% year-over-year in Q2 - our fastest growth in 18 quarters - and our AI and Chips businesses each eclipsed run rates of more than $25 billion" [1].
The precise growth figure is 36.79 percent, which Amazon's own release rounds to 37 percent. Jassy's spoken 36.7 truncates rather than rounds. It is a trivial difference and it is the only inconsistency in the release.
The story is not that Amazon had a bad quarter. It is that the headline profit figure and the health of the business are, this quarter, two different subjects.
