Amazon's Q2 2026 Anthropic remeasurement and reported profit
How did the Anthropic-related remeasurement affect Amazon's Q2 2026 reported results?
- Company
- Amazon.com, Inc. · AMZN
- Published
- Filing analyzed
- 10-Q for the quarter ended 2026-06-30, filed 2026-07-31
- SEC source cutoff
Why this quarter needs two readings
Amazon's reported net income grew much faster than its operating income in the three months ended June 30, 2026. The distinction matters because the quarter included a large upward adjustment to the recorded value of an investment associated primarily with Anthropic. That adjustment appears after operating income, within other income. It does not represent AWS sales or a payment from a retail customer.
This article traces the line items that connect operations to reported net income and examines what the filing does—and does not—show about cash. For Amazon's three reportable businesses and their sales and profit comparisons, see the separate permanent AMZN research page.
What Amazon reported
Reported fact: The Q2 2026 consolidated statement of operations reports operating income of $27,461 million, other income, net of $53,415 million, and net income of $62,647 million. The comparable Q2 2025 figures were $19,171 million, $1,117 million, and $18,164 million, respectively. All figures below are USD millions.
| Reported line | 2026 | 2025 | Arqaris calculated change |
|---|---|---|---|
| Operating income | 27,461 | 19,171 | +8,290 |
| Other income, net | 53,415 | 1,117 | +52,298 |
| Net income | 62,647 | 18,164 | +44,483 |
Calculation: Subtracting the comparable 2025 amounts gives an $8,290 million increase in operating income, a $52,298 million increase in net other income, and a $44,483 million increase in net income. These changes are not additive: interest, taxes, and other items lie between the reported lines.
Where the Anthropic adjustment enters
Reported fact: In its note on other income and non-marketable investments, Amazon reports $50,486 million of Q2 2026 upward adjustments relating to equity investments in private companies, versus $49 million a year earlier. The filing says the 2026 amount primarily reflects observable price changes in its nonvoting preferred stock in Anthropic and describes approximately $50.5 billion of adjustments to that investment. It is a component of the $53,415 million net other-income line, not a separate addition to that line.
Amazon describes the preferred-stock valuation as a Level 3 fair-value measurement based on available information, including the securities' rights, potential liquidity events, and discounts for lack of marketability. The value change is recorded in other income below operating income. The related convertible notes have a different accounting treatment, with certain unrealized changes recorded in other comprehensive income; the two treatments should not be collapsed into one number.
Interpretation: Amazon's operating business improved on the reported measure, while the investment remeasurement made the bottom-line comparison much larger. The filing does not attribute this value adjustment to AWS operating revenue, and a changed carrying value is not evidence that Amazon sold the preferred stock for cash.
The reported earnings bridge
Calculation: The following bridge uses the Q2 2026 statement of operations as reported. Positive and negative signs show how the listed items connect; it is an arithmetic reconciliation, not an alternative earnings measure.
| Line | Amount | Role |
|---|---|---|
| Operating income | +$27,461 | Result of operating activities |
| Interest income | +$1,295 | Below operating income |
| Interest expense | −$1,314 | Below operating income |
| Other income, net | +$53,415 | Includes the private-investment adjustment |
| Income before income taxes | +$80,857 | Subtotal after non-operating items |
| Income-tax provision | −$18,199 | Reported tax line |
| Equity-method activity, net of tax | −$11 | Reported final adjustment |
| Net income | +$62,647 | Reported bottom line |
The sum yields $80,857 million before taxes and $62,647 million of net income. The filing does not assign a complete stand-alone tax effect to the Anthropic remeasurement here. Subtracting the adjustment from net income would therefore create an unsupported “normalized earnings” figure.
A value adjustment and a cash investment are different events
Reported fact: The cash-flow statement starts with Q2 net income of $62,647 million and includes a $53,381 million subtraction labeled non-operating expense (income), net among its adjustments toward operating cash flow. That line covers broader non-operating activity and should not be presented as an exact one-line reversal of the Anthropic adjustment. Net cash provided by operating activities was $45,387 million; other noncash items and working-capital movements also affect it.
Separately, the filing says Amazon invested $10,000 million in Anthropic nonvoting preferred stock during Q2 2026. That is a cash investment described in the investing-activities discussion. It must not be confused with the approximately $50.5 billion upward valuation adjustment to preferred stock recorded in other income. The valuation adjustment changes the recorded investment value and reported earnings; the filing does not report it as cash proceeds from selling the stock.
Limitation: Neither this selected cash-flow comparison nor the value adjustment alone measures the eventual amount Amazon might receive from the investment. The filing discusses estimation inputs and liquidity-event uncertainty. Taxes, other investments, and the rest of Amazon's cash flows need the complete filing for context.
What the evidence supports—and where it stops
Interpretation: Amazon earned more operating income than in the comparable quarter, and a large Anthropic-related carrying-value increase appeared below that operating line. The earnings bridge explains why the rise in net income cannot be described solely as stronger retail or AWS operations. This is an accounting-location and comparability finding, not a judgment about the investment's ultimate value.
- Limitation: “Other income, net” contains additional gains, losses, and other items; the entire line is not an Anthropic gain.
- Limitation: The private-equity adjustment is a fair-value estimate, not a transaction price realized by selling the preferred stock.
- Limitation: No after-tax gain-free earnings or future investment return is calculated. The filing does not supply a complete attribution for either.
- Limitation: This analysis covers the Q2 filing through 2026-07-31; later events may change the investment's value or the analysis.
Primary evidence and method
Amazon.com, Inc., Form 10-Q, quarter ended 2026-06-30, filed 2026-07-31, SEC accession 0001018724-26-000026. The consolidated statements of operations and cash flows establish the reported figures; the notes on other income and non-marketable investments describe the valuation treatment; management's discussion identifies the Q2 cash investment.
Arqaris transcribed the specified USD-million figures from this SEC filing, calculated the period changes and earnings bridge, and wrote the explanation and limits. The figures describe historical accounting results, not an investment recommendation, price target, or forecast. Read the permanent Amazon research for segment analysis, and review Arqaris methodology for source and interpretation limits.