Amazon Server and Networking Equipment Useful Life Changes — Last Four Years
Summary Table: All Disclosed Changes, Direction, Quantified Dollar Effect, and Verbatim Filing Language
| Effective Date | Asset Type | Direction of Change | Quantified Dollar Effect on Operating Income | Verbatim Filing Language (Excerpt) | Source Document |
|---|---|---|---|---|---|
| Jan 1, 2025 | Servers & networking equipment (subset) | Decrease (6→5 years for a subset) | FY2025: Increase in depreciation and amortization expense of $1.4B; reduction in net income of $1.0B ($0.10 per share); Q3 2025: +$392M depreciation, -$298M net income; Q2 2025: +$280M depreciation, -$217M net income; Q1 2025: +$217M depreciation, -$162M net income; 9M 2025: +$889M depreciation, -$677M net income | "Effective January 1, 2025 we changed our estimate of the useful lives of a subset of our servers and networking equipment from six years to five years. The shorter useful lives are due to the increased pace of technology development, particularly in the area of artificial intelligence and machine learning. The effect of this change in estimate for the year ended December 31, 2025, based on servers and networking equipment that were included in 'Property and equipment, net' as of December 31, 2024 and those acquired during the year ended December 31, 2025, was an increase in depreciation and amortization expense of $1.4 billion and a reduction in net income of $1.0 billion, or $0.10 per basic share and $0.10 per diluted share, which primarily impacted our AWS segment." | 10-K FY2025, 10-Qs Q1–Q3 2025 |
| Jan 1, 2024 | Servers | Increase (5→6 years) | FY2024: Reduction in depreciation and amortization expense of $3.2B; benefit to net income of $2.5B ($0.23 per share); Q3 2024: -$760M depreciation, +$598M net income; Q2 2024: -$786M depreciation, +$601M net income; Q1 2024: -$897M depreciation, +$695M net income; 9M 2024: -$2.4B depreciation, +$1.9B net income | "We had previously increased the useful life of our servers from five years to six years effective January 1, 2024. The effect of this change for the year ended December 31, 2024, based on servers that were included in 'Property and equipment, net' as of December 31, 2023 and those acquired during the year ended December 31, 2024, was a reduction in depreciation and amortization expense of $3.2 billion and a benefit to net income of $2.5 billion, or $0.23 per basic share and $0.23 per diluted share. These server and networking equipment useful life changes primarily impact our AWS segment." | 10-K FY2024, 10-Qs Q1–Q3 2024 |
| Jan 1, 2022 | Servers & networking equipment | Increase (Servers: 4→5 years; Networking: 5→6 years) | FY2022: Reduction in depreciation and amortization expense of $3.6B; benefit to net loss of $2.8B ($0.28 per share); Q3 2022: -$882M depreciation, +$665M net income; 9M 2022: -$2.8B depreciation, +$2.2B net income | "We review the useful lives of equipment on an ongoing basis, and effective January 1, 2022 we changed our estimate of the useful lives for our servers from four years to five years and for our networking equipment from five years to six years. The longer useful lives are due to continuous improvements in our hardware, software, and data center designs. The effect of this change in estimate for the year ended December 31, 2022, based on servers and networking equipment that were included in 'Property and equipment, net' as of December 31, 2021 and those acquired during the year ended December 31, 2022, was a reduction in depreciation and amortization expense of $3.6 billion and a benefit to net loss of $2.8 billion, or $0.28 per basic share and $0.28 per diluted share." | 10-K FY2022, 10-Q Q3 2022 |
AWS Segment — Quarterly Operating Margin and Depreciation Expense
AWS Segment — Quarterly Operating Margin and Depreciation Expense
| Fiscal Quarter Ended | AWS Net Sales ($M) | AWS Operating Income ($M) | AWS Operating Margin (%) | AWS Depreciation & Amortization Expense ($M) |
|---|---|---|---|---|
| 2026-03-31 | 37,587 | 14,161 | 37.7 | 7,277 |
| 2025-09-30 | 33,006 | 11,434 | 34.6 | 5,648 |
| 2025-06-30 | 30,873 | 10,160 | 32.9 | 4,844 |
| 2025-03-31 | 29,267 | 11,547 | 39.45 | 4,390 |
| 2024-09-30 | 27,452 | 10,447 | 38.05 | |
| 2024-06-30 | 26,281 | 9,334 | 35.54 | |
| 2024-03-31 | 25,037 | 9,421 | 37.63 | 2,839 |
| 2023-09-30 | 23,059 | 6,976 | 30.27 | |
| 2023-06-30 | 22,140 | 5,365 | 24.24 | |
| 2023-03-31 | 21,354 | 5,123 | 24.0 | |
| 2022-09-30 | 20,538 | 5,403 | 26.3 | |
| 2022-03-31 | 18,441 | 6,518 | 35.4 |
Notes:
- AWS Depreciation & Amortization Expense is only explicitly disclosed for select quarters (Q1 2026, Q3 2025, Q2 2025, Q1 2025, Q1 2024).
- For other quarters, the value is not separately disclosed in the source documents.
Verbatim Filing Language for Each Useful Life Change
Jan 1, 2025 (Decrease, 6→5 years for a subset):
"Effective January 1, 2025 we changed our estimate of the useful lives of a subset of our servers and networking equipment from six years to five years. The shorter useful lives are due to the increased pace of technology development, particularly in the area of artificial intelligence and machine learning. The effect of this change in estimate for the year ended December 31, 2025, based on servers and networking equipment that were included in 'Property and equipment, net' as of December 31, 2024 and those acquired during the year ended December 31, 2025, was an increase in depreciation and amortization expense of $1.4 billion and a reduction in net income of $1.0 billion, or $0.10 per basic share and $0.10 per diluted share, which primarily impacted our AWS segment."
Jan 1, 2024 (Increase, 5→6 years):
"We had previously increased the useful life of our servers from five years to six years effective January 1, 2024. The effect of this change for the year ended December 31, 2024, based on servers that were included in 'Property and equipment, net' as of December 31, 2023 and those acquired during the year ended December 31, 2024, was a reduction in depreciation and amortization expense of $3.2 billion and a benefit to net income of $2.5 billion, or $0.23 per basic share and $0.23 per diluted share. These server and networking equipment useful life changes primarily impact our AWS segment."
Jan 1, 2022 (Increase, Servers: 4→5 years; Networking: 5→6 years):
"We review the useful lives of equipment on an ongoing basis, and effective January 1, 2022 we changed our estimate of the useful lives for our servers from four years to five years and for our networking equipment from five years to six years. The longer useful lives are due to continuous improvements in our hardware, software, and data center designs. The effect of this change in estimate for the year ended December 31, 2022, based on servers and networking equipment that were included in 'Property and equipment, net' as of December 31, 2021 and those acquired during the year ended December 31, 2022, was a reduction in depreciation and amortization expense of $3.6 billion and a benefit to net loss of $2.8 billion, or $0.28 per basic share and $0.28 per diluted share."
All figures and quotes are sourced directly from Amazon.com, Inc. 10-K and 10-Q filings for the periods specified.
