Walmart's FY2025 headline: revenue up, profits stronger, digital engines accelerating#
Walmart [WMT] closed FY2025 with $680.99 billion in revenue, a +5.07% increase year‑over‑year, while reported net income rose to $19.44 billion — a +25.33% gain that outpaced top‑line growth and reflected improving operating leverage in parts of the business. At the same time Walmart highlighted outsized momentum in digital channels in the quarter: global e‑commerce was reported up +25% and global advertising rose +46%, both of which management cited as material contributors to margin mix in the period. These figures were disclosed alongside FY2025 results and quarter commentary in recent company reports and market coverage Retail Insight Network and TradingView News and analyzed in marketing coverage of Walmart Connect Digiday.
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The most investment‑relevant tension in Walmart’s results is explicit: the company is absorbing near‑term cost pressure (notably tariffs and logistics costs) while layering higher‑margin revenue streams — advertising (Walmart Connect), marketplace fees and Walmart+ membership — on top of its physical retail footprint. The near‑term trade‑off is visible in the numbers: gross profit and operating income improved modestly as digital revenue scaled, but operating cash outlays to expand fulfillment and nearshoring increased capital intensity.
Financial performance: decomposition and quality#
Walmart’s FY2025 income statement shows a company still driven by scale merchandising but steadily shifting mix. Revenue rose to $680.99B from $648.13B in FY2024 (+5.07%), while gross profit expanded to $169.23B, producing a gross margin of 24.85%. Operating income increased to $29.35B (+8.66% YoY) and operating margin improved to 4.31%. The net margin moved to 2.85%, driven by higher operating earnings and one‑time items that were largely offset by cost pressures. These FY figures are compiled from the company’s FY2025 filings summary Retail Insight Network.
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Cash‑flow dynamics underscore earnings quality: operating cash flow was $36.44B in FY2025, well above reported net income of $20.16B, and free cash flow settled at $12.66B after $23.78B of capital expenditure. The divergence between cash from operations and net income points to robust working capital conversion and strong depreciation add‑backs, with depreciation & amortization totaling $12.97B for the year. These cash‑flow numbers and line items are reported in the company’s FY2025 cash‑flow summary Retail Insight Network.
Table 1 below presents the four‑year trend for core P&L items to make the trajectory clear.
| Year | Revenue (USD) | Gross Profit (USD) | Operating Income (USD) | Net Income (USD) | Gross Margin |
|---|---|---|---|---|---|
| 2025 | 680,990,000,000 | 169,230,000,000 | 29,350,000,000 | 19,440,000,000 | 24.85% |
| 2024 | 648,130,000,000 | 157,980,000,000 | 27,010,000,000 | 15,510,000,000 | 24.38% |
| 2023 | 611,290,000,000 | 147,570,000,000 | 20,430,000,000 | 11,680,000,000 | 24.14% |
| 2022 | 572,750,000,000 | 143,750,000,000 | 25,940,000,000 | 13,670,000,000 | 25.10% |
(Values from company filings as summarized by Retail Insight Network and TradingView News.)
Balance sheet and liquidity — conservative leverage but rising capital intensity#
Walmart ended FY2025 with $260.82B in total assets and $91.01B in total shareholders’ equity. Total debt was $60.11B, with long‑term debt of $52.15B and net debt of $51.08B after cash balances. Using FY‑end figures, simple leverage (Total Debt / Equity) is approximately 0.66x (66.06%), and the current ratio computed from reported current assets/liabilities is 0.82x. These balance‑sheet line items are reported in the FY2025 balance sheet summary Retail Insight Network.
Table 2 summarizes balance‑sheet and cash‑flow items.
| Year | Cash & Equivalents | Total Assets | Total Liabilities | Total Equity | Net Debt | CapEx | Free Cash Flow |
|---|---|---|---|---|---|---|---|
| 2025 | 9,040,000,000 | 260,820,000,000 | 163,130,000,000 | 91,010,000,000 | 51,080,000,000 | 23,780,000,000 | 12,660,000,000 |
| 2024 | 9,870,000,000 | 252,400,000,000 | 161,830,000,000 | 83,860,000,000 | 51,450,000,000 | 20,610,000,000 | 15,120,000,000 |
| 2023 | 8,630,000,000 | 243,200,000,000 | 159,210,000,000 | 76,690,000,000 | 50,300,000,000 | 16,860,000,000 | 11,980,000,000 |
| 2022 | 14,760,000,000 | 244,860,000,000 | 152,970,000,000 | 83,250,000,000 | 42,560,000,000 | 13,110,000,000 | 11,070,000,000 |
(Company filings summarized in Retail Insight Network.)
Two balance‑sheet points matter. First, Walmart remains investment‑grade in profile: debt levels are moderate relative to cash‑flow (net debt to reported FY2025 EBITDA of ~1.22x using FY EBITDA of $42.01B). Second, capital expenditure is rising as the company invests in supply‑chain regionalization and fulfillment (CapEx rose to $23.78B in FY2025), which reduces free cash flow but supports the strategic pivot to faster, store‑based fulfillment.
Note on metric divergence: the dataset includes TTM ratio series that differ from FY‑end simple calculations (for example, published TTM net‑debt/EBITDA is ~1.53x). Those differences reflect period‑aggregation and TTM timing; where applicable I report the explicit FY line items and call out TTM series when used by analysts.
Strategic drivers: marketplace, Walmart Connect and omnichannel fulfillment#
The strategic narrative is no longer primarily about store counts and low prices; it is about layering high‑margin digital services over an enormous physical distribution network. In Q2 commentary and subsequent coverage, management emphasized three revenue engines: marketplace (third‑party sellers and seller services), Walmart Connect advertising, and Walmart+ membership. Those digital lines grew materially in the quarter: global e‑commerce +25% and global advertising +46% (management commentary and market coverage) which has an outsized effect on margins because advertising and fees carry materially higher gross margins than grocery merchandise TradingView News, Digiday.
Operationally, Walmart is converting physical stores into distributed fulfillment centers (roughly 4,700 U.S. stores used as hubs in company commentary) to reduce last‑mile costs and support sub‑day delivery windows. The marketplace strategy reduces inventory risk while increasing assortment, and seller services and advertising monetize the increased attention and assortment. Those moves are consistent with the described shift from inventory‑led retailing to an audience‑monetization model.
From a financial perspective, the arena to watch is margin mix: a continuing acceleration in advertising and marketplace fee revenue should raise consolidated gross margin and operating leverage, all else equal. Management has indicated Walmart Connect is becoming a meaningful profit engine, and coverage confirms advertising is being used strategically to offset tariff headwinds Grocery Doppio.
Capital allocation and shareholder returns#
Walmart returned capital through dividends and buybacks while reducing share repurchases relative to peak levels. In FY2025 the company paid $6.69B in dividends and repurchased $4.49B of stock. Dividend per share for the TTM is $0.9125, yielding roughly 0.95% at the current share price of $96.08 (market data) and a cash‑dividend payout ratio (dividends / net income) of roughly 33.2% when measured against FY2025 net income. These cash‑return figures are drawn from the FY2025 cash‑flow table in company filings Retail Insight Network and market quote data TradingView News.
Capital intensity is rising, driven by logistics and nearshoring investments. The company disclosed multi‑billion dollar commitments to Mexican distribution infrastructure and elevated CapEx to support faster fulfillment and lower tariff exposure. That said, Walmart’s free cash flow remains positive at $12.66B and operating cash flow is a strong $36.44B, leaving room for continued reinvestment while maintaining a measured shareholder‑return cadence.
Competitive dynamics: how Walmart stacks up vs Amazon and grocery peers#
Walmart’s strengths are its unmatched physical footprint, low‑price brand, and increasingly valuable first‑party shopper data. Amazon still dominates U.S. e‑commerce share — widely reported as ~37.8% vs Walmart’s ~6.3% — and retains advantages in global marketplace scale and Prime’s subscription economics. But Walmart’s combination of dense store coverage (used as fulfillment hubs), aggressive marketplace expansion, and rapid advertising growth (Walmart Connect) creates a differentiated value proposition focused on essentials, speed, and lower prices.
The marketplace and advertising plays narrow the monetization gap: advertising scales quickly with less capital required and improves margins when advertisers reallocate spend to Walmart’s first‑party data. Execution risk remains — particularly in seller quality, selection breadth, and retention versus Amazon — but the strategy reduces capital tied to inventory while expanding fee and ad‑based revenue.
Risks and friction points#
Tariff volatility remains a tangible near‑term risk. Management has acknowledged tariff headwinds and disclosed active sourcing diversification efforts — shifting volumes from China toward Mexico and India — but those transitions take time and require elevated logistics spend. Tariffs pressure gross margins if costs are absorbed to preserve low retail prices.
Regulatory and antitrust scrutiny of retail media networks is an emerging risk, as is labor and transportation cost inflation. Operational execution risks include scaling seller onboarding and maintaining customer trust in a larger third‑party marketplace.
Finally, investors should note metric divergences between TTM and FY‑end ratios in various datasets. For example, net‑debt/EBITDA using FY EBITDA is ~1.22x, while published TTM metrics in the dataset show ~1.53x — both are valid but reflect different aggregation windows. I highlight these differences because analysts frequently pivot between FY and TTM bases when modeling Walmart’s leverage and valuation dynamics.
What this means for investors (featured insight)#
Walmart is executing a deliberate pivot from pure bricks‑and‑mortar volume to a hybrid model that monetizes audience and logistics. The most important takeaway is that digital revenue streams are now large enough to move consolidated margins: advertising and marketplace growth are improving gross‑margin mix even as the company invests heavily in fulfillment and nearshoring. Free cash flow is positive (FY2025 $12.66B) but CapEx is scaling, which compresses FCF yield measured against market capitalization (FCF yield ≈ +1.65% using FY2025 free cash flow and the current market cap of $766.76B at price $96.08) TradingView News.
From an operational lens, Walmart’s moat is evolving: physical reach plus data and ad inventory is a defensible position versus rivals that lack equivalent brick‑and‑mortar scale. However, the path to meaningfully higher margins depends on continued ad growth, marketplace scale and execution of fulfillment automation — all of which carry execution risk and capital requirements.
Conclusion: strategic progress with near‑term cost tradeoffs#
Walmart’s FY2025 results show clear progress in the company’s strategic transformation. Revenue of $680.99B (+5.07%) and net income of $19.44B (+25.33%) reflect both scale in merchandise and the early payoff from higher‑margin digital businesses. The company’s balance sheet remains solid, operating cash flow is robust at $36.44B, and management is redeploying capital into fulfillment, nearshoring, and ecosystem monetization.
The immediate story for stakeholders is one of trade‑offs: absorb some cost pressure today to preserve price leadership while building higher‑margin, data‑driven revenue streams that should support margin resilience over the medium term. Watch the cadence of advertising growth, marketplace fee expansion, and the pace of fulfillment automation — those three vectors are the most likely determinants of whether Walmart’s margin profile meaningfully re‑rates in coming quarters.
(Company financials and quarterly commentary summarized from company filings and quarter coverage; Q2 and market coverage sources include TradingView News, Retail Insight Network and industry reporting on Walmart Connect TradingView News, Retail Insight Network, Digiday, Grocery Doppio.