SEATTLE--(BUSINESS WIRE)-- Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its third quarter ended September 30, 2019.
Operating cash flow increased 33% to $35.3 billion for the trailing twelve months, compared with $26.6 billion for the trailing twelve months ended September 30, 2018. Free cash flow increased to $23.5 billion for the trailing twelve months, compared with $15.4 billion for the trailing twelve months ended September 30, 2018. Free cash flow less principal repayments of finance leases and financing obligations increased to $14.6 billion for the trailing twelve months, compared with $8.1 billion for the trailing twelve months ended September 30, 2018. Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations increased to $10.5 billion for the trailing twelve months, compared with $5.4 billion for the trailing twelve months ended September 30, 2018.
Common shares outstanding plus shares underlying stock-based awards totaled 511 million on September 30, 2019, compared with 507 million one year ago.
Net sales increased 24% to $70.0 billion in the third quarter, compared with $56.6 billion in third quarter 2018. Excluding the $500 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 25% compared with third quarter 2018.
Operating income decreased to $3.2 billion in the third quarter, compared with operating income of $3.7 billion in third quarter 2018.
Net income decreased to $2.1 billion in the third quarter, or $4.23 per diluted share, compared with net income of $2.9 billion, or $5.75 per diluted share, in third quarter 2018.
“We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” said Jeff Bezos, Amazon founder and CEO. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday.”
Highlights
Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of October 24, 2019, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below.
Fourth Quarter 2019 Guidance
A conference call will be webcast live today at 2:30 p.m. PT/5:30 p.m. ET, and will be available for at least three months at amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.
These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains, and develops commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services, and technologies, system interruptions, government regulation and taxation, and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.
Our investor relations website is amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases, which may contain material information about us, and you may subscribe to be notified of new information posted to this site.
About Amazon
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit amazon.com/about and follow @AmazonNews.
AMAZON.COM, INC. | |||||||||||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| Twelve Months Ended September 30, | ||||||||||||||||||
| 2018 |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
| 2019 | ||||||||||||
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CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | $ | 20,536 |
|
| $ | 22,965 |
|
| $ | 21,856 |
|
| $ | 32,173 |
|
| $ | 13,960 |
|
| $ | 21,032 |
|
OPERATING ACTIVITIES: |
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|
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| ||||||||||||
Net income | 2,883 |
|
| 2,134 |
|
| 7,046 |
|
| 8,320 |
|
| 8,902 |
|
| 11,347 |
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Adjustments to reconcile net income to net cash from operating activities: |
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Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other | 3,778 |
|
| 5,563 |
|
| 11,079 |
|
| 15,619 |
|
| 14,577 |
|
| 19,881 |
| ||||||
Stock-based compensation | 1,350 |
|
| 1,779 |
|
| 4,001 |
|
| 5,024 |
|
| 5,180 |
|
| 6,441 |
| ||||||
Other operating expense (income), net | 62 |
|
| 47 |
|
| 202 |
|
| 114 |
|
| 258 |
|
| 186 |
| ||||||
Other expense (income), net | 96 |
|
| 388 |
|
| 22 |
|
| 246 |
|
| 17 |
|
| 443 |
| ||||||
Deferred income taxes | 266 |
|
| 92 |
|
| 268 |
|
| 612 |
|
| (40 | ) |
| 784 |
| ||||||
Changes in operating assets and liabilities: |
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Inventories | (1,094 | ) |
| (381 | ) |
| 36 |
|
| (1,762 | ) |
| (2,220 | ) |
| (3,112 | ) | ||||||
Accounts receivable, net and other | (2,884 | ) |
| (1,181 | ) |
| (3,220 | ) |
| (3,776 | ) |
| (5,983 | ) |
| (5,172 | ) | ||||||
Accounts payable | 3,894 |
|
| 226 |
|
| (3,618 | ) |
| (2,490 | ) |
| 5,285 |
|
| 4,393 |
| ||||||
Accrued expenses and other | 237 |
|
| (722 | ) |
| (2,193 | ) |
| (4,277 | ) |
| (131 | ) |
| (1,612 | ) | ||||||
Unearned revenue | — |
|
| (53 | ) |
| 623 |
|
| 1,225 |
|
| 759 |
|
| 1,753 |
| ||||||
Net cash provided by (used in) operating activities | 8,588 |
|
| 7,892 |
|
| 14,246 |
|
| 18,855 |
|
| 26,604 |
|
| 35,332 |
| ||||||
INVESTING ACTIVITIES: |
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Purchases of property and equipment | (3,352 | ) |
| (4,697 | ) |
| (9,693 | ) |
| (11,549 | ) |
| (13,312 | ) |
| (15,282 | ) | ||||||
Proceeds from property and equipment sales and incentives | 825 |
|
| 1,312 |
|
| 1,490 |
|
| 2,800 |
|
| 2,073 |
|
| 3,414 |
| ||||||
Acquisitions, net of cash acquired, and other | (976 | ) |
| (398 | ) |
| (1,855 | ) |
| (1,684 | ) |
| (1,936 | ) |
| (2,015 | ) | ||||||
Sales and maturities of marketable securities | 1,964 |
|
| 7,251 |
|
| 6,301 |
|
| 15,056 |
|
| 9,787 |
|
| 16,994 |
| ||||||
Purchases of marketable securities | (4,033 | ) |
| (8,542 | ) |
| (5,040 | ) |
| (25,368 | ) |
| (7,390 | ) |
| (27,428 | ) | ||||||
Net cash provided by (used in) investing activities | (5,572 | ) |
| (5,074 | ) |
| (8,797 | ) |
| (20,745 | ) |
| (10,778 | ) |
| (24,317 | ) | ||||||
FINANCING ACTIVITIES: |
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Proceeds from long-term debt and other | 143 |
|
| 702 |
|
| 363 |
|
| 1,175 |
|
| 472 |
|
| 1,581 |
| ||||||
Repayments of long-term debt and other | (183 | ) |
| (355 | ) |
| (533 | ) |
| (819 | ) |
| (1,675 | ) |
| (953 | ) | ||||||
Principal repayments of finance leases | (2,247 | ) |
| (2,307 | ) |
| (5,544 | ) |
| (6,848 | ) |
| (7,016 | ) |
| (8,754 | ) | ||||||
Principal repayments of financing obligations | (82 | ) |
| — |
|
| (211 | ) |
| (3 | ) |
| (277 | ) |
| (129 | ) | ||||||
Net cash provided by (used in) financing activities | (2,369 | ) |
| (1,960 | ) |
| (5,925 | ) |
| (6,495 | ) |
| (8,496 | ) |
| (8,255 | ) | ||||||
Foreign currency effect on cash, cash equivalents, and restricted cash | (151 | ) |
| (269 | ) |
| (348 | ) |
| (234 | ) |
| (258 | ) |
| (238 | ) | ||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 496 |
|
| 589 |
|
| (824 | ) |
| (8,619 | ) |
| 7,072 |
|
| 2,522 |
| ||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | $ | 21,032 |
|
| $ | 23,554 |
|
| $ | 21,032 |
|
| $ | 23,554 |
|
| $ | 21,032 |
|
| $ | 23,554 |
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
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Cash paid for interest on long-term debt | $ | 283 |
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| $ | 287 |
|
| $ | 733 |
|
| $ | 720 |
|
| $ | 907 |
|
| $ | 842 |
|
Cash paid for operating leases | — |
|
| 872 |
|
| — |
|
| 2,420 |
|
| — |
|
| 2,420 |
| ||||||
Cash paid for interest on finance leases | 118 |
|
| 167 |
|
| 277 |
|
| 481 |
|
| 335 |
|
| 585 |
| ||||||
Cash paid for interest on financing obligations | 47 |
|
| 14 |
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| 142 |
|
| 20 |
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| 168 |
|
| 72 |
| ||||||
Cash paid for income taxes, net of refunds | 200 |
|
| 241 |
|
| 1,013 |
|
| 692 |
|
| 1,106 |
|
| 863 |
| ||||||
Assets acquired under operating leases | — |
|
| 2,299 |
|
| — |
|
| 5,393 |
|
| — |
|
| 5,393 |
| ||||||
Property and equipment acquired under finance leases | 2,329 |
|
| 3,606 |
|
| 6,934 |
|
| 9,541 |
|
| 9,704 |
|
| 13,222 |
| ||||||
Property and equipment acquired under build-to-suit arrangements | 962 |
|
| 390 |
|
| 2,498 |
|
| 1,109 |
|
| 3,340 |
|
| 2,252 |
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______________________________ |
On January 1, 2019, we adopted accounting guidance amending the accounting for leases, which did not have a material impact on our 2019 operating results. Prior period amounts were not retrospectively adjusted. Under this new guidance, leases we previously referred to as “capital leases” are now referred to as “finance leases.” Leases we previously referred to as “finance leases” are now referred to as “financing obligations.” |
AMAZON.COM, INC. | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(in millions, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
| 2018 |
| 2019 |
| 2018 |
| 2019 | ||||||||
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Net product sales | $ | 33,746 |
|
| $ | 39,726 |
|
| $ | 97,215 |
|
| $ | 109,866 |
|
Net service sales | 22,830 |
|
| 30,255 |
|
| 63,289 |
|
| 83,220 |
| ||||
Total net sales | 56,576 |
|
| 69,981 |
|
| 160,504 |
|
| 193,086 |
| ||||
Operating expenses: |
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Cost of sales | 33,003 |
|
| 41,302 |
|
| 94,370 |
|
| 111,559 |
| ||||
Fulfillment | 8,275 |
|
| 10,167 |
|
| 23,999 |
|
| 28,040 |
| ||||
Marketing | 3,303 |
|
| 4,752 |
|
| 8,902 |
|
| 12,707 |
| ||||
Technology and content | 7,162 |
|
| 9,200 |
|
| 21,168 |
|
| 26,191 |
| ||||
General and administrative | 1,041 |
|
| 1,348 |
|
| 3,219 |
|
| 3,791 |
| ||||
Other operating expense (income), net | 68 |
|
| 55 |
|
| 211 |
|
| 136 |
| ||||
Total operating expenses | 52,852 |
|
| 66,824 |
|
| 151,869 |
|
| 182,424 |
| ||||
Operating income | 3,724 |
|
| 3,157 |
|
| 8,635 |
|
| 10,662 |
| ||||
Interest income | 117 |
|
| 224 |
|
| 290 |
|
| 621 |
| ||||
Interest expense | (358 | ) |
| (396 | ) |
| (1,030 | ) |
| (1,145 | ) | ||||
Other income (expense), net | (93 | ) |
| (353 | ) |
| 16 |
|
| (215 | ) | ||||
Total non-operating income (expense) | (334 | ) |
| (525 | ) |
| (724 | ) |
| (739 | ) | ||||
Income before income taxes | 3,390 |
|
| 2,632 |
|
| 7,911 |
|
| 9,923 |
| ||||
Provision for income taxes | (508 | ) |
| (494 | ) |
| (870 | ) |
| (1,588 | ) | ||||
Equity-method investment activity, net of tax | 1 |
|
| (4 | ) |
| 5 |
|
| (15 | ) | ||||
Net income | $ | 2,883 |
|
| $ | 2,134 |
|
| $ | 7,046 |
|
| $ | 8,320 |
|
Basic earnings per share | $ | 5.91 |
|
| $ | 4.31 |
|
| $ | 14.49 |
|
| $ | 16.87 |
|
Diluted earnings per share | $ | 5.75 |
|
| $ | 4.23 |
|
| $ | 14.10 |
|
| $ | 16.53 |
|
Weighted-average shares used in computation of earnings per share: |
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Basic | 488 |
|
| 495 |
|
| 486 |
|
| 493 |
| ||||
Diluted | 501 |
|
| 504 |
|
| 500 |
|
| 503 |
|
AMAZON.COM, INC. | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(in millions) | |||||||||||||||
(unaudited) | |||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
| 2018 |
| 2019 |
| 2018 |
| 2019 | ||||||||
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| ||||||||
|
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Net income | $ | 2,883 |
|
| $ | 2,134 |
|
| $ | 7,046 |
|
| $ | 8,320 |
|
Other comprehensive income (loss): |
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Net change in foreign currency translation adjustments: |
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Foreign currency translation adjustments, net of tax of $2, $1, $19, and $(6) | (101 | ) |
| (368 | ) |
| (512 | ) |
| (369 | ) | ||||
Reclassification adjustment for foreign currency translation included in “Other operating expense (income), net,” net of tax of $0, $29, $0, and $29 | — |
|
| (108 | ) |
| — |
|
| (108 | ) | ||||
Net foreign currency translation adjustments | (101 | ) |
| (476 | ) |
| (512 | ) |
| (477 | ) | ||||
Net change in unrealized gains (losses) on available-for-sale debt securities: |
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|
|
|
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Unrealized gains (losses), net of tax of $0, $(2), $8, and $(13) | — |
|
| 9 |
|
| (43 | ) |
| 85 |
| ||||
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $0, $0, $0, and $0 | 1 |
|
| (2 | ) |
| 5 |
|
| (2 | ) | ||||
Net unrealized gains (losses) on available-for-sale debt securities | 1 |
|
| 7 |
|
| (38 | ) |
| 83 |
| ||||
Total other comprehensive income (loss) | (100 | ) |
| (469 | ) |
| (550 | ) |
| (394 | ) | ||||
Comprehensive income | $ | 2,783 |
|
| $ | 1,665 |
|
| $ | 6,496 |
|
| $ | 7,926 |
|
AMAZON.COM, INC. | |||||||||||||||
Segment Information | |||||||||||||||
(in millions) | |||||||||||||||
(unaudited) | |||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
| 2018 |
| 2019 |
| 2018 |
| 2019 | ||||||||
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North America |
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|
|
|
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| ||||||||
Net sales | $ | 34,348 |
|
| $ | 42,638 |
|
| $ | 97,242 |
|
| $ | 117,104 |
|
Operating expenses | 32,316 |
|
| 41,356 |
|
| 92,227 |
|
| 111,971 |
| ||||
Operating income | $ | 2,032 |
|
| $ | 1,282 |
|
| $ | 5,015 |
|
| $ | 5,133 |
|
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International |
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Net sales | $ | 15,549 |
|
| $ | 18,348 |
|
| $ | 45,037 |
|
| $ | 50,910 |
|
Operating expenses | 15,934 |
|
| 18,734 |
|
| 46,536 |
|
| 51,986 |
| ||||
Operating income (loss) | $ | (385 | ) |
| $ | (386 | ) |
| $ | (1,499 | ) |
| $ | (1,076 | ) |
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AWS |
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Net sales | $ | 6,679 |
|
| $ | 8,995 |
|
| $ | 18,225 |
|
| $ | 25,072 |
|
Operating expenses | 4,602 |
|
| 6,734 |
|
| 13,106 |
|
| 18,467 |
| ||||
Operating income | $ | 2,077 |
|
| $ | 2,261 |
|
| $ | 5,119 |
|
| $ | 6,605 |
|
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| ||||||||
Consolidated |
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Net sales | $ | 56,576 |
|
| $ | 69,981 |
|
| $ | 160,504 |
|
| $ | 193,086 |
|
Operating expenses | 52,852 |
|
| 66,824 |
|
| 151,869 |
|
| 182,424 |
| ||||
Operating income | 3,724 |
|
| 3,157 |
|
| 8,635 |
|
| 10,662 |
| ||||
Total non-operating income (expense) | (334 | ) |
| (525 | ) |
| (724 | ) |
| (739 | ) | ||||
Provision for income taxes | (508 | ) |
| (494 | ) |
| (870 | ) |
| (1,588 | ) | ||||
Equity-method investment activity, net of tax | 1 |
|
| (4 | ) |
| 5 |
|
| (15 | ) | ||||
Net income | $ | 2,883 |
|
| $ | 2,134 |
|
| $ | 7,046 |
|
| $ | 8,320 |
|
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|
|
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|
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Segment Highlights: |
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Y/Y net sales growth: |
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| ||||||||
North America | 35 | % |
| 24 | % |
| 41 | % |
| 20 | % | ||||
International | 13 |
|
| 18 |
|
| 24 |
|
| 13 |
| ||||
AWS | 46 |
|
| 35 |
|
| 48 |
|
| 38 |
| ||||
Consolidated | 29 |
|
| 24 |
|
| 37 |
|
| 20 |
| ||||
Net sales mix: |
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|
|
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| ||||||||
North America | 61 | % |
| 61 | % |
| 61 | % |
| 61 | % | ||||
International | 27 |
|
| 26 |
|
| 28 |
|
| 26 |
| ||||
AWS | 12 |
|
| 13 |
|
| 11 |
|
| 13 |
| ||||
Consolidated | 100 | % |
| 100 | % |
| 100 | % |
| 100 | % |
AMAZON.COM, INC. | |||||||
Consolidated Balance Sheets | |||||||
(in millions, except per share data) | |||||||
| December 31, 2018 |
| September 30, 2019 | ||||
|
|
| (unaudited) | ||||
ASSETS |
|
|
| ||||
Current assets: |
|
|
| ||||
Cash and cash equivalents | $ | 31,750 |
|
| $ | 23,255 |
|
Marketable securities | 9,500 |
|
| 20,146 |
| ||
Inventories | 17,174 |
|
| 18,766 |
| ||
Accounts receivable, net and other | 16,677 |
|
| 16,887 |
| ||
Total current assets | 75,101 |
|
| 79,054 |
| ||
Property and equipment, net | 61,797 |
|
| 67,662 |
| ||
Operating leases | — |
|
| 23,114 |
| ||
Goodwill | 14,548 |
|
| 14,734 |
| ||
Other assets | 11,202 |
|
| 14,535 |
| ||
Total assets | $ | 162,648 |
|
| $ | 199,099 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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|
| ||||
Current liabilities: |
|
|
| ||||
Accounts payable | $ | 38,192 |
|
| $ | 35,794 |
|
Accrued expenses and other | 23,663 |
|
| 28,961 |
| ||
Unearned revenue | 6,536 |
|
| 7,381 |
| ||
Total current liabilities | 68,391 |
|
| 72,136 |
| ||
Long-term lease liabilities | 9,650 |
|
| 37,058 |
| ||
Long-term debt | 23,495 |
|
| 22,472 |
| ||
Other long-term liabilities | 17,563 |
|
| 10,925 |
| ||
Commitments and contingencies |
|
|
| ||||
Stockholders’ equity: |
|
|
| ||||
Preferred stock, $0.01 par value: |
|
|
| ||||
Authorized shares — 500 |
|
|
| ||||
Issued and outstanding shares — none | — |
|
| — |
| ||
Common stock, $0.01 par value: |
|
|
| ||||
Authorized shares — 5,000 |
|
|
| ||||
Issued shares — 514 and 519 |
|
|
| ||||
Outstanding shares — 491 and 495 | 5 |
|
| 5 |
| ||
Treasury stock, at cost | (1,837 | ) |
| (1,837 | ) | ||
Additional paid-in capital | 26,791 |
|
| 31,817 |
| ||
Accumulated other comprehensive loss | (1,035 | ) |
| (1,429 | ) | ||
Retained earnings | 19,625 |
|
| 27,952 |
| ||
Total stockholders’ equity | 43,549 |
|
| 56,508 |
| ||
Total liabilities and stockholders’ equity | $ | 162,648 |
|
| $ | 199,099 |
|
AMAZON.COM, INC. | ||||||||||||||||||||
Supplemental Financial Information and Business Metrics | ||||||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
| Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Y/Y % Change | |||||||||||||
Cash Flows and Shares |
|
|
|
|
|
|
| |||||||||||||
Operating cash flow -- trailing twelve months (TTM) | $ | 21,793 |
| $ | 26,604 |
| $ | 30,723 |
| $ | 34,360 |
| $ | 36,029 |
| $ | 35,332 |
| 33 | % |
Operating cash flow -- TTM Y/Y growth | 22 | % | 57 | % | 67 | % | 89 | % | 65 | % | 33 | % | N/A |
| ||||||
Purchases of property and equipment, net of proceeds from sales and incentives -- TTM | $ | 11,372 |
| $ | 11,239 |
| $ | 11,323 |
| $ | 11,316 |
| $ | 11,011 |
| $ | 11,868 |
| 6 | % |
Principal repayments of finance leases -- TTM (1) | $ | 6,037 |
| $ | 7,016 |
| $ | 7,449 |
| $ | 7,649 |
| $ | 8,693 |
| $ | 8,754 |
| 25 | % |
Principal repayments of financing obligations -- TTM (1) | $ | 244 |
| $ | 277 |
| $ | 337 |
| $ | 266 |
| $ | 211 |
| $ | 129 |
| (53 | )% |
Equipment acquired under finance leases -- TTM (1) (2) | $ | 9,631 |
| $ | 9,704 |
| $ | 10,615 |
| $ | 10,909 |
| $ | 11,656 |
| $ | 12,580 |
| 30 | % |
Principal repayments of all other finance leases -- TTM (1) (3) | $ | — |
| $ | — |
| $ | — |
| $ | 76 |
| $ | 176 |
| $ | 302 |
| N/A |
|
Free cash flow -- TTM (4) | $ | 10,421 |
| $ | 15,365 |
| $ | 19,400 |
| $ | 23,044 |
| $ | 25,018 |
| $ | 23,464 |
| 53 | % |
Free cash flow less principal repayments of finance leases and financing obligations -- TTM (1) (5) | $ | 4,140 |
| $ | 8,072 |
| $ | 11,614 |
| $ | 15,129 |
| $ | 16,114 |
| $ | 14,581 |
| 81 | % |
Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations -- TTM (1) (6) | $ | 546 |
| $ | 5,384 |
| $ | 8,448 |
| $ | 11,793 |
| $ | 12,975 |
| $ | 10,453 |
| 94 | % |
Common shares and stock-based awards outstanding | 506 |
| 507 |
| 507 |
| 507 |
| 510 |
| 511 |
| 1 | % | ||||||
Common shares outstanding | 487 |
| 489 |
| 491 |
| 492 |
| 494 |
| 495 |
| 1 | % | ||||||
Stock-based awards outstanding | 19 |
| 18 |
| 16 |
| 15 |
| 16 |
| 16 |
| (14 | )% | ||||||
Stock-based awards outstanding -- % of common shares outstanding | 3.9 | % | 3.7 | % | 3.2 | % | 3.0 | % | 3.3 | % | 3.2 | % | N/A |
| ||||||
Results of Operations |
|
|
|
|
|
|
| |||||||||||||
Worldwide (WW) net sales | $ | 52,886 |
| $ | 56,576 |
| $ | 72,383 |
| $ | 59,700 |
| $ | 63,404 |
| $ | 69,981 |
| 24 | % |
WW net sales -- Y/Y growth, excluding F/X | 37 | % | 30 | % | 21 | % | 19 | % | 21 | % | 25 | % | N/A |
| ||||||
WW net sales -- TTM | $ | 208,125 |
| $ | 220,958 |
| $ | 232,887 |
| $ | 241,546 |
| $ | 252,064 |
| $ | 265,469 |
| 20 | % |
WW net sales -- TTM Y/Y growth, excluding F/X | 36 | % | 35 | % | 30 | % | 26 | % | 23 | % | 22 | % | N/A |
| ||||||
Operating income | $ | 2,983 |
| $ | 3,724 |
| $ | 3,786 |
| $ | 4,420 |
| $ | 3,084 |
| $ | 3,157 |
| (15 | )% |
F/X impact -- favorable (unfavorable) | $ | 42 |
| $ | 90 |
| $ | 123 |
| $ | 84 |
| $ | 58 |
| $ | 22 |
| N/A |
|
Operating income -- Y/Y growth (decline), excluding F/X | 369 | % | 948 | % | 72 | % | 125 | % | 1 | % | (16 | )% | N/A |
| ||||||
Operating margin -- % of WW net sales | 5.6 | % | 6.6 | % | 5.2 | % | 7.4 | % | 4.9 | % | 4.5 | % | N/A |
| ||||||
Operating income -- TTM | $ | 7,384 |
| $ | 10,762 |
| $ | 12,421 |
| $ | 14,914 |
| $ | 15,014 |
| $ | 14,448 |
| 34 | % |
Operating income -- TTM Y/Y growth (decline), excluding F/X | 115 | % | 231 | % | 197 | % | 190 | % | 99 | % | 32 | % | N/A |
| ||||||
Operating margin -- TTM % of WW net sales | 3.5 | % | 4.9 | % | 5.3 | % | 6.2 | % | 6.0 | % | 5.4 | % | N/A |
| ||||||
Net income | $ | 2,534 |
| $ | 2,883 |
| $ | 3,027 |
| $ | 3,561 |
| $ | 2,625 |
| $ | 2,134 |
| (26 | )% |
Net income per diluted share | $ | 5.07 |
| $ | 5.75 |
| $ | 6.04 |
| $ | 7.09 |
| $ | 5.22 |
| $ | 4.23 |
| (26 | )% |
Net income -- TTM | $ | 6,275 |
| $ | 8,902 |
| $ | 10,073 |
| $ | 12,005 |
| $ | 12,096 |
| $ | 11,347 |
| 27 | % |
Net income per diluted share -- TTM | $ | 12.63 |
| $ | 17.85 |
| $ | 20.14 |
| $ | 23.96 |
| $ | 24.15 |
| $ | 22.71 |
| 27 | % |
______________________________ |
(1) | On January 1, 2019, we adopted accounting guidance amending the accounting for leases, which did not have a material impact on our 2019 operating results. Prior period amounts were not retrospectively adjusted. Under this new guidance, leases we previously referred to as “capital leases” are now referred to as “finance leases.” Leases we previously referred to as “finance leases” are now referred to as “financing obligations.” |
(2) | For the twelve months ended September 30, 2019, this amount relates to equipment included in “Property and equipment acquired under finance leases” of $13,222 million. Amounts for periods prior to 2019 have not been retrospectively adjusted. |
(3) | For the twelve months ended September 30, 2019, this amount relates to property included in “Principal repayments of finance leases” of $8,754 million. Amounts for periods prior to 2019 have not been retrospectively adjusted. |
(4) | Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, net of proceeds from sales and incentives.” |
(5) | Free cash flow less principal repayments of finance leases and financing obligations is free cash flow reduced by “Principal repayments of finance leases” and “Principal repayments of financing obligations.” |
(6) | Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations is free cash flow reduced by equipment acquired under finance leases, which is included in “Property and equipment acquired under finance leases,” principal repayments of all other finance lease liabilities, which is included in “Principal repayments of finance leases,” and “Principal repayments of financing obligations.” |
AMAZON.COM, INC. | ||||||||||||||||||||
Supplemental Financial Information and Business Metrics | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
| Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Y/Y % Change | |||||||||||||
Segments |
|
|
|
|
|
|
| |||||||||||||
North America Segment: |
|
|
|
|
|
|
| |||||||||||||
Net sales | $ | 32,169 |
| $ | 34,348 |
| $ | 44,124 |
| $ | 35,812 |
| $ | 38,653 |
| $ | 42,638 |
| 24 | % |
Net sales -- Y/Y growth, excluding F/X | 44 | % | 35 | % | 18 | % | 17 | % | 20 | % | 24 | % | N/A |
| ||||||
Net sales -- TTM | $ | 125,642 |
| $ | 134,545 |
| $ | 141,366 |
| $ | 146,453 |
| $ | 152,938 |
| $ | 161,228 |
| 20 | % |
Operating income | $ | 1,835 |
| $ | 2,032 |
| $ | 2,251 |
| $ | 2,287 |
| $ | 1,564 |
| $ | 1,282 |
| (37 | )% |
F/X impact -- favorable (unfavorable) | $ | 1 |
| $ | 9 |
| $ | 17 |
| $ | 13 |
| $ | 7 |
| $ | 6 |
| N/A |
|
Operating income -- Y/Y growth (decline), excluding F/X | 321 | % |
| N/A |
| 32 | % | 98 | % | (15 | )% | (37 | )% | N/A |
| |||||
Operating margin -- % of North America net sales | 5.7 | % | 5.9 | % | 5.1 | % | 6.4 | % | 4.0 | % | 3.0 | % | N/A |
| ||||||
Operating income -- TTM | $ | 4,788 |
| $ | 6,708 |
| $ | 7,267 |
| $ | 8,405 |
| $ | 8,134 |
| $ | 7,384 |
| 10 | % |
Operating margin -- TTM % of North America net sales | 3.8 | % | 5.0 | % | 5.1 | % | 5.7 | % | 5.3 | % | 4.6 | % | N/A |
| ||||||
International Segment: |
|
|
|
|
|
|
| |||||||||||||
Net sales | $ | 14,612 |
| $ | 15,549 |
| $ | 20,829 |
| $ | 16,192 |
| $ | 16,370 |
| $ | 18,348 |
| 18 | % |
Net sales -- Y/Y growth, excluding F/X | 21 | % | 15 | % | 19 | % | 16 | % | 17 | % | 21 | % | N/A |
| ||||||
Net sales -- TTM | $ | 61,239 |
| $ | 63,074 |
| $ | 65,866 |
| $ | 67,184 |
| $ | 68,941 |
| $ | 71,740 |
| 14 | % |
Operating income (loss) | $ | (494 | ) | $ | (385 | ) | $ | (642 | ) | $ | (90 | ) | $ | (601 | ) | $ | (386 | ) | — | % |
F/X impact -- favorable (unfavorable) | $ | 86 |
| $ | 47 |
| $ | 55 |
| $ | (39 | ) | $ | (36 | ) | $ | (34 | ) | N/A |
|
Operating income/loss -- Y/Y growth (decline), excluding F/X | (20 | )% | (54 | )% | (24 | )% | (92 | )% | 15 | % | (8 | )% | N/A |
| ||||||
Operating margin -- % of International net sales | (3.4 | )% | (2.5 | )% | (3.1 | )% | (1.0 | )% | (3.7 | )% | (2.1 | )% | N/A |
| ||||||
Operating income (loss) -- TTM | $ | (2,971 | ) | $ | (2,420 | ) | $ | (2,142 | ) | $ | (1,610 | ) | $ | (1,718 | ) | $ | (1,718 | ) | (29 | )% |
Operating margin -- TTM % of International net sales | (4.9 | )% | (3.8 | )% | (3.3 | )% | (2.4 | )% | (2.5 | )% | (2.4 | )% | N/A |
| ||||||
AWS Segment: |
|
|
|
|
|
|
| |||||||||||||
Net sales | $ | 6,105 |
| $ | 6,679 |
| $ | 7,430 |
| $ | 7,696 |
| $ | 8,381 |
| $ | 8,995 |
| 35 | % |
Net sales -- Y/Y growth, excluding F/X | 49 | % | 46 | % | 46 | % | 42 | % | 37 | % | 35 | % | N/A |
| ||||||
Net sales -- TTM | $ | 21,244 |
| $ | 23,339 |
| $ | 25,655 |
| $ | 27,909 |
| $ | 30,185 |
| $ | 32,501 |
| 39 | % |
Operating income | $ | 1,642 |
| $ | 2,077 |
| $ | 2,177 |
| $ | 2,223 |
| $ | 2,121 |
| $ | 2,261 |
| 9 | % |
F/X impact -- favorable (unfavorable) | $ | (45 | ) | $ | 34 |
| $ | 51 |
| $ | 110 |
| $ | 87 |
| $ | 50 |
| N/A |
|
Operating income -- Y/Y growth, excluding F/X | 84 | % | 75 | % | 57 | % | 51 | % | 24 | % | 6 | % | N/A |
| ||||||
Operating margin -- % of AWS net sales | 26.9 | % | 31.1 | % | 29.3 | % | 28.9 | % | 25.3 | % | 25.1 | % | N/A |
| ||||||
Operating income -- TTM | $ | 5,567 |
| $ | 6,473 |
| $ | 7,296 |
| $ | 8,119 |
| $ | 8,598 |
| $ | 8,782 |
| 36 | % |
Operating margin -- TTM % of AWS net sales | 26.2 | % | 27.7 | % | 28.4 | % | 29.1 | % | 28.5 | % | 27.0 | % | N/A |
|
AMAZON.COM, INC. | ||||||||||||||||||||
Supplemental Financial Information and Business Metrics | ||||||||||||||||||||
(in millions, except employee data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
| Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Y/Y % Change | |||||||||||||
Net Sales |
|
|
|
|
|
|
| |||||||||||||
Online stores (1) | $ | 27,165 |
| $ | 29,061 |
| $ | 39,822 |
| $ | 29,498 |
| $ | 31,053 |
| $ | 35,039 |
| 21 | % |
Online stores -- Y/Y growth, excluding F/X | 12 | % | 11 | % | 14 | % | 12 | % | 16 | % | 22 | % | N/A |
| ||||||
Physical stores (2) | $ | 4,312 |
| $ | 4,248 |
| $ | 4,401 |
| $ | 4,307 |
| $ | 4,330 |
| $ | 4,192 |
| (1 | )% |
Physical stores -- Y/Y growth, excluding F/X |
| N/A |
|
| N/A |
| (3 | )% | 1 | % | 1 | % | (1 | )% | N/A |
| ||||
Third-party seller services (3) | $ | 9,702 |
| $ | 10,395 |
| $ | 13,383 |
| $ | 11,141 |
| $ | 11,962 |
| $ | 13,212 |
| 27 | % |
Third-party seller services -- Y/Y growth, excluding F/X | 36 | % | 32 | % | 28 | % | 23 | % | 25 | % | 28 | % | N/A |
| ||||||
Subscription services (4) | $ | 3,408 |
| $ | 3,698 |
| $ | 3,959 |
| $ | 4,342 |
| $ | 4,676 |
| $ | 4,957 |
| 34 | % |
Subscription services -- Y/Y growth, excluding F/X | 55 | % | 52 | % | 26 | % | 42 | % | 39 | % | 35 | % | N/A |
| ||||||
AWS | $ | 6,105 |
| $ | 6,679 |
| $ | 7,430 |
| $ | 7,696 |
| $ | 8,381 |
| $ | 8,995 |
| 35 | % |
AWS -- Y/Y growth, excluding F/X | 49 | % | 46 | % | 46 | % | 42 | % | 37 | % | 35 | % | N/A |
| ||||||
Other (5) | $ | 2,194 |
| $ | 2,495 |
| $ | 3,388 |
| $ | 2,716 |
| $ | 3,002 |
| $ | 3,586 |
| 44 | % |
Other -- Y/Y growth, excluding F/X (6) | 129 | % | 123 | % | 97 | % | 36 | % | 37 | % | 45 | % | N/A |
| ||||||
|
|
|
|
|
|
|
| |||||||||||||
Stock-based Compensation Expense |
|
|
|
|
|
|
| |||||||||||||
Cost of sales | $ | 19 |
| $ | 19 |
| $ | 21 |
| $ | 24 |
| $ | 43 |
| $ | 39 |
| 110 | % |
Fulfillment | $ | 320 |
| $ | 269 |
| $ | 287 |
| $ | 234 |
| $ | 360 |
| $ | 301 |
| 12 | % |
Marketing | $ | 190 |
| $ | 201 |
| $ | 217 |
| $ | 209 |
| $ | 307 |
| $ | 298 |
| 48 | % |
Technology and content | $ | 788 |
| $ | 719 |
| $ | 750 |
| $ | 675 |
| $ | 1,077 |
| $ | 966 |
| 34 | % |
General and administrative | $ | 151 |
| $ | 142 |
| $ | 142 |
| $ | 132 |
| $ | 184 |
| $ | 175 |
| 23 | % |
Total stock-based compensation expense | $ | 1,468 |
| $ | 1,350 |
| $ | 1,417 |
| $ | 1,274 |
| $ | 1,971 |
| $ | 1,779 |
| 32 | % |
Other |
|
|
|
|
|
|
| |||||||||||||
WW shipping costs | $ | 5,990 |
| $ | 6,568 |
| $ | 9,041 |
| $ | 7,320 |
| $ | 8,134 |
| $ | 9,608 |
| 46 | % |
WW shipping costs -- Y/Y growth | 31 | % | 22 | % | 23 | % | 21 | % | 36 | % | 46 | % | N/A |
| ||||||
WW paid units -- Y/Y growth (7) | 17 | % | 15 | % | 14 | % | 10 | % | 18 | % | 22 | % | N/A |
| ||||||
WW seller unit mix -- % of WW paid units (7) | 53 | % | 53 | % | 52 | % | 53 | % | 54 | % | 53 | % | N/A |
| ||||||
Employees (full-time and part-time; excludes contractors & temporary personnel) | 575,700 |
| 613,300 |
| 647,500 |
| 630,600 |
| 653,300 |
| 750,000 |
| 22 | % | ||||||
Employees (full-time and part-time; excludes contractors & temporary personnel) -- Y/Y growth | 51 | % | 13 | % | 14 | % | 12 | % | 13 | % | 22 | % | N/A |
| ||||||
________________________ |
(1) | Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, music, videos, games, and software. These product sales include digital products sold on a transactional basis. Digital product subscriptions that provide unlimited viewing or usage rights are included in “Subscription services.” |
(2) | Includes product sales where our customers physically select items in a store. Sales from customers who order goods online for delivery or pickup at our physical stores are included in “Online stores.” |
(3) | Includes commissions and any related fulfillment and shipping fees, and other third-party seller services. |
(4) | Includes annual and monthly fees associated with Amazon Prime memberships, as well as audiobook, digital video, e-book, digital music, and other non-AWS subscription services. |
(5) | Primarily includes sales of advertising services, as well as sales related to our other service offerings. |
(6) | As a result of revenue recognition accounting guidance adopted on January 1, 2018, certain advertising services are classified as revenue rather than a reduction in cost of sales. |
(7) | Excludes the impact of Whole Foods Market. |
Amazon.com, Inc. Certain Definitions
Customer Accounts
Seller Accounts
AWS Customers
Units
View source version on businesswire.com: https://www.businesswire.com/news/home/20191024005962/en/
Amazon.com Investor Relations Dave Fildes, amazon-ir@amazon.comamazon.com/ir
Amazon.com Public Relations Dan Perlet, amazon-pr@amazon.comamazon.com/pr
Source: Amazon.com, Inc.