Amazon.com, Inc. (NASDAQ: AMZN) today announced financial
results for its second quarter ended June 30, 2016.
Operating cash flow increased 42% to $12.7 billion for the
trailing twelve months, compared with $9.0 billion for the trailing
twelve months ended June 30, 2015. Free cash
flow increased to $7.3 billion for the trailing twelve months,
compared with $4.4 billion for the trailing twelve months ended
June 30, 2015. Free cash flow less lease principal repayments
increased to $3.9 billion for the trailing twelve months, compared
with $2.4 billion for the trailing twelve months ended
June 30, 2015. Free cash flow less finance lease principal
repayments and assets acquired under capital leases increased to
$2.5 billion for the trailing twelve months, compared with an
outflow of $492 million for the trailing twelve months ended
June 30, 2015.
Common shares outstanding plus shares underlying stock-based
awards totaled 495 million on June 30, 2016, compared with 488
million one year ago.
Net sales increased 31% to $30.4 billion in the second quarter,
compared with $23.2 billion in second quarter 2015. The favorable
impact from year-over-year changes in foreign exchange rates
throughout the quarter on net sales was $166 million.
Operating income was $1.3 billion in the second quarter,
compared with $464 million in second quarter 2015.
Net income was $857 million in the second quarter, or $1.78 per
diluted share, compared with $92 million, or $0.19 per diluted
share, in second quarter 2015.
“It’s been a busy few months for Amazon around the world, and
particularly in India — where we launched a new AWS Region,
introduced Prime with unlimited free shipping, and announced that
Prime Video is coming soon, offering Prime members in India
exclusive access to Amazon Original Series and Movies — including
original content featuring top Indian creators and talent,” said
Jeff Bezos, founder and CEO of Amazon.com. “The team in India is
inventing at a torrid pace, and we’re very grateful to our Indian
customers for their welcoming response.”
Highlights
- The second annual Prime Day was the
biggest day ever for Amazon, and was also a record day for Amazon
devices globally. Compared to Prime Day 2015, worldwide orders grew
by more than 60%, orders from third-party sellers with Prime Day
deals nearly tripled, and Prime members saved over twice as much on
deals.
- Amazon launched Prime in India. With
Prime, Indian customers in over 100 cities can enjoy unlimited free
one-day and two-day delivery on hundreds of thousands of eligible
products from India’s largest online shopping selection. Sellers
using Fulfillment by Amazon now automatically provide customers
with unlimited fast, free delivery. Prime Video is coming, offering
Prime members exclusive access to Amazon Original Series and
Movies, and premium movies and TV shows from Indian and global
content providers.
- Fire TV, the #1 best-selling streaming
media player in the U.S., continues to add new features, including
expanded Alexa integration that enables customers to ask Alexa to
play TV shows and movies, music, launch apps, and more.
- Amazon now has over 1,900 third party
skills for Alexa, including new skills from Kayak, Lyft, NBC,
Honeywell, and more.
- Amazon introduced the all-new $79.99
Kindle, which is thinner and lighter compared to the previous
generation Kindle at the same price, and includes built-in
Bluetooth audio support and the VoiceView screen reader that
enables visually impaired users to read books without an
adapter.
- Amazon Dash Button added 50 new brands
to the program, which now has over 150 buttons including Campbell’s
Soup, Cascade, FIJI Water, Pepperidge Farm Goldfish Crackers, and
Play-Doh.
- Amazon introduced exclusive offers on
unlocked Android phones for Prime members: the all-new BLU R1 HD
for $49.99 and the all-new Moto G4 for $149.99, both $50 off retail
price.
- Amazon Studios received 16 Emmy
nominations for Original Series Transparent, The Man in the High
Castle, Mozart in the Jungle, and Catastrophe. For the second year
in a row, Transparent was nominated for Outstanding Comedy Series
and Outstanding Lead Actor in a Comedy Series (Jeffrey
Tambor).
- Amazon Studios is in production on a
slate of Original Series that will premiere exclusively for Prime
members this fall, including new seasons of Golden Globe and Emmy
award-winning Transparent, Golden Globe-winning Mozart in the
Jungle, the second season of the critically-acclaimed drama The Man
in the High Castle, the first seasons of Good Girls Revolt,
Goliath, and Woody Allen’s first-ever TV series, and the new series
from Jeremy Clarkson, Richard Hammond, and James May, The Grand
Tour.
- Amazon Original Kids Series Tumble Leaf
and Niko and the Sword of Light won a combined four Daytime Emmy
Awards.
- Amazon Studios will release several
critically-acclaimed films in theaters this fall, including
Manchester by the Sea, The Handmaiden, and Gleason, joining Woody
Allen’s recently released Café Society now in theaters. Each film
will be available exclusively to Prime members through Prime Video
following its theatrical release.
- Amazon launched Amazon Video Direct, a
new self-service program for creators to make their video content
available to Amazon customers through many distribution options,
including Prime Video, one-time purchase, rental, or ad-supported
viewing.
- Amazon Business now serves more than
400,000 businesses and generated more than $1 billion in sales in
its first year. Amazon Business has more than 30,000 third-party
sellers who fulfill over half of Amazon Business orders.
- Amazon Prime Air and the U.K.
government announced a partnership to advance the safe use of
drones for small parcel delivery, providing Amazon with permission
to trial new methods, including beyond line-of-sight
operation.
- Amazon launched the Pan-European
Fulfillment Program, a service that helps sellers of all sizes more
efficiently export their products to millions of Amazon customers
across Europe while allowing customers to benefit from faster
delivery and lower shipping costs.
- AmazonFresh launched in London, the
first international location to provide this offering. In the U.S.,
AmazonFresh launched in Boston, joining northern and southern
California, northern New Jersey, Baltimore, New York, Philadelphia,
and Seattle.
- Since launching in Mexico one year ago,
Amazon has expanded unique selection to over 50 million items and
added categories including Toys & Games, Office Supplies, and
Amazon Fashion.
- Amazon.in was the most visited
e-commerce site and the most downloaded mobile shopping app in
India in the second quarter, according to third-party reports.
- Amazon Marketplace announced the
inaugural Women’s Entrepreneur Conference, which will be held in
August in Seattle. The full-day event will bring together over 300
women entrepreneurs and business owners from around the world to
network and learn from experts on how to grow, lead, and scale a
business on Amazon.
- Amazon announced that Career Choice,
the program that pre-pays 95% of tuition and books for courses that
teach in-demand skills, began to open-source its program roadmap
and lessons learned with other companies. Since launching four
years ago, over 7,000 Amazon associates across ten countries have
participated in Career Choice.
- Amazon Web Services (AWS) announced
that Salesforce selected AWS as its preferred public cloud
infrastructure provider. For the first time, Salesforce will expand
use of AWS to Salesforce’s core services — including Sales Cloud,
Service Cloud, App Cloud, Community Cloud, Analytics Cloud and more
— for the company’s planned international infrastructure
expansion.
- AWS announced the industry’s first
fully-managed, cloud-based file system, Amazon Elastic File System
(Amazon EFS). Amazon EFS is a new service that makes it easy to set
up and scale file storage in the AWS Cloud, allowing customers to
create petabyte scale file systems with gigabytes of throughput
that are accessible to multiple Amazon EC2 instances and can
support thousands of concurrent client connections with consistent
performance.
- AWS launched its Asia Pacific (Mumbai)
Region, the sixth AWS Region in Asia Pacific. With this launch, AWS
provides 35 Availability Zones across 13 technology infrastructure
regions globally.
- AWS announced the availability of X1
instances, a new Memory Optimized instance for Amazon EC2. X1
instances have 2 TB of memory — the most memory available in any
cloud instance offered today by any cloud provider. Powered by the
latest Intel processors and certified by SAP, X1 instances are
ideal for running in-memory databases like SAP HANA, big data
processing engines like Apache Spark or Presto, and high
performance computing (HPC) workloads.
- AWS also announced that SAP
business-critical applications are gaining momentum on AWS as
customers including GE Oil & Gas, Kellogg’s, Brooks Brothers,
Ferrara Candy Company, GPT Group, Hoya Corporation, Lionsgate,
Macmillan Publishers India, RWE Czech Republic, and Bart &
Associates Inc., are running SAP on AWS.
- AWS achieved the new FedRAMP High
compliance certification, giving U.S. government agencies the
ability to use the AWS Cloud for highly sensitive applications and
workloads like patient records, financial data, and law enforcement
data.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s
expectations as of July 28, 2016, 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.
Third Quarter 2016 Guidance
- Net sales are expected to be between
$31.0 billion and $33.5 billion, or to grow between 22% and 32%
compared with third quarter 2015.
- Operating income is expected to be
between $50 million and $650 million, compared with $406 million in
third quarter 2015.
- This guidance assumes, among other
things, that no additional business acquisitions, investments,
restructurings, or legal settlements are concluded.
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
www.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 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, 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 www.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 and social media
postings, 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
www.amazon.com/about.
AMAZON.COM, INC. Consolidated Statements of Cash
Flows (in millions) (unaudited)
Three Months Ended June 30,
Six Months Ended June 30, Twelve
Months Ended June 30, 2016
2015 2016 2015 2016
2015 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 12,470
$ 10,237 $ 15,890 $ 14,557 $ 10,269 $ 5,057 OPERATING ACTIVITIES:
Net income (loss) 857 92 1,370 35 1,931 (188 ) Adjustments to
reconcile net income (loss) to net cash from operating activities:
Depreciation of property and equipment, including internal-use
software and website development, and other amortization, including
capitalized content costs 1,909 1,504 3,736 2,930 7,087 5,557
Stock-based compensation 768 563 1,312 969 2,461 1,755 Other
operating expense (income), net 53 42 97 87 166 153 Losses (gains)
on sales of marketable securities, net 1 1 3 2 6 (1 ) Other expense
(income), net 31 18 (21 ) 109 115 229 Deferred income taxes 106 (43
) 117 (45 ) 243 (130 ) Excess tax benefits from stock-based
compensation (113 ) (95 ) (320 ) (117 ) (323 ) (1 ) Changes in
operating assets and liabilities: Inventories (57 ) (27 ) 712 693
(2,167 ) (1,291 ) Accounts receivable, net and other (1,184 ) (430
) (772 ) 11 (2,538 ) (1,456 ) Accounts payable 977 373 (4,793 )
(3,876 ) 3,377 2,901 Accrued expenses and other (15 ) (129 ) (972 )
(1,068 ) 1,007 387 Additions to unearned revenue 2,340 1,397 5,154
3,200 9,355 5,647 Amortization of previously unearned revenue
(2,208 ) (1,269 ) (4,318 ) (2,432 ) (7,994 ) (4,582 ) Net cash
provided by (used in) operating activities 3,465 1,997 1,305 498
12,726 8,980 INVESTING ACTIVITIES: Purchases of property and
equipment, including internal-use software and website development,
net (1,711 ) (1,213 ) (2,890 ) (2,084 ) (5,395 ) (4,607 )
Acquisitions, net of cash acquired, and other (14 ) (8 ) (30 ) (374
) (452 ) (1,287 ) Sales and maturities of marketable securities 931
470 2,069 845 4,249 2,639 Purchases of marketable securities (1,645
) (625 ) (2,281 ) (1,610 ) (4,762 ) (3,379 ) Net cash provided by
(used in) investing activities (2,439 ) (1,376 ) (3,132 ) (3,223 )
(6,360 ) (6,634 ) FINANCING ACTIVITIES: Excess tax benefits from
stock-based compensation 113 95 320 117 323 1 Proceeds from
long-term debt and other 66 44 75 226 202 6,236 Repayments of
long-term debt and other (70 ) (215 ) (245 ) (531 ) (1,366 ) (797 )
Principal repayments of capital lease obligations (1,116 ) (580 )
(1,917 ) (1,082 ) (3,298 ) (1,832 ) Principal repayments of finance
lease obligations (32 ) (35 ) (61 ) (74 ) (108 ) (155 ) Net cash
provided by (used in) financing activities (1,039 ) (691 ) (1,828 )
(1,344 ) (4,247 ) 3,453 Foreign currency effect on cash and cash
equivalents 64 102 286 (219 ) 133 (587
) Net increase (decrease) in cash and cash equivalents 51 32
(3,369 ) (4,288 ) 2,252 5,212 CASH AND CASH
EQUIVALENTS, END OF PERIOD $ 12,521 $ 10,269 $ 12,521
$ 10,269 $ 12,521 $ 10,269 SUPPLEMENTAL
CASH FLOW INFORMATION: Cash paid for interest on long-term debt $
143 $ 152 $ 145 $ 169 $ 301 $ 212 Cash paid for interest on capital
and finance lease obligations 48 35 95 67 180 119 Cash paid for
income taxes (net of refunds) 88 65 226 119 380 188 Property and
equipment acquired under capital leases 1,422 1,384 2,297 2,338
4,676 4,710 Property and equipment acquired under build-to-suit
leases 231 153 582 256 870 813
AMAZON.COM,
INC. Consolidated Statements of Operations (in
millions, except per share data) (unaudited)
Three Months Ended June 30,
Six Months Ended June 30, 2016
2015 2016 2015 Net
product sales $ 21,116 $ 17,104 $ 41,697 $ 34,187 Net service sales
9,288 6,081 17,835 11,714 Total net
sales 30,404 23,185 59,532 45,901 Operating expenses: Cost of sales
19,180 15,160 38,047 30,555 Fulfillment 3,878 2,876 7,565 5,634
Marketing 1,546 1,150 2,982 2,233 Technology and content 3,880
3,020 7,405 5,774 General and administrative 580 467 1,077 894
Other operating expense (income), net 55 48 100
92 Total operating expenses 29,119 22,721
57,176 45,182 Operating income 1,285 464 2,356
719 Interest income 24 12 45 23 Interest expense (116 ) (114 ) (233
) (228 ) Other income (expense), net (14 ) — 66 (131
) Total non-operating income (expense) (106 ) (102 ) (122 ) (336 )
Income before income taxes 1,179 362 2,234 383 Provision for income
taxes (307 ) (266 ) (782 ) (337 ) Equity-method investment
activity, net of tax (15 ) (4 ) (82 ) (11 ) Net income $ 857
$ 92 $ 1,370 $ 35 Basic earnings per share $
1.81 $ 0.20 $ 2.90 $ 0.07 Diluted
earnings per share $ 1.78 $ 0.19 $ 2.84 $ 0.07
Weighted-average shares used in computation of earnings per
share: Basic 473 467 472 466 Diluted
483 476 482 475
AMAZON.COM, INC. Consolidated Statements of Comprehensive
Income (Loss) (in millions) (unaudited)
Three Months Ended June 30,
Six Months Ended June 30, 2016
2015 2016 2015 Net income
$ 857 $ 92 $ 1,370 $ 35 Other comprehensive income (loss): Foreign
currency translation adjustments, net of tax of $36, $1, $13, and
$0 11 128 113 (114 ) Net change in unrealized gains (losses) on
available-for-sale securities: Unrealized gains (losses), net of
tax of $(17), $(8), $(17), and $(8) 31 6 37 7 Reclassification
adjustment for losses (gains) included in “Other income (expense),
net,” net of tax of $0, $0, $(1), and $(1) 1 1 2
1 Net unrealized gains (losses) on available-for-sale
securities 32 7 39 8 Total other
comprehensive income (loss) 43 135 152 (106 )
Comprehensive income (loss) $ 900 $ 227 $ 1,522
$ (71 )
AMAZON.COM, INC. Segment
Information (in millions) (unaudited)
Three Months Ended June 30,
Six Months Ended June 30, 2016
2015 2016 2015 North
America Net sales $ 17,674 $ 13,796 $ 34,670 $ 27,202 Operating
expenses 16,517 13,093 32,590 25,982
Operating income before stock-based compensation and other 1,157
703 2,080 1,220 Stock-based compensation and other 455 355
790 617 Operating income $ 702 $ 348
$ 1,290 $ 603
International Net sales $
9,844 $ 7,565 $ 19,410 $ 15,310 Operating expenses 9,756
7,584 19,301 15,405 Operating income (loss)
before stock-based compensation and other 88 (19 ) 109 (95 )
Stock-based compensation and other 223 170 364
288 Operating income (loss) $ (135 ) $ (189 ) $ (255 ) $
(383 )
AWS Net sales $ 2,886 $ 1,824 $ 5,452 $ 3,389
Operating expenses 2,023 1,433 3,873 2,734
Operating income before stock-based compensation and other
863 391 1,579 655 Stock-based compensation and other 145 86
258 156 Operating income $ 718 $ 305
$ 1,321 $ 499
Consolidated Net sales $
30,404 $ 23,185 $ 59,532 $ 45,901 Operating expenses 28,296
22,110 55,764 44,121 Operating income before
stock-based compensation and other 2,108 1,075 3,768 1,780
Stock-based compensation and other 823 611 1,412
1,061 Operating income 1,285 464 2,356 719 Total
non-operating income (expense) (106 ) (102 ) (122 ) (336 )
Provision for income taxes (307 ) (266 ) (782 ) (337 )
Equity-method investment activity, net of tax (15 ) (4 ) (82 ) (11
) Net income $ 857 $ 92 $ 1,370 $ 35
Segment Highlights: Y/Y net sales growth: North
America 28 % 26 % 27 % 25 % International 30 3 27 1 AWS 58 81 61 65
Consolidated 31 20 30 17 Net sales mix: North America 58 % 59 % 58
% 59 % International 32 33 33 33 AWS 10 8 9
8 Consolidated 100 % 100 % 100 % 100 %
AMAZON.COM, INC. Supplemental Net Sales
Information (in millions) (unaudited)
Three Months Ended June 30,
Six Months Ended June 30, 2016
2015 2016 2015 Net Sales:
North America Media $ 2,928 $ 2,620 $ 6,136 $ 5,589 Electronics and
other general merchandise 14,459 10,987 27,970 21,237 Other (1) 287
189 564 376 Total North America $
17,674 $ 13,796 $ 34,670 $ 27,202
International Media $ 2,283 $ 2,094 $ 4,763 $ 4,413 Electronics and
other general merchandise 7,504 5,425 14,537 10,804 Other (1) 57
46 110 93 Total International $ 9,844
$ 7,565 $ 19,410 $ 15,310
Year-over-year Percentage Growth: North America Media 12 % 6 % 10 %
6 % Electronics and other general merchandise 32 31 32 31 Other 52
16 50 19 Total North America 28 26 27 25 International Media 9 %
(12 )% 8 % (12 )% Electronics and other general merchandise 38 10
35 7 Other 25 (7 ) 18 (10 ) Total International 30 3 27 1
Year-over-year Percentage Growth, excluding the effect of foreign
exchange rates: North America Media 12 % 7 % 10 % 6 % Electronics
and other general merchandise 32 32 32 31 Other 52 16 50 19 Total
North America 28 26 28 25 International Media 7 % 3 % 8 % 2 %
Electronics and other general merchandise 36 31 35 26 Other 25 8 20
5 Total International 28 22 27 18 ______________________________
(1) Includes sales from non-retail activities, such as certain
advertising services and our co-branded credit card agreements.
AMAZON.COM, INC. Consolidated Balance
Sheets (in millions, except per share data)
June 30, 2016 December 31,
2015 (unaudited)
ASSETS
Current assets: Cash and cash equivalents $ 12,521 $ 15,890
Marketable securities 4,019 3,918 Inventories 9,588 10,243 Accounts
receivable, net and other 6,092 5,654 Total current
assets 32,220 35,705 Property and equipment, net 25,190 21,838
Goodwill 3,774 3,759 Other assets 3,892 3,445 Total
assets $ 65,076 $ 64,747
LIABILITIES AND
STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 16,123 $ 20,397 Accrued
expenses and other 9,613 10,372 Unearned revenue 3,851 3,118
Total current liabilities 29,587 33,887 Long-term debt 8,212
8,227 Other long-term liabilities 10,739 9,249 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 — 497 and 494 Outstanding shares — 474 and 471 5 5 Treasury
stock, at cost (1,837 ) (1,837 ) Additional paid-in capital 15,026
13,394 Accumulated other comprehensive loss (571 ) (723 ) Retained
earnings 3,915 2,545 Total stockholders’ equity
16,538 13,384 Total liabilities and stockholders’
equity $ 65,076 $ 64,747
AMAZON.COM,
INC. Supplemental Financial Information and Business
Metrics (in millions, except per share data)
(unaudited) Q1 2015
Q2 2015 Q3 2015
Q4 2015 Q1 2016 Q2
2016
Y/Y %Change
Cash Flows and Shares
Operating cash flow — trailing twelve
months (TTM)
$ 7,845 $ 8,980 $ 9,823 $ 11,920 $ 11,258 $ 12,726 42 %
Operating cash flow — TTM Y/Y growth
47 % 69 % 72 % 74 % 44 % 42 % N/A
Purchases of property and equipment,
including internal-use software and website development, net —
TTM
$ 4,684 $ 4,607 $ 4,424 $ 4,589 $ 4,897 $ 5,395 17 %
Principal repayments of capital lease
obligations — TTM
$ 1,537 $ 1,832 $ 2,144 $ 2,462 $ 2,761 $ 3,298 80 %
Principal repayments of finance lease
obligations — TTM
$ 132 $ 155 $ 163 $ 121 $ 111 $ 108
(31
)%
Property and equipment acquired under
capital leases — TTM
$ 4,246 $ 4,710 $ 4,599 $ 4,717 $ 4,638 $ 4,676 (1
)%
Free cash flow — TTM (1)
$ 3,161 $ 4,373 $ 5,399 $ 7,331 $ 6,361 $ 7,331 68 %
Free cash flow less lease principal
repayments — TTM (2)
$ 1,492 $ 2,386 $ 3,092 $ 4,748 $ 3,489 $ 3,925 65 %
Free cash flow less finance lease
principal repayments and assets acquired under capital leases — TTM
(3)
$ (1,217 ) $ (492 ) $ 637 $ 2,493 $ 1,612 $ 2,547 N/A Invested
capital (4) $ 24,040 $ 26,478 $ 28,860 $ 31,393 $ 32,824 $ 34,695
31 % Common shares and stock-based awards outstanding 483 488 489
490 490 495 1 % Common shares outstanding 466 468 469 471 472 474 1
% Stock-based awards outstanding 17 20 20 19 18 21 2 %
Stock-based awards outstanding — % of
common shares outstanding
3.8 % 4.4 % 4.3 % 4.1 % 3.9 % 4.4 % N/A
Results of
Operations Worldwide (WW) net sales $ 22,717 $ 23,185 $ 25,358
$ 35,747 $ 29,128 $ 30,404 31 %
WW net sales — Y/Y growth, excluding
F/X
22 % 27 % 30 % 26 % 29 % 30 % N/A
WW net sales — TTM
$ 91,963 $ 95,808 $ 100,588 $ 107,006 $ 113,418 $ 120,637 26 %
WW net sales — TTM Y/Y growth, excluding
F/X
20 % 22 % 24 % 26 % 28 % 29 % N/A Operating income $ 255 $ 464 $
406 $ 1,108 $ 1,071 $ 1,285 177 %
Operating income — Y/Y growth, excluding
F/X
90 % N/A N/A 84 % 300 % 168 % N/A
Operating margin — % of WW net sales
1.1 % 2.0 % 1.6 % 3.1 % 3.7 % 4.2 % N/A
Operating income — TTM
$ 287 $ 765 $ 1,715 $ 2,233 $ 3,049 $ 3,871 406 %
Operating income — TTM Y/Y growth
(decline), excluding F/X
(56 )% 35 % N/A N/A 933 % 388 % N/A
Operating margin — TTM % of WW net
sales
0.3 % 0.8 % 1.7 % 2.1 % 2.7 % 3.2 % N/A Net income (loss) $ (57 ) $
92 $ 79 $ 482 $ 513 $ 857 836 % Net income (loss) per diluted share
$ (0.12 ) $ 0.19 $ 0.17 $ 1.00 $ 1.07 $ 1.78 822 %
Net income (loss) — TTM
$ (405 ) $ (188 ) $ 328 $ 596 $ 1,166 $ 1,931 N/A
Net income (loss) per diluted share —
TTM
$ (0.88 ) $ (0.41 ) $ 0.69 $ 1.25 $ 2.43 $ 4.02 N/A
______________________________
(1) Free cash flow is cash flow from operations
reduced by “Purchases of property and equipment, including
internal-use software and website development, net,” which is
included in cash flow from investing activities. (2) Free cash flow
less lease principal repayments is free cash flow reduced by
“Principal repayments of capital lease obligations,” and “Principal
repayments of finance lease obligations,” which are included in
cash flow from financing activities. (3) Free cash flow less
finance lease principal repayments and assets acquired under
capital leases is free cash flow reduced by “Principal repayments
of finance lease obligations,” which are included in cash flow from
financing activities, and property and equipment acquired under
capital leases. In this measure, property and equipment acquired
under capital leases is reflected as if these assets had been
purchased with cash, which is not the case as these assets have
been leased. (4) Average Total Assets minus Current Liabilities
(excluding current portion of Long-Term Debt and current portion of
capital lease obligations and finance lease obligations) over five
quarter ends.
AMAZON.COM, INC. Supplemental
Financial Information and Business Metrics (in millions)
(unaudited) Q1 2015
Q2 2015 Q3 2015
Q4 2015 Q1 2016 Q2
2016 Y/Y %Change Segments
North America Segment: Net sales $ 13,406 $
13,796 $ 15,006 $ 21,501 $ 16,996 $ 17,674 28 %
Net sales — Y/Y growth, excluding F/X
24 % 26 % 29 % 24 % 27 % 28 % N/A
Net sales — TTM
$ 53,432 $ 56,233 $ 59,540 $ 63,708 $ 67,299 $ 71,176 27 %
Operating income before stock-based compensation and other:
Operating income
$ 517 $ 703 $ 528 $ 1,003 $ 924 $ 1,157 65 %
Operating income — Y/Y growth, excluding
F/X
77 % 111 % N/A 36 % 78 % 64 % N/A
Operating margin — % of North America net
sales
3.9 % 5.1 % 3.5 % 4.7 % 5.4 % 6.6 % N/A
Operating income — TTM
$ 1,520 $ 1,893 $ 2,480 $ 2,751 $ 3,157 $ 3,611 91 %
Operating margin — TTM % of North America
net sales
2.8 % 3.4 % 4.2 % 4.3 % 4.7 % 5.1 % N/A Operating income: Operating
income $ 254 $ 348 $ 186 $ 636 $ 588 $ 702 102 %
Operating income — Y/Y growth, excluding
F/X
129 % 100 % N/A
Operating margin — % of North America net
sales
1.9 % 2.5 % 1.2 % 3.0 % 3.5 % 4.0 % N/A
Operating income — TTM
$ 1,425 $ 1,759 $ 2,113 170 %
Operating margin — TTM % of North America
net sales
2.2 % 2.6 % 3.0 % N/A International Segment: Net sales $ 7,745 $
7,565 $ 8,267 $ 11,841 $ 9,566 $ 9,844 30 %
Net sales — Y/Y growth, excluding F/X
14 % 22 % 24 % 22 % 26 % 28 % N/A
Net sales — TTM
$ 33,371 $ 33,598 $ 34,154 $ 35,418 $ 37,239 $ 39,518 18 %
Operating income (loss) before stock-based compensation and other:
Operating income (loss) $ (76 ) $ (19 ) $ (56 ) $ 60 $ 20 $ 88 N/A
Operating income/loss — Y/Y growth
(decline), excluding F/X
N/A N/A N/A 65 % N/A N/A N/A
Operating margin — % of International net
sales
(1.0
)%
(0.2 )% (0.7 )% 0.5 % 0.2 % 0.9 % N/A
Operating income (loss) — TTM
$ (188 ) $ (205 ) $ (86 ) $ (91 ) $ 6 $ 113 N/A
Operating margin — TTM % of International
net sales
(0.6 )% (0.6 )% (0.3 )% (0.3 )% — % 0.3 % N/A Operating income
(loss): Operating income (loss) $ (194 ) $ (189 ) $ (208 ) $ (108 )
$ (121 ) $ (135 ) (29 )%
Operating income/loss — Y/Y growth
(decline), excluding F/X
(27 )% (8 )% N/A
Operating margin — % of International net
sales
(2.5 )% (2.5 )% (2.5 )% (0.9 )% (1.3 )% (1.4 )% N/A
Operating income (loss) — TTM
$ (699 ) $ (626 ) $ (571 ) N/A
Operating margin — TTM % of International
net sales
(2.0 )% (1.7 )% (1.4 )% N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions) (unaudited) Q1
2015 Q2 2015 Q3 2015
Q4 2015 Q1 2016
Q2 2016 Y/Y %Change
Segments (continued)
AWS Segment: Net
sales $ 1,566 $ 1,824 $ 2,085 $ 2,405 $ 2,566 $ 2,886 58 %
Net sales — Y/Y growth, excluding F/X
49 % 81 % 78 % 69 % 64 % 58 % N/A
Net sales — TTM
$ 5,160 $ 5,977 $ 6,894 $ 7,880 $ 8,880 $ 9,943 66 % Operating
income before stock-based compensation and other: Operating income
$ 265 $ 391 $ 521 $ 687 $ 716 $ 863 121 %
Operating income — Y/Y growth (decline),
excluding F/X
(13 )% 314 % 353 % 161 % 161 % 121 % N/A
Operating margin — % of AWS net sales
16.9 % 21.4 % 25.0 % 28.5 % 27.9 % 29.9 % N/A
Operating income — TTM
$ 680 $ 993 $ 1,417 $ 1,863 $ 2,315 $ 2,787 181 %
Operating margin — TTM % of AWS net
sales
13.2 % 16.6 % 20.6 % 23.6 % 26.1 % 28.0 % N/A Operating income:
Operating income $ 195 $ 305 $ 428 $ 580 $ 604 $ 718 135 %
Operating income — Y/Y growth, excluding
F/X
198 % 136 % N/A
Operating margin — % of AWS net sales
12.4 % 16.7 % 20.5 % 24.1 % 23.5 % 24.9 % N/A
Operating income — TTM
$ 1,507 $ 1,916 $ 2,329 N/A
Operating margin — TTM % of AWS net
sales
19.1 % 21.6 % 23.4 % N/A Consolidated Segments Before Stock-Based
Compensation and Other: Operating income $ 706 $ 1,075 $ 993 $
1,750 $ 1,660 $ 2,108 96 %
Operating income — Y/Y growth, excluding
F/X
45 % 168 % N/A 67 % 128 % 92 % N/A
Operating margin — % of Consolidated net
sales
3.1 % 4.6 % 3.9 % 4.9 % 5.7 % 6.9 % N/A
Operating income — TTM
$ 2,012 $ 2,682 $ 3,811 $ 4,523 $ 5,478 $ 6,511 143 %
Operating margin — TTM % of Consolidated
net sales
2.2 % 2.8 % 3.8 % 4.2 % 4.8 % 5.4 % N/A
AMAZON.COM, INC. Supplemental Financial Information and
Business Metrics (in millions, except inventory turnover,
accounts payable days, and employee data) (unaudited)
Q1 2015 Q2 2015
Q3 2015 Q4 2015
Q1 2016 Q2 2016
Y/Y %
Change
Supplemental
Supplemental North
America Segment Net Sales: Media $ 2,969 $ 2,620 $ 2,963 $ 3,931 $
3,208 $ 2,928 12 %
Media — Y/Y growth, excluding F/X
5 % 7 % 9 % 12 % 8 % 12 % N/A
Media — TTM
$ 11,711 $ 11,867 $ 12,096 $ 12,483 $ 12,722 $ 13,030 10 %
Electronics and other general merchandise $ 10,250 $ 10,987 $
11,840 $ 17,325 $ 13,511 $ 14,459 32 %
Electronics and other general merchandise
— Y/Y growth, excluding F/X
31 % 32 % 35 % 28 % 32 % 32 % N/A
Electronics and other general merchandise
— TTM
$ 40,938 $ 43,559 $ 46,606 $ 50,401 $ 53,663 $ 57,134 31 %
Electronics and other general merchandise
— TTM % of North America net sales
77 % 77 % 78 % 79 % 80 % 80 % N/A Other $ 187 $ 189 $ 203 $ 245 $
277 $ 287 52 % Supplemental International Segment Net Sales: Media
$ 2,320 $ 2,094 $ 2,320 $ 3,292 $ 2,480 $ 2,283 9 % Media -- Y/Y
growth, excluding F/X 2 % 3 % 6 % 5 % 9 % 7 % N/A Media -- TTM $
10,615 $ 10,329 $ 10,140 $ 10,026 $ 10,186 $ 10,375 — % Electronics
and other general merchandise $ 5,378 $ 5,425 $ 5,901 $ 8,491 $
7,034 $ 7,504 38 %
Electronics and other general merchandise
— Y/Y growth, excluding F/X
21 % 31 % 32 % 31 % 33 % 36 % N/A
Electronics and other general merchandise
— TTM
$ 22,559 $ 23,072 $ 23,814 $ 25,196 $ 26,851 $ 28,930 25 %
Electronics and other general merchandise
— TTM % of International net sales
68 % 69 % 70 % 71 % 72 % 73 % N/A Other $ 47 $ 46 $ 46 $ 58 $ 52 $
57 25 %
Balance Sheet
Cash and marketable securities —
ending
$ 13,781 $ 14,001 $ 14,428 $ 19,808 $ 15,859 $ 16,540 18 %
Inventory, net — ending
$ 7,369 $ 7,470 $ 8,981 $ 10,243 $ 9,582 $ 9,588 28 %
Inventory turnover, average — TTM
8.8 8.9 8.6 8.5 8.6 8.6 (3 )%
Property and equipment, net — ending
$ 17,736 $ 19,479 $ 20,636 $ 21,838 $ 23,308 $ 25,190 29 %
Accounts payable — ending
$ 11,917 $ 12,391 $ 14,437 $ 20,397 $ 14,990 $ 16,123 30 %
Accounts payable days — ending
70 74 79 77 72 77 3 %
Stock-based Compensation Expense
Fulfillment $ 90 $ 132 $ 122 $ 137 $ 116 $ 186 41 % Marketing $ 35
$ 50 $ 48 $ 57 $ 56 $ 80 62 % Technology and content $ 233 $ 319 $
309 $ 364 $ 317 $ 419 31 % General and administrative $ 49 $ 62 $
65 $ 48 $ 55 $ 83 32 %
Total stock-based compensation expense
$ 407 $ 563 $ 544 $ 606 $ 544 $ 768
36
%
Other WW shipping revenue $ 1,299 $ 1,399 $ 1,494 $ 2,328 $
1,820 $ 2,000 43 %
WW shipping revenue — Y/Y growth
53 % 57 % 43 % 37 % 40 % 43 % N/A WW shipping costs $ 2,309 $ 2,340
$ 2,720 $ 4,170 $ 3,275 $ 3,362 44 %
WW shipping costs — Y/Y growth
26 % 29 % 35 % 37 % 42 % 44 % N/A WW net shipping costs $ 1,010 $
941 $ 1,226 $ 1,842 $ 1,455 $ 1,362 45 %
WW net shipping costs — Y/Y growth
3 % 2 % 26 % 37 % 44 % 45 % N/A
WW paid units — Y/Y growth
20 % 22 % 26 % 26 % 27 % 28 % N/A
WW seller unit mix — % of WW paid
units
44 % 45 % 46 % 47 % 48 % 49 % N/A Employees (full-time and
part-time; excludes contractors & temporary personnel) 165,000
183,100 222,400 230,800 245,200 268,900 47 %
Amazon.com, Inc.Certain
Definitions
Customer Accounts
- References to customers mean customer
accounts, which are unique e-mail addresses, established either
when a customer places an order or when a customer orders from
other sellers on our websites. Customer accounts exclude certain
customers, including customers associated with certain of our
acquisitions, Amazon Payments customers, AWS customers, and the
customers of select companies with whom we have a technology
alliance or marketing and promotional relationship. Customers are
considered active when they have placed an order during the
preceding twelve-month period.
Seller Accounts
- References to sellers means seller
accounts, which are established when a seller receives an order
from a customer account. Sellers are considered active when they
have received an order from a customer during the preceding
twelve-month period.
AWS Customers
- References to AWS customers mean unique
AWS customer accounts, which are unique e-mail addresses that are
eligible to use AWS services. This includes AWS accounts in the AWS
free tier. Multiple users accessing AWS services via one account
are counted as a single account. Customers are considered active
when they have had AWS usage activity during the preceding
one-month period.
Units
- References to units mean physical and
digital units sold (net of returns and cancellations) by us and
sellers at Amazon domains worldwide — for example www.amazon.com,
www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr,
www.amazon.ca, www.amazon.cn, www.amazon.it, www.amazon.es,
www.amazon.com.br, www.amazon.in, www.amazon.com.mx,
www.amazon.com.au, www.amazon.nl, www.diapers.com, www.shopbop.com,
and www.zappos.com — as well as Amazon-owned items sold through
non-Amazon domains. Units sold are paid units and do not include
units associated with AWS, certain acquisitions, rental businesses,
or advertising businesses, or Amazon gift cards.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160728006553/en/
Amazon.com, Inc.Investor RelationsDarin
Manneyir@amazon.comwww.amazon.com/irorPublic RelationsTy
Rogersamazon-pr@amazon.comwww.amazon.com/about
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