Amazon.com, Inc. (NASDAQ: AMZN) today announced financial
results for its second quarter ended June 30, 2015.
Operating cash flow increased 69% to $8.98 billion for the
trailing twelve months, compared with $5.33 billion for the
trailing twelve months ended June 30, 2014. Free cash
flow increased to $4.37 billion for the trailing twelve
months, compared with $1.04 billion for the trailing twelve months
ended June 30, 2014.
Common shares outstanding plus shares underlying stock-based
awards totaled 488 million on June 30, 2015, compared with 480
million one year ago.
Net sales increased 20% to $23.18 billion in the second quarter,
compared with $19.34 billion in second quarter 2014. Excluding the
$1.39 billion unfavorable impact from year-over-year changes in
foreign exchange rates throughout the quarter, net sales increased
27% compared to second quarter 2014.
Operating income was $464 million in the second quarter,
compared with operating loss of $15 million in second quarter
2014.
Net income was $92 million in the second quarter, or $0.19 per
diluted share, compared with net loss of $126 million, or $0.27 per
diluted share, in second quarter 2014.
“The teams at Amazon have been working hard for customers,” said
Jeff Bezos, founder and CEO of Amazon.com. “We unveiled Amazon
Business, opened Amazon Mexico, launched Prime free same-day,
rolled out our ninth Prime Now city, broke our Black Friday record
with the first-ever Prime Day, received 11 Emmy nominations
for Transparent, debuted six new kids pilots, brought
Echo to general availability, introduced the Alexa Skills Kit and
Alexa Voice Service, opened FBA Small and Light, continued to
double down on our fastest growing geography — India, launched
350 significant AWS features and services so far this year
(ahead of last year’s pace), introduced AWS Educate, and entered
into agreements for new solar and wind farms — enough to exceed our
2016 goal of 40% renewable energy.”
Highlights
- Amazon celebrated Prime Day on July
15th, a global shopping event that offered Prime members more deals
than Black Friday. More new members tried Prime worldwide than any
single day in Amazon history. Customers purchased more units on
Prime Day than Black Friday 2014, and saved millions of dollars on
deals around the world. Sellers using Fulfillment by Amazon (FBA)
also benefited, experiencing record-breaking unit sales on Prime
Day.
- Amazon launched Prime free same-day
delivery in 14 U.S. metro areas, serving more than 500 cities and
towns. Prime members can choose from over one million items and
order as late as noon to receive their order on the same day, for
free.
- Prime Now expanded to three additional
cities including London, the first international location to offer
the service. Prime Now is available in nine cities, bringing Prime
members one-hour delivery on thousands of daily essentials.
- Amazon Echo, the first device designed
entirely around your voice, moved to general availability in the
U.S. Customer response to Echo has been overwhelmingly positive
with over 14,000 5-star reviews and an average customer rating of
4.5 stars.
- Amazon announced the Alexa Fund — named
for Alexa, the cloud-based voice service that powers Echo — which
will invest up to $100 million to support developers,
manufacturers, and start-ups of all sizes to create new experiences
designed around the human voice.
- Amazon opened the Alexa Voice Service
to third-party hardware makers, giving them the tools to integrate
Alexa into internet-connected devices.
- Amazon introduced the Alexa Skills Kit,
a free SDK that makes it fast and easy for developers to create new
voice-driven capabilities for Alexa.
- Amazon introduced the new Kindle
Paperwhite with twice the pixels of the previous Paperwhite, the
exclusive Bookerly font, and a new typesetting engine for more
beautiful pages.
- Amazon announced the expansion of the
Fire HD Kids Edition tablet to the U.K. and Germany. Fire HD Kids
Edition is the first tablet built from the ground up for kids, and
comes with a two-year worry-free guarantee and access to thousands
of kid-friendly books, videos, educational apps, and games.
- Amazon Fire TV now offers nearly 2,000
channels, apps, and games. Popular new additions include STARZ
Play, Candy Crush Saga, and Popcornflix.
- Amazon Original Series Transparent is
the most nominated Comedy Series at this year’s Emmys with 11
nominations, including Outstanding Comedy Series and Lead Actor,
Comedy (Jeffrey Tambor).
- Amazon Original Series Tumble Leaf won
five Daytime Emmy Awards, including Outstanding Preschool
Children’s Animated Program.
- Amazon Studios launched six new pilots
for kids and debuted a second season of Annedroids on Prime Instant
Video.
- Amazon announced Amazon Business, a new
business-to-business marketplace that offers hundreds of millions
of products.
- Amazon introduced the FBA Small and
Light program, a new fulfillment solution for fast-moving, small,
and light products that increases free shipping selection for
customers and provides a low-cost shipping option for sellers.
- The Council of Fashion Designers of
America held the inaugural showcase for American men’s fashion, New
York Fashion Week: Men’s, which was presented by Amazon Fashion,
East Dane, and MyHabit.
- Amazon announced the launch of its
Mexico physical goods store, Amazon.com.mx, with the largest
selection in Mexico and more categories, items, and features than
any previous Amazon launch anywhere in the world. Amazon also
launched Selling on Amazon and FBA in Mexico, allowing third-party
sellers to list and sell their products at Amazon.com.mx.
- Amazon announced the Global Selling
Program for sellers in India, which enables them to access hundreds
of millions of customers around the world.
- Amazon.in introduced Sunday delivery
across 100 cities in India for all FBA products at no additional
cost.
- Amazon India continues to be Amazon’s
fastest growing geography in sales, and India’s largest online
store with over 25 million products.
- Amazon Prime members in Italy now
receive free one-day shipping on more than one million items with
their Prime subscription.
- Amazon hosted its first-ever “Amazon
Academy” in Berlin. Over 250 sellers, software developers, and
authors from across Germany gathered to share their experiences and
ideas on how to build thriving businesses and careers with Amazon’s
platforms. Additional Amazon Academy events are scheduled for
this fall across Europe.
- Amazon has tripled the selection
available on the Amazon Global Store on Amazon.cn,
allowing Chinese customers to choose from three million
products curated from the U.S. Amazon website.
- Amazon Web Services (AWS) announced
that it will open a new region in India in 2016, which will enable
customers to run workloads in India and serve Indian
end-users with even better latency.
- AWS announced that the EU (Frankfurt)
region, which opened in October 2014, is AWS’ fastest growing
international region to date.
- AWS announced AWS Educate, a free
program that helps educators and students use real-world cloud
technology in the classroom to prepare students for the cloud
workforce.
- AWS entered into separate agreements to
support the construction and operation of Amazon Solar Farm U.S.
East and Amazon Wind Farm U.S. East. These are expected to generate
approximately 170,000 megawatt hours (MWh) of solar power and
670,000 MWh of wind energy on an annual basis. The energy generated
from these facilities will be delivered into the electrical grids
that power both current and future AWS data centers.
- AWS announced Amazon API Gateway, a new
fully managed service that makes it easy for AWS customers to
create, publish, maintain, monitor, and secure APIs at any
scale.
- AWS Device Farm is a new service that
helps mobile app developers quickly and securely test their apps on
smartphones, tablets, and other devices to improve the quality of
their Android and Fire OS apps.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s
expectations as of July 23, 2015, 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 and online commerce, and the various factors
detailed below.
Third Quarter 2015 Guidance
- Net sales are expected to be between
$23.3 billion and $25.5 billion, or to grow between 13% and 24%
compared with third quarter 2014.
- Operating income (loss) is expected to
be between $(480) million and $70 million, compared to $(544)
million in third quarter 2014.
- This guidance includes approximately
$580 million for stock-based compensation and amortization of
intangible assets, and it assumes, among other things, that no
additional business acquisitions, investments, restructurings, or
legal settlements are concluded and that there are no further
revisions to stock-based compensation estimates.
A conference call will be webcast live today at 2:00 p.m.
PT/5:00 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 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.com opened on the World Wide Web in July 1995. The
company 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 phone, Fire
tablets, Fire TV, and Amazon Echo are some of the products and
services pioneered by Amazon.
AMAZON.COM, INC.
Consolidated Statements of Cash Flows (in millions)
(unaudited) Three Months Ended Six Months
Ended Twelve Months Ended June 30, June
30, June 30, 2015 2014 2015
2014 2015 2014 CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD $ 10,237 $ 5,074 $ 14,557 $ 8,658
$ 5,057 $ 3,704 OPERATING ACTIVITIES: Net income (loss) 92 (126 )
35 (18 ) (188 ) 181 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 1,504
1,109 2,930 2,119 5,557 3,916 Stock-based compensation 563 391 969
711 1,755 1,318 Other operating expense (income), net 42 28 87 62
153 113 Losses (gains) on sales of marketable securities, net 1 (1
) 2 (1 ) (1 ) 1 Other expense (income), net 18 (8 ) 109 (57 ) 229
(1 ) Deferred income taxes (43 ) (49 ) (45 ) (234 ) (130 ) (332 )
Excess tax benefits from stock-based compensation (95 ) — (117 )
(121 ) (1 ) (199 ) Changes in operating assets and liabilities:
Inventories (27 ) 92 693 791 (1,291 ) (1,124 ) Accounts receivable,
net and other (430 ) (299 ) 11 428 (1,456 ) (936 ) Accounts payable
373 (344 ) (3,876 ) (5,018 ) 2,901 1,056 Accrued expenses and other
(129 ) (15 ) (1,068 ) (746 ) 387 770 Additions to unearned revenue
1,397 894 3,200 1,986 5,647 3,477 Amortization of previously
unearned revenue (1,269 ) (810 ) (2,432 ) (1,542 ) (4,582 ) (2,913
) Net cash provided by (used in) operating activities 1,997 862 498
(1,640 ) 8,980 5,327 INVESTING ACTIVITIES: Purchases of property
and equipment, including internal-use software and website
development (1,213 ) (1,290 ) (2,084 ) (2,370 ) (4,607 ) (4,288 )
Acquisitions, net of cash acquired, and other (8 ) (67 ) (374 ) (66
) (1,287 ) (127 ) Sales and maturities of marketable securities 470
962 845 1,555 2,639 2,565 Purchases of marketable securities (625 )
(336 ) (1,610 ) (773 ) (3,379 ) (1,710 ) Net cash provided by (used
in) investing activities (1,376 ) (731 ) (3,223 ) (1,654 ) (6,634 )
(3,560 ) FINANCING ACTIVITIES: Excess tax benefits from stock-based
compensation 95 — 117 121 1 199 Proceeds from long-term debt 44 286
226 351 6,236 627 Repayments of long-term debt (215 ) (178 ) (531 )
(247 ) (797 ) (334 ) Principal repayments of capital lease
obligations (580 ) (285 ) (1,082 ) (535 ) (1,832 ) (969 ) Principal
repayments of finance lease obligations (35 ) (12 ) (74 ) (54 )
(155 ) (60 ) Net cash provided by (used in) financing activities
(691 ) (189 ) (1,344 ) (364 ) 3,453 (537 ) Foreign-currency effect
on cash and cash equivalents 102 41 (219 ) 57
(587 ) 123 Net increase (decrease) in cash and cash
equivalents 32 (17 ) (4,288 ) (3,601 ) 5,212 1,353
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,269 $
5,057 $ 10,269 $ 5,057 $ 10,269 $ 5,057
SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest
on long-term debt $ 152 $ 31 $ 169 $ 49 $ 212 $ 94 Cash paid for
income taxes (net of refunds) 65 71 119 109 188 158 Property and
equipment acquired under capital leases 1,384 920 2,338 1,636 4,710
2,716 Property and equipment acquired under build-to-suit leases
153 237 256 363 813 846
AMAZON.COM,
INC. Consolidated Statements of Operations (in
millions, except per share data) (unaudited)
Three Months Ended Six Months Ended June 30,
June 30, 2015 2014 2015
2014 Net product sales $ 17,104 $ 15,251 $ 34,187 $ 30,956
Net service sales 6,081 4,089 11,714 8,125
Total net sales 23,185 19,340 45,901 39,081 Operating
expenses (1): Cost of sales 15,160 13,399 30,555 27,453 Fulfillment
2,876 2,382 5,634 4,699 Marketing 1,150 943 2,233 1,813 Technology
and content 3,020 2,226 5,774 4,217 General and administrative 467
377 894 704 Other operating expense (income), net 48 28
92 63 Total operating expenses 22,721
19,355 45,182 38,949 Income (loss) from
operations 464 (15 ) 719 132 Interest income 12 11 23 21 Interest
expense (114 ) (45 ) (228 ) (87 ) Other income (expense), net —
22 (131 ) 27 Total non-operating income
(expense) (102 ) (12 ) (336 ) (39 ) Income (loss) before income
taxes 362 (27 ) 383 93 Provision for income taxes (266 ) (94 ) (337
) (167 ) Equity-method investment activity, net of tax (4 ) (5 )
(11 ) 56 Net income (loss) $ 92 $ (126 ) $ 35
$ (18 ) Basic earnings per share $ 0.20 $ (0.27 ) $ 0.07
$ (0.04 ) Diluted earnings per share $ 0.19 $ (0.27 )
$ 0.07 $ (0.04 ) Weighted average shares used in computation
of earnings per share: Basic 467 461 466 460
Diluted 476 461 475 460
_____________ (1) Includes stock-based compensation as follows:
Fulfillment $ 132 $ 104 $ 222 $ 184 Marketing 50 32 84 59
Technology and content 319 206 552 375 General and administrative
62 49 111 93
AMAZON.COM, INC.
Consolidated Statements of Comprehensive Income (Loss)
(in millions) (unaudited) Three Months
Ended Six Months Ended June 30, June 30,
2015 2014 2015 2014 Net
income (loss) $ 92 $ (126 ) $ 35 $ (18 ) Other comprehensive income
(loss): Foreign currency translation adjustments, net of tax of $1,
$0, $0, and $1 128 11 (114 ) 39 Net change in unrealized gains on
available-for-sale securities: Unrealized gains, net of tax of
$(8), $0, $(8), and $(1) 6 3 7 4 Reclassification adjustment for
losses included in “Other income (expense), net,” net of tax of $0,
$0, $(1), and $0 1 (1 ) 1 (1 ) Net unrealized gains
on available-for-sale securities 7 2 8 3
Total other comprehensive income (loss) 135 13
(106 ) 42 Comprehensive income (loss) $ 227 $ (113 )
$ (71 ) $ 24
AMAZON.COM,
INC. Segment Information (in millions)
(unaudited) Three Months Ended Six Months
Ended June 30, June 30, 2015
2014 2015 2014 North America Net
sales $ 13,796 $ 10,994 $ 27,202 $ 21,802 Segment operating
expenses (1) 13,093 10,665 25,982 21,183
Segment operating income $ 703 $ 329 $ 1,220
$ 619
International Net sales $ 7,565 $ 7,341
$ 15,310 $ 15,224 Segment operating expenses (1) 7,584 7,343
15,405 15,259 Segment operating income (loss)
$ (19 ) $ (2 ) $ (95 ) $ (35 )
AWS Net sales $ 1,824 $ 1,005
$ 3,389 $ 2,055 Segment operating expenses (1) 1,433 928
2,734 1,733 Segment operating income $ 391
$ 77 $ 655 $ 322
Consolidated
Net sales $ 23,185 $ 19,340 $ 45,901 $ 39,081 Segment operating
expenses (1) 22,110 18,936 44,121 38,175
Segment operating income 1,075 404 1,780 906 Stock-based
compensation (563 ) (391 ) (969 ) (711 ) Other operating income
(expense), net (48 ) (28 ) (92 ) (63 ) Income (loss) from
operations 464 (15 ) 719 132 Total non-operating income (expense)
(102 ) (12 ) (336 ) (39 ) Provision for income taxes (266 ) (94 )
(337 ) (167 ) Equity-method investment activity, net of tax (4 ) (5
) (11 ) 56 Net income (loss) $ 92 $ (126 ) $ 35
$ (18 )
Segment Highlights: Y/Y net sales growth:
North America 26 % 25 % 25 % 24 % International 3 18 1 18 AWS 81 43
65 55 Consolidated 20 23 17 23 Net sales mix: North America 59 % 57
% 59 % 56 % International 33 38 33 39 AWS 8 5 8
5 Consolidated 100 % 100 % 100 % 100 %
______________________________ (1) Excludes stock-based
compensation and “Other operating expense (income), net,” which are
not allocated to segments.
AMAZON.COM, INC. Supplemental Net Sales Information
(in millions) (unaudited) Three Months
Ended Six Months Ended June 30, June 30,
2015 2014 2015 2014 Net
Sales: North America Media $ 2,620 $ 2,464 $ 5,589 $ 5,289
Electronics and other general merchandise 10,987 8,366 21,237
16,196 Other (1) 189 164 376 317 Total
North America $ 13,796 $ 10,994 $ 27,202 $
21,802 International Media $ 2,094 $ 2,380 $ 4,413 $ 5,022
Electronics and other general merchandise 5,425 4,912 10,804 10,100
Other (1) 46 49 93 102 Total
International $ 7,565 $ 7,341 $ 15,310 $
15,224 Year-over-year Percentage Growth: North
America Media 6 % 13 % 6 % 13 % Electronics and other general
merchandise 31 29 31 28 Other 16 17 19 18 Total North America 26 25
25 24 International Media (12 )% 7 % (12 )% 5 % Electronics and
other general merchandise 10 25 7 26 Other (7 ) 4 (10 ) 8 Total
International 3 18 1 18 Year-over-year Percentage Growth, excluding
the effect of foreign exchange rates: North America Media 7 % 14 %
6 % 13 % Electronics and other general merchandise 32 29 31 29
Other 16 17 19 18 Total North America 26 25 25 24 International
Media 3 % 4 % 2 % 4 % Electronics and other general merchandise 31
20 26 23 Other 8 (1 ) 5 5 Total International 22 14 18 16
______________________________ (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, 2015 December 31,
2014 (unaudited)
ASSETS
Current assets: Cash and cash equivalents $ 10,269 $ 14,557
Marketable securities 3,732 2,859 Inventories 7,470 8,299 Accounts
receivable, net and other 4,920 5,612 Total current
assets 26,391 31,327 Property and equipment, net 19,479 16,967
Goodwill 3,523 3,319 Other assets 3,047 2,892 Total
assets $ 52,440 $ 54,505
LIABILITIES AND
STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 12,391 $ 16,459 Accrued
expenses and other 8,959 9,807 Unearned revenue 2,562 1,823
Total current liabilities 23,912 28,089 Long-term debt 8,250
8,265 Other long-term liabilities 8,510 7,410 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 — 491 and 488 Outstanding shares — 468 and 465 5 5 Treasury
stock, at cost (1,837 ) (1,837 ) Additional paid-in capital 12,233
11,135 Accumulated other comprehensive loss (617 ) (511 ) Retained
earnings 1,984 1,949 Total stockholders’ equity
11,768 10,741 Total liabilities and stockholders’
equity $ 52,440 $ 54,505
AMAZON.COM, INC. Supplemental
Financial Information and Business Metrics (in millions,
except per share data) (unaudited) Y/Y %
Q2 2014 Q3 2014 Q4 2014
Q1 2015 Q2 2015 Change Cash
Flows and Shares Operating cash flow -- trailing twelve months
(TTM) $ 5,327 $ 5,705 $ 6,842 $ 7,845 $ 8,980 69 % Purchases of
property and equipment (incl. internal-use software & website
development) -- TTM $ 4,288 $ 4,628 $ 4,893 $ 4,684 $ 4,607 7 %
Principal repayments of capital lease obligations -- TTM $ 969 $
1,103 $ 1,285 $ 1,537 $ 1,832 89 % Principal repayments of finance
lease obligations -- TTM $ 60 $ 73 $ 135 $ 132 $ 155 162 % Property
and equipment acquired under capital leases -- TTM $ 2,716 $ 3,347
$ 4,008 $ 4,246 $ 4,710 73 % Free cash flow -- TTM (1) $ 1,039 $
1,077 $ 1,949 $ 3,161 $ 4,373 321 % Free cash flow -- TTM Y/Y
growth (decline) 292 % 178 % (4 )% 112 % 321 % N/A Invested capital
(2) $ 17,743 $ 18,715 $ 21,021 $ 23,090 $ 25,289 43 % Return on
invested capital (3) 6 % 6 % 9 % 14 % 17 % N/A Free cash flow less
lease principal repayments -- TTM (4) $ 10 $ (99 ) $ 529 $ 1,492 $
2,386 N/A Free cash flow less finance lease principal repayments
and capital acquired under capital leases -- TTM (5) $ (1,737 ) $
(2,343 ) $ (2,194 ) $ (1,217 ) $ (492 ) (72 )% Common shares and
stock-based awards outstanding 480 481 483 483 488 2 % Common
shares outstanding 462 463 465 466 468 1 % Stock awards outstanding
18 18 18 17 20 16 % Stock awards outstanding -- % of common shares
outstanding 3.9 % 3.9 % 3.8 % 3.8 % 4.4 % N/A
Results of
Operations Worldwide (WW) net sales $ 19,340 $ 20,579 $ 29,328
$ 22,717 $ 23,185 20 % WW net sales -- Y/Y growth, excluding F/X 22
% 20 % 18 % 22 % 27 % N/A WW net sales -- TTM $ 81,759 $ 85,246 $
88,988 $ 91,963 $ 95,808 17 % WW net sales -- TTM Y/Y growth,
excluding F/X 23 % 22 % 20 % 20 % 22 % N/A Operating income (loss)
$ (15 ) $ (544 ) $ 591 $ 255 $ 464 N/A Operating income/loss -- Y/Y
growth (decline), excluding F/X (158 )% N/A 22 % 90 % N/A N/A
Operating margin -- % of WW net sales (0.1 )% (2.6 )% 2.0 % 1.1 %
2.0 % N/A Operating income -- TTM $ 617 $ 97 $ 178 $ 287 $ 765 24 %
Operating income -- TTM Y/Y growth (decline), excluding F/X (11 )%
(94 )% (79 )% (56 )% 35 % N/A Operating margin -- TTM % of WW net
sales 0.8 % 0.1 % 0.2 % 0.3 % 0.8 % N/A Net income (loss) $ (126 )
$ (437 ) $ 214 $ (57 ) $ 92 N/A Net income (loss) per diluted share
$ (0.27 ) $ (0.95 ) $ 0.45 $ (0.12 ) $ 0.19 N/A Net income (loss)
-- TTM $ 181 $ (216 ) $ (241 ) $ (405 ) $ (188 ) (204 )% Net income
(loss) per diluted share -- TTM $ 0.39 $ (0.47 ) $ (0.52 ) $ (0.88
) $ (0.41 ) (203 )% ______________________________ (1) “Free
cash flow” is defined as net cash provided by operating activities
less cash expenditures for purchases of property and equipment,
including internal-use software and website development. (2)
Average Total Assets minus Current Liabilities (excluding current
portion of Long-Term Debt) over five quarter ends. (3) TTM Free
Cash Flow divided by Invested Capital. (4) “Free cash flow less
lease principal repayments” is defined as net cash provided by
operating activities, less (i) purchases of property and equipment,
including internal-use software and website development, (ii)
principal repayments of capital lease obligations, and (iii)
principal repayments of finance lease obligations. Free cash flow
less lease principal repayments approximates the actual payments of
cash for our capital and finance leases. (5) “Free cash flow less
finance lease principal repayments and capital acquired under
capital leases” is defined as net cash provided by operating
activities, less (i) purchases of property and equipment, including
internal-use software and website development, (ii) principal
repayments of finance lease obligations, and (iii) 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 for cash, which is not the case as
these assets have been leased.
AMAZON.COM, INC. Supplemental Financial
Information and Business Metrics (in millions)
(unaudited) Y/Y % Q2 2014 Q3
2014 Q4 2014 Q1 2015 Q2
2015 Change Segments North America
Segment: Net sales $ 10,994 $ 11,699 $ 17,333 $ 13,406 $ 13,796 26
% Net sales -- Y/Y growth, excluding F/X 25 % 23 % 21 % 24 % 26 %
N/A Net sales -- TTM $ 50,834 $ 53,432 $ 56,233 23 % Operating
income (loss) $ 329 $ (60 ) $ 733 $ 517 $ 703 113 % Operating
income/loss -- Y/Y growth, excluding F/X 77 % 111 % N/A Operating
margin -- % of North America net sales 3.0 % (0.5 )% 4.2 % 3.9 %
5.1 % N/A Operating income -- TTM $ 1,292 $ 1,520 $ 1,893 N/A
Operating margin -- TTM % of North America net sales 2.5 % 2.8 %
3.4 % N/A International Segment: Net sales $ 7,341 $ 7,711 $ 10,575
$ 7,745 $ 7,565 3 % Net sales -- Y/Y growth, excluding F/X 14 % 13
% 12 % 14 % 22 % N/A Net sales -- TTM $ 33,510 $ 33,371 $ 33,598 4
% Net sales -- TTM % of WW net sales 38 % 36 % 35 % N/A Operating
income (loss) $ (2 ) $ (174 ) $ 65 $ (76 ) $ (19 ) 734 % Operating
income/loss -- Y/Y growth (decline), excluding F/X N/A N/A N/A
Operating margin -- % of International net sales — % (2.3 )% 0.6 %
(1.0 )% (0.2 )% N/A Operating income (loss) -- TTM $ (144 ) $ (188
) $ (205 ) N/A Operating margin -- TTM % of International net sales
(0.4 )% (0.6 )% (0.6 )% N/A AWS Segment: Net sales $ 1,005 $ 1,169
$ 1,420 $ 1,566 $ 1,824 81 % Net sales -- Y/Y growth, excluding F/X
43 % 43 % 47 % 49 % 81 % N/A Net sales -- TTM 4,644 $ 5,160 $ 5,977
56 % Net sales -- TTM % of WW net sales 5 % 6 % 6 % N/A Operating
income $ 77 $ 98 $ 240 $ 265 $ 391 407 % Operating income -- Y/Y
growth (decline), excluding F/X (13 )% 314 % N/A Operating margin
-- % of AWS net sales 7.7 % 8.4 % 16.9 % 16.9 % 21.4 % N/A
Operating income -- TTM 660 $ 680 $ 993 N/A Operating margin -- TTM
% of AWS net sales 14.2 % 13.2 % 16.6 % N/A Consolidated Segments:
Operating expenses (6) $ 18,936 $ 20,715 $ 28,290 $ 22,011 $ 22,110
17 % Operating expenses -- TTM (6) $ 79,710 $ 83,599 $ 87,180 $
89,951 $ 93,126 17 % Operating income (loss) $ 404 $ (136 ) $ 1,038
$ 706 $ 1,075 166 % Operating income/loss -- Y/Y growth (decline),
excluding F/X (9 )% (151 )% 22 % 45 % 168 % N/A Operating margin --
% of Consolidated net sales 2.1 % (0.7 )% 3.5 % 3.1 % 4.6 % N/A
Operating income -- TTM $ 2,049 $ 1,647 $ 1,808 $ 2,012 $ 2,682 31
% Operating income -- TTM Y/Y growth (decline), excluding F/X 14 %
(12 )% (10 )% (1 )% 34 % N/A Operating margin -- TTM % of
Consolidated net sales 2.5 % 1.9 % 2.0 % 2.2 % 2.8 % N/A
______________________________ (6) Represents cost of sales,
fulfillment, marketing, technology and content, and general and
administrative operating expenses, excluding stock-based
compensation.
AMAZON.COM, INC. Supplemental Financial Information and
Business Metrics (in millions, except inventory turnover,
accounts payable days and employee data) (unaudited)
Y/Y % Q2 2014 Q3 2014
Q4 2014 Q1 2015 Q2 2015
Change Supplemental Supplemental North America
Segment Net Sales: Media $ 2,464 $ 2,734 $ 3,544 $ 2,969 $ 2,620 6
% Media -- Y/Y growth, excluding F/X 14 % 5 % 1 % 5 % 7 % N/A Media
-- TTM $ 11,411 $ 11,536 $ 11,567 $ 11,711 $ 11,867 4 % Electronics
and other general merchandise $ 8,366 $ 8,793 $ 13,529 $ 10,250 $
10,987 31 % Electronics and other general merchandise -- Y/Y
growth, excluding F/X 29 % 31 % 27 % 31 % 32 % N/A Electronics and
other general merchandise -- TTM $ 33,575 $ 35,636 $ 38,517 $
40,938 $ 43,559 30 % Electronics and other general merchandise --
TTM % of North America net sales 74 % 74 % 76 % 77 % 77 % N/A Other
$ 164 $ 172 $ 260 $ 187 $ 189 16 % Supplemental International
Segment Net Sales: Media $ 2,380 $ 2,510 $ 3,406 $ 2,320 $ 2,094
(12 )% Media -- Y/Y growth, excluding F/X 4 % 3 % (1 )% 2 % 3 % N/A
Media -- TTM $ 11,160 $ 11,246 $ 10,938 $ 10,615 $ 10,329 (7 )%
Electronics and other general merchandise $ 4,912 $ 5,160 $ 7,109 $
5,378 $ 5,425 10 % Electronics and other general merchandise -- Y/Y
growth, excluding F/X 20 % 19 % 19 % 21 % 31 % N/A Electronics and
other general merchandise -- TTM $ 20,894 $ 21,737 $ 22,369 $
22,559 $ 23,072 10 % Electronics and other general merchandise --
TTM % of International net sales 65 % 65 % 67 % 68 % 69 % N/A Other
$ 49 $ 41 $ 60 $ 47 $ 46 (7 )%
Balance Sheet Cash and
marketable securities $ 7,986 $ 6,883 $ 17,416 $ 13,781 $ 14,001 75
% Inventory, net -- ending $ 6,644 $ 7,316 $ 8,299 $ 7,369 $ 7,470
12 % Inventory turnover, average -- TTM 9.1 8.9 8.6 8.8 8.9 (2 )%
Property and equipment, net $ 14,089 $ 15,702 $ 16,967 $ 17,736 $
19,479 38 % Accounts payable -- ending $ 10,457 $ 11,811 $ 16,459 $
11,917 $ 12,391 18 % Accounts payable days -- ending 71 74 73 70 74
5 %
Other WW shipping revenue $ 889 $ 1,048 $ 1,701 $ 1,299
$ 1,399 57 % WW shipping costs $ 1,812 $ 2,020 $ 3,049 $ 2,309 $
2,340 29 % WW net shipping costs $ 923 $ 972 $ 1,348 $ 1,010 $ 941
2 % WW net shipping costs -- % of net sales (7) 5.0 % 5.0 % 4.8 %
4.8 % 4.4 % N/A WW paid units -- Y/Y growth 23 % 21 % 20 % 20 % 22
% N/A WW seller unit mix -- % of WW paid units 41 % 42 % 43 % 44 %
45 % N/A Employees (full-time and part-time; excludes contractors
& temporary personnel) 132,600 149,500 154,100 165,000 183,100
38 % ______________________________ (7) Includes North America and
International segment net sales.
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/20150723006558/en/
Amazon.comInvestor Relations:Phil Hardin,
206-266-2171www.amazon.com/irorPublic Relations:Ty Rogers,
206-266-7180www.amazon.com/pr
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