Amazon.com, Inc. (NASDAQ: AMZN) today announced financial
results for its second quarter ended June 30, 2020.
- Operating cash flow increased 42% to $51.2 billion for
the trailing twelve months, compared with $36.0 billion for the
trailing twelve months ended June 30, 2019.
- Free cash flow increased to $31.9 billion for the
trailing twelve months, compared with $25.0 billion for the
trailing twelve months ended June 30, 2019.
- Free cash flow less principal repayments of finance leases
and financing obligations increased to $21.3 billion for the
trailing twelve months, compared with $16.1 billion for the
trailing twelve months ended June 30, 2019.
- Free cash flow less equipment finance leases and principal
repayments of all other finance leases and financing
obligations increased to $19.4 billion for the trailing twelve
months, compared with $13.0 billion for the trailing twelve months
ended June 30, 2019.
- Common shares outstanding plus shares underlying stock-based
awards totaled 517 million on June 30, 2020, compared with 510
million one year ago.
- Net sales increased 40% to $88.9 billion in the second
quarter, compared with $63.4 billion in second quarter 2019.
Excluding the $582 million unfavorable impact from year-over-year
changes in foreign exchange rates throughout the quarter, net sales
increased 41% compared with second quarter 2019.
- Operating income increased to $5.8 billion in the second
quarter, compared with operating income of $3.1 billion in second
quarter 2019.
- Net income increased to $5.2 billion in the second
quarter, or $10.30 per diluted share, compared with net income of
$2.6 billion, or $5.22 per diluted share, in second quarter
2019.
“This was another highly unusual quarter, and I couldn’t be more
proud of and grateful to our employees around the globe,” said Jeff
Bezos, Amazon founder and CEO. “As expected, we spent over $4
billion on incremental COVID-19-related costs in the quarter to
help keep employees safe and deliver products to customers in this
time of high demand—purchasing personal protective equipment,
increasing cleaning of our facilities, following new safety process
paths, adding new backup family care benefits, and paying a special
thank you bonus of over $500 million to front-line employees and
delivery partners. We’ve created over 175,000 new jobs since March
and are in the process of bringing 125,000 of these employees into
regular, full-time positions. And third-party sales again grew
faster this quarter than Amazon’s first-party sales. Lastly, even
in this unpredictable time, we injected significant money into the
economy this quarter, investing over $9 billion in capital
projects, including fulfillment, transportation, and AWS.”
Highlights
Supporting Employees
- Amazon’s top priority is providing for the health and safety of
our employees and partners, and the company spent more than $4
billion in the second quarter on incremental COVID-19 related
initiatives to help keep employees safe, provide additional
compensation to our employees and delivery partners, and deliver
products to customers.
- Amazon provided a one-time Thank You bonus totaling over $500
million to all front-line employees and partners who were with the
company throughout the month of June.
- Amazon introduced a new family backup care benefit through
Care.com to 650,000 full and part-time Amazon and Whole Foods
Market employees in the U.S. This benefit provides employees with
up to 10 days of company-subsidized emergency backup child or adult
care.
- Amazon introduced Distance Assistant to help keep employees
safe by providing them with live feedback on their social
distancing via a 50-inch monitor. Amazon made the software and AI
behind this innovation available via open source so that anyone can
create their own Distance Assistant at no cost and get up and
running with just a monitor, computer, and camera.
- Amazon is collaborating with national medical care group
Crossover Health to pilot Amazon Neighborhood Health Centers, which
are new medical facilities available to Amazon employees and their
families. The centers will provide access to quality, convenient
care while reducing health care costs for employees and Amazon. The
pilot includes 20 Crossover Health branded and operated centers in
Dallas/Fort Worth, Texas; Phoenix, Arizona; Louisville, Kentucky;
Detroit, Michigan; and San Bernardino/Moreno Valley,
California.
Investing in Communities
- Amazon donated more than $10 million of personal protective
equipment, including 4.4 million masks and thousands of contactless
thermometers, to Direct Relief and Feeding America. The masks went
to over 200 of Direct Relief’s partner clinics and Feeding
America’s food banks and agencies in 47 states, the District of
Columbia, and Puerto Rico.
- Amazon Business delivered more than 200 million essential
health and safety products to healthcare and government
organizations in tens of thousands of locations across the
U.S.
- Amazon partnered with food banks and schools to deliver more
than six million meals to underserved families and vulnerable
seniors in 25 U.S. cities and in communities in Australia, Japan,
Singapore, Spain, and the U.K. Amazon plans to deliver one million
more meals by the end of this summer.
- Amazon teamed up with Boys & Girls Clubs of America to
launch Camp Prime, offering families fun, safe, and easy ways to
help kids stay engaged this summer, including a digital handbook
full of camp-themed activities using items from around the house.
Camp Prime is free and available to all, and Prime members can
extend their experience with content from Prime Video, Prime
Reading, and Amazon Music. Amazon also donated $500,000 to Boys
& Girls Clubs to help dozens of Club locations offer kids
summer activities, including filling “curbside camp” kits available
for pickup from Clubs that remain closed.
- Amazon announced a $10 million donation to 12 organizations
that are working to bring about social justice for and improve the
lives of Black and African Americans. In addition, Amazon also
matched 100% of $8.5 million in donations by Amazon employees,
bringing total donations to these organizations from the company
and its employees to $27 million.
- Amazon announced its first ever Amazon Future Engineer Teacher
of the Year Award honoring 10 teachers each with a grant valued at
more than $50,000 to benefit their schools and students. Amazon
also announced its second annual class of Amazon Future Engineer
Scholarship recipients, awarding 100 students each with a $40,000
college scholarship and a guaranteed paid internship at
Amazon.
Protecting the Planet
- Verizon, Infosys, Reckitt Benckiser, and Oak View Group signed
The Climate Pledge, the commitment co-founded by Amazon and Global
Optimism to achieve net-zero carbon by 2040, a decade ahead of the
Paris Agreement.
- Amazon and We Mean Business, a global nonprofit coalition
working with businesses to accelerate the transition to a
zero-carbon economy, announced a partnership to establish the
world’s most comprehensive effort to drive companies to adopt more
ambitious carbon emissions reduction goals. The partnership
encourages companies to accelerate their goals to meet The Climate
Pledge.
- Amazon launched The Climate Pledge Fund with an initial $2
billion in funding to help support visionary companies whose
product and service solutions will facilitate the transition to a
zero carbon economy.
- Amazon announced it is on a path to run on 100% renewable
energy by 2025, five years ahead of schedule. As part of The
Climate Pledge, Amazon had previously committed to reach 80%
renewable energy by 2024 and 100% renewable energy by 2030.
- Amazon Air secured up to six million gallons of sustainable
aviation fuel (SAF) supplied by Shell Aviation and produced by
World Energy. The investment will help increase production of SAF
by demonstrating growing demand for low-carbon aviation fuel. The
fuel is produced from a feedstock of inedible agricultural waste
fats and oils and is expected to reduce carbon emissions by up to
20% compared to conventional jet fuel.
- Amazon secured the naming rights to the new home of Seattle’s
NHL team, Kraken, and WNBA team, Storm, and will name it Climate
Pledge Arena. Opening in summer 2021, Climate Pledge Arena will be
one of the world’s most sustainable arenas. Through a partnership
between Amazon, Oak View Group, and NHL Seattle, the rebuild of
this venue is expected to be the first net zero carbon certified
arena in the world.
- In Germany, Amazon announced the first project in Europe from
Amazon’s $100 million Right Now Climate Fund. The €3.75 million
commitment to The Nature Conservancy will support its work, which
includes increasing species biodiversity in cities.
Empowering Small and Medium-Sized Businesses
- Amazon released its 2020 Small and Medium-Sized Business (SMB)
Impact Report, highlighting how SMBs selling in its U.S. store have
sold more than 3.4 billion products in the past year and created an
estimated 1.1 million jobs.
- In partnership with the British small business support network
“Enterprise Nation,” Amazon launched the Amazon Small Business
Accelerator, which aims to support more than 200,000 small
businesses across the U.K. negatively impacted by the COVID-19
crisis. Amazon hosted a week-long boot camp in the U.K. to help
1,000 offline businesses get online, and offered free services, AWS
credits, training, and support.
- In the U.K., Amazon worked with the British Chambers of
Commerce to give up to 1,000 businesses tours of Amazon fulfillment
centers, helping other companies learn from the safety measures
Amazon has put in place within its own operations so the businesses
can re-open safely and kick-start the economy.
- Amazon in Japan launched Global Selling to allow Japanese
sellers to reach new customers across 16 Amazon sites
worldwide.
- Amazon in India announced plans to help digitally enable micro,
small, and medium businesses across the country as part of a $1
billion investment pledge. Amazon launched Local Shops on
Amazon.in, offering shopkeepers and retailers with physical stores
the ability to register to serve more customers from their local
areas. Since launch, more than 11,000 sellers have enrolled in the
program. In addition, Amazon introduced seller registration and
account management services in Hindi to help businesses overcome
language barriers. Since launch, more than 10,000 sellers have used
Hindi to register on Amazon.in.
Shopping and Entertainment
- Amazon increased grocery delivery capacity by over 160% and
tripled grocery pickup locations to support customers during
COVID-19. Online grocery sales tripled in the second quarter when
compared with the same period last year.
- Amazon continues working closely with the U.S. Department of
Agriculture to expand access to online grocery shopping for people
who rely on Supplemental Nutrition Assistance Program (SNAP)
benefits. Amazon now reaches beneficiaries in 39 states and the
District of Columbia, providing more than 90% of SNAP households
with the ability to use their SNAP benefits online.
- Amazon established the Amazon Counterfeit Crimes Unit, a team
dedicated to bringing counterfeiters who violate the law and
Amazon’s policies by listing counterfeit products in its stores to
justice. Amazon’s Counterfeit Crimes Unit is a global,
multi-disciplinary group composed of former federal prosecutors,
experienced investigators, and data analysts who will join Amazon’s
existing Customer Trust team working to drive counterfeit to
zero.
- Prime Video launched Watch Parties, a feature that enables
Prime members to interact with each other via chat on a desktop
while watching Prime Video content, including award-winning TV
shows and movies.
- Prime Video introduced Prime Video Profiles, allowing customers
to create and manage up to six profiles within a single account.
Each profile offers individualized recommendations, season
progress, and watchlists based on individual profile activity.
- Amazon premiered several Amazon Original series including
Upload, from Emmy-winner Greg Daniels, Homecoming Season 2, Bosch
Season 6, and Regular Heroes, a docuseries focusing on COVID-19
heroes. Additionally, Amazon premiered several Original movies
including Selah and the Spades, The Goldfinch, The Vast of Night,
7500, and the family action-comedy My Spy, along with local Indian
movies Ponmagal Vandhal and Gulabo Sitabo.
Devices and Alexa
- Amazon expanded the portfolio of devices and features that are
available to customers around the world. Echo Auto is now available
in Australia, Canada, France, Germany, Italy, Spain, and the U.K.;
Echo Dot with clock and Echo Studio are now available in Brazil;
eero mesh WiFi systems are now available in Australia and Mexico;
and Alexa Skill Blueprints are now available in France, Italy,
Mexico, and Spain.
- Amazon announced new or expanded Alexa integrations with global
automotive brands including General Motors, Volkswagen, Toyota, and
Lexus.
- Amazon continues to make Alexa smarter and add more ways for
customers to stay connected. Customers can now set reminders that
play across all of their Alexa devices, use new notification
capabilities with Routines, ask Alexa for nutrition tips, receive
Announcements on their mobile phones as a push notification, and
broadcast a response to an Announcement.
- The Alexa Fund is supporting the startup community through
investments in Molekule, a leader in reinventing air purification,
and Amira Learning, the first AI-powered reading assistant. The
Alexa Fund also announced its newest cohort of companies
participating in Alexa Next Stage powered by Techstars, a program
empowering entrepreneurs who are innovating in the field of voice
technology.
- Amazon announced new live content integrations on Fire TV from
YouTube TV and Hulu, and expanded discovery options including the
new Free tab which helps customers find free movies, TV shows, and
more.
- Ring launched its next-generation original Ring Video Doorbell
for improved home security, featuring a higher resolution camera,
improved night vision and additional privacy features. Ring also
announced Ring Alarm is now available in several additional
European countries, including Germany, Norway, and Sweden.
Amazon Web Services
- Customers are using AWS to lessen the impact of the COVID-19
crisis on families, communities, and businesses. Examples include:
- With the support of AWS hosting services, the World Health
Organization (WHO) launched an app to support health workers around
the world in caring for patients with COVID-19, as well as to
protect themselves as they do this critical work.
- Zoom, a provider of enterprise video communications, has long
utilized AWS to host a significant portion of its network. In
addition to offering a robust free service, since March Zoom has
also offered free access to over 100,000 schools to enable them to
educate students remotely. Zoom and AWS have worked together to
help businesses, schools, and healthcare institutions maintain
mission and business continuity as they stay safe at home.
- Propel, a company focused on building software to help
low-income Americans improve their financial health, developed
Fresh Electronic Benefit Transfer (EBT), an app built on AWS that
has helped more than three million individuals per month manage
their benefits under the Supplemental Nutrition Assistance Program
(SNAP), save with coupons, and find jobs.
- UNC Health built a chatbot on AWS to help address increased
call volumes to its COVID-19 help line, answering questions from
patients seeking guidance on COVID-19 testing and what to do if
they or their loved ones were exposed to the virus.
- Orange County United Way built a highly-secure mobile and
web-enabled app on AWS called AssistOC that allows individuals to
submit requests for financial assistance to the nonprofit’s
Homelessness Prevention Program, launched in response to the
current pandemic, via a smartphone or personal computer.
- AWS announced several significant new customer commitments and
migrations during the quarter. Examples include:
- HSBC, one of the world’s largest financial services
organizations, selected AWS as a key, long-term strategic cloud
provider to drive their digital transformation and deliver new and
personalized banking services for millions of personal banking
customers worldwide.
- Global market intelligence company IHS Markit selected AWS as
its preferred cloud provider to help improve scalability and
agility to respond to industry changes and develop new products and
services.
- Formula 1 is using a range of AWS services, including machine
learning, for six new F1 Insights powered by AWS that will roll out
during the 2020 racing season to give fans the ability to compare
their favorite drivers and cars and better predict race
outcomes.
- Bundesliga is using AWS machine learning and analytics to
enhance the fan experience for Germany’s top football league,
delivering new advanced statistics through Bundesliga Match Facts
powered by AWS, including Average Positions and xGoals.
- Capella Space, a provider of on-demand Earth observation data
via satellite-based radar, is all-in on AWS, running its entire
infrastructure on AWS using a full portfolio of cloud services
including AWS Ground Station to deliver satellite data to customers
in minutes.
- Genesys has selected AWS as the preferred cloud provider for
Genesys Cloud, an all-in-one solution and leading public cloud
contact center platform used by organizations around the world to
manage and improve customer relationships across any channel,
including voice, text, web chat, and social.
- AWS announced Amazon Honeycode, a fully-managed service that
allows customers to quickly build powerful mobile and web
applications – with no programming required. With Amazon Honeycode,
customers can create applications using the simplicity and
familiarity of a spreadsheet, but with the data management
capability of a database, the collaboration and notifications
common in business applications, and a truly seamless web and
mobile user experience to perform important business functions like
managing field agents, performing PO approvals, scheduling weekly
events, reporting employee or team activities, tracking task
progress, following customer activity, surveying end users,
managing content, inventorying resources, and more.
- AWS announced the general availability of AWS Snowcone, a
small, ultra-portable, rugged, and secure edge computing and data
transfer device that can fit in a small backpack. At under five
pounds, AWS Snowcone is the smallest member of the AWS Snow Family
of devices, enabling customers to collect data, process it locally,
and move it to AWS. AWS Snowcone is built to withstand harsh
conditions, and is designed for a variety of use cases in
environments outside of the traditional data center that lack
consistent network connectivity and/or require portability.
- AWS announced the general availability of AWS IoT SiteWise, a
managed service that collects data from the plant floor, structures
and labels the data, and generates real-time key performance
indicators (KPIs) and metrics to help industrial customers make
better, data-driven decisions. Customers can use SiteWise to
monitor operations across facilities, quickly compute industrial
performance metrics, create applications that analyze industrial
equipment data to prevent costly equipment issues, and reduce gaps
in production.
- AWS announced the general availability of the sixth generation
of Amazon Elastic Compute Cloud (Amazon EC2) with three Arm-based
instances (M6g, C6g, R6g) powered by AWS-designed, Arm-based
Graviton2 processors, that deliver up to 40% better price and
performance than current x86 processor-based instances.
- AWS announced the general availability of Amazon CodeGuru, a
developer-quality service powered by machine learning that provides
intelligent recommendations for improving code quality and
identifying an application’s most expensive lines of code.
- AWS announced the general availability of UltraWarm for Amazon
Elasticsearch Service, a highly performant, fully-managed, low-cost
warm storage tier that provides fast, interactive analytics of log
data at one-tenth the cost of existing storage options. UltraWarm
for Amazon Elasticsearch Service gives Elasticsearch customers a
warm storage tier that both stores large amounts of data
cost-effectively and provides the type of interactive experience
that Elasticsearch customers expect.
- AWS announced the general availability of Amazon Kendra, a
highly accurate and easy to use enterprise search service powered
by machine learning. Amazon Kendra enables organizations to index
all of their internal data sources across siloes, makes that data
searchable, and allows users to get precise answers to natural
language queries instead of trial-and-error keyword search – all
with no machine learning expertise required.
- AWS and Slack announced a multi-year agreement to deliver
solutions for enhanced enterprise workforce collaboration. Slack
will migrate its Slack Calls capability for all voice and video
calling to Amazon Chime, AWS’s communications service that lets
users meet, chat, and place business calls. Slack is also
leveraging AWS’s global infrastructure to support enterprise
customers’ rapid adoption of its platform and to offer them data
residency – the ability to choose which country or region their
data is stored at rest in while fulfilling compliance
requirements.
- AWS announced a new, global team dedicated to accelerating
innovation in the global aerospace and satellite industry. The
Aerospace and Satellite Solutions team will bring AWS services and
solutions to the space enterprise, and work with customers and
partners around the world to: reimagine space system architectures;
transform space enterprises; launch new services that process space
data on Earth and in orbit; and provide secure, flexible, scalable,
and cost-efficient cloud solutions to support government missions
and companies advancing space around the world.
- AWS announced Amazon Interactive Video Service (Amazon IVS), a
managed service customers may use to set up live, interactive video
streams for web or mobile applications in just a few minutes.
Amazon IVS uses the same technology that powers Twitch and allows
customers to configure live streams that can be delivered to
millions of concurrent viewers globally with interactive features
like virtual chat spaces, votes and polls, moderated question and
answer sessions, and synchronized promotional elements.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s
expectations as of July 30, 2020, 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. This guidance reflects our estimates as of
July 30, 2020 regarding the impact of the COVID-19 pandemic on our
operations, including those discussed above, and is highly
dependent on numerous factors that we may not be able to predict or
control, including: the duration and scope of the pandemic,
including any recurrence; actions taken by governments, businesses,
and individuals in response to the pandemic; the impact of the
pandemic on global and regional economies and economic activity,
workforce staffing and productivity, and our significant and
continuing spending on employee safety measures; our ability to
continue operations in affected areas; and consumer demand and
spending patterns, as well as the effects on suppliers, creditors,
and third-party sellers, all of which are uncertain. This guidance
also assumes the impacts on consumer demand and spending patterns,
including impacts due to concerns over the current economic
outlook, will be in line with those experienced during the third
quarter to date, and the additional assumptions set forth below.
However, it is not possible to determine the ultimate impact on our
operations for the third quarter, or whether other currently
unanticipated direct or indirect consequences of the pandemic are
reasonably likely to materially affect our operations.
Third Quarter 2020 Guidance
- Net sales are expected to be between $87.0 billion and $93.0
billion, or to grow between 24% and 33% compared with third quarter
2019. This guidance anticipates an unfavorable impact of
approximately 20 basis points from foreign exchange rates.
- Operating income is expected to be between $2.0 billion and
$5.0 billion, compared with $3.2 billion in third quarter 2019.
This guidance assumes more than $2.0 billion of costs related to
COVID-19.
- 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
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 claims, litigation, government investigations, and other
proceedings, 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, additional or unforeseen effects
from the COVID-19 pandemic and the global economic climate may give
rise to or amplify 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 June
30,
Six Months Ended June
30,
Twelve Months Ended
June 30,
2019
2020
2019
2020
2019
2020
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH, BEGINNING OF PERIOD
$
23,507
$
27,505
$
32,173
$
36,410
$
20,536
$
22,965
OPERATING ACTIVITIES:
Net income
2,625
5,243
6,186
7,778
12,096
13,180
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization of property
and equipment and capitalized content costs, operating lease
assets, and other
5,202
5,748
10,056
11,110
18,097
22,843
Stock-based compensation
1,971
2,601
3,245
4,358
6,012
7,977
Other operating expense (income), net
80
282
67
348
200
445
Other expense (income), net
(7
)
(769
)
(142
)
(204
)
152
(310
)
Deferred income taxes
105
465
520
787
958
1,063
Changes in operating assets and
liabilities:
Inventories
(2,100
)
(672
)
(1,381
)
720
(3,826
)
(1,176
)
Accounts receivable, net and other
(2,193
)
(2,854
)
(2,594
)
(1,592
)
(6,873
)
(6,680
)
Accounts payable
3,668
8,616
(2,716
)
573
8,060
11,482
Accrued expenses and other
(623
)
1,699
(3,556
)
(1,063
)
(653
)
1,110
Unearned revenue
390
247
1,278
854
1,806
1,286
Net cash provided by (used in) operating
activities
9,118
20,606
10,963
23,669
36,029
51,220
INVESTING ACTIVITIES:
Purchases of property and equipment
(3,562
)
(7,459
)
(6,852
)
(14,254
)
(13,938
)
(24,263
)
Proceeds from property and equipment sales
and incentives
919
844
1,488
2,212
2,927
4,895
Acquisitions, net of cash acquired, and
other
(117
)
(118
)
(1,285
)
(210
)
(2,592
)
(1,385
)
Sales and maturities of marketable
securities
5,161
8,138
7,804
19,764
11,706
34,641
Purchases of marketable securities
(9,950
)
(19,209
)
(16,827
)
(34,210
)
(22,919
)
(49,196
)
Net cash provided by (used in) investing
activities
(7,549
)
(17,804
)
(15,672
)
(26,698
)
(24,816
)
(35,308
)
FINANCING ACTIVITIES:
Proceeds from short-term debt, and
other
222
2,433
307
3,050
972
4,145
Repayments of short-term debt, and
other
(73
)
(1,906
)
(363
)
(2,537
)
(958
)
(3,693
)
Proceeds from long-term debt
61
9,918
166
9,994
347
10,699
Repayments of long-term debt
(39
)
(205
)
(101
)
(241
)
(122
)
(1,305
)
Principal repayments of finance leases
(2,327
)
(2,817
)
(4,541
)
(5,417
)
(8,693
)
(10,504
)
Principal repayments of financing
obligations
(2
)
(15
)
(3
)
(32
)
(211
)
(56
)
Net cash provided by (used in) financing
activities
(2,158
)
7,408
(4,535
)
4,817
(8,665
)
(714
)
Foreign currency effect on cash, cash
equivalents, and restricted cash
47
127
36
(356
)
(119
)
(321
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(542
)
10,337
(9,208
)
1,432
2,429
14,877
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH, END OF PERIOD
$
22,965
$
37,842
$
22,965
$
37,842
$
22,965
$
37,842
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt
$
147
$
139
$
433
$
430
$
837
$
872
Cash paid for operating leases
838
1,086
1,547
2,115
1,547
3,929
Cash paid for interest on finance
leases
150
161
315
329
536
662
Cash paid for interest on financing
obligations
4
21
5
43
105
77
Cash paid for income taxes, net of
refunds
283
486
451
791
822
1,221
Assets acquired under operating leases
2,220
3,347
3,094
5,755
3,094
10,530
Property and equipment acquired under
finance leases
3,307
3,155
5,935
5,321
11,944
13,110
Property and equipment acquired under
build-to-suit arrangements
283
482
719
861
2,825
1,504
AMAZON.COM, INC.
Consolidated Statements of
Operations
(in millions, except per share
data)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2020
2019
2020
Net product sales
$
35,856
$
50,244
$
70,139
$
92,085
Net service sales
27,548
38,668
52,965
72,279
Total net sales
63,404
88,912
123,104
164,364
Operating expenses:
Cost of sales
36,337
52,660
70,257
96,917
Fulfillment
9,271
13,806
17,872
25,337
Technology and content
9,065
10,388
16,991
19,713
Marketing
4,291
4,345
7,955
9,173
General and administrative
1,270
1,580
2,444
3,032
Other operating expense (income), net
86
290
81
360
Total operating expenses
60,320
83,069
115,600
154,532
Operating income
3,084
5,843
7,504
9,832
Interest income
215
135
398
337
Interest expense
(383
)
(403
)
(749
)
(805
)
Other income (expense), net
(27
)
646
138
240
Total non-operating income (expense)
(195
)
378
(213
)
(228
)
Income before income taxes
2,889
6,221
7,291
9,604
Provision for income taxes
(257
)
(984
)
(1,094
)
(1,729
)
Equity-method investment activity, net of
tax
(7
)
6
(11
)
(97
)
Net income
$
2,625
$
5,243
$
6,186
$
7,778
Basic earnings per share
$
5.32
$
10.50
$
12.57
$
15.59
Diluted earnings per share
$
5.22
$
10.30
$
12.31
$
15.32
Weighted-average shares used in
computation of earnings per share:
Basic
493
500
492
499
Diluted
503
509
503
508
AMAZON.COM, INC.
Consolidated Statements of
Comprehensive Income
(in millions)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2020
2019
2020
Net income
$
2,625
$
5,243
$
6,186
$
7,778
Other comprehensive income (loss):
Foreign currency translation adjustments,
net of tax of $(6), $(8), $(8) and $13
7
207
(1
)
(668
)
Net change in unrealized gains (losses) on
available-for-sale debt securities:
Unrealized gains (losses), net of tax of
$(11), $(73), $(11) and $(61)
44
407
76
205
Reclassification adjustment for losses
(gains) included in “Other income (expense), net,” net of tax of
$0, $0, $0 and $0
(1
)
(6
)
—
(6
)
Net unrealized gains (losses) on
available-for-sale debt securities
43
401
76
199
Total other comprehensive income
(loss)
50
608
75
(469
)
Comprehensive income
$
2,675
$
5,851
$
6,261
$
7,309
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2020
2019
2020
North America
Net sales
$
38,653
$
55,436
$
74,465
$
101,563
Operating expenses
37,089
53,295
70,614
98,111
Operating income
$
1,564
$
2,141
$
3,851
$
3,452
International
Net sales
$
16,370
$
22,668
$
32,563
$
41,774
Operating expenses
16,971
22,323
33,253
41,826
Operating income (loss)
$
(601
)
$
345
$
(690
)
$
(52
)
AWS
Net sales
$
8,381
$
10,808
$
16,076
$
21,027
Operating expenses
6,260
7,451
11,733
14,595
Operating income
$
2,121
$
3,357
$
4,343
$
6,432
Consolidated
Net sales
$
63,404
$
88,912
$
123,104
$
164,364
Operating expenses
60,320
83,069
115,600
154,532
Operating income
3,084
5,843
7,504
9,832
Total non-operating income (expense)
(195
)
378
(213
)
(228
)
Provision for income taxes
(257
)
(984
)
(1,094
)
(1,729
)
Equity-method investment activity, net of
tax
(7
)
6
(11
)
(97
)
Net income
$
2,625
$
5,243
$
6,186
$
7,778
Segment Highlights:
Y/Y net sales growth:
North America
20
%
43
%
18
%
36
%
International
12
38
10
28
AWS
37
29
39
31
Consolidated
20
40
18
34
Net sales mix:
North America
61
%
62
%
61
%
62
%
International
26
26
26
25
AWS
13
12
13
13
Consolidated
100
%
100
%
100
%
100
%
AMAZON.COM, INC.
Consolidated Balance
Sheets
(in millions, except per share
data)
December 31, 2019
June 30, 2020
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
36,092
$
37,466
Marketable securities
18,929
33,925
Inventories
20,497
19,599
Accounts receivable, net and other
20,816
19,918
Total current assets
96,334
110,908
Property and equipment, net
72,705
86,517
Operating leases
25,141
28,537
Goodwill
14,754
14,751
Other assets
16,314
17,601
Total assets
$
225,248
$
258,314
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
47,183
$
51,036
Accrued expenses and other
32,439
33,863
Unearned revenue
8,190
8,997
Total current liabilities
87,812
93,896
Long-term lease liabilities
39,791
42,798
Long-term debt
23,414
33,128
Other long-term liabilities
12,171
14,764
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 — 521 and 524
Outstanding shares — 498 and 501
5
5
Treasury stock, at cost
(1,837
)
(1,837
)
Additional paid-in capital
33,658
38,017
Accumulated other comprehensive income
(loss)
(986
)
(1,455
)
Retained earnings
31,220
38,998
Total stockholders’ equity
62,060
73,728
Total liabilities and stockholders’
equity
$
225,248
$
258,314
AMAZON.COM, INC.
Supplemental Financial
Information and Business Metrics
(in millions, except per share
data)
(unaudited)
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Y/Y % Change
Cash Flows and Shares
Operating cash flow -- trailing twelve
months (TTM)
$
34,360
$
36,029
$
35,332
$
38,514
$
39,732
$
51,220
42
%
Operating cash flow -- TTM Y/Y growth
89
%
65
%
33
%
25
%
16
%
42
%
N/A
Purchases of property and equipment, net
of proceeds from sales and incentives -- TTM
$
11,316
$
11,011
$
11,868
$
12,689
$
15,395
$
19,368
76
%
Principal repayments of finance leases --
TTM (1)
$
7,649
$
8,693
$
8,754
$
9,628
$
10,013
$
10,504
21
%
Principal repayments of financing
obligations -- TTM (1)
$
266
$
211
$
129
$
27
$
43
$
56
(73
)%
Equipment acquired under finance leases --
TTM (1) (2)
$
10,909
$
11,656
$
12,580
$
12,916
$
12,209
$
11,952
3
%
Principal repayments of all other finance
leases -- TTM (1) (3)
$
76
$
176
$
302
$
392
$
407
$
415
136
%
Free cash flow -- TTM (4)
$
23,044
$
25,018
$
23,464
$
25,825
$
24,337
$
31,852
27
%
Free cash flow less principal repayments
of finance leases and financing obligations -- TTM (1) (5)
$
15,129
$
16,114
$
14,581
$
16,170
$
14,281
$
21,292
32
%
Free cash flow less equipment finance
leases and principal repayments of all other finance leases and
financing obligations -- TTM (1) (6)
$
11,793
$
12,975
$
10,453
$
12,490
$
11,678
$
19,429
50
%
Common shares and stock-based awards
outstanding
507
510
511
512
513
517
1
%
Common shares outstanding
492
494
495
498
499
501
1
%
Stock-based awards outstanding
15
16
16
14
14
16
—
%
Stock-based awards outstanding -- % of
common shares outstanding
3.0
%
3.3
%
3.2
%
2.9
%
2.8
%
3.2
%
N/A
Results of Operations
Worldwide (WW) net sales
$
59,700
$
63,404
$
69,981
$
87,437
$
75,452
$
88,912
40
%
WW net sales -- Y/Y growth, excluding
F/X
19
%
21
%
25
%
21
%
27
%
41
%
N/A
WW net sales -- TTM
$
241,546
$
252,064
$
265,469
$
280,522
$
296,274
$
321,782
28
%
WW net sales -- TTM Y/Y growth, excluding
F/X
26
%
23
%
22
%
22
%
23
%
28
%
N/A
Operating income
$
4,420
$
3,084
$
3,157
$
3,879
$
3,989
$
5,843
89
%
F/X impact -- favorable (unfavorable)
$
84
$
58
$
22
$
16
$
63
$
111
N/A
Operating income -- Y/Y growth (decline),
excluding F/X
125
%
1
%
(16
)%
2
%
(11
)%
86
%
N/A
Operating margin -- % of WW net sales
7.4
%
4.9
%
4.5
%
4.4
%
5.3
%
6.6
%
N/A
Operating income -- TTM
$
14,914
$
15,014
$
14,448
$
14,541
$
14,109
$
16,868
12
%
Operating income -- TTM Y/Y growth
(decline), excluding F/X
190
%
99
%
32
%
16
%
(6
)%
11
%
N/A
Operating margin -- TTM % of WW net
sales
6.2
%
6.0
%
5.4
%
5.2
%
4.8
%
5.2
%
N/A
Net income
$
3,561
$
2,625
$
2,134
$
3,268
$
2,535
$
5,243
100
%
Net income per diluted share
$
7.09
$
5.22
$
4.23
$
6.47
$
5.01
$
10.30
97
%
Net income -- TTM
$
12,005
$
12,096
$
11,347
$
11,588
$
10,563
$
13,180
9
%
Net income per diluted share -- TTM
$
23.96
$
24.08
$
22.57
$
23.01
$
20.93
$
26.04
8
%
______________________________
(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 June 30, 2019
and 2020, this amount relates to equipment included in “Property
and equipment acquired under finance leases” of $11,944 million and
$13,110 million.
(3)
For the twelve months ended June 30, 2019
and 2020, this amount relates to property included in “Principal
repayments of finance leases” of $8,693 million and $10,504
million.
(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)
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Y/Y % Change
Segments
North America Segment:
Net sales
$
35,812
$
38,653
$
42,638
$
53,670
$
46,127
$
55,436
43
%
Net sales -- Y/Y growth, excluding F/X
17
%
20
%
24
%
22
%
29
%
44
%
N/A
Net sales -- TTM
$
146,453
$
152,938
$
161,228
$
170,773
$
181,088
$
197,871
29
%
Operating income
$
2,287
$
1,564
$
1,282
$
1,900
$
1,312
$
2,141
37
%
F/X impact -- favorable (unfavorable)
$
13
$
7
$
6
$
(3
)
$
5
$
(4
)
N/A
Operating income -- Y/Y growth (decline),
excluding F/X
98
%
(15
)%
(37
)%
(16
)%
(43
)%
37
%
N/A
Operating margin -- % of North America net
sales
6.4
%
4.0
%
3.0
%
3.5
%
2.8
%
3.9
%
N/A
Operating income -- TTM
$
8,405
$
8,134
$
7,384
$
7,033
$
6,057
$
6,634
(18
)%
Operating margin -- TTM % of North America
net sales
5.7
%
5.3
%
4.6
%
4.1
%
3.4
%
3.4
%
N/A
International Segment:
Net sales
$
16,192
$
16,370
$
18,348
$
23,813
$
19,106
$
22,668
38
%
Net sales -- Y/Y growth, excluding F/X
16
%
17
%
21
%
15
%
20
%
41
%
N/A
Net sales -- TTM
$
67,184
$
68,941
$
71,740
$
74,723
$
77,637
$
83,935
22
%
Operating income (loss)
$
(90
)
$
(601
)
$
(386
)
$
(617
)
$
(398
)
$
345
N/A
F/X impact -- favorable (unfavorable)
$
(39
)
$
(36
)
$
(34
)
$
(7
)
$
(5
)
$
32
N/A
Operating income/loss -- Y/Y growth
(decline), excluding F/X
(92
)%
15
%
(8
)%
(5
)%
338
%
N/A
N/A
Operating margin -- % of International net
sales
(1.0
)%
(3.7
)%
(2.1
)%
(2.6
)%
(2.1
)%
1.5
%
N/A
Operating income (loss) -- TTM
$
(1,610
)
$
(1,718
)
$
(1,718
)
$
(1,693
)
$
(2,001
)
$
(1,055
)
(39
)%
Operating margin -- TTM % of International
net sales
(2.4
)%
(2.5
)%
(2.4
)%
(2.3
)%
(2.6
)%
(1.3
)%
N/A
AWS Segment:
Net sales
$
7,696
$
8,381
$
8,995
$
9,954
$
10,219
$
10,808
29
%
Net sales -- Y/Y growth, excluding F/X
42
%
37
%
35
%
34
%
33
%
29
%
N/A
Net sales -- TTM
$
27,909
$
30,185
$
32,501
$
35,026
$
37,549
$
39,976
32
%
Operating income
$
2,223
$
2,121
$
2,261
$
2,596
$
3,075
$
3,357
58
%
F/X impact -- favorable (unfavorable)
$
110
$
87
$
50
$
26
$
63
$
83
N/A
Operating income -- Y/Y growth, excluding
F/X
51
%
24
%
6
%
18
%
36
%
54
%
N/A
Operating margin -- % of AWS net sales
28.9
%
25.3
%
25.1
%
26.1
%
30.1
%
31.1
%
N/A
Operating income -- TTM
$
8,119
$
8,598
$
8,782
$
9,201
$
10,053
$
11,289
31
%
Operating margin -- TTM % of AWS net
sales
29.1
%
28.5
%
27.0
%
26.3
%
26.8
%
28.2
%
N/A
AMAZON.COM, INC.
Supplemental Financial
Information and Business Metrics
(in millions, except employee
data)
(unaudited)
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Y/Y % Change
Net Sales
Online stores (1)
$
29,498
$
31,053
$
35,039
$
45,657
$
36,652
$
45,896
48
%
Online stores -- Y/Y growth, excluding
F/X
12
%
16
%
22
%
15
%
25
%
49
%
N/A
Physical stores (2)
$
4,307
$
4,330
$
4,192
$
4,363
$
4,640
$
3,774
(13
)%
Physical stores -- Y/Y growth, excluding
F/X
1
%
1
%
(1
)%
(1
)%
8
%
(13
)%
N/A
Third-party seller services (3)
$
11,141
$
11,962
$
13,212
$
17,446
$
14,479
$
18,195
52
%
Third-party seller services -- Y/Y growth,
excluding F/X
23
%
25
%
28
%
31
%
31
%
53
%
N/A
Subscription services (4)
$
4,342
$
4,676
$
4,957
$
5,235
$
5,556
$
6,018
29
%
Subscription services -- Y/Y growth,
excluding F/X
42
%
39
%
35
%
32
%
29
%
30
%
N/A
AWS
$
7,696
$
8,381
$
8,995
$
9,954
$
10,219
$
10,808
29
%
AWS -- Y/Y growth, excluding F/X
42
%
37
%
35
%
34
%
33
%
29
%
N/A
Other (5)
$
2,716
$
3,002
$
3,586
$
4,782
$
3,906
$
4,221
41
%
Other -- Y/Y growth, excluding F/X
36
%
37
%
45
%
41
%
44
%
41
%
N/A
Stock-based Compensation
Expense
Cost of sales
$
24
$
43
$
39
$
43
$
41
$
76
79
%
Fulfillment
$
234
$
360
$
301
$
286
$
260
$
417
16
%
Technology and content
$
675
$
1,077
$
966
$
1,007
$
961
$
1,421
32
%
Marketing
$
209
$
307
$
298
$
322
$
332
$
456
49
%
General and administrative
$
132
$
184
$
175
$
182
$
163
$
231
25
%
Total stock-based compensation expense
$
1,274
$
1,971
$
1,779
$
1,840
$
1,757
$
2,601
32
%
Other
WW shipping costs
$
7,320
$
8,134
$
9,608
$
12,884
$
10,936
$
13,652
68
%
WW shipping costs -- Y/Y growth
21
%
36
%
46
%
43
%
49
%
68
%
N/A
WW paid units -- Y/Y growth (6)
10
%
18
%
22
%
22
%
32
%
57
%
N/A
WW seller unit mix -- % of WW paid units
(6)
53
%
54
%
53
%
53
%
52
%
53
%
N/A
Employees (full-time and part-time;
excludes contractors & temporary personnel)
630,600
653,300
750,000
798,000
840,400
876,800
34
%
Employees (full-time and part-time;
excludes contractors & temporary personnel) -- Y/Y growth
12
%
13
%
22
%
23
%
33
%
34
%
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, digital music, e-book, and other non-AWS
subscription services.
(5)
Primarily includes sales of advertising
services, as well as sales related to our other service
offerings.
(6)
Excludes the impact of Whole Foods
Market.
Amazon.com, Inc. Certain Definitions
Customer Accounts
- References to customers mean customer accounts established when
a customer places an order through one of our stores. 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 customer account IDs that are eligible to use AWS
services. This includes AWS accounts in the AWS free tier. Multiple
users accessing AWS services via one account ID 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 in our stores as
well as Amazon-owned items sold in other stores. Units sold are
paid units and do not include units associated with AWS, certain
acquisitions, certain subscriptions, rental businesses, or
advertising businesses, or Amazon gift cards.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200730006021/en/
Amazon Investor Relations Dave Fildes, amazon-ir@amazon.com
amazon.com/ir
Amazon Public Relations Dan Perlet, amazon-pr@amazon.com
amazon.com/pr
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