Amazon.com 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.
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.
[table style=”table-striped”]
| 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 | ||||||||||||||||||||
[/table]
[table style=”table-striped”]
| 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 | |||||||||||||
[/table]
[table style=”table-striped”]
| 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 | |||||||
[/table]
[table style=”table-striped”]
| 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 | % | |||||||||
[/table]
[table style=”table-striped”]
| ______________________________ |
| (1) Excludes stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments. |
[/table]
[table style=”table-striped”]
| 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 | |||||||||||||
[/table]
[table style=”table-striped”]
| ______________________________ |
| (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 | )% | |||||||
[/table]
[table style=”table-striped”]
| ______________________________ | ||
| (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. | |
[/table]
[table style=”table-striped”]
| 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 | ||||||||||||
[/table]
[table style=”table-striped”]
| ______________________________ |
| (6) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation. |
[/table]
[table style=”table-striped”]
| 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 | % | ||||||||||||||||
[/table]
[table style=”table-striped”]
| ______________________________ |
| (7) Includes North America and International segment net sales. |
[/table]
