AMZN
$828.72
Amazon.Com
$12.61
1.55%
Earnings Details
2nd Quarter June 2016
Thursday, July 28, 2016 4:01:04 PM
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Summary

Amazon.Com Beats

Amazon.Com (AMZN) reported 2nd Quarter June 2016 earnings of $1.78 per share on revenue of $30.4 billion. The consensus earnings estimate was $1.14 per share on revenue of $29.5 billion. The Earnings Whisper number was $1.31 per share. Revenue grew 31.1% on a year-over-year basis.

The company said it expects third quarter revenue of $31.0 billion to $33.5 billion. The current consensus revenue estimate is $31.61 billion for the quarter ending September 30, 2016.

Amazon.com Inc is an online retailer. The Company sells its products through the website which provides services, such as advertising services and co-branded credit card agreements. It also offers electronic devices like Kindle e-readers and Fire tablets.

Results
Reported Earnings
$1.78
Earnings Whisper
$1.31
Consensus Estimate
$1.14
Reported Revenue
$30.40 Bil
Revenue Estimate
$29.54 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Amazon.com Announces Second Quarter Sales up 31% to $30.4 Billion

Amazon.com, Inc. (AMZN) today announced financial results for its second quarter ended June 30, 2016.

Operating cash flow increased 42% to $12.7 billion for the trailing twelve months, compared with $9.0 billion for the trailing twelve months ended June 30, 2015. Free cash flow increased to $7.3 billion for the trailing twelve months, compared with $4.4 billion for the trailing twelve months ended June 30, 2015. Free cash flow less lease principal repayments increased to $3.9 billion for the trailing twelve months, compared with $2.4 billion for the trailing twelve months ended June 30, 2015. Free cash flow less finance lease principal repayments and assets acquired under capital leases increased to $2.5 billion for the trailing twelve months, compared with an outflow of $492 million for the trailing twelve months ended June 30, 2015.

Common shares outstanding plus shares underlying stock-based awards totaled 495 million on June 30, 2016, compared with 488 million one year ago.

Net sales increased 31% to $30.4 billion in the second quarter, compared with $23.2 billion in second quarter 2015. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on net sales was $166 million.

Operating income was $1.3 billion in the second quarter, compared with $464 million in second quarter 2015.

Net income was $857 million in the second quarter, or $1.78 per diluted share, compared with $92 million, or $0.19 per diluted share, in second quarter 2015.

"It’s been a busy few months for Amazon around the world, and particularly in India -- where we launched a new AWS Region, introduced Prime with unlimited free shipping, and announced that Prime Video is coming soon, offering Prime members in India exclusive access to Amazon Original Series and Movies -- including original content featuring top Indian creators and talent," said Jeff Bezos, founder and CEO of Amazon.com. "The team in India is inventing at a torrid pace, and we’re very grateful to our Indian customers for their welcoming response."

Highlights

The second annual Prime Day was the biggest day ever for Amazon, and was also a record day for Amazon devices globally. Compared to Prime Day 2015, worldwide orders grew by more than 60%, orders from third-party sellers with Prime Day deals nearly tripled, and Prime members saved over twice as much on deals.

Amazon launched Prime in India. With Prime, Indian customers in over 100 cities can enjoy unlimited free one-day and two-day delivery on hundreds of thousands of eligible products from India’s largest online shopping selection. Sellers using Fulfillment by Amazon now automatically provide customers with unlimited fast, free delivery. Prime Video is coming, offering Prime members exclusive access to Amazon Original Series and Movies, and premium movies and TV shows from Indian and global content providers.

Fire TV, the #1 best-selling streaming media player in the U.S., continues to add new features, including expanded Alexa integration that enables customers to ask Alexa to play TV shows and movies, music, launch apps, and more.

Amazon now has over 1,900 third party skills for Alexa, including new skills from Kayak, Lyft, NBC, Honeywell, and more.

Amazon introduced the all-new $79.99 Kindle, which is thinner and lighter compared to the previous generation Kindle at the same price, and includes built-in Bluetooth audio support and the VoiceView screen reader that enables visually impaired users to read books without an adapter.

Amazon Dash Button added 50 new brands to the program, which now has over 150 buttons including Campbell’s Soup, Cascade, FIJI Water, Pepperidge Farm Goldfish Crackers, and Play-Doh.

Amazon introduced exclusive offers on unlocked Android phones for Prime members: the all-new BLU R1 HD for $49.99 and the all-new Moto G4 for $149.99, both $50 off retail price.

Amazon Studios received 16 Emmy nominations for Original Series Transparent, The Man in the High Castle, Mozart in the Jungle, and Catastrophe. For the second year in a row, Transparent was nominated for Outstanding Comedy Series and Outstanding Lead Actor in a Comedy Series (Jeffrey Tambor).

Amazon Studios is in production on a slate of Original Series that will premiere exclusively for Prime members this fall, including new seasons of Golden Globe and Emmy award-winning Transparent, Golden Globe-winning Mozart in the Jungle, the second season of the critically-acclaimed drama The Man in the High Castle, the first seasons of Good Girls Revolt, Goliath, and Woody Allen’s first-ever TV series, and the new series from Jeremy Clarkson, Richard Hammond, and James May, The Grand Tour.

Amazon Original Kids Series Tumble Leaf and Niko and the Sword of Light won a combined four Daytime Emmy Awards.

Amazon Studios will release several critically-acclaimed films in theaters this fall, including Manchester by the Sea, The Handmaiden, and Gleason, joining Woody Allen’s recently released Cafe Society now in theaters. Each film will be available exclusively to Prime members through Prime Video following its theatrical release.

Amazon launched Amazon Video Direct, a new self-service program for creators to make their video content available to Amazon customers through many distribution options, including Prime Video, one-time purchase, rental, or ad-supported viewing.

Amazon Business now serves more than 400,000 businesses and generated more than $1 billion in sales in its first year. Amazon Business has more than 30,000 third-party sellers who fulfill over half of Amazon Business orders.

Amazon Prime Air and the U.K. government announced a partnership to advance the safe use of drones for small parcel delivery, providing Amazon with permission to trial new methods, including beyond line-of-sight operation.

Amazon launched the Pan-European Fulfillment Program, a service that helps sellers of all sizes more efficiently export their products to millions of Amazon customers across Europe while allowing customers to benefit from faster delivery and lower shipping costs.

AmazonFresh launched in London, the first international location to provide this offering. In the U.S., AmazonFresh launched in Boston, joining northern and southern California, northern New Jersey, Baltimore, New York, Philadelphia, and Seattle.

Since launching in Mexico one year ago, Amazon has expanded unique selection to over 50 million items and added categories including Toys & Games, Office Supplies, and Amazon Fashion.

Amazon.in was the most visited e-commerce site and the most downloaded mobile shopping app in India in the second quarter, according to third-party reports.

Amazon Marketplace announced the inaugural Women’s Entrepreneur Conference, which will be held in August in Seattle. The full-day event will bring together over 300 women entrepreneurs and business owners from around the world to network and learn from experts on how to grow, lead, and scale a business on Amazon.

Amazon announced that Career Choice, the program that pre-pays 95% of tuition and books for courses that teach in-demand skills, began to open-source its program roadmap and lessons learned with other companies. Since launching four years ago, over 7,000 Amazon associates across ten countries have participated in Career Choice.

Amazon Web Services (AWS) announced that Salesforce selected AWS as its preferred public cloud infrastructure provider. For the first time, Salesforce will expand use of AWS to Salesforce’s core services -- including Sales Cloud, Service Cloud, App Cloud, Community Cloud, Analytics Cloud and more -- for the company’s planned international infrastructure expansion.

AWS announced the industry’s first fully-managed, cloud-based file system, Amazon Elastic File System (Amazon EFS). Amazon EFS is a new service that makes it easy to set up and scale file storage in the AWS Cloud, allowing customers to create petabyte scale file systems with gigabytes of throughput that are accessible to multiple Amazon EC2 instances and can support thousands of concurrent client connections with consistent performance.

AWS launched its Asia Pacific (Mumbai) Region, the sixth AWS Region in Asia Pacific. With this launch, AWS provides 35 Availability Zones across 13 technology infrastructure regions globally.

AWS announced the availability of X1 instances, a new Memory Optimized instance for Amazon EC2. X1 instances have 2 TB of memory -- the most memory available in any cloud instance offered today by any cloud provider. Powered by the latest Intel processors and certified by SAP, X1 instances are ideal for running in-memory databases like SAP HANA, big data processing engines like Apache Spark or Presto, and high performance computing (HPC) workloads.

AWS also announced that SAP business-critical applications are gaining momentum on AWS as customers including GE Oil & Gas, Kellogg’s, Brooks Brothers, Ferrara Candy Company, GPT Group, Hoya Corporation, Lionsgate, Macmillan Publishers India, RWE Czech Republic, and Bart & Associates Inc., are running SAP on AWS.

AWS achieved the new FedRAMP High compliance certification, giving U.S. government agencies the ability to use the AWS Cloud for highly sensitive applications and workloads like patient records, financial data, and law enforcement data.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of July 28, 2016, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below.

Third Quarter 2016 Guidance

Net sales are expected to be between $31.0 billion and $33.5 billion, or to grow between 22% and 32% compared with third quarter 2015.

Operating income is expected to be between $50 million and $650 million, compared with $406 million in third quarter 2015.

This guidance assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded.

A conference call will be webcast live today at 2:30 p.m. PT/5:30 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains, and develops commercial agreements, acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services, and technologies, system interruptions, government regulation and taxation, and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission ("SEC"), including its most recent Annual Report on Form 10-K and subsequent filings.

Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings, which may contain material information about us, and you may subscribe to be notified of new information posted to this site.

About Amazon

Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit www.amazon.com/about.

AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
Twelve Months Ended
June 30,
June 30,
June 30,
2016
2015
2016
2015
2016
2015
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$ 12,470
$ 10,237
$ 15,890
$ 14,557
$ 10,269
$
5,057
OPERATING ACTIVITIES:
Net income (loss)
857
92
1,370
35
1,931
(188 )
Adjustments to reconcile net income (loss) to net cash from
operating activities:
Depreciation of property and equipment, including internal-use
1,909
1,504
3,736
2,930
7,087
5,557
software and website development, and other amortization, including
capitalized content costs
Stock-based compensation
768
563
1,312
969
2,461
1,755
Other operating expense (income), net
53
42
97
87
166
153
Losses (gains) on sales of marketable securities, net
1
1
3
2
6
(1 )
Other expense (income), net
31
18
(21 )
109
115
229
Deferred income taxes
106
(43 )
117
(45 )
243
(130 )
Excess tax benefits from stock-based compensation
(113 )
(95 )
(320 )
(117 )
(323 )
(1 )
Changes in operating assets and liabilities:
Inventories
(57 )
(27 )
712
693
(2,167 )
(1,291 )
Accounts receivable, net and other
(1,184 )
(430 )
(772 )
11
(2,538 )
(1,456 )
Accounts payable
977
373
(4,793 )
(3,876 )
3,377
2,901
Accrued expenses and other
(15 )
(129 )
(972 )
(1,068 )
1,007
387
Additions to unearned revenue
2,340
1,397
5,154
3,200
9,355
5,647
Amortization of previously unearned revenue
(2,208 )
(1,269 )
(4,318 )
(2,432 )
(7,994 )
(4,582 )
Net cash provided by (used in) operating activities
3,465
1,997
1,305
498
12,726
8,980
INVESTING ACTIVITIES:
Purchases of property and equipment, including internal-use software
(1,711 )
(1,213 )
(2,890 )
(2,084 )
(5,395 )
(4,607 )
and website development, net
Acquisitions, net of cash acquired, and other
(14 )
(8 )
(30 )
(374 )
(452 )
(1,287 )
Sales and maturities of marketable securities
931
470
2,069
845
4,249
2,639
Purchases of marketable securities
(1,645 )
(625 )
(2,281 )
(1,610 )
(4,762 )
(3,379 )
Net cash provided by (used in) investing activities
(2,439 )
(1,376 )
(3,132 )
(3,223 )
(6,360 )
(6,634 )
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation
113
95
320
117
323
1
Proceeds from long-term debt and other
66
44
75
226
202
6,236
Repayments of long-term debt and other
(70 )
(215 )
(245 )
(531 )
(1,366 )
(797 )
Principal repayments of capital lease obligations
(1,116 )
(580 )
(1,917 )
(1,082 )
(3,298 )
(1,832 )
Principal repayments of finance lease obligations
(32 )
(35 )
(61 )
(74 )
(108 )
(155 )
Net cash provided by (used in) financing activities
(1,039 )
(691 )
(1,828 )
(1,344 )
(4,247 )
3,453
Foreign currency effect on cash and cash equivalents
64
102
286
(219 )
133
(587 )
Net increase (decrease) in cash and cash equivalents
51
32
(3,369 )
(4,288 )
2,252
5,212
CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 12,521
$ 10,269
$ 12,521
$ 10,269
$ 12,521
$ 10,269
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt
$
143
$
152
$
145
$
169
$
301
$
212
Cash paid for interest on capital and finance lease obligations
48
35
95
67
180
119
Cash paid for income taxes (net of refunds)
88
65
226
119
380
188
Property and equipment acquired under capital leases
1,422
1,384
2,297
2,338
4,676
4,710
Property and equipment acquired under build-to-suit leases
231
153
582
256
870
813
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Net product sales
$ 21,116
$
17,104
$ 41,697
$ 34,187
Net service sales
9,288
6,081
17,835
11,714
Total net sales
30,404
23,185
59,532
45,901
Operating expenses:
Cost of sales
19,180
15,160
38,047
30,555
Fulfillment
3,878
2,876
7,565
5,634
Marketing
1,546
1,150
2,982
2,233
Technology and content
3,880
3,020
7,405
5,774
General and administrative
580
467
1,077
894
Other operating expense (income), net
55
48
100
92
Total operating expenses
29,119
22,721
57,176
45,182
Operating income
1,285
464
2,356
719
Interest income
24
12
45
23
Interest expense
(116 )
(114 )
(233 )
(228 )
Other income (expense), net
(14 )
--
66
(131 )
Total non-operating income (expense)
(106 )
(102 )
(122 )
(336 )
Income before income taxes
1,179
362
2,234
383
Provision for income taxes
(307 )
(266 )
(782 )
(337 )
Equity-method investment activity, net of tax
(15 )
(4 )
(82 )
(11 )
Net income
$
857
$
92
$
1,370
$
35
Basic earnings per share
$
1.81
$
0.20
$
2.90
$
0.07
Diluted earnings per share
$
1.78
$
0.19
$
2.84
$
0.07
Weighted-average shares used in computation of earnings per share:
Basic
473
467
472
466
Diluted
483
476
482
475
AMAZON.COM, INC.
Consolidated Statements of Comprehensive Income (Loss)
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Net income
$ 857
$
92
$ 1,370
$
35
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $36, $1,
11
128
113
(114 )
$13, and $0
Net change in unrealized gains (losses) on available-for-sale
securities:
Unrealized gains (losses), net of tax of $(17), $(8), $(17), and $(8)
31
6
37
7
Reclassification adjustment for losses (gains) included in "Other
1
1
2
1
income (expense), net," net of tax of $0, $0, $(1), and $(1)
Net unrealized gains (losses) on available-for-sale securities
32
7
39
8
Total other comprehensive income (loss)
43
135
152
(106 )
Comprehensive income (loss)
$ 900
$ 227
$ 1,522
$ (71 )
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
North America
Net sales
$ 17,674
$ 13,796
$ 34,670
$ 27,202
Operating expenses
16,517
13,093
32,590
25,982
Operating income before stock-based compensation and other
1,157
703
2,080
1,220
Stock-based compensation and other
455
355
790
617
Operating income
$
702
$
348
$
1,290
$
603
International
Net sales
$
9,844
$
7,565
$ 19,410
$ 15,310
Operating expenses
9,756
7,584
19,301
15,405
Operating income (loss) before stock-based compensation and other
88
(19 )
109
(95 )
Stock-based compensation and other
223
170
364
288
Operating income (loss)
$
(135 )
$
(189 )
$
(255 )
$
(383 )
AWS
Net sales
$
2,886
$
1,824
$
5,452
$
3,389
Operating expenses
2,023
1,433
3,873
2,734
Operating income before stock-based compensation and other
863
391
1,579
655
Stock-based compensation and other
145
86
258
156
Operating income
$
718
$
305
$
1,321
$
499
Consolidated
Net sales
$ 30,404
$ 23,185
$ 59,532
$ 45,901
Operating expenses
28,296
22,110
55,764
44,121
Operating income before stock-based compensation and other
2,108
1,075
3,768
1,780
Stock-based compensation and other
823
611
1,412
1,061
Operating income
1,285
464
2,356
719
Total non-operating income (expense)
(106 )
(102 )
(122 )
(336 )
Provision for income taxes
(307 )
(266 )
(782 )
(337 )
Equity-method investment activity, net of tax
(15 )
(4 )
(82 )
(11 )
Net income
$
857
$
92
$
1,370
$
35
Segment Highlights:
Y/Y net sales growth:
North America
28
%
26
%
27
%
25
%
International
30
3
27
1
AWS
58
81
61
65
Consolidated
31
20
30
17
Net sales mix:
North America
58
%
59
%
58
%
59
%
International
32
33
33
33
AWS
10
8
9
8
Consolidated
100
%
100
%
100
%
100
%
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Net Sales:
North America
Media
$
2,928
$
2,620
$
6,136
$
5,589
Electronics and other general merchandise
14,459
10,987
27,970
21,237
Other (1)
287
189
564
376
Total North America
$ 17,674
$ 13,796
$ 34,670
$ 27,202
International
Media
$
2,283
$
2,094
$
4,763
$
4,413
Electronics and other general merchandise
7,504
5,425
14,537
10,804
Other (1)
57
46
110
93
Total International
$
9,844
$
7,565
$ 19,410
$ 15,310
Year-over-year Percentage Growth:
North America
Media
12
%
6
%
10
%
6
%
Electronics and other general merchandise
32
31
32
31
Other
52
16
50
19
Total North America
28
26
27
25
International
Media
9
%
(12
)%
8
%
(12
)%
Electronics and other general merchandise
38
10
35
7
Other
25
(7 )
18
(10 )
Total International
30
3
27
1
Year-over-year Percentage Growth, excluding the effect of foreign
exchange rates:
North America
Media
12
%
7
%
10
%
6
%
Electronics and other general merchandise
32
32
32
31
Other
52
16
50
19
Total North America
28
26
28
25
International
Media
7
%
3
%
8
%
2
%
Electronics and other general merchandise
36
31
35
26
Other
25
8
20
5
Total International
28
22
27
18
______________________________
(1) Includes sales from non-retail activities, such as certain
advertising services and our co-branded credit card agreements.
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
June 30, 2016
December 31, 2015
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
12,521
$
15,890
Marketable securities
4,019
3,918
Inventories
9,588
10,243
Accounts receivable, net and other
6,092
5,654
Total current assets
32,220
35,705
Property and equipment, net
25,190
21,838
Goodwill
3,774
3,759
Other assets
3,892
3,445
Total assets
$
65,076
$
64,747
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
16,123
$
20,397
Accrued expenses and other
9,613
10,372
Unearned revenue
3,851
3,118
Total current liabilities
29,587
33,887
Long-term debt
8,212
8,227
Other long-term liabilities
10,739
9,249
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares -- 500
Issued and outstanding shares -- none
--
--
Common stock, $0.01 par value:
Authorized shares -- 5,000
Issued shares -- 497 and 494
Outstanding shares -- 474 and 471
5
5
Treasury stock, at cost
(1,837 )
(1,837 )
Additional paid-in capital
15,026
13,394
Accumulated other comprehensive loss
(571 )
(723 )
Retained earnings
3,915
2,545
Total stockholders’ equity
16,538
13,384
Total liabilities and stockholders’ equity
$
65,076
$
64,747
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Y/Y %
Change
Cash Flows and Shares
Operating cash flow -- trailing twelve months (TTM)
$
7,845
$
8,980
$
9,823
$
11,920
$
11,258
$
12,726
42 %
Operating cash flow -- TTM Y/Y growth
47
%
69
%
72
%
74
%
44
%
42
%
N/A
Purchases of property and equipment, including internal-use
$
4,684
$
4,607
$
4,424
$
4,589
$
4,897
$
5,395
17 %
software and website development, net -- TTM
Principal repayments of capital lease obligations -- TTM
$
1,537
$
1,832
$
2,144
$
2,462
$
2,761
$
3,298
80 %
Principal repayments of finance lease obligations -- TTM
$
132
$
155
$
163
$
121
$
111
$
108
(31 )%
Property and equipment acquired under capital leases -- TTM
$
4,246
$
4,710
$
4,599
$
4,717
$
4,638
$
4,676
(1 )%
Free cash flow -- TTM (1)
$
3,161
$
4,373
$
5,399
$
7,331
$
6,361
$
7,331
68 %
Free cash flow less lease principal repayments -- TTM (2)
$
1,492
$
2,386
$
3,092
$
4,748
$
3,489
$
3,925
65 %
Free cash flow less finance lease principal repayments and assets
$ (1,217 )
$
(492 )
$
637
$
2,493
$
1,612
$
2,547
N/A
acquired under capital leases -- TTM (3)
Invested capital (4)
$ 24,040
$ 26,478
$
28,860
$
31,393
$
32,824
$
34,695
31 %
Common shares and stock-based awards outstanding
483
488
489
490
490
495
1 %
Common shares outstanding
466
468
469
471
472
474
1 %
Stock-based awards outstanding
17
20
20
19
18
21
2 %
Stock-based awards outstanding -- % of common shares outstanding
3.8
%
4.4
%
4.3
%
4.1
%
3.9
%
4.4
%
N/A
Results of Operations
Worldwide (WW) net sales
$ 22,717
$ 23,185
$
25,358
$
35,747
$
29,128
$
30,404
31 %
WW net sales -- Y/Y growth, excluding F/X
22
%
27
%
30
%
26
%
29
%
30
%
N/A
WW net sales -- TTM
$ 91,963
$ 95,808
$ 100,588
$ 107,006
$ 113,418
$ 120,637
26 %
WW net sales -- TTM Y/Y growth, excluding F/X
20
%
22
%
24
%
26
%
28
%
29
%
N/A
Operating income
$
255
$
464
$
406
$
1,108
$
1,071
$
1,285
177 %
Operating income -- Y/Y growth, excluding F/X
90
%
N/A
N/A
84
%
300
%
168
%
N/A
Operating margin -- % of WW net sales
1.1
%
2.0
%
1.6
%
3.1
%
3.7
%
4.2
%
N/A
Operating income -- TTM
$
287
$
765
$
1,715
$
2,233
$
3,049
$
3,871
406 %
Operating income -- TTM Y/Y growth (decline), excluding F/X
(56 )%
35
%
N/A
N/A
933
%
388
%
N/A
Operating margin -- TTM % of WW net sales
0.3
%
0.8
%
1.7
%
2.1
%
2.7
%
3.2
%
N/A
Net income (loss)
$
(57 )
$
92
$
79
$
482
$
513
$
857
836 %
Net income (loss) per diluted share
$
(0.12 )
$
0.19
$
0.17
$
1.00
$
1.07
$
1.78
822 %
Net income (loss) -- TTM
$
(405 )
$
(188 )
$
328
$
596
$
1,166
$
1,931
N/A
Net income (loss) per diluted share -- TTM
$
(0.88 )
$
(0.41 )
$
0.69
$
1.25
$
2.43
$
4.02
N/A
______________________________
(1)
Free cash flow is cash flow from operations reduced by "Purchases of
property and equipment, including internal-use software and website
development, net," which is included in cash flow from investing
activities.
(2)
Free cash flow less lease principal repayments is free cash flow
reduced by "Principal repayments of capital lease obligations," and
"Principal repayments of finance lease obligations," which are
included in cash flow from financing activities.
(3)
Free cash flow less finance lease principal repayments and assets
acquired under capital leases is free cash flow reduced by
"Principal repayments of finance lease obligations," which are
included in cash flow from financing activities, and property and
equipment acquired under capital leases. In this measure, property
and equipment acquired under capital leases is reflected as if these
assets had been purchased with cash, which is not the case as these
assets have been leased.
(4)
Average Total Assets minus Current Liabilities (excluding current
portion of Long-Term Debt and current portion of capital lease
obligations and finance lease obligations) over five quarter ends.
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Y/Y %
Change
Segments
North America Segment:
Net sales
$ 13,406
$ 13,796
$ 15,006
$ 21,501
$
16,996
$ 17,674
28 %
24 %
26 %
29 %
24 %
27 %
28 %
N/A
Net sales -- Y/Y growth, excluding F/X
$ 53,432
$ 56,233
$ 59,540
$ 63,708
$
67,299
$ 71,176
27 %
Net sales -- TTM
Operating income before stock-based compensation and other:
$
517
$
703
$
528
$
1,003
$
924
$
1,157
65 %
Operating income
77 %
111 %
N/A
36 %
78 %
64 %
N/A
Operating income -- Y/Y growth, excluding F/X
3.9 %
5.1 %
3.5 %
4.7 %
5.4 %
6.6 %
N/A
Operating margin -- % of North America net sales
$
1,520
$
1,893
$
2,480
$
2,751
$
3,157
$
3,611
91 %
Operating income -- TTM
2.8 %
3.4 %
4.2 %
4.3 %
4.7 %
5.1 %
N/A
Operating margin -- TTM % of North America net sales
Operating income:
Operating income
$
254
$
348
$
186
$
636
$
588
$
702
102 %
129 %
100 %
N/A
Operating income -- Y/Y growth, excluding F/X
1.9 %
2.5 %
1.2 %
3.0 %
3.5 %
4.0 %
N/A
Operating margin -- % of North America net sales
$
1,425
$
1,759
$
2,113
170 %
Operating income -- TTM
2.2 %
2.6 %
3.0 %
N/A
Operating margin -- TTM % of North America net sales
International Segment:
Net sales
$
7,745
$
7,565
$
8,267
$ 11,841
$
9,566
$
9,844
30 %
14 %
22 %
24 %
22 %
26 %
28 %
N/A
Net sales -- Y/Y growth, excluding F/X
$ 33,371
$ 33,598
$ 34,154
$ 35,418
$
37,239
$ 39,518
18 %
Net sales -- TTM
Operating income (loss) before stock-based compensation and other:
Operating income (loss)
$
(76 )
$
(19 )
$
(56 )
$
60
$
20
$
88
N/A
N/A
N/A
N/A
65 %
N/A
N/A
N/A
Operating income/loss -- Y/Y growth (decline), excluding F/X
(1.0 )%
(0.2 )%
(0.7 )%
0.5 %
0.2 %
0.9 %
N/A
Operating margin -- % of International net sales
$
(188 )
$
(205 )
$
(86 )
$
(91 )
$
6
$
113
N/A
Operating income (loss) -- TTM
(0.6 )%
(0.6 )%
(0.3 )%
(0.3 )%
-- %
0.3 %
N/A
Operating margin -- TTM % of International net sales
Operating income (loss):
Operating income (loss)
$
(194 )
$
(189 )
$
(208 )
$
(108 )
$
(121 )
$
(135 )
(29 )%
(27 )%
(8 )%
N/A
Operating income/loss -- Y/Y growth (decline), excluding F/X
(2.5 )%
(2.5 )%
(2.5 )%
(0.9 )%
(1.3 )%
(1.4 )%
N/A
Operating margin -- % of International net sales
$
(699 )
$
(626 )
$
(571 )
N/A
Operating income (loss) -- TTM
(2.0 )%
(1.7 )%
(1.4 )%
N/A
Operating margin -- TTM % of International net sales
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Y/Y %
Change
Segments (continued)
AWS Segment:
Net sales
$ 1,566
$ 1,824
$ 2,085
$ 2,405
$ 2,566
$ 2,886
58 %
49 %
81 %
78 %
69 %
64 %
58 %
N/A
Net sales -- Y/Y growth, excluding F/X
$ 5,160
$ 5,977
$ 6,894
$ 7,880
$ 8,880
$ 9,943
66 %
Net sales -- TTM
Operating income before stock-based compensation and other:
Operating income
$
265
$
391
$
521
$
687
$
716
$
863
121 %
(13 )%
314 %
353 %
161 %
161 %
121 %
N/A
Operating income -- Y/Y growth (decline), excluding F/X
16.9 %
21.4 %
25.0 %
28.5 %
27.9 %
29.9 %
N/A
Operating margin -- % of AWS net sales
$
680
$
993
$ 1,417
$ 1,863
$ 2,315
$ 2,787
181 %
Operating income -- TTM
13.2 %
16.6 %
20.6 %
23.6 %
26.1 %
28.0 %
N/A
Operating margin -- TTM % of AWS net sales
Operating income:
Operating income
$
195
$
305
$
428
$
580
$
604
$
718
135 %
198 %
136 %
N/A
Operating income -- Y/Y growth, excluding F/X
12.4 %
16.7 %
20.5 %
24.1 %
23.5 %
24.9 %
N/A
Operating margin -- % of AWS net sales
$ 1,507
$ 1,916
$ 2,329
N/A
Operating income -- TTM
19.1 %
21.6 %
23.4 %
N/A
Operating margin -- TTM % of AWS net sales
Consolidated Segments Before Stock-Based Compensation and Other:
Operating income
$
706
$ 1,075
$
993
$ 1,750
$ 1,660
$ 2,108
96 %
45 %
168 %
N/A
67 %
128 %
92 %
N/A
Operating income -- Y/Y growth, excluding F/X
3.1 %
4.6 %
3.9 %
4.9 %
5.7 %
6.9 %
N/A
Operating margin -- % of Consolidated net sales
$ 2,012
$ 2,682
$ 3,811
$ 4,523
$ 5,478
$ 6,511
143 %
Operating income -- TTM
2.2 %
2.8 %
3.8 %
4.2 %
4.8 %
5.4 %
N/A
Operating margin -- TTM % of Consolidated net sales
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days,
and employee data)
(unaudited)
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Y/Y %
Change
Supplemental
Supplemental North America Segment Net Sales:
Media
$
2,969
$
2,620
$
2,963
$
3,931
$
3,208
$
2,928
12 %
5
%
7
%
9
%
12
%
8
%
12
%
N/A
Media -- Y/Y growth, excluding F/X
$ 11,711
$ 11,867
$ 12,096
$ 12,483
$ 12,722
$ 13,030
10 %
Media -- TTM
Electronics and other general merchandise
$ 10,250
$ 10,987
$ 11,840
$ 17,325
$ 13,511
$ 14,459
32 %
31
%
32
%
35
%
28
%
32
%
32
%
N/A
Electronics and other general merchandise -- Y/Y growth, excluding
F/X
$ 40,938
$ 43,559
$ 46,606
$ 50,401
$ 53,663
$ 57,134
31 %
Electronics and other general merchandise -- TTM
77
%
77
%
78
%
79
%
80
%
80
%
N/A
Electronics and other general merchandise -- TTM % of North America
net sales
Other
$
187
$
189
$
203
$
245
$
277
$
287
52 %
Supplemental International Segment Net Sales:
Media
$
2,320
$
2,094
$
2,320
$
3,292
$
2,480
$
2,283
9 %
Media -- Y/Y growth, excluding F/X
2
%
3
%
6
%
5
%
9
%
7
%
N/A
Media -- TTM
$ 10,615
$ 10,329
$ 10,140
$ 10,026
$ 10,186
$ 10,375
-- %
Electronics and other general merchandise
$
5,378
$
5,425
$
5,901
$
8,491
$
7,034
$
7,504
38 %
21
%
31
%
32
%
31
%
33
%
36
%
N/A
Electronics and other general merchandise -- Y/Y growth, excluding
F/X
$ 22,559
$ 23,072
$ 23,814
$ 25,196
$ 26,851
$ 28,930
25 %
Electronics and other general merchandise -- TTM
68
%
69
%
70
%
71
%
72
%
73
%
N/A
Electronics and other general merchandise -- TTM % of International
net sales
Other
$
47
$
46
$
46
$
58
$
52
$
57
25 %
Balance Sheet
Cash and marketable securities -- ending
$ 13,781
$ 14,001
$ 14,428
$ 19,808
$ 15,859
$ 16,540
18 %
Inventory, net -- ending
$
7,369
$
7,470
$
8,981
$ 10,243
$
9,582
$
9,588
28 %
Inventory turnover, average -- TTM
8.8
8.9
8.6
8.5
8.6
8.6
(3 )%
Property and equipment, net -- ending
$ 17,736
$ 19,479
$ 20,636
$ 21,838
$ 23,308
$ 25,190
29 %
Accounts payable -- ending
$ 11,917
$ 12,391
$ 14,437
$ 20,397
$ 14,990
$ 16,123
30 %
Accounts payable days -- ending
70
74
79
77
72
77
3 %
Stock-based Compensation Expense
Fulfillment
$
90
$
132
$
122
$
137
$
116
$
186
41 %
Marketing
$
35
$
50
$
48
$
57
$
56
$
80
62 %
Technology and content
$
233
$
319
$
309
$
364
$
317
$
419
31 %
General and administrative
$
49
$
62
$
65
$
48
$
55
$
83
32 %
$
407
$
563
$
544
$
606
$
544
$
768
36 %
Total stock-based compensation expense
Other
WW shipping revenue
$
1,299
$
1,399
$
1,494
$
2,328
$
1,820
$
2,000
43 %
WW shipping revenue -- Y/Y growth
53
%
57
%
43
%
37
%
40
%
43
%
N/A
WW shipping costs
$
2,309
$
2,340
$
2,720
$
4,170
$
3,275
$
3,362
44 %
WW shipping costs -- Y/Y growth
26
%
29
%
35
%
37
%
42
%
44
%
N/A
WW net shipping costs
$
1,010
$
941
$
1,226
$
1,842
$
1,455
$
1,362
45 %
WW net shipping costs -- Y/Y growth
3
%
2
%
26
%
37
%
44
%
45
%
N/A
WW paid units -- Y/Y growth
20
%
22
%
26
%
26
%
27
%
28
%
N/A
WW seller unit mix -- % of WW paid units
44
%
45
%
46
%
47
%
48
%
49
%
N/A
Employees (full-time and part-time; excludes contractors & temporary
165,000
183,100
222,400
230,800
245,200
268,900
47 %
personnel)

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.

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SOURCE: Amazon.com, Inc.

Amazon.com, Inc.
Investor Relations
Darin Manney
ir@amazon.com
www.amazon.com/ir
or
Public Relations
Ty Rogers
amazon-pr@amazon.com
www.amazon.com/about