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SEATTLE–(BUSINESS WIRE)–Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for
its first quarter ended March 31, 2019.
Operating cash flow increased 89% to $34.4 billion for the trailing
twelve months, compared with $18.2 billion for the trailing twelve
months ended March 31, 2018. Free cash flow increased to $23.0 billion
for the trailing twelve months, compared with $7.3 billion for the
trailing twelve months ended March 31, 2018. Free cash flow less
principal repayments of finance leases and financing obligations
increased to $15.1 billion for the trailing twelve months, compared with
$1.1 billion for the trailing twelve months ended March 31, 2018. Free
cash flow less equipment finance leases and principal repayments of all
other finance leases and financing obligations increased to an inflow of
$11.8 billion for the trailing twelve months, compared with an outflow
of $3.0 billion for the trailing twelve months ended March 31, 2018.
On January 1, 2019, we adopted accounting guidance amending the
accounting for leases, which did not have a material impact on our first
quarter 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.”
Common shares outstanding plus shares underlying stock-based awards
totaled 507 million on March 31, 2019, compared with 504 million one
year ago.
Net sales increased 17% to $59.7 billion in the first quarter, compared
with $51.0 billion in first quarter 2018. Excluding the $1.1 billion
unfavorable impact from year-over-year changes in foreign exchange rates
throughout the quarter, net sales increased 19% compared with first
quarter 2018.
Operating income increased to $4.4 billion in the first quarter,
compared with operating income of $1.9 billion in first quarter 2018.
Net income increased to $3.6 billion in the first quarter, or $7.09 per
diluted share, compared with net income of $1.6 billion, or $3.27 per
diluted share, in first quarter 2018.
“The son of a working single mom, Leo Jean Baptiste grew up speaking
Haitian Creole in a New Jersey home without internet access. He’s also
one of our inaugural group of 100 high school seniors to receive a
$40,000 Amazon Future Engineer scholarship and Amazon internship,” said
Jeff Bezos, Amazon founder and CEO. “He rose to the top of his class and
is set to study computer science at college this fall, with the dream of
getting a job in machine learning. Our passion for invention led us to
create Amazon Future Engineer so we could help young people like Leo
from underrepresented groups and underserved communities across the
country. In addition to 100 college scholarships a year, we’re funding
computer science classes in 1,000 high schools and counting, and
inspiring younger kids to explore coding through coding camps and
after-school programs. We love this program, and we can’t wait to see
what Leo and his fellow future engineers invent.”
Highlights
Financial Guidance
The following forward-looking statements reflect Amazon.com’s
expectations as of April 25, 2019, 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.
Second Quarter 2019 Guidance
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 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, 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, 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 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 March 31, |
Twelve Months Ended March 31, |
||||||||||||||
2018 | 2019 | 2018 | 2019 | |||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | $ | 21,856 | $ | 32,173 | $ | 16,301 | $ | 17,616 | ||||||||
OPERATING ACTIVITIES: | ||||||||||||||||
Net income | 1,629 | 3,561 | 3,938 | 12,005 | ||||||||||||
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 |
3,671 | 4,854 | 12,714 | 16,524 | ||||||||||||
Stock-based compensation | 1,182 | 1,274 | 4,605 | 5,509 | ||||||||||||
Other operating expense (income), net | 56 | (13 | ) | 216 | 205 | |||||||||||
Other expense (income), net | (184 | ) | (135 | ) | (437 | ) | 268 | |||||||||
Deferred income taxes | 141 | 415 | 134 | 714 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Inventories | 2,220 | 719 | (2,309 | ) | (2,815 | ) | ||||||||||
Accounts receivable, net and other | 1,029 | (401 | ) | (4,716 | ) | (6,043 | ) | |||||||||
Accounts payable | (10,216 | ) | (6,384 | ) | 3,749 | 7,095 | ||||||||||
Accrued expenses and other | (2,225 | ) | (2,932 | ) | (538 | ) | (235 | ) | ||||||||
Unearned revenue | 906 | 888 | 838 | 1,133 | ||||||||||||
Net cash provided by (used in) operating activities | (1,791 | ) | 1,846 | 18,194 | 34,360 | |||||||||||
INVESTING ACTIVITIES: | ||||||||||||||||
Purchases of property and equipment | (3,098 | ) | (3,290 | ) | (12,905 | ) | (13,619 | ) | ||||||||
Proceeds from property and equipment incentives | 371 | 569 | 1,981 | 2,303 | ||||||||||||
Acquisitions, net of cash acquired, and other | (13 | ) | (1,169 | ) | (13,939 | ) | (3,342 | ) | ||||||||
Sales and maturities of marketable securities | 2,677 | 2,643 | 10,444 | 8,205 | ||||||||||||
Purchases of marketable securities | (470 | ) | (6,876 | ) | (11,846 | ) | (13,506 | ) | ||||||||
Net cash provided by (used in) investing activities | (533 | ) | (8,123 | ) | (26,265 | ) | (19,959 | ) | ||||||||
FINANCING ACTIVITIES: | ||||||||||||||||
Proceeds from long-term debt and other | 125 | 190 | 16,332 | 833 | ||||||||||||
Repayments of long-term debt and other | (202 | ) | (351 | ) | (1,463 | ) | (817 | ) | ||||||||
Principal repayments of finance leases | (2,015 | ) | (2,214 | ) | (5,981 | ) | (7,649 | ) | ||||||||
Principal repayments of financing obligations | (72 | ) | (2 | ) | (235 | ) | (266 | ) | ||||||||
Net cash provided by (used in) financing activities | (2,164 | ) | (2,377 | ) | 8,653 | (7,899 | ) | |||||||||
Foreign currency effect on cash, cash equivalents, and restricted cash |
248 | (12 | ) | 733 | (611 | ) | ||||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
(4,240 | ) | (8,666 | ) | 1,315 | 5,891 | ||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | $ | 17,616 | $ | 23,507 | $ | 17,616 | $ | 23,507 | ||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||||||
Cash paid for interest on long-term debt | $ | 282 | $ | 286 | $ | 607 | $ | 858 | ||||||||
Cash paid for operating leases | — | 709 | — | 709 | ||||||||||||
Cash paid for interest on finance leases | 75 | 165 | 234 | 471 | ||||||||||||
Cash paid for interest on financing obligations | 54 | 2 | 153 | 142 | ||||||||||||
Cash paid for income taxes, net of refunds | 513 | 168 | 1,224 | 840 | ||||||||||||
Assets acquired under operating leases | — | 875 | — | 875 | ||||||||||||
Property and equipment acquired under finance leases | 2,270 | 2,628 | 10,020 | 10,972 | ||||||||||||
Property and equipment acquired under build-to-suit arrangements | 741 | 436 | 3,081 | 3,336 | ||||||||||||
_____________________ |
On January 1, 2019, we adopted accounting guidance amending the
accounting for leases, which did not have a material impact on our Q1
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.”
AMAZON.COM, INC. | ||||||||
Consolidated Statements of Operations | ||||||||
(in millions, except per share data) | ||||||||
(unaudited) | ||||||||
Three Months Ended March 31, |
||||||||
2018 | 2019 | |||||||
Net product sales | $ | 31,605 | $ | 34,283 | ||||
Net service sales | 19,437 | 25,417 | ||||||
Total net sales | 51,042 | 59,700 | ||||||
Operating expenses: | ||||||||
Cost of sales | 30,735 | 33,920 | ||||||
Fulfillment | 7,792 | 8,601 | ||||||
Marketing | 2,699 | 3,664 | ||||||
Technology and content | 6,759 | 7,927 | ||||||
General and administrative | 1,067 | 1,173 | ||||||
Other operating expense (income), net | 63 | (5 | ) | |||||
Total operating expenses | 49,115 | 55,280 | ||||||
Operating income | 1,927 | 4,420 | ||||||
Interest income | 80 | 183 | ||||||
Interest expense | (330 | ) | (366 | ) | ||||
Other income (expense), net | 239 | 164 | ||||||
Total non-operating income (expense) | (11 | ) | (19 | ) | ||||
Income before income taxes | 1,916 | 4,401 | ||||||
Provision for income taxes | (287 | ) | (836 | ) | ||||
Equity-method investment activity, net of tax | — | (4 | ) | |||||
Net income | $ | 1,629 | $ | 3,561 | ||||
Basic earnings per share | $ | 3.36 | $ | 7.24 | ||||
Diluted earnings per share | $ | 3.27 | $ | 7.09 | ||||
Weighted-average shares used in computation of earnings per share: | ||||||||
Basic | 484 | 491 | ||||||
Diluted | 498 | 502 | ||||||
Contacts
Amazon.com Investor Relations
Dave Fildes, amazon-ir@amazon.com
amazon.com/ir
Amazon.com Public Relations
Dan Perlet, amazon-pr@amazon.com
amazon.com/pr
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