Amazon Earnings: Q2 Sales Up 29% (But Not Good Enough)

Chris CrumBusiness

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Amazon has released its Q2 financial results, missing analysts' expectations. The report includes net sales of $12.83 Billion, a 29% increase year-over-year. At the same time, net income decreased by 96% to $7 million. The quarter included a net loss of $65 million related to the acquisition of Kiva Systems.

The company has cast Amazon Prime as a bright spot. Here's what CEO Jeff Bezos had to say in the announcement: “Amazon Prime is now the best bargain in the history of shopping – that is not hyperbole,” said Jeff Bezos, founder and CEO of Amazon.com. “We successfully launched Prime seven years ago with free unlimited two-day shipping on one million items. The price of annual membership was$79. Since then, Prime selection has grown to 15 million items. We've also added 18,000 movies and TV episodes available for unlimited streaming. And we’ve added the Kindle Owners’ Lending Library – borrow 170,000 books for free with no due dates – it even includes all sevenHarry Potter books. What hasn’t changed since we launched Prime? The price. It’s still $79. We’re very grateful to our Prime members, and thank them whole-heartedly for the business and for the word-of-mouth that has made this program grow.”

At the time of this writing, Amazon stock is down by nearly 2% in after hours trading.

Here's the release in its entirety:

SEATTLE--(BUSINESS WIRE)--Jul. 26, 2012-- Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its second quarter ended June 30, 2012.

Operating cash flow was $3.22 billion for the trailing twelve months, compared with $3.21 billion for the trailing twelve months ended June 30, 2011. Free cash flow decreased 40% to $1.10 billion for the trailing twelve months, compared with $1.83 billion for the trailing twelve months ended June 30, 2011.

Common shares outstanding plus shares underlying stock-based awards totaled 468 million on June 30, 2012, consistent with 468 million one year ago.

Net sales increased 29% to $12.83 billion in the second quarter, compared with $9.91 billion in second quarter 2011. Excluding the $272 millionunfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 32% compared with second quarter 2011.

Operating income was $107 million in the second quarter, compared with $201 million in second quarter 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $8 million.

Net income decreased 96% to $7 million in the second quarter, or $0.01 per diluted share, compared with net income of $191 million, or $0.41per diluted share, in second quarter 2011. The second quarter 2012 includes $65 million of estimated net loss related to the acquisition and integration of Kiva Systems, Inc.

“Amazon Prime is now the best bargain in the history of shopping – that is not hyperbole,” said Jeff Bezos, founder and CEO of Amazon.com. “We successfully launched Prime seven years ago with free unlimited two-day shipping on one million items. The price of annual membership was$79. Since then, Prime selection has grown to 15 million items. We've also added 18,000 movies and TV episodes available for unlimited streaming. And we’ve added the Kindle Owners’ Lending Library – borrow 170,000 books for free with no due dates – it even includes all sevenHarry Potter books. What hasn’t changed since we launched Prime? The price. It’s still $79. We’re very grateful to our Prime members, and thank them whole-heartedly for the business and for the word-of-mouth that has made this program grow.”

Highlights

  • Kindle Fire remains the #1 bestselling product across the millions of items available on Amazon.com since launch. Over this same period, the top 10 selling items on Amazon.com were digital products – Kindle, Kindle books, and accessories.
  • Kindle Owners’ Lending Library has grown to over 170,000 books available to borrow for free as frequently as a book a month, including many titles exclusive to Amazon. Additionally, customers can now borrow all seven Harry Potter books in English, French, Italian, German and Spanish.
  • During the quarter, 20 of our top 100 bestselling Kindle titles were from Kindle Direct Publishing authors.
  • Amazon expanded its catalog of title offerings for Prime Instant Video to more than 18,000 movies and TV episodes, announcing licensing agreements with Paramount Pictures and MGM, for titles including Braveheart, Forrest Gump, Mean Girls, Nacho Libre, Clueless, Moonstruck, Rain Man, Silence of the Lambs, Species, Stargate and many more.
  • Amazon.com announced that Prime Instant Video is now available on the Xbox 360 console. Customers can now access Amazon video content through Kindle Fire, PlayStation 3, Mac or PC, or on a TV using either a compatible connected device such as a Blu-ray player or a Roku or directly on compatible Smart TVs.
  • Amazon’s LOVEFiLM, the leading European film and TV subscription service, announced new multi-year agreements with Twentieth Century Fox Television Distribution and NBCUniversal International Television Distribution, providing LOVEFiLM members in the U.K.exclusive streaming access to movies and TV series from the studios, including Despicable Me, Green Zone, and Robin Hood. The agreements are the latest in a long line of exclusive content deals announced by LOVEFiLM, including agreements with Disney, Sony Pictures, Warner Bros., Entertainment One and STUDIOCANAL.
  • North America segment sales, representing the Company’s U.S. and Canadian sites, were $7.33 billion, up 36% from second quarter 2011.
  • International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were$5.51 billion, up 22% from second quarter 2011. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 28%.
  • Worldwide Media sales grew 13% to $4.12 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 15%.
  • Worldwide Electronics and Other General Merchandise sales grew 38% to $8.16 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 42%.
  • Amazon.com announced that developers can now submit mobile apps for distribution through our upcoming appstore launches this summer on the Company’s U.K., German, French, Italian and Spanish sites. In just over one year, the Amazon Appstore onwww.amazon.com has grown to tens of thousands of apps and games. For additional information, visithttps://developer.amazon.com/welcome.html.
  • Amazon.com introduced “GameCircle,” an all-new gaming experience for Kindle Fire, and released a series of APIs for developers to add this new experience to their games. GameCircle offers gaming customers a series of features such as achievements, leaderboards, and sync that make gaming even more fun, convenient and social on Kindle Fire. The newly-released GameCircle APIs will help game developers quickly and easily integrate their games with GameCircle, allowing them to grow their business by reaching new customers and keeping them engaged. For additional information, visit http://amazon.com/gamecircle.
  • AWS relaunched AWS Support with the expansion of free support for all AWS customers, a reduction in pricing on premium support plans and adding multiple new features to help customers better interact with and improve their use of AWS, including chat functionality and proactive alerts when opportunities exist to save money, improve system performance, or close security gaps. The price reduction marked the 20th time AWS has lowered prices since its launch in 2006. For additional information, visit http://aws.amazon.com/premiumsupport.
  • Amazon announced the Amazon Career Choice Program, providing employees with a resource for building the job skills needed for today's most in-demand and well-paying careers. For employees who’ve been with Amazon as little as three years, the program will pre-pay 95% of the cost of courses such as aircraft mechanics, computer-aided design, machine tool technologies, medical lab technologies, nursing, and many other fields.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of July 26, 2012. 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 consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Third Quarter 2012 Guidance

  • Net sales are expected to be between $12.9 billion and $14.3 billion, or to grow between 19% and 31% compared with third quarter 2011.
  • Operating income (loss) is expected to be between $(350) million and $(50) million, down from $79 million in the comparable prior year period.
  • This guidance includes approximately $275 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

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

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, 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, payments 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.

About Amazon.com

Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV shows, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.

Amazon and its affiliates operate websites, including www.amazon.comwww.amazon.co.ukwww.amazon.dewww.amazon.co.jp,www.amazon.frwww.amazon.cawww.amazon.cnwww.amazon.it, and www.amazon.es. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months EndedSix Months EndedTwelve Months Ended
June 30,June 30,June 30,
201220112012201120122011
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD$2,288$2,641$5,269$3,777$2,047$1,629
OPERATING ACTIVITIES:
Net income71911373913771,038
Adjustments to reconcile net income to net cash from operating activities:
Depreciation of fixed assets, including internal-use software and website development, and other amortization4852449424461,579766
Stock-based compensation221144381254684481
Other operating expense (income), net32417974158129
Losses (gains) on sales of marketable securities, net(2)1(4)3(10)2
Other expense (income), net(19)(39)(4)(2)(58)(53)
Deferred income taxes(43)20(81)352067
Excess tax benefits from stock-based compensation(85)(15)(125)(61)(126)(159)
Changes in operating assets and liabilities:
Inventories(124)(274)62269(1,224)(1,130)
Accounts receivable, net and other(166)(73)580286(572)(304)
Accounts payable180114(4,078)(2,535)1,4531,835
Accrued expenses and other5963(470)(119)716663
Additions to unearned revenue3822577794671,376805
Amortization of previously unearned revenue(333)(251)(602)(471)(1,151)(935)
Net cash provided by (used in) operating activities594423(1,844)(1,163)3,2223,205
INVESTING ACTIVITIES:
Purchases of fixed assets, including internal-use software and website development(657)(433)(1,043)(731)(2,123)(1,374)
Acquisitions, net of cash acquired, and other(624)(469)(673)(608)(770)(921)
Sales and maturities of marketable securities and other investments1,2512,0282,9893,9675,8646,138
Purchases of marketable securities and other investments(565)(2,077)(1,417)(3,189)(4,485)(6,746)
Net cash provided by (used in) investing activities(595)(951)(144)(561)(1,514)(2,903)
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation851512561126159
Common stock repurchased--(960)-(1,237)-
Proceeds from long-term debt and other12334190123242197
Repayments of long-term debt, capital lease, and finance lease obligations(141)(140)(293)(251)(483)(398)
Net cash provided by (used in) financing activities67(91)(938)(67)(1,352)(42)
Foreign-currency effect on cash and cash equivalents(19)25(8)61(68)158
Net increase (decrease) in cash and cash equivalents47(594)(2,934)(1,730)288418
CASH AND CASH EQUIVALENTS, END OF PERIOD$2,335$2,047$2,335$2,047$2,335$2,047
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long term debt$8$3$14$6$22$12
Cash paid for income taxes (net of refunds)20(1)3966635
Fixed assets acquired under capital leases207230356411699673
Fixed assets acquired under build-to-suit leases159731166125219
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Months Ended Six Months Ended 
June 30, June 30, 
2012201120122011
Net product sales (1)$10,791$8,611$22,040$17,310
Net services sales (2)2,0431,3023,9792,460
Net sales12,8349,91326,01919,770
Operating expenses (3):
Cost of sales9,4887,52519,51515,133
Fulfillment1,3569412,6511,795
Marketing5373411,017667
Technology and content1,0826982,0271,278
General and administrative232166432300
Other operating expense (income), net32417974
Total operating expenses12,7279,71225,72119,247
Income from operations107201298523
Interest income10162231
Interest expense(21)(15)(42)(27)
Other income (expense), net5023(49)4
Total non-operating income (expense)3924(69)8
Income before income taxes146225229531
Provision for income taxes(109)(49)(151)(138)
Equity-method investment activity, net of tax(30)1559(2)
Net income$7$191$137$391
Basic earnings per share$0.02$0.42$0.30$0.87
Diluted earnings per share$0.01$0.41$0.30$0.85
Weighted average shares used in computation of earnings per share:
Basic451453452452
Diluted458460459460
(1) Represents revenue from the sale of products and related shipping fees and digital content where we are the seller of record.
 
(2) Represents third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities.
 
(3) Includes stock-based compensation as follows:
Fulfillment$58$32$94$56
Marketing16102817
Technology and content11275198136
General and administrative35276145
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
(unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
2012201120122011
Net income$7$191$137$391
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $17, $9, $(21) and $1(151)31(14)166
Change in unrealized gains on available-for-sale securities, net of tax of $1, $(2), $(2) and $3(3)52(6)
Total other comprehensive income (loss)(154)36(12)160
Comprehensive income (loss)$(147)$227$125$551
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
2012201120122011
North America
Net sales$7,326$5,406$14,754$10,871
Segment operating expenses (1)6,9825,19214,06110,367
Segment operating income$344$214$693$504
International
Net sales$5,508$4,507$11,265$8,899
Segment operating expenses (1)5,4924,33511,2008,552
Segment operating income$16$172$65$347
Consolidated
Net sales$12,834$9,913$26,019$19,770
Segment operating expenses (1)12,4749,52725,26118,919
Segment operating income360386758851
Stock-based compensation(221)(144)(381)(254)
Other operating income (expense), net(32)(41)(79)(74)
Income from operations107201298523
Total non-operating income (expense)3924(69)8
Provision for income taxes(109)(49)(151)(138)
Equity-method investment activity, net of tax(30)1559(2)
Net income$7$191$137$391
Segment Highlights:
Y/Y net sales growth:
North America36%51%36%48%
International22512741
Consolidated29513244
Y/Y segment operating income growth (decline):
North America61%7%37%7%
International(91)(16)(81)(21)
Consolidated(7)(5)(11)(7)
Net sales mix:
North America57%55%57%55%
International43454345
100%100%100%100%
(1) Represents operating expenses, excluding stock-based compensation and "Other operating expense (income), net," which are not allocated to segments.
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
2012201120122011
North America
Media$1,874$1,585$4,070$3,470
Electronics and other general merchandise4,9373,4969,7106,799
Other (1)515325974602
Total North America$7,326$5,406$14,754$10,871
International
Media$2,245$2,075$4,758$4,147
Electronics and other general merchandise3,2242,3986,4264,684
Other (1)39348168
Total International$5,508$4,507$11,265$8,899
Consolidated
Media$4,119$3,660$8,828$7,617
Electronics and other general merchandise8,1615,89416,13611,483
Other (1)5543591,055670
Total Consolidated$12,834$9,913$26,019$19,770
Y/Y Net Sales Growth:
North America:
Media18%20%17%19%
Electronics and other general merchandise41674365
Other58856280
Total North America36513648
International:
Media8%34%15%23%
Electronics and other general merchandise34713762
Other14251920
Total International22512741
Consolidated:
Media13%27%16%21%
Electronics and other general merchandise38694164
Other54775771
Total Consolidated29513244
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
International:
Media12%20%17%14%
Electronics and other general merchandise42534251
Other20132312
Total International28363031
Consolidated:
Media15%20%17%16%
Electronics and other general merchandise42624259
Other55755870
Total Consolidated32443340
Consolidated Net Sales Mix:
Media32%37%34%39%
Electronics and other general merchandise64596258
Other4443
100%100%100%100%
(1) Includes non-retail activities, such as AWS in the North America segment, and miscellaneous marketing and promotional activities, our co-branded credit card agreements, and other seller sites in both segments.
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
June 30,December 31,
20122011
ASSETS(unaudited)
Current assets:
Cash and cash equivalents$2,335$5,269
Marketable securities2,6354,307
Inventories4,3804,992
Accounts receivable, net and other2,0352,571
Deferred tax assets408351
Total current assets11,79317,490
Fixed assets, net5,0974,417
Deferred tax assets2628
Goodwill2,5211,955
Other assets1,5851,388
Total assets$21,022$25,278
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$7,072$11,145
Accrued expenses and other3,8923,751
Total current liabilities10,96414,896
Long-term liabilities2,5532,625
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 — 476 and 473
Outstanding shares — 452 and 45555
Treasury stock, at cost(1,837)(877)
Additional paid-in capital7,5736,990
Accumulated other comprehensive loss(328)(316)
Retained earnings2,0921,955
Total stockholders' equity7,5057,757
Total liabilities and stockholders' equity$21,022$25,278
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
Y/Y %
Q2 2011Q3 2011Q4 2011Q1 2012Q2 2012Change
Cash Flows and Shares
Operating cash flow -- trailing twelve months (TTM)$3,205$3,114$3,903$3,051$3,2221%
Purchases of fixed assets (incl. internal-use software & website development) -- TTM$1,374$1,589$1,811$1,899$2,12354%
Free cash flow (operating cash flow less purchases of fixed assets) -- TTM$1,831$1,525$2,092$1,152$1,099(40%)
Free cash flow -- TTM Y/Y growth(8%)(17%)(17%)(39%)(40%)N/A
Invested capital (1)$8,551$9,147$9,680$10,006$10,250N/A
Return on invested capital (2)21%17%22%12%11%N/A
Common shares and stock-based awards outstanding4684694684644680%
Common shares outstanding4544554554504520%
Stock-based awards outstanding151414131610%
Stock-based awards outstanding -- % of common shares outstanding3.2%3.2%3.0%2.9%3.6%N/A
Results of Operations
Worldwide (WW) net sales$9,913$10,876$17,431$13,185$12,83429%
WW net sales -- Y/Y growth, excluding F/X44%39%34%34%32%N/A
WW net sales -- TTM$40,278$43,594$48,077$51,404$54,32535%
WW net sales -- TTM Y/Y growth, excluding F/X39%39%37%37%35%N/A
Operating income$201$79$260$192$107(47%)
Operating income -- Y/Y growth, excluding F/X(36%)(77%)(48%)(38%)(34%)N/A
Operating margin -- % of WW net sales2.0%0.7%1.5%1.5%0.8%N/A
Operating income -- TTM$1,265$1,076$862$732$637(50%)
Operating income -- TTM Y/Y growth, excluding F/X(7%)(25%)(44%)(50%)(50%)N/A
Operating margin -- TTM % of WW net sales3.1%2.5%1.8%1.4%1.2%N/A
Net income$191$63$177$130$7(96%)
Net income per diluted share$0.41$0.14$0.38$0.28$0.01(96%)
Net income -- TTM$1,038$871$631$561$377(64%)
Net income per diluted share -- TTM$2.26$1.89$1.37$1.22$0.82(64%)
Segments
North America Segment:
Net sales$5,406$5,932$9,902$7,427$7,32636%
Net sales -- Y/Y growth, excluding F/X50%44%37%36%36%N/A
Net sales -- TTM$22,208$24,014$26,705$28,667$30,58738%
Operating income$214$144$285$349$34461%
Operating margin -- % of North America net sales4.0%2.4%2.9%4.7%4.7%N/A
Operating income -- TTM$986$943$933$991$1,12014%
Operating income -- TTM Y/Y growth, excluding F/X9%1%(2%)2%14%N/A
Operating margin -- TTM % of North America net sales4.4%3.9%3.5%3.5%3.7%N/A
International Segment:
Net sales$4,507$4,944$7,529$5,758$5,50822%
Net sales -- Y/Y growth, excluding F/X36%33%29%32%28%N/A
Net sales -- TTM$18,070$19,580$21,372$22,737$23,73831%
Net sales -- TTM % of WW net sales45%45%44%44%44%N/A
Operating income$172$116$177$49$16(91%)
Operating margin -- % of International net sales3.8%2.4%2.4%0.9%0.3%N/A
Operating income -- TTM$888$790$640$515$359(60%)
Operating income -- TTM Y/Y growth, excluding F/X(7%)(23%)(41%)(49%)(57%)N/A
Operating margin -- TTM % of International net sales4.9%4.0%3.0%2.3%1.5%N/A
Consolidated Segments:
Operating expenses (3)$9,527$10,616$16,969$12,787$12,47431%
Operating expenses -- TTM (3)$38,404$41,860$46,504$49,899$52,84638%
Operating income$386$260$462$398$360(7%)
Operating margin -- % of Consolidated sales3.9%2.4%2.7%3.0%2.8%N/A
Operating income -- TTM$1,874$1,734$1,573$1,505$1,480(21%)
Operating income -- TTM Y/Y growth, excluding F/X1%(11%)(21%)(22%)(21%)N/A
Operating margin -- TTM % of Consolidated net sales4.7%4.0%3.3%2.9%2.7%N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
Y/Y %
Q2 2011Q3 2011Q4 2011Q1 2012Q2 2012Change
Supplemental
Supplemental North America Segment Net Sales:
Media$1,585$1,927$2,562$2,197$1,87418%
Media -- Y/Y growth, excluding F/X19%21%8%17%18%N/A
Media -- TTM$7,430$7,767$7,959$8,270$8,55915%
Electronics and other general merchandise$3,496$3,635$6,881$4,772$4,93741%
Electronics and other general merchandise -- Y/Y growth, excluding F/X67%56%51%44%41%N/A
Electronics and other general merchandise -- TTM$13,683$14,992$17,315$18,784$20,22648%
Electronics and other general merchandise -- TTM % of North America net sales62%62%65%66%66%N/A
Other$325$370$459$458$51558%
Other -- TTM$1,095$1,255$1,431$1,613$1,80265%
Supplemental International Segment Net Sales:
Media$2,075$2,226$3,447$2,513$2,2458%
Media -- Y/Y growth, excluding F/X20%17%18%22%12%N/A
Media -- TTM$8,772$9,238$9,820$10,261$10,43119%
Electronics and other general merchandise$2,398$2,681$4,032$3,203$3,22434%
Electronics and other general merchandise -- Y/Y growth, excluding F/X53%51%41%42%42%N/A
Electronics and other general merchandise -- TTM$9,162$10,199$11,397$12,314$13,13943%
Electronics and other general merchandise -- TTM % of International net sales51%52%53%54%55%N/A
Other$34$37$50$42$3914%
Other -- TTM$136$143$155$162$16823%
Supplemental Worldwide Net Sales:
Media$3,660$4,153$6,009$4,710$4,11913%
Media -- Y/Y growth, excluding F/X20%19%14%19%15%N/A
Media -- TTM$16,202$17,005$17,779$18,531$18,99017%
Electronics and other general merchandise$5,894$6,316$10,913$7,975$8,16138%
Electronics and other general merchandise -- Y/Y growth, excluding F/X62%54%47%43%42%N/A
Electronics and other general merchandise -- TTM$22,845$25,191$28,712$31,098$33,36546%
Electronics and other general merchandise -- TTM % of WW net sales57%58%60%60%61%N/A
Other$359$407$509$500$55454%
Other -- TTM$1,231$1,398$1,586$1,775$1,97060%
Balance Sheet
Cash and marketable securities$6,355$6,326$9,576$5,715$4,970(22%)
Inventory, net -- ending$3,229$3,770$4,992$4,255$4,38036%
Inventory turnover, average -- TTM11.310.810.310.410.1(11%)
Fixed assets, net$3,470$3,999$4,417$4,653$5,09747%
Accounts payable -- ending$5,721$6,552$11,145$6,886$7,07224%
Accounts payable days -- ending6972746268(2%)
Other
WW shipping revenue$331$360$531$461$46942%
WW shipping costs$820$918$1,466$1,129$1,05429%
WW net shipping costs$489$558$935$668$58520%
WW net shipping costs -- % of WW net sales4.9%5.1%5.4%5.1%4.6%N/A
Employees (full-time and part-time; excludes contractors & temporary personnel)43,20051,30056,20065,60069,10060%
(1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends.
(2) TTM Free Cash Flow divided by Invested Capital.
(3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

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 Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services 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. Seller accounts exclude Amazon Enterprise Solutions sellers. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

Registered Developers

  • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

Units

 

Source: Amazon.com, Inc.

Chris Crum

Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.