01—Abstract
Summary
Summary of the 10-K filed February 11, 2008. Cited figures are marked; the original filing is the authoritative source.
Amazon.com, Inc. (AMZN) reported strong revenue growth of 39% for the fiscal year ended December 31, 2007, reaching $14.84 billiona.
This growth was driven by both its North America and International segments, which experienced 38%b and 39% increases, respectively. The company's strategic focus on customer-centricity, evidenced by efforts to offer low prices, wide selection, and convenience, continues to fuel its expansion. Significant investments in technology and content are ongoing to enhance customer experience and operational efficiency, positioning Amazon for continued long-term growth despite intense competition and global economic uncertainties.
The company's financial performance demonstrates robust operating income growth, with $655 millionc reported for 2007, up from $389 million in 2006. Free cash flow also saw substantial improvement, increasing to $1.18 billion in 2007 from $486 million in the prior year.
Amazon's balance sheet remains strong, with $3.1 billiond in cash, cash equivalents, and marketable securities, providing ample liquidity for future investments and operations. The company reiterated its commitment to long-term value creation and efficient capital management, while navigating risks associated with international expansion, competition, and evolving technology.
02—Key points
Key Highlights
- Revenue surged by 39% year-over-year to $14.84 billion in 2007, fueled by strong performance in both North America (38% growth) and International (39% growth) segments.
- Operating income saw significant improvement, reaching $655 million in 2007, a substantial increase from $389 million in 2006.
- Free cash flow demonstrated robust growth, reaching $1.18 billion in 2007, more than doubling from $486 million in 2006.
- The company maintained a strong liquidity position with $3.1 billion in cash, cash equivalents, and marketable securities as of December 31, 2007.
- Continued strategic investment in technology and content is a priority, aimed at enhancing customer experience and expanding service offerings.
- Amazon continues to focus on its core strategy of offering Earth's Biggest Selection, low prices, and customer convenience.
- The company manages a complex global operation with significant international sales, contributing 45% of total revenue in 2007.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Amazon.com Inc kept $0.03.
- Revenue$14.84B100.0%
- Cost of revenue−$11.48B77.4%
- Gross profit$3.35B22.6%
- Operating costs−$2.70B18.2%
- Operating income$655.0M4.4%
- Interest, other & tax−$179.0M1.2%
- Net income$476.0M3.2%
Where FY2007 revenue went
$14.84B- Cost of revenue: $11.48B, 77% of revenue
- Operating costs: $2.70B, 18% of revenue
- Net income: $476.0M, 3.2% of revenue
- Interest, other & tax: $179.0M, 1.2% of revenue
Kept 3.2% as net incomeNet income $476.0M · 3.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 11, 2008Financial Statements
| Revenue | $14.84B |
| Cost of Revenue | $11.48B |
| Gross Profit | $3.35B |
| Operating Expenses | $2.70B |
| Operating Income | $655.00M |
| Interest Expense | $77.00M |
| Net Income | $476.00M |
| EPS (Basic) | $0.06 |
| EPS (Diluted) | $0.06 |
| Shares Outstanding (Basic) | 8.26B |
| Shares Outstanding (Diluted) | 8.48B |
05—Questions
Frequently Asked Questions
What was Amazon's revenue growth and profitability for the fiscal year 2007?
For the fiscal year ended December 31, 2007, Amazon reported net sales of $14.84 billion, representing a 39% increase compared to the previous year. The company's income from operations was $655 million, a significant improvement from $389 million in 2006, indicating growing profitability.
How did Amazon's international operations perform in 2007?
Amazon's International segment experienced strong growth, with net sales increasing by 39% to $6.74 billion. This segment contributed 45% of the company's total net sales, highlighting its significant role in Amazon's overall business strategy and revenue generation.
What are the key risks identified by Amazon for its business?
Amazon identified several key risks, including intense competition from both online and physical retailers, the strain of rapid global expansion on its resources, risks associated with entering new product and service segments, potential fluctuations in operating results, and the challenges of expanding successfully into international markets. Cyber security and maintaining customer trust are also critical concerns.
How is Amazon managing its liquidity and financial resources?
Amazon maintained a strong liquidity position with $3.1 billion in cash, cash equivalents, and marketable securities as of December 31, 2007. The company generated substantial operating cash flow of $1.4 billion and free cash flow of $1.18 billion in 2007, providing ample resources for ongoing operations, investments in technology and infrastructure, and potential strategic acquisitions.
06—Continue