10-KPeriod: FY2014

AMAZON COM INC Annual Report, Year Ended Dec 31, 2014

Filed January 30, 2015For Securities:AMZN

Summary

Amazon.com Inc.'s 2014 10-K filing highlights a year of significant revenue growth, with total net sales increasing by 20% to $88.99 billion. The company continued its aggressive investment in infrastructure, technology, and content, which, while impacting profitability and leading to a net loss of $241 million for the year, is presented as a strategic imperative for long-term customer-centric growth and free cash flow generation. The North America segment remained the larger contributor to sales, growing 25%, while the International segment saw 12% growth. Amazon Web Services (AWS) is mentioned as a key driver of growth within the North America segment, though not reported separately at this time. The company emphasizes its commitment to lowering prices, expanding selection, and improving delivery, supported by significant capital expenditures in fulfillment and technology.

Financial Highlights

55 data points
Beta

Revenue

$88.99B

29.5% Gross Margin

Net Income

-$241.00M

-0.3% Net Margin

EPS (Diluted)

$-0.03

Total Assets

$54.51B

Cash & Equivalents

$14.56B

Free Cash Flow

$1.95B

Financial Statements
Beta
Revenue$88.99B
Cost of Revenue$62.75B
Gross Profit$26.24B
Operating Expenses$88.81B
Operating Income$178.00M
Interest Expense$210.00M
Net Income-$241.00M
EPS (Basic)$-0.03
EPS (Diluted)$-0.03
Shares Outstanding (Basic)9.24B
Shares Outstanding (Diluted)9.24B

Key Highlights

  • 1Total net sales grew 20% year-over-year to $88.99 billion in 2014.
  • 2The company incurred a net loss of $241 million in 2014, a reversal from a net income of $274 million in 2013, primarily due to increased investments and costs.
  • 3North America segment sales grew 25% to $55.47 billion, while International segment sales grew 12% to $33.52 billion.
  • 4Free cash flow was $1.95 billion in 2014, a slight decrease from $2.03 billion in 2013, driven by increased capital expenditures.
  • 5Significant investments were made in technology and content ($9.28 billion) and fulfillment ($10.77 billion), reflecting ongoing strategic expansion.
  • 6Amazon Web Services (AWS) is identified as a growth driver within the North America segment, though it was not yet reported as a separate segment.
  • 7The company continues to heavily invest in expanding its fulfillment and data center infrastructure to support future growth.

Frequently Asked Questions

In 2014, Amazon.com Inc. reported a 20% increase in net sales to $88.99 billion. However, the company experienced a net loss of $241 million, a significant shift from the $274 million net income in 2013. This was driven by substantial investments in technology, content, and infrastructure, alongside increased operating expenses.

The North America segment continued to be the largest contributor, with net sales growing 25% to $55.47 billion. The International segment also saw growth, with net sales increasing by 12% to $33.52 billion. The company noted that AWS was a growth driver within the North America segment.

Amazon's strategy remains focused on long-term growth driven by customer obsession, innovation, and operational excellence. This involves significant ongoing investments in technology, content, fulfillment infrastructure, and new business opportunities. The company views these investments, even if they lead to short-term impacts on profitability (like the net loss in 2014), as critical for sustainable growth and increasing free cash flow per share over the long term.

Key risks highlighted include intense competition in various business segments (retail, cloud computing, digital content, devices), the strain on management and operational resources due to rapid global expansion, potential fluctuations in operating results, risks associated with international operations (regulatory, economic, political), reliance on third-party sellers, fulfillment and data center operational risks, seasonality, cybersecurity threats, and the volatility of its stock price.