01—Abstract
Summary
Summary of the 10-K filed January 31, 2020. Cited figures are marked; the original filing is the authoritative source.
Amazon.com, Inc.'s 2019 10-K filing highlights a year of continued strong growth, with net sales increasing by 20% to $280.5 billiona.
This growth was driven by solid performance across all segments: North America, International, and particularly Amazon Web Services (AWS), which saw a 37% increase in sales. The company's customer-centric approach, focus on selection, price, and convenience, along with its Prime membership program, continue to be key drivers of its success. Despite increased operating expenses, particularly in fulfillment and technology and content, Amazon reported a net income of $11.6 billionb, up from $10.1 billion in the prior year, and generated robust operating cash flow of $38.5 billion.
The company continues to invest heavily in infrastructure, technology, and new initiatives to support long-term growth, while also navigating a competitive and evolving global market. Key risks identified include intense competition, operational expansion strains, and regulatory changes.
02—Key points
Key Highlights
- Net sales grew 20% to $280.5 billion in 2019, demonstrating continued strong top-line expansion.
- AWS revenue surged by 37% year-over-year, underscoring its critical role in the company's profitability and growth.
- Net income reached $11.6 billion, an increase from $10.1 billion in 2018, reflecting improved profitability.
- Operating cash flow remained strong at $38.5 billion, showcasing the company's ability to generate cash from its core operations.
- Significant investments in technology and content ($35.9 billion) and fulfillment ($40.2 billion) were made to support growth and enhance customer experience.
- The company continues to expand its physical footprint with a notable increase in leased and owned physical stores.
- Amazon faces significant competition across its diverse business lines, from traditional retailers to cloud service providers and tech giants.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Amazon.com Inc kept $0.04.
- Revenue$280.52B100.0%
- Cost of revenue−$165.54B59.0%
- Gross profit$114.99B41.0%
- Operating costs−$100.44B35.8%
- Operating income$14.54B5.2%
- Interest, other & tax−$2.95B1.1%
- Net income$11.59B4.1%
Where FY2019 revenue went
$280.52B- Cost of revenue: $165.54B, 59% of revenue
- Operating costs: $100.44B, 36% of revenue
- Net income: $11.59B, 4.1% of revenue
- Interest, other & tax: $2.95B, 1.1% of revenue
Kept 4.1% as net incomeNet income $11.59B · 4.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed January 31, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $280.52B$232.89B | +20.5% |
| Cost of Revenue | $165.54B$139.16B | +19.0% |
| Gross Profit | $114.99B$93.73B | +22.7% |
| Operating Expenses | $265.98B$220.47B | +20.6% |
| Operating Income | $14.54B$12.42B | +17.1% |
| Interest Expense | $1.60B$1.42B | +12.9% |
| Net Income | $11.59B$10.07B | +15.0% |
| EPS (Basic) | $1.17$1.03 | +13.4% |
| EPS (Diluted) | $1.15$1.01 | +14.3% |
| Shares Outstanding (Basic) | 9.88B9.74B | +1.4% |
| Shares Outstanding (Diluted) | 10.08B10.00B | +0.8% |
05—Questions
Frequently Asked Questions
What were Amazon's main revenue drivers in 2019?
Amazon's main revenue drivers in 2019 were its North America e-commerce operations, its International e-commerce operations, and its Amazon Web Services (AWS) cloud computing segment. Net sales across these segments collectively grew by 20% to $280.5 billion, with AWS showing particularly strong growth of 37%.
How did Amazon's profitability change in 2019?
Amazon's profitability improved in 2019, with net income increasing to $11.6 billion, up from $10.1 billion in 2018. Operating income also saw an increase, rising to $14.5 billion from $12.4 billion in the prior year, despite significant investments in operating expenses.
What are the key risks highlighted by Amazon in its 2019 filing?
Amazon identified several key risks, including intense and evolving competition across all its business segments, the strain of rapid global expansion on its resources, the risks associated with expanding into new products, services, and geographic regions, and the potential for significant fluctuations in operating results and growth rates. Regulatory changes and cybersecurity threats were also noted as significant risks.
How is Amazon investing for future growth?
Amazon is heavily investing in technology and content, as well as its fulfillment and delivery networks. In 2019, spending on technology and content reached $35.9 billion, and fulfillment costs were $40.2 billion. These investments are aimed at enhancing customer experience, improving operational efficiency, and supporting the growth of its various businesses, including AWS and its expanding selection of products and services.
06—Continue