10-KPeriod: FY2019

AMAZON COM INC Annual Report, Year Ended Dec 31, 2019

Filed January 31, 2020For Securities:AMZN

Summary

Amazon.com, Inc.'s 2019 10-K filing highlights a year of continued strong growth, with net sales increasing by 20% to $280.5 billion. 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 billion, 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.

Financial Highlights

53 data points
Beta

Revenue

$280.52B

41.0% Gross Margin

Net Income

$11.59B

4.1% Net Margin

EPS (Diluted)

$1.15

Total Assets

$225.25B

Cash & Equivalents

$36.41B

Free Cash Flow

$38.51B

Financial Statements
Beta
Revenue$280.52B
Cost of Revenue$165.54B
Gross Profit$114.99B
Operating Expenses$265.98B
Operating Income$14.54B
Interest Expense$1.60B
Net Income$11.59B
EPS (Basic)$1.17
EPS (Diluted)$1.15
Shares Outstanding (Basic)9.88B
Shares Outstanding (Diluted)10.08B

Key Highlights

  • 1Net sales grew 20% to $280.5 billion in 2019, demonstrating continued strong top-line expansion.
  • 2AWS revenue surged by 37% year-over-year, underscoring its critical role in the company's profitability and growth.
  • 3Net income reached $11.6 billion, an increase from $10.1 billion in 2018, reflecting improved profitability.
  • 4Operating cash flow remained strong at $38.5 billion, showcasing the company's ability to generate cash from its core operations.
  • 5Significant investments in technology and content ($35.9 billion) and fulfillment ($40.2 billion) were made to support growth and enhance customer experience.
  • 6The company continues to expand its physical footprint with a notable increase in leased and owned physical stores.
  • 7Amazon faces significant competition across its diverse business lines, from traditional retailers to cloud service providers and tech giants.

Frequently Asked Questions

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%.

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.

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.

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.