Summary
Amazon.com, Inc. reported its second-quarter 2008 financial results, showcasing robust top-line growth driven by strong performance in both its North America and International segments. Net sales increased by 41% year-over-year to $4.06 billion, reflecting continued customer acquisition and increased unit sales, aided by pricing initiatives and expanded selection. The company also benefited from a $53 million non-cash gain on the sale of its European DVD rental assets, contributing to a net income of $158 million, a significant increase from $78 million in the prior year quarter. Despite the top-line growth and increased profitability, Amazon continues to invest heavily in technology and infrastructure to support future growth. Operating expenses, particularly in fulfillment and technology, saw increases to accommodate expansion. The company also managed its debt obligations, including the conversion of a significant portion of its 4.75% Convertible Subordinated Notes. Investors should note the ongoing strategic investments in technology and the potential impact of foreign currency fluctuations on future results, alongside the company's focus on long-term free cash flow growth.
Financial Highlights
28 data points| Revenue | $4.06B |
| Cost of Revenue | $3.10B |
| Gross Profit | $967.00M |
| Operating Expenses | $750.00M |
| Operating Income | $217.00M |
| Interest Expense | $21.00M |
| Net Income | $158.00M |
| EPS (Basic) | $0.02 |
| EPS (Diluted) | $0.02 |
| Shares Outstanding (Basic) | 8.40B |
| Shares Outstanding (Diluted) | 8.60B |
Key Highlights
- 1Net sales for the second quarter of 2008 grew 41% year-over-year to $4.06 billion, with both North America and International segments showing strong performance.
- 2Net income more than doubled to $158 million in Q2 2008, up from $78 million in Q2 2007, boosted partly by a $53 million non-cash gain from the sale of European DVD rental assets.
- 3Operating income increased significantly to $217 million, compared to $116 million in the same period last year.
- 4The company continued to invest in technology and content, with capitalized costs for internal-use software and website development totaling $41 million in Q2 2008.
- 5Amazon repurchased $473 million principal amount of its 4.75% Convertible Subordinated Notes through conversions into common stock, issuing 6.1 million shares.
- 6Free cash flow for the trailing twelve months ended June 30, 2008, increased by 16% to $816 million.
- 7International segment net sales grew by 47% year-over-year, indicating significant global expansion.