Summary
Amazon.com Inc. reported its financial results for the third quarter and the first nine months ended September 29, 2014. The company experienced a net loss of $437 million for the third quarter and $455 million for the first nine months, a significant shift from the prior year's modest profit. This loss was driven by increased operating expenses, particularly in fulfillment, marketing, and technology and content, which outpaced the 20% and 22% year-over-year net sales growth respectively. Despite the net loss, the company demonstrated strong operational cash flow and continued its aggressive investment in infrastructure and growth initiatives, evidenced by substantial capital expenditures. The acquisition of Twitch Interactive for approximately $842 million in cash was a notable event during the quarter, aimed at enhancing Amazon's streaming capabilities. The company's balance sheet remained robust, with a substantial cash and marketable securities balance, providing liquidity for ongoing operations and strategic investments. Investors should note the significant increase in capital expenditures, a key indicator of Amazon's commitment to expanding its technological capabilities and fulfillment network.
Financial Highlights
53 data points| Revenue | $20.58B |
| Cost of Revenue | $14.63B |
| Gross Profit | $5.95B |
| Operating Expenses | $21.12B |
| Operating Income | -$544.00M |
| Interest Expense | $49.00M |
| Net Income | -$437.00M |
| EPS (Basic) | $-0.05 |
| EPS (Diluted) | $-0.05 |
| Shares Outstanding (Basic) | 9.26B |
| Shares Outstanding (Diluted) | 9.26B |
Key Highlights
- 1Reported a net loss of $437 million for Q3 2014 ($0.95 per diluted share) and $455 million for the first nine months of 2014 ($0.99 per diluted share), compared to net losses of $41 million and a net income of $34 million in the respective prior year periods.
- 2Net sales grew 20% to $20.6 billion for Q3 2014 and 22% to $59.7 billion for the first nine months of 2014, demonstrating continued top-line growth.
- 3Operating expenses increased by 23% in Q3 2014 and 23.5% for the nine months ended Sept 30, 2014, outpacing sales growth and contributing to operating losses.
- 4Acquired Twitch Interactive for approximately $842 million in cash, aiming to bolster its live streaming capabilities.
- 5Capital expenditures increased significantly, with $1.4 billion spent in Q3 2014 and $3.7 billion in the first nine months, reflecting substantial investments in technology infrastructure (including AWS) and fulfillment capacity.
- 6Generated $1.77 billion in cash from operating activities in Q3 2014, a 27% increase year-over-year, indicating strong underlying cash generation despite net losses.
- 7Free cash flow for the trailing twelve months ended September 30, 2014, was $1.1 billion, an increase from $388 million in the prior year period.