10-QPeriod: Q1 FY2022

AMAZON COM INC Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 29, 2022For Securities:AMZN

Summary

Amazon.com, Inc. reported a net loss of $3.84 billion for the first quarter of 2022, a significant shift from the $8.11 billion net income in the same period last year. This loss was heavily influenced by a substantial $7.6 billion valuation loss on its investment in Rivian Automotive, Inc. Excluding this one-time item, the company's operational performance shows continued growth in net sales, which increased by 7% year-over-year to $116.4 billion, driven primarily by AWS and the North America segment. Despite the net loss, operating income from AWS remained strong, growing to $6.5 billion. However, both the North America and International segments reported operating losses, totaling $1.6 billion and $1.3 billion respectively. This shift is attributed to increased operating costs, including higher shipping and fulfillment expenses, wage increases, transportation costs, and fulfillment network inefficiencies, exacerbated by a constrained labor market and global supply chain issues. The company also announced a new $10 billion stock repurchase program, signaling confidence in its long-term outlook.

Financial Highlights

52 data points
Beta

Revenue

$116.44B

42.9% Gross Margin

Net Income

-$3.84B

-3.3% Net Margin

EPS (Diluted)

$-0.38

Total Assets

$410.77B

Cash & Equivalents

$36.60B

Free Cash Flow

-$2.79B

Financial Statements
Beta
Revenue$116.44B
Cost of Revenue$66.50B
Gross Profit$49.95B
Operating Expenses$112.78B
Operating Income$3.67B
Interest Expense$472.00M
Net Income-$3.84B
EPS (Basic)$-0.38
EPS (Diluted)$-0.38
Shares Outstanding (Basic)10.17B
Shares Outstanding (Diluted)10.17B

Key Highlights

  • 1Reported a net loss of $3.84 billion for Q1 2022, compared to a net income of $8.11 billion in Q1 2021.
  • 2Net sales increased by 7% to $116.44 billion in Q1 2022, driven by AWS and North America segment growth.
  • 3AWS operating income grew to $6.52 billion, a 56% increase year-over-year.
  • 4North America segment reported an operating loss of $1.57 billion, a significant decline from an operating income of $3.45 billion in Q1 2021.
  • 5International segment also reported an operating loss of $1.28 billion, down from an operating income of $1.25 billion in Q1 2021.
  • 6The company recognized a $7.6 billion valuation loss on its investment in Rivian Automotive, Inc., a major contributor to the net loss.
  • 7Announced a new $10 billion stock repurchase program.

Frequently Asked Questions

The net loss of $3.84 billion was primarily due to a $7.6 billion valuation loss on Amazon's investment in Rivian Automotive, Inc. This is an unrealized loss from the fair value accounting of the investment and not directly related to Amazon's core operating performance.

Operating losses in these segments were driven by a substantial increase in operating costs. These include higher shipping and fulfillment expenses, increased wage rates and incentives, rising transportation costs, and inefficiencies within the fulfillment network, which were all exacerbated by a constrained labor market and ongoing global supply chain challenges.

AWS continues to be a strong performer, with net sales increasing by 37% to $18.44 billion and operating income growing to $6.52 billion in Q1 2022. This growth is primarily attributed to increased customer usage, partially offset by pricing changes and increased investments in technology infrastructure and personnel.

Foreign exchange rates had an unfavorable impact on net sales and operating income in Q1 2022. The company reported that changes in foreign currency exchange rates negatively impacted International net sales by $1.8 billion and had an unfavorable impact on its guidance for Q2 2022.