10-QPeriod: Q2 FY2022

AMAZON COM INC Quarterly Report for Q2 Ended Jun 30, 2022

Filed July 29, 2022For Securities:AMZN

Summary

Amazon.com, Inc. reported a net loss of $2.03 billion for the second quarter of 2022, a significant shift from the $7.78 billion net income in the prior year's second quarter. This loss was largely attributed to a substantial decrease in the valuation of its equity investment in Rivian Automotive, Inc., which resulted in a pre-tax valuation loss of $3.9 billion. Despite the net loss, the company's net sales saw a 7% increase year-over-year, reaching $121.23 billion in Q2 2022, driven by growth in North America and a robust performance in AWS. However, international sales experienced a decline of 12%, impacted by foreign currency fluctuations. Operating expenses also increased across several categories, including fulfillment and technology and content, contributing to a significant decrease in operating income. Looking ahead, Amazon provided guidance for the third quarter of 2022, expecting net sales to grow between 13% and 17% year-over-year, but projected operating income to be between $0 and $3.5 billion, indicating continued cost pressures and a challenging operating environment.

Financial Highlights

52 data points
Beta

Revenue

$121.23B

45.2% Gross Margin

Net Income

-$2.03B

-1.7% Net Margin

EPS (Diluted)

$-0.20

Total Assets

$419.73B

Cash & Equivalents

$37.70B

Free Cash Flow

$8.96B

Financial Statements
Beta
Revenue$121.23B
Cost of Revenue$66.42B
Gross Profit$54.81B
Operating Expenses$117.92B
Operating Income$3.32B
Interest Expense$584.00M
Net Income-$2.03B
EPS (Basic)$-0.20
EPS (Diluted)$-0.20
Shares Outstanding (Basic)10.18B
Shares Outstanding (Diluted)10.18B

Key Highlights

  • 1Net loss of $2.03 billion in Q2 2022, compared to a net income of $7.78 billion in Q2 2021, primarily due to investment valuation changes.
  • 2Total net sales increased by 7% to $121.23 billion in Q2 2022, compared to $113.08 billion in Q2 2021.
  • 3AWS segment continues strong growth, with net sales up 33% to $19.74 billion in Q2 2022.
  • 4North America net sales increased by 10% to $74.43 billion in Q2 2022.
  • 5International net sales decreased by 12% to $27.07 billion in Q2 2022, affected by foreign exchange rates and lower unit sales.
  • 6Operating income significantly decreased to $3.32 billion in Q2 2022, down from $7.70 billion in Q2 2021.
  • 7The company repurchased $3.3 billion of common stock in Q2 2022.

Frequently Asked Questions

The net loss of $2.03 billion in Q2 2022 was primarily driven by a significant mark-to-market valuation loss of $3.9 billion on Amazon's equity investment in Rivian Automotive, Inc., which more than offset operating income and other gains.

AWS continued its strong growth with a 33% increase in net sales. North America also showed solid growth with a 10% increase in net sales. However, the International segment experienced a 12% decline in net sales, impacted by currency fluctuations and lower unit sales.

Amazon cited increased inflation, global supply chain constraints, increased transportation and wage costs, and fulfillment network inefficiencies as key challenges impacting its operations, particularly in the North America and International segments. These factors contributed to increased operating expenses and a decrease in operating income.

Amazon expects Q3 2022 net sales to grow between 13% and 17% year-over-year, reaching $125 billion to $130 billion. However, operating income is projected to be between $0 and $3.5 billion, reflecting ongoing cost pressures.