Amazon.com Announces Fourth Quarter Sales up 21% to $87.4 Billion

Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2019.

Operating cash flow increased 25% to $38.5 billion for the trailing twelve months, compared with $30.7 billion for the trailing twelve months ended December 31, 2018. Free cash flow increased to $25.8 billion for the trailing twelve months, compared with $19.4 billion for the trailing twelve months ended December 31, 2018. Free cash flow less principal repayments of finance leases and financing obligations increased to $16.2 billion for the trailing twelve months, compared with $11.6 billion for the trailing twelve months ended December 31, 2018. Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations increased to $12.5 billion for the trailing twelve months, compared with $8.4 billion for the trailing twelve months ended December 31, 2018.

Common shares outstanding plus shares underlying stock-based awards totaled 512 million on December 31, 2019, compared with 507 million one year ago.

Fourth Quarter 2019

Net sales increased 21% to $87.4 billion in the fourth quarter, compared with $72.4 billion in fourth quarter 2018. Excluding the $120 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 21% compared with fourth quarter 2018.

Operating income increased to $3.9 billion in the fourth quarter, compared with operating income of $3.8 billion in fourth quarter 2018.

Net income increased to $3.3 billion in the fourth quarter, or $6.47 per diluted share, compared with net income of $3.0 billion, or $6.04 per diluted share, in fourth quarter 2018.

Full Year 2019

Net sales increased 20% to $280.5 billion, compared with $232.9 billion in 2018. Excluding the $2.6 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 22% compared with 2018.

Operating income increased to $14.5 billion, compared with operating income of $12.4 billion in 2018.

Net income increased to $11.6 billion, or $23.01 per diluted share, compared with net income of $10.1 billion, or $20.14 per diluted share, in 2018.

“Prime membership continues to get better for customers year after year. And customers are responding — more people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world,” said Jeff Bezos, Amazon founder and CEO. “We’ve made Prime delivery faster — the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year. Members now have free two-hour grocery delivery from Amazon Fresh and Whole Foods Market in more than 2,000 U.S. cities and towns. Prime members watched double the hours of original movies and TV shows on Prime Video this quarter compared to last year, and Amazon Originals received a record 88 nominations and 26 wins at major awards shows. A huge thank you to teams across Amazon for their dedicated work to build, innovate, and deliver for customers this holiday.”

Highlights

  • During this holiday season, customers ordered billions of items worldwide, including tens of millions of Amazon devices. Best-selling devices this holiday were Echo Dot, Fire TV Stick 4K with Alexa Voice Remote, and Echo Show 5.
  • Amazon announced that delivery through Amazon Fresh, which was previously $14.99 a month, is now a free benefit for Prime members. Members in more than 2,000 U.S. cities and towns can access free two-hour grocery delivery from Amazon Fresh and Whole Foods Market. Grocery delivery orders from Amazon Fresh and Whole Foods Market more than doubled in the fourth quarter year-over-year.
  • Amazon announced Alexa integrations with new automotive brands at CES 2020. Fiat Chrysler Automobiles is adding Alexa to the newest version of its infotainment system for cars, Uconnect 5.0, Lamborghini is adding Alexa to its Huracan Evo range, and Rivian is integrating Alexa into its electric vehicle lineup, including its upcoming fleet of 100,000 all-electric Amazon delivery vans.
  • Alexa continues to get smarter and make customers’ lives easier with new features, including medication reminders and voice refills, BuzzFeed Tasty recipe videos, the ability to pay utility bills, and purchase fuel at more than 11,500 Exxon and Mobil stations. Customers can also enjoy even more entertainment options for Alexa including content from Spotify Free, Spotify Podcasts, Apple Podcasts, SiriusXM’s On Demand library, and Tubi TV. Additionally customers can say “Alexa, why did you do that?” to hear short explanations about her response.
  • Amazon announced additional companies joined the Voice Interoperability Initiative, a program to ensure voice-enabled products provide customers with choice and flexibility through multiple, interoperable voice services. New participants include automakers such as Audi and Volkswagen; brands such as Acer, BBC, Hisense, TIM, TiVo, and Vestel; and technology brands Aspinity, Syntiant, and Vesper.
  • Amazon announced there are now hundreds of millions of Alexa-enabled devices in customers’ hands and customers interact with Alexa billions of times each week. Customers rely on Alexa to control smart home devices hundreds of millions of times each week, and can enjoy new features including the ability to pause or resume Wi-Fi access in their home using voice.
  • Fire TV now has more than 40 million active users worldwide. Amazon announced the new Fire TV Edition at CES 2020, which includes a set of tools, features, and services that make it even easier for developers, operators, device makers, and manufacturers to integrate Fire TV into their products. BMW and Fiat Chrysler Automobiles are among the first automakers to introduce Fire TV in their future vehicles.
  • Fire TV announced the expansion of Fire TV Edition Smart TVs in India with Onida, adding to the growing list of Fire TV Edition Smart TVs and soundbars from brands like Toshiba, Insignia, and Grundig. Fire TV added more content for customers, including apps from Disney+, Apple TV, and Peloton.
  • Amazon released several new products and services designed for kids, including the all-new Fire HD 10 Kids Edition, Kindle Kids Edition, Echo Glow, and expansion of FreeTime on Alexa to Echo Show devices — enabling kids to watch age-appropriate videos, make video calls with approved family and friends, take photos and add stickers, and more.
  • Ring announced several new products and features, including additions to its smart lighting lineup and the all-new Control Center, a new, easy-to-use dashboard where customers can view and control privacy and security settings. Ring also launched Ring Alarm in the U.K., as well as the all-new Indoor Cam and Stick Up Cam in several countries such as Canada, Australia, New Zealand, the U.K., France, Germany, Italy, and Spain.
  • Amazon Music has more than 55 million customers worldwide. Collectively, in the U.S., U.K., Germany, and Japan, Amazon Music customers have grown nearly 50% year-over-year; and in newer marketplaces France, Italy, Spain, and Mexico, Amazon Music customers more than doubled in 2019. Additionally, Amazon Music Unlimited subscribers grew more than 50% in 2019.
  • Amazon announced that free returns can now be made at more than 18,000 drop-off locations in the U.S., including Amazon Books and Amazon 4-star stores, Amazon Hub locations, Kohl’s, select Whole Foods Market stores, UPS, and more. In support of Amazon’s commitment to sustainability, more than 5,800 locations now offer label-free and box-free returns, limiting the amount of packaging used.
  • Amazon pledged to invest $1 billion to help digitize traders and micro, small, and medium-sized businesses (MSMBs) across India, with the goal of bringing more than 10 million MSMBs online by 2025. Today, there are more than 550,000 sellers on the Amazon India marketplace, more than 60,000 Indian manufacturers and brands are exporting their “Make in India” products to customers worldwide on Amazon, and we expect our new $1 billion investment to enable $10 billion in cumulative Indian exports by 2025.