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Amazon.com Announces First Quarter Sales up 17% to $59.7 Billion

April 25, 2019 4:01 PM

SEATTLE--(BUSINESS WIRE)-- Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its first quarter ended March�31, 2019.

Operating cash flow increased 89% to $34.4 billion for the trailing twelve months, compared with $18.2 billion for the trailing twelve months ended March�31, 2018. Free cash flow increased to $23.0 billion for the trailing twelve months, compared with $7.3 billion for the trailing twelve months ended March�31, 2018. Free cash flow less principal repayments of finance leases and financing obligations increased to $15.1 billion for the trailing twelve months, compared with $1.1 billion for the trailing twelve months ended March�31, 2018. Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations increased to an inflow of $11.8 billion for the trailing twelve months, compared with an outflow of $3.0 billion for the trailing twelve months ended March�31, 2018.

On January 1, 2019, we adopted accounting guidance amending the accounting for leases, which did not have a material impact on our first quarter operating results. Prior period amounts were not retrospectively adjusted. Under this new guidance, leases we previously referred to as “capital leases” are now referred to as “finance leases.”�Leases we previously referred to as “finance leases” are now referred to as “financing obligations.”

Common shares outstanding plus shares underlying stock-based awards totaled 507 million�on March�31, 2019, compared with 504 million one year ago.

Net sales increased 17% to $59.7 billion in the first quarter, compared with $51.0 billion in first quarter 2018. Excluding the $1.1 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 19% compared with first quarter 2018.

Operating income increased to $4.4 billion in the first quarter, compared with operating income of $1.9 billion in first quarter 2018.

Net income increased to $3.6 billion in the first quarter, or $7.09 per diluted share, compared with net income of $1.6 billion, or $3.27 per diluted share, in first quarter 2018.

“The son of a working single mom, Leo Jean Baptiste grew up speaking Haitian Creole in a New Jersey home without internet access. He’s also one of our inaugural group of 100 high school seniors to receive a $40,000 Amazon Future Engineer scholarship and Amazon internship,” said Jeff Bezos, Amazon founder and CEO. “He rose to the top of his class and is set to study computer science at college this fall, with the dream of getting a job in machine learning. Our passion for invention led us to create Amazon Future Engineer so we could help young people like Leo from underrepresented groups and underserved communities across the country. In addition to 100 college scholarships a year, we’re funding computer science classes in 1,000 high schools and counting, and inspiring younger kids to explore coding through coding camps and after-school programs. We love this program, and we can’t wait to see what Leo and his fellow future engineers invent.”

Highlights

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of April�25, 2019, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below.

Second Quarter 2019 Guidance

A conference call will be webcast live today at 2:30 p.m. PT/5:30 p.m. ET, and will be available for at least three months at amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains, and develops commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services, and technologies, system interruptions, government regulation and taxation, and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

Our investor relations website is amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases, which may contain material information about us, and you may subscribe to be notified of new information posted to this site.

About Amazon

Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit amazon.com/about and follow @AmazonNews.

AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
� �

�

Three Months Ended
March 31, 		Twelve Months Ended
March 31,
2018 � 2019 2018 � 2019
�
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 21,856 $ 32,173 $ 16,301 $ 17,616
OPERATING ACTIVITIES:
Net income 1,629 3,561 3,938 12,005
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other 3,671 4,854 12,714 16,524
Stock-based compensation 1,182 1,274 4,605 5,509
Other operating expense (income), net 56 (13 ) 216 205
Other expense (income), net (184 ) (135 ) (437 ) 268
Deferred income taxes 141 415 134 714
Changes in operating assets and liabilities:
Inventories 2,220 719 (2,309 ) (2,815 )
Accounts receivable, net and other 1,029 (401 ) (4,716 ) (6,043 )
Accounts payable (10,216 ) (6,384 ) 3,749 7,095
Accrued expenses and other (2,225 ) (2,932 ) (538 ) (235 )
Unearned revenue 906 � 888 � 838 � 1,133 �
Net cash provided by (used in) operating activities (1,791 ) 1,846 18,194 34,360
INVESTING ACTIVITIES:
Purchases of property and equipment (3,098 ) (3,290 ) (12,905 ) (13,619 )
Proceeds from property and equipment incentives 371 569 1,981 2,303
Acquisitions, net of cash acquired, and other (13 ) (1,169 ) (13,939 ) (3,342 )
Sales and maturities of marketable securities 2,677 2,643 10,444 8,205
Purchases of marketable securities (470 ) (6,876 ) (11,846 ) (13,506 )
Net cash provided by (used in) investing activities (533 ) (8,123 ) (26,265 ) (19,959 )
FINANCING ACTIVITIES:
Proceeds from long-term debt and other 125 190 16,332 833
Repayments of long-term debt and other (202 ) (351 ) (1,463 ) (817 )
Principal repayments of finance leases (2,015 ) (2,214 ) (5,981 ) (7,649 )
Principal repayments of financing obligations (72 ) (2 ) (235 ) (266 )
Net cash provided by (used in) financing activities (2,164 ) (2,377 ) 8,653 (7,899 )
Foreign currency effect on cash, cash equivalents, and restricted cash 248 � (12 ) 733 � (611 )
Net increase (decrease) in cash, cash equivalents, and restricted cash (4,240 ) (8,666 ) 1,315 � 5,891 �
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $ 17,616 � $ 23,507 � $ 17,616 � $ 23,507 �
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt $ 282 $ 286 $ 607 $ 858
Cash paid for operating leases — 709 — 709
Cash paid for interest on finance leases 75 165 234 471
Cash paid for interest on financing obligations 54 2 153 142
Cash paid for income taxes, net of refunds 513 168 1,224 840
Assets acquired under operating leases — 875 — 875
Property and equipment acquired under finance leases 2,270 2,628 10,020 10,972
Property and equipment acquired under build-to-suit arrangements 741 436 3,081 3,336

_____________________

On January 1, 2019, we adopted accounting guidance amending the accounting for leases, which did not have a material impact on our Q1 2019 operating results. Prior period amounts were not retrospectively adjusted. Under this new guidance, leases we previously referred to as “capital leases” are now referred to as “finance leases.”�Leases we previously referred to as “finance leases” are now referred to as “financing obligations.”

AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
�
� Three Months Ended
March 31,
2018 � 2019
�
Net product sales $ 31,605 $ 34,283
Net service sales 19,437 � 25,417 �
Total net sales 51,042 59,700
Operating expenses:
Cost of sales 30,735 33,920
Fulfillment 7,792 8,601
Marketing 2,699 3,664
Technology and content 6,759 7,927
General and administrative 1,067 1,173
Other operating expense (income), net 63 � (5 )
Total operating expenses 49,115 � 55,280 �
Operating income 1,927 4,420
Interest income 80 183
Interest expense (330 ) (366 )
Other income (expense), net 239 � 164 �
Total non-operating income (expense) (11 ) (19 )
Income before income taxes 1,916 4,401
Provision for income taxes (287 ) (836 )
Equity-method investment activity, net of tax — � (4 )
Net income $ 1,629 � $ 3,561 �
Basic earnings per share $ 3.36 � $ 7.24 �
Diluted earnings per share $ 3.27 � $ 7.09 �
Weighted-average shares used in computation of earnings per share:
Basic 484 � 491 �
Diluted 498 � 502 �
�
AMAZON.COM, INC.
Consolidated Statements of Comprehensive Income
(in millions)
(unaudited)
�
� Three Months Ended
March 31,
2018 � 2019
�
Net income $ 1,629 $ 3,561
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $21 and $(1) 59 (8 )
Net change in unrealized gains (losses) on available-for-sale debt securities:
Unrealized gains (losses), net of tax of $9 and $0 (44 ) 32
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $0 and $0 2 � 1 �
Net unrealized gains (losses) on available-for-sale debt securities (42 ) 33 �
Total other comprehensive income (loss) 17 � 25 �
Comprehensive income $ 1,646 � $ 3,586 �
�
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
�
Three Months Ended
March 31,
2018 � � 2019 �
�
�
North America
Net sales $ 30,725 $ 35,812
Operating expenses 29,576 � 33,525 �
Operating income $ 1,149 � $ 2,287 �
�
International
Net sales $ 14,875 $ 16,192
Operating expenses 15,497 � 16,282 �
Operating income (loss) $ (622 ) $ (90 )
�
AWS
Net sales $ 5,442 $ 7,696
Operating expenses 4,042 � 5,473 �
Operating income $ 1,400 � $ 2,223 �
�
Consolidated
Net sales $ 51,042 $ 59,700
Operating expenses 49,115 � 55,280 �
Operating income 1,927 4,420
Total non-operating income (expense) (11 ) (19 )
Provision for income taxes (287 ) (836 )
Equity-method investment activity, net of tax — � (4 )
Net income $ 1,629 � $ 3,561 �
�
Segment Highlights:
Y/Y net sales growth:
North America 46 % 17 %
International 34 9
AWS 49 41
Consolidated 43 17
Net sales mix:
North America 60 % 60 %
International 29 27
AWS 11 � 13 �
Consolidated 100 % 100 %
�
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
�
� December 31, 2018 � March 31, 2019
(unaudited)

ASSETS

Current assets:
Cash and cash equivalents $ 31,750 $ 23,115
Marketable securities 9,500 13,905
Inventories 17,174 16,432
Accounts receivable, net and other 16,677 � 15,979 �
Total current assets 75,101 69,431
Property and equipment, net 61,797

61,048

Operating leases —

20,132

Goodwill 14,548 14,708
Other assets 11,202 � 12,783 �
Total assets $ 162,648 � $ 178,102 �

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable $ 38,192 $ 31,809
Accrued expenses and other 23,663 24,588
Unearned revenue 6,536 � 7,298 �
Total current liabilities 68,391 63,695
Long-term lease liabilities 9,650 33,275
Long-term debt 23,495 23,322
Other long-term liabilities 17,563 9,400
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares — 500
Issued and outstanding shares — none — —
Common stock, $0.01 par value:
Authorized shares — 5,000
Issued shares — 514 and 516
Outstanding shares — 491 and 492 5 5
Treasury stock, at cost (1,837 ) (1,837 )
Additional paid-in capital 26,791 28,059
Accumulated other comprehensive loss (1,035 ) (1,010 )
Retained earnings 19,625 � 23,193 �
Total stockholders’ equity 43,549 � 48,410 �
Total liabilities and stockholders’ equity $ 162,648 � $ 178,102 �
�
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
�
� Q4 2017 � Q1 2018 � Q2 2018 � Q3 2018 � Q4 2018 � Q1 2019 �

Y/Y %

Change

Cash Flows and Shares � � � � � �
Operating cash flow -- trailing twelve months (TTM) (1) $ 18,365 $ 18,194 $ 21,793 $ 26,604 $ 30,723 $ 34,360 89 %
Operating cash flow -- TTM Y/Y growth 7 % 4 % 22 % 57 % 67 % 89 % N/A
Purchases of property and equipment, net of proceeds from property and equipment incentives -- TTM $ 10,058 $ 10,924 $ 11,372 $ 11,239 $ 11,323 $ 11,316 4 %
Principal repayments of finance leases -- TTM (2) $ 4,799 $ 5,981 $ 6,037 $ 7,016 $ 7,449 $ 7,649 28 %
Principal repayments of financing obligations -- TTM (2) $ 200 $ 235 $ 244 $ 277 $ 337 $ 266 13 %
Equipment acquired under finance leases -- TTM (2) (3) $ 9,637 $ 10,020 $ 9,631 $ 9,704 $ 10,615 $ 10,909 9 %
Principal repayments of all other finance leases -- TTM (2) (4) $ — $ — $ — $ — $ — $ 76 N/A
Free cash flow -- TTM (1) (5) $ 8,307 $ 7,270 $ 10,421 $ 15,365 $ 19,400 $ 23,044 217 %
Free cash flow less principal repayments of finance leases and financing obligations
-- TTM (1) (2) (6) 		$ 3,308 $ 1,054 $ 4,140 $ 8,072 $ 11,614 $ 15,129 N/A
Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations -- TTM (1) (2) (7) $ (1,530 ) $ (2,985 ) $ 546 $ 5,384 $ 8,448 $ 11,793 N/A
Common shares and stock-based awards outstanding 504 504 506 507 507 507 1 %
Common shares outstanding 484 485 487 489 491 492 1 %
Stock-based awards outstanding 20 19 19 18 16 15 (22 )%
Stock-based awards outstanding -- % of common shares outstanding 4.2 % 3.9 % 3.9 % 3.7 % 3.2 % 3.0 % N/A
Results of Operations
Worldwide (WW) net sales $ 60,453 $ 51,042 $ 52,886 $ 56,576 $ 72,383 $ 59,700 17 %
WW net sales -- Y/Y growth, excluding F/X 36 % 39 % 37 % 30 % 21 % 19 % N/A
WW net sales -- TTM $ 177,866 $ 193,194 $ 208,125 $ 220,958 $ 232,887 $ 241,546 25 %
WW net sales -- TTM Y/Y growth, excluding F/X 31 % 34 % 36 % 35 % 30 % 26 % N/A
Operating income $ 2,127 $ 1,927 $ 2,983 $ 3,724 $ 3,786 $ 4,420 129 %
F/X impact -- favorable (unfavorable) $ (33 ) $ (29 ) $ 42 $ 90 $ 123 $ 84 N/A
Operating income -- Y/Y growth (decline), excluding F/X 72 % 95 % 369 % 948 % 72 % 125 % N/A
Operating margin -- % of WW net sales 3.5 % 3.8 % 5.6 % 6.6 % 5.2 % 7.4 % N/A
Operating income -- TTM $ 4,106 $ 5,028 $ 7,384 $ 10,762 $ 12,421 $ 14,914 197 %
Operating income -- TTM Y/Y growth (decline), excluding F/X 1 % 25 % 115 % 231 % 197 % 190 % N/A
Operating margin -- TTM % of WW net sales 2.3 % 2.6 % 3.5 % 4.9 % 5.3 % 6.2 % N/A
Net income $ 1,856 $ 1,629 $ 2,534 $ 2,883 $ 3,027 $ 3,561 119 %
Net income per diluted share $ 3.75 $ 3.27 $ 5.07 $ 5.75 $ 6.04 $ 7.09 117 %
Net income -- TTM $ 3,033 $ 3,938 $ 6,275 $ 8,902 $ 10,073 $ 12,005 205 %
Net income per diluted share -- TTM $ 6.15 $ 7.90 $ 12.63 $ 17.85 $ 20.14 $ 23.96 203 %

____________________

(1) � As a result of the adoption of accounting guidance in Q1 2018, we retrospectively adjusted our consolidated statements of cash flows to add restricted cash to cash and cash equivalents.
(2) On January 1, 2019, we adopted accounting guidance amending the accounting for leases, which did not have a material impact on our Q1 2019 operating results. Prior period amounts were not retrospectively adjusted. Under this new guidance, leases we previously referred to as “capital leases” are now referred to as “finance leases.” Leases we previously referred to as “finance leases” are now referred to as “financing obligations.”
(3) For the twelve months ended March 31, 2019, this amount relates to equipment included in “Property and equipment acquired under finance leases” of $10,972 million. Amounts for prior periods have not been retrospectively adjusted.
(4) For the twelve months ended March 31, 2019, this amount relates to property included in “Principal repayments of finance leases” of $7,649 million. Amounts for prior periods have not been retrospectively adjusted.
(5) Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, net of proceeds from property and equipment incentives.”
(6) Free cash flow less principal repayments of finance leases and financing obligations is free cash flow reduced by “Principal repayments of finance leases” and “Principal repayments of financing obligations.”
(7) Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations is free cash flow reduced by equipment acquired under finance leases, which is included in “Property and equipment acquired under finance leases,” principal repayments of all other finance lease liabilities, which is included in “Principal repayments of finance leases,” and “Principal repayments of financing obligations.”
�
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)
�
� Q4 2017 � Q1 2018 � Q2 2018 � Q3 2018 � Q4 2018 � Q1 2019 �

Y/Y %
Change

Segments � � � � � �
North America Segment:
Net sales $ 37,302 $ 30,725 $ 32,169 $ 34,348 $ 44,124 $ 35,812 17 %
Net sales -- Y/Y growth, excluding F/X 42 % 46 % 44 % 35 % 18 % 17 % N/A
Net sales -- TTM $ 106,110 $ 115,843 $ 125,642 $ 134,545 $ 141,366 $ 146,453 26 %
Operating income $ 1,692 $ 1,149 $ 1,835 $ 2,032 $ 2,251 $ 2,287 99 %
F/X impact -- favorable (unfavorable) $ (8 ) $ (10 ) $ 1 $ 9 $ 17 $ 13 N/A
Operating income -- Y/Y growth (decline), excluding F/X 108 % 95 % 321 % N/A 32 % 98 % N/A
Operating margin -- % of North America net sales 4.5 % 3.7 % 5.7 % 5.9 % 5.1 % 6.4 % N/A
Operating income -- TTM $ 2,837 $ 3,390 $ 4,788 $ 6,708 $ 7,267 $ 8,405 148 %
Operating margin -- TTM % of North America net sales 2.7 % 2.9 % 3.8 % 5.0 % 5.1 % 5.7 % N/A
International Segment:
Net sales $ 18,038 $ 14,875 $ 14,612 $ 15,549 $ 20,829 $ 16,192 9 %
Net sales -- Y/Y growth, excluding F/X 22 % 21 % 21 % 15 % 19 % 16 % N/A
Net sales -- TTM $ 54,297 $ 58,111 $ 61,239 $ 63,074 $ 65,866 $ 67,184 16 %
Operating income (loss) $ (919 ) $ (622 ) $ (494 ) $ (385 ) $ (642 ) $ (90 ) (86 )%
F/X impact -- favorable (unfavorable) $ 20 $ 70 $ 86 $ 47 $ 55 $ (39 ) N/A
Operating income/loss -- Y/Y growth (decline), excluding F/X 93 % 44 % (20 )% (54 )% (24 )% (92 )% N/A
Operating margin -- % of International net sales (5.1 )% (4.2 )% (3.4 )% (2.5 )% (3.1 )% (1.0 )% N/A
Operating income (loss) -- TTM $ (3,062 ) $ (3,202 ) $ (2,971 ) $ (2,420 ) $ (2,142 ) $ (1,610 ) (50 )%
Operating margin -- TTM % of International net sales (5.6 )% (5.5 )% (4.9 )% (3.8 )% (3.3 )% (2.4 )% N/A
AWS Segment:
Net sales $ 5,113 $ 5,442 $ 6,105 $ 6,679 $ 7,430 $ 7,696 41 %
Net sales -- Y/Y growth, excluding F/X 44 % 48 % 49 % 46 % 46 % 42 % N/A
Net sales -- TTM $ 17,459 $ 19,240 $ 21,244 $ 23,339 $ 25,655 $ 27,909 45 %
Operating income $ 1,354 $ 1,400 $ 1,642 $ 2,077 $ 2,177 $ 2,223 59 %
F/X impact -- favorable (unfavorable) $ (45 ) $ (89 ) $ (45 ) $ 34 $ 51 $ 110 N/A
Operating income -- Y/Y growth, excluding F/X 51 % 67 % 84 % 75 % 57 % 51 % N/A
Operating margin -- % of AWS net sales 26.5 % 25.7 % 26.9 % 31.1 % 29.3 % 28.9 % N/A
Operating income -- TTM $ 4,331 $ 4,840 $ 5,567 $ 6,473 $ 7,296 $ 8,119 68 %
Operating margin -- TTM % of AWS net sales 24.8 % 25.2 % 26.2 % 27.7 % 28.4 % 29.1 % N/A
�
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except employee data)
(unaudited)
�
� Q4 2017 � Q1 2018 � Q2 2018 � Q3 2018 � Q4 2018 � Q1 2019 �

Y/Y %
Change

Net Sales: � � � � � �
Online stores (1) $ 35,383 $ 26,939 $ 27,165 $ 29,061 $ 39,822 $ 29,498 10 %
Online stores - Y/Y growth, excluding F/X 17 % 13 % 12 % 11 % 14 % 12 % N/A
Physical stores (2) $ 4,522 $ 4,263 $ 4,312 $ 4,248 $ 4,401 $ 4,307 1 %
Physical stores - Y/Y growth, excluding F/X N/A N/A N/A N/A (3 )% 1 % N/A
Third-party seller services (3) $ 10,523 $ 9,265 $ 9,702 $ 10,395 $ 13,383 $ 11,141 20 %
Third-party seller services - Y/Y growth, excluding F/X 38 % 39 % 36 % 32 % 28 % 23 % N/A
Subscription services (4) $ 3,177 $ 3,102 $ 3,408 $ 3,698 $ 3,959 $ 4,342 40 %
Subscription services - Y/Y growth, excluding F/X 47 % 56 % 55 % 52 % 26 % 42 % N/A
AWS $ 5,113 $ 5,442 $ 6,105 $ 6,679 $ 7,430 $ 7,696 41 %
AWS - Y/Y growth, excluding F/X 44 % 48 % 49 % 46 % 46 % 42 % N/A
Other (5) (6) $ 1,735 $ 2,031 $ 2,194 $ 2,495 $ 3,388 $ 2,716 34 %
Other - Y/Y growth, excluding F/X (6) 60 % 132 % 129 % 123 % 97 % 36 % N/A
�
Stock-based Compensation Expense
Cost of sales $ 14 $ 15 $ 19 $ 19 $ 21 $ 24 64 %
Fulfillment $ 256 $ 244 $ 320 $ 269 $ 287 $ 234 (4 )%
Marketing $ 148 $ 161 $ 190 $ 201 $ 217 $ 209 29 %
Technology and content $ 637 $ 631 $ 788 $ 719 $ 750 $ 675 7 %
General and administrative $ 124 $ 132 $ 151 $ 142 $ 142 $ 132 — %
Total stock-based compensation expense $ 1,179 $ 1,183 $ 1,468 $ 1,350 $ 1,417 $ 1,274 8 %
Other
WW shipping costs $ 7,368 $ 6,069 $ 5,990 $ 6,568 $ 9,041 $ 7,320 21 %
WW shipping costs -- Y/Y growth 31 % 38 % 31 % 22 % 23 % 21 % N/A
WW paid units -- Y/Y growth (7) 23 % 22 % 17 % 15 % 14 % 10 % N/A
WW seller unit mix -- % of WW paid units (7) 51 % 52 % 53 % 53 % 52 % 53 % N/A
Employees (full-time and part-time; excludes contractors & temporary personnel) 566,000 563,100 575,700 613,300 647,500 630,600 12 %
Employees (full-time and part-time; excludes contractors & temporary personnel) -- Y/Y growth 66 % 60 % 51 % 13 % 14 % 12 % N/A

____________________

(1) � Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, music, videos, games, and software. These product sales include digital products sold on a transactional basis. Digital product subscriptions that provide unlimited viewing or usage rights are included in Subscription services.
(2) Includes product sales where our customers physically select items in a store.
(3) Includes commissions and any related fulfillment and shipping fees, and other third-party seller services.
(4) Includes annual and monthly fees associated with Amazon Prime memberships, as well as audiobook, digital video, e-book, digital music, and other non-AWS subscription services.
(5) Primarily includes sales of advertising services, as well as sales related to our other service offerings.
(6) As a result of revenue recognition accounting guidance adopted on January 1, 2018, certain advertising services are classified as revenue rather than a reduction in cost of sales.
(7) Excludes the impact of Whole Foods Market.
�

Amazon.com, Inc.

Certain Definitions

Customer Accounts

Seller Accounts

AWS Customers

Units

Amazon.com Investor Relations

Dave Fildes, [email protected]

amazon.com/ir

Amazon.com Public Relations

Dan Perlet, [email protected]

amazon.com/pr

Source: Amazon.com, Inc.

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