SEATTLE — Amazon.com, Inc. announced financial results for its fourth quarter ended December 31, 2020.
- Operating cash flow increased 72% to $66.1 billion for the trailing twelve months, compared with $38.5 billion for the trailing twelve months ended December 31, 2019.
- Free cash flow increased to $31.0 billion for the trailing twelve months, compared with $25.8 billion for the trailing twelve months ended December 31, 2019.
- Free cash flow less principal repayments of finance leases and financing obligations increased to $20.3 billion for the trailing twelve months, compared with $16.2 billion for the trailing twelve months ended December 31, 2019.
- Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations increased to $21.4 billion for the trailing twelve months, compared with $12.5 billion for the trailing twelve months ended December 31, 2019.
- Common shares outstanding plus shares underlying stock-based awards totaled 518 million on December 31, 2020, compared with 512 million one year ago.
Fourth Quarter 2020
- Net sales increased 44% to $125.6 billion in the fourth quarter, compared with $87.4 billion in fourth quarter 2019. Excluding the $1.7 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 42% compared with fourth quarter 2019.
- Operating income increased to $6.9 billion in the fourth quarter, compared with operating income of $3.9 billion in fourth quarter 2019.
- Net income increased to $7.2 billion in the fourth quarter, or $14.09 per diluted share, compared with net income of $3.3 billion, or $6.47 per diluted share, in fourth quarter 2019.
Full Year 2020
- Net sales increased 38% to $386.1 billion, compared with $280.5 billion in 2019. Excluding the $1.4 billion favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 37% compared with 2019.
- Operating income increased to $22.9 billion, compared with operating income of $14.5 billion in 2019.
- Net income increased to $21.3 billion, or $41.83 per diluted share, compared with net income of $11.6 billion, or $23.01 per diluted share, in 2019.
Amazon is also announcing that Jeff Bezos will transition to the role of Executive Chair in the third quarter of 2021 and Andy Jassy will become Chief Executive Officer at that time.
“Amazon is what it is because of invention. We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more,” said Jeff Bezos, Amazon founder and CEO. “If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”
Empowering Small and Medium-Sized Businesses
- The 2020 holiday season was the best ever for independent businesses selling on Amazon—nearly all of which are small and medium-sized businesses—with worldwide sales growing over 50% compared to the same period in 2019. Sellers surpassed $4.8 billion in worldwide sales from Black Friday through Cyber Monday, growing about 60% from the previous year. During the holiday season as a whole, small and medium-sized businesses in the U.S. sold nearly one billion products in Amazon’s store.
- Since the start of the COVID-19 pandemic, Amazon has incurred more than $5 billion in operational costs on behalf of independent businesses selling in Amazon’s store, and expects to invest billions more through 2021. In 2020, Amazon increased square footage across its fulfillment and logistics network by 50%, dedicated 60% of fulfillment center capacity to seller products, and postponed annual selling fee adjustments until June 2021.
- As part of the AWS Activate program, Amazon provided more than $1 billion in AWS credits during 2020 to help early stage startups launch their businesses and accelerate their growth. With this help, startups are using scalable, reliable, and secure cloud services like compute, storage, database, analytics, Internet of Things, machine learning, and many others from AWS to scale their businesses.
Amazon launched small business accelerator programs across Europe to help entrepreneurs and small businesses succeed in the digital world. These programs offer free access to online training, expert advice, live events, and services, and they include the Amazon Small Business Accelerator in the UK, Quickstart-Online in Germany, Despega in Spain, Accelera con Amazon in Italy, and Accelerateur du Numerique in France. The programs are delivered in collaboration with associations and universities, and they have already supported tens of thousands of small businesses. - In December, Amazon India hosted Small Business Day, an event to increase visibility and sales for entrepreneurs and small businesses selling in Amazon’s store. Over 55,000 sellers from over 4,000 Postal Index Codes benefitted from Small Business Day, and over 1,500 sellers had their highest ever day of sales on Amazon.
- In 2020, thousands of independent authors earned more than $50,000 through Kindle Direct Publishing, with more than 1,000 authors surpassing $100,000 in royalties.
- In 2020, authors using Amazon’s self-publishing service Kindle Direct Publishing (KDP) earned more than $370 million in royalties from their participation in Kindle Unlimited. KDP authors have earned more than $1.5 billion from participation in Kindle Unlimited since 2014.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of February 2, 2021, 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. This guidance reflects our estimates as of February 2, 2021 regarding the impact of the COVID-19 pandemic on our operations, including those discussed above, and is highly dependent on numerous factors that we may not be able to predict or control, including: the duration and scope of the pandemic, including any recurrence; actions taken by governments, businesses, and individuals in response to the pandemic; the impact of the pandemic on global and regional economies and economic activity, workforce staffing and productivity, and our significant and continuing spending on employee safety measures; our ability to continue operations in affected areas; and consumer demand and spending patterns, as well as the effects on suppliers, creditors, and third-party sellers, all of which are uncertain. This guidance also assumes the impacts on consumer demand and spending patterns, including impacts due to concerns over the current economic outlook, will be in line with those experienced during the first quarter of 2021 to date, and the additional assumptions set forth below. However, it is not possible to determine the ultimate impact on our operations for the first quarter of 2021, or whether other currently unanticipated direct or indirect consequences of the pandemic are reasonably likely to materially affect our operations.
First Quarter 2021 Guidance
- Net sales are expected to be between $100.0 billion and $106.0 billion, or to grow between 33% and 40% compared with first quarter 2020. This guidance anticipates a favorable impact of approximately 300 basis points from foreign exchange rates.
- Operating income is expected to be between $3.0 billion and $6.5 billion, compared with $4.0 billion in first quarter 2020. This guidance assumes approximately $2.0 billion of costs related to COVID-19.
- This guidance assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded.