Amazon.com Announces Financial Results and CEO Transition

Founder and CEO Jeff Bezos will transition to role of Executive Chair in Q3, Andy Jassy to become Chief Executive Officer of Amazon at that time

SEATTLE–(BUSINESS WIRE)–Amazon.com, Inc. (NASDAQ: AMZN) today 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 today 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.”

Highlights

Investing in Employee Safety and Providing Good Jobs

Amazon is working to ensure that its front-line employees receive vaccines as soon as possible. The company is closely monitoring the availability of COVID-19 vaccines worldwide, advocating on behalf of its employees, and working in partnership with global medical experts, governments, and health providers to accelerate vaccination programs.
Amazon continues to ramp up its in-house COVID-19 testing program as part of its investments to keep front-line employees safe. More than 700 employees are now tested every hour, and Amazon’s dedicated COVID-19 labs have processed more than one million tests globally.
Amazon recognized front-line employees by investing $2.5 billion in additional pay in 2020. This is on top of the company’s industry-leading starting wage of at least $15 an hour, which is double the federal minimum wage. All full-time employees also receive healthcare and full benefits from their first day on the job.
Amazon received the Lee Anderson Veteran and Military Spouse Employment Award for excellence in hiring, training, and retaining veterans, transitioning service members, and military spouses. Amazon employs more than 40,000 veterans and military spouses across the U.S.

Supporting Communities

Amazon announced a new Housing Equity Fund, a $2 billion commitment to preserve and create over 20,000 affordable housing units in Washington State’s Puget Sound region; Arlington, Virginia; and Nashville, Tennessee. The Fund provides below-market loans and grants to housing partners, public agencies, and minority-led organizations. It started with initial investments totaling $567 million for 2,300 affordable apartment homes.
Amazon announced plans to provide free cloud skills training to 29 million people around the world by 2025, as it continues to invest in upskilling and career development for its customers and employees. The AWS-designed programs range from self-paced online courses to intensive upskilling programs that help participants build new careers in the technology industry. This expands on Amazon’s Upskilling 2025 initiative, a $700 million commitment to upskill 100,000 U.S. employees by helping them transition into high-demand, high-paying jobs, as well as Career Choice, a program that pre-pays tuition for employees looking to earn degrees in in-demand fields.
Amazon unveiled plans for the second phase of construction for its headquarters in Arlington, Virginia. Amazon plans to build 2.8 million square feet of office space as part of its commitment to create 25,000 jobs and invest $2.5 billion in the community over the next decade. The project will create more than 2.5 acres of open space for the local community, run on renewable energy, and bring retail and other services to local residents.
Amazon in the UK expanded its long-standing partnership with nonprofit Magic Breakfast to reach more children at risk of hunger. In addition to being a significant financial donor, Amazon distributed more than two million free, healthy breakfasts to children studying at home due to COVID-19 who would normally receive these meals at school.
In the UK, Amazon delivered more than six million COVID-19 testing kits free of charge, in support of the government’s COVID-19 testing program.
Globally, Amazon has donated over 65,000 Echo devices, Fire Tablets, and other devices throughout the COVID-19 crisis to organizations that support frontline workers and first responders, and to help keep patients, students, and communities impacted by the pandemic connected.
In support of World AIDS Day and Giving Tuesday, Amazon announced the limited-edition (echo)^RED. Available in the all-new spherical design, (echo)^RED offers premium sound and a built-in smart home hub. Amazon will donate $10 of every (echo)^RED sale to support (RED)’s fight against AIDS and COVID-19 in sub-Saharan Africa. Customers can also donate to (RED)’s fight against the COVID-19 and HIV/AIDS pandemics on any Alexa-enabled device by simply saying, “Alexa, donate to RED.”
Ring announced a new program with Habitat for Humanity, a global nonprofit that shares Ring’s commitment to help make homes and neighborhoods safer, including a donation of $1 million worth of Ring Video Doorbells to provide Habitat homeowners with added peace of mind.

Protecting the Planet

Amazon became the world’s largest corporate purchaser of renewable energy, taking another step in its journey to be net-zero carbon by 2040. The company is investing in the building of 26 new utility-scale wind and solar projects in Australia, France, Germany, Italy, South Africa, Sweden, the UK, and the U.S., bringing Amazon’s total number of renewable energy projects to 127. Amazon’s investments will supply its operations with more than 18,000 gigawatt hours (GWh) of renewable energy annually, helping put the company on a path to achieve 100% renewable energy by 2025, five years ahead of the initial 2030 target.
Thirty-one organizations have signed The Climate Pledge, a commitment co-founded by Amazon and Global Optimism to achieve net-zero carbon by 2040. Twenty of those companies signed The Climate Pledge last quarter: Atos, Boom Supersonic, Brooks, Cabify, Canary Wharf Group, Coca-Cola European Partners, ERM, Groupe SEB France, Harbour Air, Henkel, ITV, JetBlue, Microsoft, Neste, Rivian, Rubicon, Signify, Uber, Unilever, and Vaude.
Amazon joined the Food Loss and Waste 2030 Champions group, an effort by the U.S. Environmental Protection Agency and Department of Agriculture to reduce food loss and waste within U.S. company operations by 50% by 2030.
Amazon expanded Climate Pledge Friendly, a program to help customers discover and shop for more sustainable products, in five countries across Europe. The program launched with over 40,000 Climate Pledge Friendly products in France, Germany, Italy, Spain, and the UK.

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.

Shopping and Entertainment

Thanks to customers, employees, and selling partners, Amazon had a record-breaking holiday season, delivering more than a billion toys, home, fashion, electronics, beauty, and personal care products to customers worldwide.
Amazon Pharmacy launched in the U.S., bringing prescription medications to customers’ doorsteps. Customers can now browse medications, create a secure pharmacy profile, and request or manage prescriptions on Amazon.com. Prime members receive unlimited, free two-day delivery on Amazon Pharmacy orders with their membership.
Amazon launched a new Amazon Prime prescription savings benefit, which brings pharmacy savings to customers who pay without insurance and can be used at 50,000 participating pharmacies nationwide.
Amazon Fashion introduced Made For You, a way for customers to design custom T-shirts to their exact measurements and style preferences. For just $25, U.S. shoppers can customize a T-shirt’s fit, fabric, color, sleeve length, shirt length, neckline, and back-neck label.
Amazon India’s Great Indian Festival shopping event focused on enabling the revival of small and medium-sized businesses and helping customers, even in remote areas of the country, shop safely and conveniently from their homes. During the month-long event, customers purchased items from over 110,000 sellers, the majority of whom were from rural towns.
Hudson, a travel experience leader with over 1,000 stores across North America, announced it will use Amazon’s Just Walk Out technology in select travel convenience stores. Just Walk Out technology enables shoppers to enter a store, grab what they want, and just go. The first Hudson store with Just Walk Out technology is planned to open in early 2021 at Dallas Love Field Airport, with additional stores coming later this year.
Amazon Fresh grocery stores expanded into seven new communities in the U.S.: Irvine, CA; Ladera Heights, CA; Naperville, IL; North Hollywood, CA; Northridge, CA; Schaumburg, IL; and Whittier, CA. To support the continued growth, Amazon is hiring thousands of grocery associates across Chicagoland, the greater Los Angeles area, and Seattle.
Amazon was identified as the best overall grocery retailer by dunnhumby Retailer Preference Index that ranks the top 57 grocery retailers in the U.S. based on an annual survey of 10,000 U.S. households. The survey also placed Amazon at the top of the list for customer safety ratings.
Amazon Music signed an agreement to acquire innovative podcast publisher, Wondery. Through this acquisition, Amazon Music aims to accelerate the growth and evolution of podcasts by bringing creators, hosts, and immersive experiences to even more listeners across the globe. Wondery will be able to provide more high-quality, innovative content, continuing their mission of bringing a world of entertainment and knowledge to their audiences, wherever they listen. The acquisition is not yet closed and is subject to customary closing conditions.
Prime Video continues to launch Amazon Original series and movies globally. Amazon Original movie Borat Subsequent Moviefilm, starring Sacha Baron Cohen, generated tens of millions of customer streams globally on opening weekend. Other popular Amazon Original movies include Uncle Frank, Sylvie’s Love, Sound of Metal, and I’m Your Woman. Prime Video members also enjoyed new and returning Amazon Original series and specials such as What the Constitution Means to Me, Utopia, Truth Seekers, The Pack, Small Axe, The Wilds, The Expanse, Yearly Departed, and the final season of Vikings. Internationally, locally produced Amazon Originals debuting included FERRO (Italy), El Cid (Spain), The Challenge: ETA (Spain), BILD.Macht.Deutschland? (Germany), Binge Reloaded (Germany), Truth Seekers (UK), The Grand Tour: A Massive Hunt (UK), All or Nothing: Tottenham Hotspur (UK), The Bachelorette (Japan), Mirzapur (India), and Locas por el Cambio (Mexico).
The fourth quarter marked Prime Video’s strongest viewership for live sports globally. In the U.S., Prime Video’s exclusive coverage of the San Francisco 49ers vs. Arizona Cardinals game on December 26 drew an estimated 11.2 million total viewers and delivered the highest digital average-minute-audience ever for an NFL regular season game. In the UK, the number of customers tuning into live Premier League football grew for the second season as millions watched 22 live and exclusive matches on Prime Video. In addition, millions of Prime members streamed live, international rugby for the first-ever Autumn Nations Cup tournament; and in India, Prime Video announced its first foray into live sports, with the acquisition of India territory rights for New Zealand Cricket through 2025-26.
Amazon Studios announced deals for upcoming Prime Video series and movies, including the Eddie Murphy comedy Coming 2 America, which premieres in March on Prime Video globally and an unscripted docuseries and new coming-of-age series based on Jessica Simpson’s best-selling memoir Open Book.

Amazon Devices and Services

Amazon announced that Fire TV now reaches more than 50 million monthly active users around the world. Amazon also secured new content deals with premium streaming providers, including HBO Max, discovery+, and Xfinity in the U.S.; Disney+ in Mexico and Brazil; NOW TV in the UK; and CANAL+ in France. The new Fire TV Experience released globally includes a redesigned Home Screen, Profiles, and a new voice-first experience with Alexa to easily discover content.
Zoox revealed the first look at their fully functional, electric, autonomous vehicle, which features bi-directional driving and is capable of speeds up to 75 miles per hour.
Amazon announced Alexa Custom Assistant, a new service that lets device makers, auto makers, and service providers create custom-branded voice assistants that are powered by and work in cooperation with Alexa. The Alexa Custom Assistant can be built into automobiles and consumer electronics, including smart displays, speakers, set top boxes, fitness devices, and more, providing a complete, managed voice solution that substantially reduces cost, complexity, and time to market.
Amazon continued to make progress on Project Kuiper, a low earth orbit satellite constellation that will increase broadband access for unserved and underserved communities around the world. In December, the team revealed designs for the Ka-band phased array antenna that will be used in its customer terminal. The antenna is smaller and lighter than legacy designs, allowing Amazon to produce a customer terminal that is more affordable and easier to install.
Ring introduced general availability of its new Mailbox Sensor to customers, launched Customizable Motion Zones for all battery-powered Ring Video Doorbells and Security Cameras, and became the first major smart home security company to offer Video End-to-End Encryption. Additionally, Ring announced Ring Video Doorbell Wired, its smallest doorbell yet, and availability of the Ring Alarm in Spain.
Amazon took another step toward making interactions with Alexa more natural, and skills more discoverable, by introducing a new capability that infers customers’ latent goals—goals that are implicit in customer requests but not directly expressed—and seamlessly transitions to a relevant skill without requiring the name of the skill, or repeating the same information across skills.
Key by Amazon’s In-Garage Delivery service expanded to tens of millions of Prime members in over 4,000 cities in the U.S., enabling them to enjoy free, contactless, and secure package delivery conveniently inside their garage to keep packages safe.
Amazon announced the first Alexa built-in commercial trucking integration in Volvo Trucks in the EU; the first integration in Brazil with BMW’s BMWi and MINI cars; and new vehicle launches with Dodge Durango, Chrysler Pacifica, Fiat 500 electric, and Acura MDX. Additionally, new Alexa integrations were announced at the Consumer Electronics Show (CES), including Harman, Intel, Lenovo, TP-Link, Rise Gardens, and more.
Alexa added Netflix to its global roster of streaming service providers for Echo Show customers, giving them more at-home entertainment options. Amazon also added podcast support to Alexa from services like Amazon Music, Apple, and Spotify in more countries around the world.
Alexa became more multilingual, allowing members of a household to interact with Alexa in two different languages without needing to change the settings. In the U.S., multilingual mode allows bilingual customers to code-switch from English to Spanish, and vice versa. Amazon also launched multilingual mode in new languages and countries including Germany, Spain, France, Italy, and Japan.
Amazon added new Alexa features that make customers’ daily lives more convenient, including the ability to share a shopping list with Alexa contacts by voice, video calling on Fire TV, and new Alexa Routines on Fire TV.

Amazon Web Services

AWS announced significant customer momentum during the quarter with new commitments and migrations spanning major industries, including financial services with JPMorgan Chase, Itaú Unibanco (Latin America’s largest bank), Standard Chartered Bank, and Nationwide; media and entertainment with Metro-Goldwyn-Mayer (MGM), Thomson Reuters, and ViacomCBS; technology with Arm and Twitter; travel with Boom Technology, Inc. (Boom Supersonic) and Star Alliance (the world’s largest airline alliance); retail and e-commerce with Mercado Libre (Latin America’s largest online commerce and payments provider) and Zalando (Europe’s largest online fashion and lifestyle platform); power and utilities with Siemens Smart Infrastructure (a Siemens AG business group that focuses on energy distribution and intelligent buildings); and automotive with The BMW Group, as well as a multi-year, global agreement to develop and market BlackBerry’s Intelligent Vehicle Data Platform, IVY.
At AWS re:Invent, Amazon’s ninth-annual learning conference for the global cloud computing and information technology communities, AWS attracted over 570,000 registered attendees and announced 180 new services and features, including:
- The industry’s first cloud-based Mac instances (EC2 Mac instances for Amazon Elastic Compute Cloud) that enable customers to develop, scale, and run macOS workloads in AWS.
- Five new services that push the envelope on price performance and extend Amazon EC2’s lead as the broadest and deepest portfolio of compute instances in the cloud, including Graviton2-powered C6gn instances that provide 40% better price performance for networking and compute-intensive workloads over comparable current generation x86-based instances, AMD-powered G4ad Graphics Processing Unit (GPU) instances that offer the industry’s best price performance for graphics-intensive applications, M5zn instances that deliver the fastest Intel Xeon Scalable processors in the cloud, Intel-powered D3/D3en instances that offer the highest storage capacity for local HDD storage in the cloud, and memory-optimized R5b instances that deliver the fastest block storage performance available for Amazon EC2.
- Nine new capabilities for Amazon SageMaker that make it even easier for developers and data scientists to prepare, build, train, deploy, and manage machine learning models.
- Five new services for industrial customers that use machine learning to improve operational efficiency, quality control, security, and workplace safety. Amazon Monitron and Amazon Lookout for Equipment use sensor data to enable predictive maintenance.

Contacts

Amazon Investor Relations

Dave Fildes, amazon-ir@amazon.com

amazon.com/ir

Amazon Public Relations

Dan Perlet, amazon-pr@amazon.com

amazon.com/pr

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