Press Release: Amazon.com Announces First Quarter Sales up 28% to $29.1 Billion

SEATTLE — April 28, 2016 — Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its first quarter ended March 31, 2016.

Operating cash flow increased 44% to $11.3 billion for the trailing twelve months, compared with $7.8 billion for the trailing twelve months ended March 31, 2015. Free cash flow increased to $6.4 billion for the trailing twelve months, compared with $3.2 billion for the trailing twelve months ended March 31, 2015. Free cash flow less lease principal repayments increased to $3.5 billion for the trailing twelve months, compared with $1.5 billion for the trailing twelve months ended March 31, 2015. Free cash flow less finance lease principal repayments and assets acquired under capital leases increased to $1.6 billion for the trailing twelve months, compared with an outflow of $1.2 billion for the trailing twelve months ended March 31, 2015.

Common shares outstanding plus shares underlying stock-based awards totaled 490 million on March 31, 2016, compared with 483 million one year ago.

Net sales increased 28% to $29.1 billion in the first quarter, compared with $22.7 billion in first quarter 2015. Excluding the $210 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29% compared to first quarter 2015.

Operating income was $1.1 billion in the first quarter, compared with $255 million in first quarter 2015.

Net income was $513 million in the first quarter, or $1.07 per diluted share, compared with net loss of $57 million, or $0.12 per diluted share, in first quarter 2015.

“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year,” said Jeff Bezos, founder and CEO of Amazon.com. “Earlier this week, the $39 Fire TV Stick became the first product ever — from any manufacturer — to pass 100,000 customer reviews, including over 62,000 5 star reviews, also more than any other product ever sold on Amazon. Echo too is off to an incredible start, and we can’t yet manage to keep it in stock despite all efforts. We’re building premium products at non-premium prices, and we’re thrilled so many customers are responding to our approach.”

Highlights

• Amazon introduced Kindle Oasis, the thinnest and lightest Kindle, crafted from the ground up for readers with an all-new, incredibly thin and light design, plus an included charging cover that delivers months of battery life. Kindle Oasis, our eighth generation of Kindle, weighs just 4.6 ounces and is only 3.4 mm at its thinnest point — 30% thinner and over 20% lighter than any other Kindle.
• Amazon announced two Alexa-enabled devices: Amazon Echo Dot, a hands-free, voice-controlled device that uses the same far-field voice recognition as Amazon Echo — for less than $90; and Amazon Tap, an Alexa-enabled portable Bluetooth and Wi-Fi speaker for under $130.
• Amazon announced that Spotify Premium is now available in the U.S. on Echo. Spotify subscribers can listen to their music on Echo and ask Alexa to play any playlist, artist, genre, and more from Spotify’s catalog.
• Alexa added hundreds of new skills, which include requesting a car from Uber, ordering a pizza from Domino’s, checking your credit balance with Capital One, getting fitness information from Fitbit, receiving election updates from NBC News, and many more. Alexa also supports more smart home devices, including thermostats from Nest, ecobee, Insteon, and Honeywell so customers can control the temperature in their homes using only their voice.
• Amazon Dash Button has more than tripled the lineup of available brands. Customers can now choose from over 100 Dash Buttons, including Brawny, Doritos, Energizer, Honest Kids, Peet’s Coffee, Purina, Red Bull, Seventh Generation, and Starbucks.
• Amazon Studios acquired the rights to several high-profile films including Woody Allen’s Café Society, Whit Stillman’s Love & Friendship, and 2016 Sundance Film Festival titles Manchester by the Sea, Gleason, Author: The JT Leroy Story, and Wiener-Dog. Following its theatrical run, each film will become available exclusively to Prime members through Prime Video.
• Amazon’s second original live-action kids’ series, Just Add Magic, was the most successful Amazon Original Kids premiere with the most streams and hours in the first weekend.
• Prime Music teamed up with Macklemore & Ryan Lewis to live stream their album release concert for This Unruly Mess I’ve Made. The live stream was available to all Amazon customers at no cost.
• Amazon entered into agreements with Air Transport Services Group (ATSG) to lease 20 air cargo planes to support one and two-day delivery for U.S. customers. ATSG will operate the planes for Amazon.
• Prime Free Same-Day Delivery expanded to 11 new metro areas and now serves Prime members in 27 metro areas throughout the U.S.
• Amazon launched Prime Belgium with unlimited Free One-Day Shipping on millions of items, unlimited photo storage with Prime Photos, access to more than one million books to borrow with Kindle Owners’ Lending Library, and early access to flash sales.
• Amazon was ranked #1 in corporate reputation among the 100 most visible companies in America, according to the 23,000-person Harris Poll. Amazon was also ranked #1 on the Reputation Institute’s U.S. RepTrak 100 list of the most reputable companies, which is based on more than 83,000 ratings.
• U.K. consumers ranked Amazon #1 in customer satisfaction in a nationwide poll from the Institute of Customer Service. And for the second year in a row, customers selected Amazon.in as India’s most trusted online shopping brand, according to an annual Trust Research Advisory survey.
• The Amazon Global Store on Amazon.cn has grown to over 10 million items, providing Chinese customers with an easier and more convenient shopping experience with authentic products curated from the Amazon.com website.
• Amazon.in launched Amazon Tatkal, a studio-on-wheels offering a suite of launch services to sellers, including registration, imaging and cataloging services, and basic seller training. Since launching in February, Amazon Tatkal has reached sellers in 25 cities.
• Handmade at Amazon, featuring genuinely handcrafted items sold directly from artisans, has increased selection to nearly 400,000 products from 12,000 artisans in more than 80 countries.
• Amazon Home Services, providing customers with a simple way to buy and schedule professional services, now serves more than 40,000 U.S. zip codes with more than 1,200 service options across 45 categories.
• Amazon launched the Amazon Payments Partner Program, a global program that offers unique tools and services to help ecommerce service providers and developers integrate their merchant customers with Amazon Payments.
• Amazon Business, a B2B offering that includes features and benefits tailored to businesses, now serves more than 300,000 businesses ranging from small to Fortune 500 companies.
• Amazon launched Style Code Live, a daily live show dedicated to fashion and beauty that features trends and useful tips from style experts, looks that the audience can shop, and interactive features like live chat. Style Code Live is hosted by Lyndsey Rodrigues, Rachel Smith, and Frankie Grande, and has featured guests such as Meghan Trainor, Karolina Kurkova, Lauren Conrad, Whitney Port, and Molly Sims. The show streams free for all viewers weeknights at 9 p.m. ET/6 p.m. PT at www.amazon.com/stylecodelive.
• Amazon Education, TenMarks, and a coalition of non-profit education and education technology organizations launched the initiative “With Math I Can” to change student mindsets about math. The campaign challenges more than three million teachers and their students to replace the notion of “I’m not good at math” with “I am working to get better at math.” Teachers and students can visit www.withmathican.org to learn more.
• Amazon Web Services (AWS) announced Amazon Lumberyard, a free, cross-platform, 3D game engine for developers to create the highest-quality games, connect their games to compute and storage of the AWS Cloud, and engage fans on Twitch. Amazon Lumberyard helps developers build beautiful worlds, make realistic characters, and create stunning real-time effects.
• AWS announced the general availability of the AWS Database Migration Service, a fully managed service that allows customers to migrate their production Oracle, SQL Server, MySQL, MariaDB, and PostgreSQL databases from on-premises data centers to any of these engines or Amazon Aurora on AWS with virtually no downtime. So far this year, customers used the AWS Database Migration Service to move more than 2,000 databases to the AWS Cloud.
• AWS announced the general availability of Amazon Inspector, an automated security assessment service that helps customers improve the security and compliance of their applications deployed on Amazon Elastic Compute Cloud (Amazon EC2).
• AWS further enhanced its block storage service, Amazon Elastic Block Store (Amazon EBS), announcing two new low-cost hard disk drive (HDD)-backed storage options that offer customers predictable performance for big data workloads. Amazon EBS Throughput Optimized HDD (st1) and Cold HDD (sc1) volumes deliver consistent baseline performance with the ability to “burst” to higher throughput to meet the performance needs of big data applications like processing streaming data or performing data analytics.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of April 28, 2016, 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 2016 Guidance

• Net sales are expected to be between $28.0 billion and $30.5 billion, or to grow between 21% and 32% compared with second quarter 2015.
• Operating income is expected to be between $375 million and $975 million, compared with $464 million in second quarter 2015.
• This guidance includes approximately $825 million for stock-based compensation and other operating expense (income), net. It assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2:00 p.m. PT/5:00 p.m. ET, and will be available for at least three months at www.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 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, 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 www.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 and social media postings, which may contain material information about us, and you may subscribe to be notified of new information posted to this site.

About Amazon
Amazon.com opened on the World Wide Web in July 1995. The company 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 www.amazon.com/about.