Amazon.com Announces Financial Results and CEO Transition

Rhea-AI Summary

Amazon.com, Inc. (NASDAQ: AMZN) reported a robust financial performance for the fourth quarter of 2020, with net sales soaring 44% to $125.6 billion. Operating income reached $6.9 billion, while net income totaled $7.2 billion, translating to $14.09 per diluted share. For the full year, net sales increased 38% to $386.1 billion, with net income of $21.3 billion or $41.83 per diluted share. Additionally, Jeff Bezos announced his transition to Executive Chair in Q3 2021, with Andy Jassy set to become the new CEO. The company continues to prioritize employee safety amid the ongoing pandemic.

Positive

• Operating cash flow rose 72% to $66.1 billion for the trailing twelve months.
• Free cash flow increased to $31.0 billion, up from $25.8 billion year-over-year.
• Net sales for Q4 2020 grew 44% compared to Q4 2019.
• Full-year net sales increased 38% to $386.1 billion.

Negative

• None.

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.

FAQ

What were Amazon's earnings results for Q4 2020?

Amazon reported net sales of $125.6 billion, operating income of $6.9 billion, and net income of $7.2 billion, or $14.09 per diluted share.

How did Amazon perform in 2020 compared to 2019?

In 2020, Amazon's net sales increased 38% to $386.1 billion, and net income rose to $21.3 billion, or $41.83 per diluted share.

What changes are happening in Amazon's leadership in 2021?

Jeff Bezos will transition to Executive Chair in Q3 2021, with Andy Jassy taking over as CEO.

What is Amazon's strategy regarding employee safety during the pandemic?

Amazon is prioritizing employee safety by advocating for vaccines, ramping up COVID-19 testing, and investing in additional pay for front-line workers.