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SalesTechPro

  • Salesforce Acquires MetaMind To Add AI to Services

    Salesforce Acquires MetaMind To Add AI to Services

    Artificial intelligence startup MetaMind launched in late 2014 with $8 million in funding from Salesforce CEO Mark Benioff and Khosla Ventures. Now, Salesforce has has acquired it.

    Salesforce will integrate MetaMind’s technology into its services.

    “With MetaMind and Salesforce coming together, we’ll be able to offer customers real AI solutions with breakthrough capabilities that further automate and personalize customer support, marketing automation, and many other business processes,” says MetaMind co-founder and CEO Richard Socher. “We’ll extend Salesforce’s data science capabilities by embedding deep learning within the Salesforce platform.”

    “Over the past year and a half, we’ve been on a mission to empower business users with state of the art deep learning technology to simplify, improve and automate decision making,” he says. “And now, we’ll be able to continue our journey at Salesforce on a much larger scale, with the resources and ecosystem of one of the world’s most innovative and influential enterprise software companies.”

    While under Salesforce, MetaMind intends to continue its AI research. According to Socher, they’ll be publishing “groundbreaking discoveries” that advance the technology. They’re also hiring.

    MetaMind’s products will be discontinued on May 4 for unpaid web users with June 4 being the end date for recurring monthly users. The company says all user data will be deleted “promptly” after closing.

    Terms of the deal were not disclosed.

  • Salesforce Launches Quotable Content Site For Salespeople

    Salesforce Launches Quotable Content Site For Salespeople

    This week, Salesforce announced the launch of Quotable, a new site with articles aimed at benefiting sales professionals of all types.

    According to the company, it will be full of helpful sales advice from salespeople “who’ve lived it.”

    “Let’s say you’re a vice president of sales at a startup or a company that’s just getting off the ground,” writes Sara Varni on the Salesforce blog. “You’re tasked with building a sales team from scratch and are thinking about all of the processes that involves. You could really use some practical hands-on information about how to get up and running.”

    “Or say you’re a sales account executive who has had a lot of success where you are in your career,” she adds. “You’re looking for advice on how to make the jump to the next level. What does it take to become a sales manager? Would you even make a good sales manager, or should you stay where you are and keep crushing your quota?”

    This is who Quotable is for. You an peruse the site here, and find content about technology for concept selling, how prospects can tell if you’ve done your due diligence, how to respond to a particular blow off, etc.

    Image via Salesforce

  • Amazon Earnings Out, Sales up 22%

    Amazon Earnings Out, Sales up 22%

    Amazon just announced its earnings for Q4 with sales up 22% to $35.7 billion.

    Operating cash flow was up 74% to $11.9 billion over the year with free cash flow up to $7.3 billion.

    EPS was $1, which was significantly lower than Wall Street expectations.

    CEO Jeff Bezos said, “Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift. This year, we pass $100 billion in annual sales and serve 300 million customers. And still, measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like Day 1.”

    Here’s the release in its entirety:

    SEATTLE–(BUSINESS WIRE)–Jan. 28, 2016– Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2015.

    Operating cash flow increased 74% to $11.9 billion for the trailing twelve months, compared with $6.8 billion for the trailing twelve months ended December 31, 2014. Free cash flow increased to $7.3 billion for the trailing twelve months, compared with $1.9 billion for the trailing twelve months ended December 31, 2014. Free cash flow less lease principal repayments increased to $4.7 billion for the trailing twelve months, compared with $529 million for the trailing twelve months ended December 31, 2014. Free cash flow less finance lease principal repayments and assets acquired under capital leases increased to $2.5 billion for the trailing twelve months, compared with an outflow of $2.2 billion for the trailing twelve months ended December 31, 2014.

    Common shares outstanding plus shares underlying stock-based awards totaled 490 million on December 31, 2015, compared with 483 million one year ago.

    Fourth Quarter 2015

    Net sales increased 22% to $35.7 billion in the fourth quarter, compared with $29.3 billion in fourth quarter 2014. Excluding the $1.2 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 26% compared with fourth quarter 2014.

    Operating income increased 88% to $1.1 billion in the fourth quarter, compared with operating income of $591 million in fourth quarter 2014.

    Net income was $482 million in the fourth quarter, or $1.00 per diluted share, compared with net income of $214 million, or$0.45 per diluted share, in fourth quarter 2014.

    Full Year 2015

    Net sales increased 20% to $107.0 billion, compared with $89.0 billion in 2014. Excluding the $5.2 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 26% compared with 2014.

    Operating income was $2.2 billion, compared with operating income of $178 million in 2014.

    Net income was $596 million, or $1.25 per diluted share, compared with net loss of $241 million, or $0.52 per diluted share, in 2014.

    “Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift. This year, we pass $100 billion in annual sales and serve 300 million customers,” said Jeff Bezos, founder and CEO of Amazon.com. “And still, measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like Day 1.”

    Highlights

    • Fire TV remains the #1 best-selling streaming media player in the U.S., having added over 1,000 new apps, channels, and games since September, including NBC, NBC Sports, Watch HGTV, Watch Food Network, and Watch Travel Channel.
    • The $50 Fire tablet has been the #1 best-selling, most gifted, and most wished-for product across all items available on Amazon.com since its introduction 19 weeks ago.
    • The Alexa Skills Kit and Alexa Voice Service continue to attract innovative companies, with Ford, Invoxia, Vivint,Alarm.com, and Ooma announcing plans to integrate their products and services with Alexa. In addition, Alexa continues to get smarter with new features, including local search from Yelp, news sources from CNN andBloomberg, enhanced IFTTT support, new alarm tones, and customized sports updates.
    • Last quarter, developers added over 100 new capabilities to Alexa-enabled devices. Amazon Echo and Fire TV customers can now play Jeopardy!, get stock quotes with Fidelity, hear headlines from The Huffington Post, exercise with a seven-minute workout, and test their Star Wars knowledge with a trivia quiz from Disney.
    • Amazon announced the first devices available with Amazon Dash Replenishment Service, including products from Brother, GE, and Gmate. Additionally, new brands and devices have joined the Dash Replenishment program, including Purell and Whirlpool.
    • In 2015, worldwide paid Prime memberships increased 51% — 47% in the U.S. and even faster outside the U.S.
    • Prime Video continues to grow internationally with nearly double the streaming customers compared with fourth quarter 2014.
    • The Prime-exclusive Original Series Mozart in the Jungle received two Golden Globes for Best Television Series – Musical or Comedy and Best Performance by an Actor in a Television Series – Musical or Comedy (Gael García Bernal).
    • Over the holidays Prime members made The Man in The High Castle the most watched series on Prime Video by 4.5x. The Amazon Original Series received outstanding critical acclaim, including USA Today calling it the “best new drama of the season.”
    • The second season of hit show Transparent was named as one of the top television series of 2015 by The New York Times, Variety, IndieWire, and The New Yorker.
    • Amazon Studios released its first Original Movie Chi-Raq, directed by Spike Lee, to rave reviews. The film has been included in 2015 “Best Films” lists from LA Weekly, The New Yorker, The Washington Post, Los Angeles Times, Slant, and Vulture.
    • Amazon launched the Streaming Partners Program, an over-the-top streaming subscription program that gives Prime members the option to add SHOWTIME, STARZ, and dozens more video subscriptions to their Prime membership.
    • In the fourth quarter, Prime Music streaming hours more than tripled in the U.S. compared with fourth quarter 2014.
    • Prime Music launched in Germany and Japan, offering Prime members more than one million songs and hundreds of playlists at no additional cost to their membership.
    • Since launching in December 2014 with one location, Prime Now has grown to more than 25 metropolitan areas across the U.S., U.K., Italy, and Japan.
    • Prime Same Day launched in the U.K. and Germany, offering Prime members unlimited free same-day delivery on a million items.
    • Amazon Pantry launched in the U.K., allowing Prime members to purchase daily essentials in everyday sizes and have items delivered for a low, flat-rate fee.
    • In 2015, Fulfillment by Amazon (FBA) shipped over one billion units on behalf of sellers. The number of active sellers using FBA grew more than 50%.
    • In the fourth quarter, FBA units represented nearly 50% of total third-party units.
    • Payment volume from Pay with Amazon grew more than 150% year-over-year in 2015, giving Amazon shoppers a secure way to pay on thousands of websites using information already stored in their Amazon accounts.
    • Amazon China launched the Amazon Global Store (AGS) 2.0 customer experience, which provides customers an easier and more convenient shopping experience through single login, unified shopping cart, and local payment. Additionally, AGS selection has grown to over nine million items.
    • Amazon.in was the top e-commerce site in India throughout the fourth quarter, including the busy Diwali shopping season, according to global analytics firm comScore.
    • Downloads of the Amazon.in mobile shopping app grew faster in the fourth quarter than any other e-commerce app in India, according to app analytics firm App Annie.
    • Sellers on Amazon.in sold more in the fourth quarter than in all four quarters combined in 2014.
    • Amazon Fashion, East Dane, and MyHabit return as the lead sponsor for the second season of New York Fashion Week: Men’s, hosted by The Council of Fashion Designers of America.
    • Amazon Launchpad, a program that helps startups launch, market, and distribute their products, has worked with leading venture capital firms, startup accelerators, and crowd-funding platforms to help more than 500 startups launch over 750 products in the U.S., U.K., and China.
    • Amazon entered into an agreement to support the construction and operation of Amazon Wind Farm U.S. Central, which is expected to generate approximately 320,000 megawatt hours (MWh) of wind energy on an annual basis. Amazon Wind Farm U.S. Central, combined with Amazon’s previously announced projects, Amazon Wind Farm Fowler Ridge, Amazon Solar Farm U.S. East in Virginia, and Amazon Wind Farm U.S. East in North Carolina, will be responsible for delivering more than 1.6 million MWh of additional renewable energy annually, roughly equivalent to the amount of energy required to power 150,000 U.S. homes for a year.
    • Only eight months after launch, Amazon Business, a marketplace with features and benefits tailored to businesses, serves more than 200,000 businesses ranging from small businesses to Fortune 500 companies.
    • Amazon Web Services (AWS) announced the launch of its Asia Pacific (Seoul) Region in Korea and its plans to open a new region in Canada. The AWS Cloud is now available from 32 Availability Zones across 12 geographic regions worldwide, with another five AWS Regions (and 11 Availability Zones) in Canada, China, India, Ohio, and the U.K. expected to be available in the coming year.
    • AWS announced the general availability of Amazon WorkMail, a secure, managed business email and calendaring service with support for existing desktop and mobile email clients.
    • AWS announced the general availability of AWS IoT, a managed cloud platform that lets billions of connected devices — such as mobile phones, cars, factory floors, aircraft engines, sensor grids, and more — easily and securely interact with cloud applications and other devices. AWS IoT can support trillions of messages, and can process, route, and keep track of those messages to AWS endpoints and other devices reliably and securely, even when the devices aren’t connected.
    • AWS announced AWS Certificate Manager (ACM), a new service that enables customers to easily provision, manage, and deploy Secure Sockets Layer/Transport Layer Security (SSL/TLS) certificates for use with AWS services. SSL/TLS certificates are used to secure network communications and establish the identity of websites over the Internet. Certificates, which typically cost between $45 and $499, are provided to AWS customers free of charge through ACM and are verified by Amazon’s certificate authority, Amazon Trust Services.
    • AWS launched EC2 Scheduled Reserved Instances, allowing customers to reserve capacity for their applications that run on a part-time, recurring basis with a daily, weekly, or monthly schedule over the course of a one-year term.
    • AWS announced 722 significant new services and features in 2015, a 40% increase over 2014.

    Financial Guidance

    The following forward-looking statements reflect Amazon.com’s expectations as of January 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 and online commerce, and the various factors detailed below.

    First Quarter 2016 Guidance

    • Net sales are expected to be between $26.5 billion and $29.0 billion, or to grow between 17% and 28% compared with first quarter 2015.
    • Operating income is expected to be between $100 million and $700 million, compared with $255 million in first quarter 2015.
    • This guidance includes approximately $600 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 atwww.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 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 theSEC, 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 byAmazon. For more information, visit www.amazon.com/about.

    AMAZON.COM, INC.
    Consolidated Statements of Cash Flows
    (in millions)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015

    2014
    (unaudited)
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 10,709 $ 5,258 $ 14,557 $ 8,658
    OPERATING ACTIVITIES:
    Net income (loss) 482 214 596 (241 )
    Adjustments to reconcile net income (loss) to net cash from operating activities:
    Depreciation of property and equipment, including internal-use software and website development, and other amortization, including capitalized content costs 1,752 1,379 6,281 4,746
    Stock-based compensation 606 408 2,119 1,497
    Other operating expense (income), net 35 36 155 129
    Losses (gains) on sales of marketable securities, net 1 — 5 (3 )
    Other expense (income), net 79 78 245 62
    Deferred income taxes 190 185 81 (316 )
    Excess tax benefits from stock-based compensation 93 115 (119 ) (6 )
    Changes in operating assets and liabilities:
    Inventories (1,343 ) (1,139 ) (2,187 ) (1,193 )
    Accounts receivable, net and other (1,178 ) (1,104 ) (1,755 ) (1,039 )
    Accounts payable 6,140 5,053 4,294 1,759
    Accrued expenses and other 1,836 1,451 913 706
    Additions to unearned revenue 2,422 1,378 7,401 4,433
    Amortization of previously unearned revenue (2,303 ) (1,339 ) (6,109 ) (3,692 )
    Net cash provided by (used in) operating activities 8,812 6,715 11,920 6,842
    INVESTING ACTIVITIES:
    Purchases of property and equipment, including internal-use software and website development, net (1,309 ) (1,144 ) (4,589 ) (4,893 )
    Acquisitions, net of cash acquired, and other (317 ) (53 ) (795 ) (979 )
    Sales and maturities of marketable securities 1,135 355 3,025 3,349
    Purchases of marketable securities (1,359 ) (1,623 ) (4,091 ) (2,542 )
    Net cash provided by (used in) investing activities (1,850 ) (2,465 ) (6,450 ) (5,065 )
    FINANCING ACTIVITIES:
    Excess tax benefits from stock-based compensation (93 ) (115 ) 119 6
    Proceeds from long-term debt and other 93 5,981 353 6,359
    Repayments of long-term debt and other (940 ) (183 ) (1,652 ) (513 )
    Principal repayments of capital lease obligations (724 ) (406 ) (2,462 ) (1,285 )
    Principal repayments of finance lease obligations (26 ) (68 ) (121 ) (135 )
    Net cash provided by (used in) financing activities (1,690 ) 5,209 (3,763 ) 4,432
    Foreign-currency effect on cash and cash equivalents (91 ) (160 ) (374 ) (310 )
    Net increase (decrease) in cash and cash equivalents 5,181 9,299 1,333 5,899
    CASH AND CASH EQUIVALENTS, END OF PERIOD $ 15,890 $ 14,557 $ 15,890 $ 14,557
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest on long-term debt $ 148 $ 36 $ 325 $ 91
    Cash paid for interest on capital and finance lease obligations 44 29 153 86
    Cash paid for income taxes (net of refunds) 73 30 273 177
    Property and equipment acquired under capital leases 1,332 1,214 4,717 4,008
    Property and equipment acquired under build-to-suit leases 163 214 544 920
    AMAZON.COM, INC.
    Consolidated Statements of Operations
    (in millions, except per share data)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    (unaudited)
    Net product sales $ 26,618 $ 23,102 $ 79,268 $ 70,080
    Net service sales 9,129 6,226 27,738 18,908
    Total net sales 35,747 29,328 107,006 88,988
    Operating expenses (1):
    Cost of sales 24,341 20,671 71,651 62,752
    Fulfillment 4,546 3,424 13,410 10,766
    Marketing 1,755 1,526 5,254 4,332
    Technology and content 3,571 2,635 12,540 9,275
    General and administrative 390 442 1,747 1,552
    Other operating expense (income), net 36 39 171 133
    Total operating expenses 34,639 28,737 104,773 88,810
    Income from operations 1,108 591 2,233 178
    Interest income 13 8 50 39
    Interest expense (115 ) (74 ) (459 ) (210 )
    Other income (expense), net (68 ) (96 ) (256 ) (118 )
    Total non-operating income (expense) (170 ) (162 ) (665 ) (289 )
    Income (loss) before income taxes 938 429 1,568 (111 )
    Provision for income taxes (453 ) (205 ) (950 ) (167 )
    Equity-method investment activity, net of tax (3 ) (10 ) (22 ) 37
    Net income (loss) $ 482 $ 214 $ 596 $ (241 )
    Basic earnings per share $ 1.03 $ 0.46 $ 1.28 $ (0.52 )
    Diluted earnings per share $ 1.00 $ 0.45 $ 1.25 $ (0.52 )
    Weighted-average shares used in computation of earnings per share:
    Basic 470 464 467 462

    Diluted

    		 481 472 477 462

    ______________________________
    (1) Includes stock-based compensation as follows:
    Fulfillment $ 137 $ 97 $ 482 $ 375
    Marketing 57 34 190 125
    Technology and content 364 226 1,224 804
    General and administrative 48 51 223 193
    AMAZON.COM, INC.
    Consolidated Statements of Comprehensive Income (Loss)
    (in millions)

    Three Months Ended

    		 Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    (unaudited)
    Net income (loss) $ 482 $ 214 $ 596 $ (241 )
    Other comprehensive income (loss):
    Foreign currency translation adjustments, net of tax of $7, $(3), $10, and $(3) (40 ) (116 ) (210 ) (325 )
    Net change in unrealized gains (losses) on available-for-sale securities:
    Unrealized gains (losses), net of tax of $1, $1, $(5), and $1 (9 ) 2 (7 ) 2
    Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $0, $(1), $0, and $(1) 1 (2 ) 5 (3 )
    Net unrealized gains (losses) on available-for-sale securities (8 ) — (2 ) (1 )
    Total other comprehensive income (loss) (48 ) (116 ) (212 ) (326 )
    Comprehensive income (loss) $ 434 $ 98 $ 384 $ (567 )
    AMAZON.COM, INC.
    Segment Information
    (in millions)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    (unaudited)
    North America
    Net sales $ 21,501 $ 17,333 $ 63,708 $ 50,834
    Segment operating expenses (1) 20,498 16,600 60,957 49,542
    Segment operating income (loss) $ 1,003 $ 733 $ 2,751 $ 1,292
    International
    Net sales $ 11,841 $ 10,575 $ 35,418 $ 33,510
    Segment operating expenses (1) 11,781 10,510 35,509 33,654
    Segment operating income (loss) $ 60 $ 65 $ (91 ) $ (144 )
    AWS
    Net sales $ 2,405 $ 1,420 $ 7,880 $ 4,644
    Segment operating expenses (1) 1,718 1,180 6,017 3,984
    Segment operating income (loss) $ 687 $ 240 $ 1,863 $ 660
    Consolidated
    Net sales $ 35,747 $ 29,328 $ 107,006 $ 88,988
    Segment operating expenses (1) 33,997 28,290 102,483 87,180
    Segment operating income (loss) 1,750 1,038 4,523 1,808
    Stock-based compensation (606 ) (408 ) (2,119 ) (1,497 )
    Other operating income (expense), net (36 ) (39 ) (171 ) (133 )
    Income from operations 1,108 591 2,233 178
    Total non-operating income (expense) (170 ) (162 ) (665 ) (289 )
    Provision for income taxes (453 ) (205 ) (950 ) (167 )
    Equity-method investment activity, net of tax (3 ) (10 ) (22 ) 37
    Net income (loss) $ 482 $ 214 $ 596 $ (241 )
    Segment Highlights:
    Y/Y net sales growth:
    North America 24 % 21 % 25 % 23 %
    International 12 3 6 12
    AWS 69 47 70 49
    Consolidated 22 15 20 20
    Net sales mix:
    North America 60 % 59 % 60 % 57 %
    International 33 36 33 38
    AWS 7 5 7 5
    Consolidated 100 % 100 % 100 % 100 %

    ______________________________

    (1) Excludes stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.
    AMAZON.COM, INC.
    Supplemental Net Sales Information
    (in millions)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    (unaudited)
    Net Sales:
    North America
    Media $ 3,931 $ 3,544 $ 12,483 $ 11,567
    Electronics and other general merchandise 17,325 13,529 50,401 38,517
    Other (1) 245 260 824 750
    Total North America $ 21,501 $ 17,333 $ 63,708 $ 50,834
    International
    Media $ 3,292 $ 3,406 $ 10,026 $ 10,938
    Electronics and other general merchandise 8,491 7,109 25,196 22,369
    Other (1) 58 60 196 203
    Total International $ 11,841 $ 10,575 $ 35,418 $ 33,510
    Year-over-year Percentage Growth:
    North America
    Media 11 % 1 % 8 % 7 %
    Electronics and other general merchandise 28 27 31 28
    Other (6 ) 28 10 22
    Total North America 24 21 25 23
    International
    Media (3 )% (8 )% (8 )% — %
    Electronics and other general merchandise 19 10 13 19
    Other (3 ) (6 ) (3 ) (3 )
    Total International 12 3 6 12
    Year-over-year Percentage Growth, excluding the effect of foreign exchange rates:
    North America
    Media 12 % 1 % 8 % 7 %
    Electronics and other general merchandise 28 27 31 29
    Other (6 ) 28 10 22
    Total North America 24 21 26 23
    International
    Media 5 % (1 )% 4 % 2 %
    Electronics and other general merchandise 31 19 29 21
    Other 5 1 10 (3 )
    Total International 22 12 21 14

    ______________________________

    (1) Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements.
    AMAZON.COM, INC.
    Consolidated Balance Sheets
    (in millions, except per share data)
    December 31, 2015 December 31, 2014
    ASSETS
    Current assets:
    Cash and cash equivalents $ 15,890 $ 14,557
    Marketable securities 3,918 2,859
    Inventories 10,243 8,299
    Accounts receivable, net and other 6,423 5,612
    Total current assets 36,474 31,327
    Property and equipment, net 21,838 16,967
    Goodwill 3,759 3,319
    Other assets 3,373 2,892
    Total assets $ 65,444 $ 54,505
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 20,397 $ 16,459
    Accrued expenses and other 10,384 9,807
    Unearned revenue 3,118 1,823
    Total current liabilities 33,899 28,089
    Long-term debt 8,235 8,265
    Other long-term liabilities 9,926 7,410
    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 — 494 and 488
    Outstanding shares — 471 and 465 5 5
    Treasury stock, at cost (1,837 ) (1,837 )
    Additional paid-in capital 13,394 11,135
    Accumulated other comprehensive loss (723 ) (511 )
    Retained earnings 2,545 1,949
    Total stockholders’ equity 13,384 10,741
    Total liabilities and stockholders’ equity $ 65,444 $ 54,505
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except per share data)
    (unaudited)

    		Y/Y %
    Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Change
    Cash Flows and Shares
    Operating cash flow — trailing twelve months (TTM) $ 6,842 $ 7,845 $ 8,980 $ 9,823 $ 11,920 74 %
    Operating cash flow — TTM Y/Y growth (decline) 25 % 47 % 69 % 72 % 74 % N/A
    Purchases of property and equipment, including internal-use software and website development, net — TTM $ 4,893 $ 4,684 $ 4,607 $ 4,424 $ 4,589

    (6

    )%
    Principal repayments of capital lease obligations — TTM $ 1,285 $ 1,537 $ 1,832 $ 2,144 $ 2,462 92 %
    Principal repayments of finance lease obligations — TTM $ 135 $ 132 $ 155 $ 163 $ 121 (11 )%
    Property and equipment acquired under capital leases — TTM $ 4,008 $ 4,246 $ 4,710 $ 4,599 $ 4,717 18 %
    Free cash flow — TTM (1) $ 1,949 $ 3,161 $ 4,373 $ 5,399 $ 7,331 276 %
    Invested capital (2) $ 21,021 $ 23,090 $ 25,289 $ 27,425 $ 29,694 41 %
    Free cash flow less lease principal repayments — TTM (3) $ 529 $ 1,492 $ 2,386 $ 3,092 $ 4,748 797 %
    Free cash flow less finance lease principal repayments and assets acquired under capital leases — TTM (4) $ (2,194 ) $ (1,217 ) $ (492 ) $ 637 $ 2,493 N/A
    Common shares and stock-based awards outstanding 483 483 488 489 490 1 %
    Common shares outstanding 465 466 468 469 471 1 %
    Stock-based awards outstanding 18 17 20 20 19 7 %
    Stock-based awards outstanding — % of common shares outstanding 3.8 % 3.8 % 4.4 % 4.3 % 4.1 % N/A
    Results of Operations
    Worldwide (WW) net sales $ 29,328 $ 22,717 $ 23,185 $ 25,358 $ 35,747 22 %
    WW net sales — Y/Y growth, excluding F/X 18 % 22 % 27 % 30 % 26 % N/A
    WW net sales — TTM $ 88,988 $ 91,963 $ 95,808 $ 100,588 $ 107,006 20 %
    WW net sales — TTM Y/Y growth, excluding F/X 20 % 20 % 22 % 24 % 26 % N/A
    Operating income (loss) $ 591 $ 255 $ 464 $ 406 $ 1,108 88 %
    Operating income/loss — Y/Y growth (decline), excluding F/X 22 % 90 % N/A N/A 84 % N/A
    Operating margin — % of WW net sales 2.0 % 1.1 % 2.0 % 1.6 % 3.1 % N/A
    Operating income (loss) — TTM $ 178 $ 287 $ 765 $ 1,715 $ 2,233 N/A
    Operating income/loss — TTM Y/Y growth (decline), excluding F/X (79 )% (56 )% 35 % N/A N/A N/A
    Operating margin — TTM % of WW net sales 0.2 % 0.3 % 0.8 % 1.7 % 2.1 % N/A
    Net income (loss) $ 214 $ (57 ) $ 92 $ 79 $ 482 125 %
    Net income (loss) per diluted share $ 0.45 $ (0.12 ) $ 0.19 $ 0.17 $ 1.00 121 %
    Net income (loss) — TTM $ (241 ) $ (405 ) $ (188 ) $ 328 $ 596 N/A
    Net income (loss) per diluted share — TTM $ (0.52 ) $ (0.88 ) $ (0.41 ) $ 0.69 $ 1.25 N/A

    ______________________________

    (1) Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, including internal-use software and website development, net” which is included in cash flow from investing activities.

    (2) Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.

    (3) Free cash flow less lease principal repayments is free cash flow reduced by “Principal repayments of capital lease obligations,” and “Principal repayments of finance lease obligations,” which are included in cash flow from financing activities.

    (4) Free cash flow less finance lease principal repayments and assets acquired under capital leases is free cash flow reduced by “Principal repayments of finance lease obligations,” which are included in cash flow from financing activities, and property and equipment acquired under capital leases. In this measure, property and equipment acquired under capital leases is reflected as if these assets had been purchased with cash, which is not the case as these assets have been leased.
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions)
    (unaudited)
    Y/Y %
    Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Change
    Segments
    North America Segment:
    Net sales $ 17,333 $ 13,406 $ 13,796 $ 15,006 $ 21,501 24 %
    Net sales — Y/Y growth, excluding F/X 21 % 24 % 26 % 29 % 24 % N/A
    Net sales — TTM $ 50,834 $ 53,432 $ 56,233 $ 59,540 $ 63,708 25 %
    Operating income (loss) $ 733 $ 517 $ 703 $ 528 $ 1,003 37 %
    Operating income/loss — Y/Y growth (decline), excluding F/X 77 % 111 % N/A 36 % N/A
    Operating margin — % of North America net sales 4.2 % 3.9 % 5.1 % 3.5 % 4.7 % N/A
    Operating income (loss) — TTM $ 1,292 $ 1,520 $ 1,893 $ 2,480 $ 2,751 113 %
    Operating margin — TTM % of North America net sales 2.5 % 2.8 % 3.4 % 4.2 % 4.3 % N/A
    International Segment:
    Net sales $ 10,575 $ 7,745 $ 7,565 $ 8,267 $ 11,841 12 %
    Net sales — Y/Y growth, excluding F/X 12 % 14 % 22 % 24 % 22 % N/A
    Net sales — TTM $ 33,510 $ 33,371 $ 33,598 $ 34,154 $ 35,418 6 %
    Net sales — TTM % of WW net sales 38 % 36 % 35 % 34 % 33 % N/A
    Operating income (loss) $ 65 $ (76 ) $ (19 ) $ (56 ) $ 60 (7 )%
    Operating income/loss — Y/Y growth (decline), excluding F/X N/A N/A N/A 65 % N/A
    Operating margin — % of International net sales 0.6 % (1.0 )% (0.2 )% (0.7 )% 0.5 % N/A
    Operating income (loss) — TTM $ (144 ) $ (188 ) $ (205 ) $ (86 ) $ (91 ) (36 )%
    Operating margin — TTM % of International net sales (0.4 )% (0.6 )% (0.6 )% (0.3 )% (0.3 )% N/A
    AWS Segment:
    Net sales $ 1,420 $ 1,566 $ 1,824 $ 2,085 $ 2,405 69 %
    Net sales — Y/Y growth, excluding F/X 47 % 49 % 81 % 78 % 69 % N/A
    Net sales — TTM $ 4,644 $ 5,160 $ 5,977 $ 6,894 $ 7,880 70 %
    Net sales — TTM % of WW net sales 5 % 6 % 6 % 7 % 7 % N/A
    Operating income (loss) $ 240 $ 265 $ 391 $ 521 $ 687 186 %
    Operating income/loss — Y/Y growth (decline), excluding F/X (13 )% 314 % 353 % 161 % N/A
    Operating margin — % of AWS net sales 16.9 % 16.9 % 21.4 % 25.0 % 28.5 % N/A
    Operating income (loss) — TTM $ 660 $ 680 $ 993 $ 1,417 $ 1,863 182 %
    Operating margin — TTM % of AWS net sales 14.2 % 13.2 % 16.6 % 20.6 % 23.6 % N/A
    Consolidated Segments:
    Operating expenses (5) $ 28,290 $ 22,011 $ 22,110 $ 24,365 $ 33,997 20 %
    Operating expenses — TTM (5) $ 87,180 $ 89,951 $ 93,126 $ 96,777 $ 102,483 18 %
    Operating income (loss) $ 1,038 $ 706 $ 1,075 $ 993 $ 1,750 69 %
    Operating income/loss — Y/Y growth (decline), excluding F/X 22 % 45 % 168 % N/A 67 % N/A
    Operating margin — % of Consolidated sales 3.5 % 3.1 % 4.6 % 3.9 % 4.9 % N/A
    Operating income (loss) — TTM $ 1,808 $ 2,012 $ 2,682 $ 3,811 $ 4,523 150 %
    Operating income/loss — TTM Y/Y growth (decline), excluding F/X (10 )% (1 )% 34 % 134 % 149 % N/A
    Operating margin — TTM % of Consolidated net sales 2.0 % 2.2 % 2.8 % 3.8 % 4.2 % N/A

    ______________________________

    (5) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except inventory turnover, accounts payable days and employee data)
    (unaudited)
    Y/Y %
    Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Change
    Supplemental
    Supplemental North America Segment Net Sales:
    Media $ 3,544 $ 2,969 $ 2,620 $ 2,963 $ 3,931 11 %
    Media — Y/Y growth, excluding F/X 1 % 5 % 7 % 9 % 12 % N/A
    Media — TTM $ 11,567 $ 11,711 $ 11,867 $ 12,096 $ 12,483 8 %
    Electronics and other general merchandise $ 13,529 $ 10,250 $ 10,987 $ 11,840 $ 17,325 28 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 27 % 31 % 32 % 35 % 28 % N/A
    Electronics and other general merchandise — TTM $ 38,517 $ 40,938 $ 43,559 $ 46,606 $ 50,401 31 %
    Electronics and other general merchandise — TTM % of North America net sales 76 % 77 % 77 % 78 % 79 % N/A
    Other $ 260 $ 187 $ 189 $ 203 $ 245 (6 )%
    Supplemental International Segment Net Sales:
    Media $ 3,406 $ 2,320 $ 2,094 $ 2,320 $ 3,292 (3 )%
    Media — Y/Y growth, excluding F/X (1 )% 2 % 3 % 6 % 5 % N/A
    Media — TTM $ 10,938 $ 10,615 $ 10,329 $ 10,140 $ 10,026 (8 )%
    Electronics and other general merchandise $ 7,109 $ 5,378 $ 5,425 $ 5,901 $ 8,491 19 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 19 % 21 % 31 % 32 % 31 % N/A
    Electronics and other general merchandise — TTM $ 22,369 $ 22,559 $ 23,072 $ 23,814 $ 25,196 13 %
    Electronics and other general merchandise — TTM % of International net sales 67 % 68 % 69 % 70 % 71 % N/A
    Other $ 60 $ 47 $ 46 $ 46 $ 58 (3 )%
    Balance Sheet
    Cash and marketable securities — ending $ 17,416 $ 13,781 $ 14,001 $ 14,428 $ 19,808 14 %
    Inventory, net — ending $ 8,299 $ 7,369 $ 7,470 $ 8,981 $ 10,243 23 %
    Inventory turnover, average — TTM 8.6 8.8 8.9 8.6 8.5 (2 )%
    Property and equipment, net — ending $ 16,967 $ 17,736 $ 19,479 $ 20,636 $ 21,838 29 %
    Accounts payable — ending $ 16,459 $ 11,917 $ 12,391 $ 14,437 $ 20,397 24 %
    Accounts payable days — ending 73 70 74 79 77 5 %
    Other
    WW shipping revenue $ 1,701 $ 1,299 $ 1,399 $ 1,494 $ 2,328 37 %
    WW shipping revenue – % of net sales (6) 6.1 % 6.1 % 6.6 % 6.4 % 7.0 % N/A
    WW shipping costs $ 3,049 $ 2,309 $ 2,340 $ 2,720 $ 4,170 37 %
    WW shipping costs – % of net sales (6) 10.9 % 10.9 % 11.0 % 11.7 % 12.5 % N/A
    WW net shipping costs $ 1,348 $ 1,010 $ 941 $ 1,226 $ 1,842 37 %
    WW net shipping costs — % of WW net sales (6) 4.8 % 4.8 % 4.4 % 5.3 % 5.5 % N/A
    WW paid units — Y/Y growth 20 % 20 % 22 % 26 % 26 % N/A
    WW seller unit mix — % of WW paid units 43 % 44 % 45 % 46 % 47 % N/A
    Employees (full-time and part-time; excludes contractors & temporary personnel) 154,100 165,000 183,100 222,400 230,800 50 %

    ______________________________

    (6) Includes North America and International segment net sales.

    Amazon.com, Inc.
    Certain Definitions

    Customer Accounts

    • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Payments customers, AWS customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

    Seller Accounts

    • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

    AWS Customers

    • References to AWS customers mean unique AWS customer accounts, which are unique e-mail addresses that are eligible to use AWS services. This includes AWS accounts in the AWS free tier. Multiple users accessing AWS services via one account are counted as a single account. Customers are considered active when they have had AWS usage activity during the preceding one-month period.

    Units

    Source: Amazon.com, Inc.

    Image via Amazon

  • Salesforce Introduces Updated App Cloud

    Salesforce Introduces Updated App Cloud

    Last fall, Salesforce announced Salesforce App Cloud, which it called the “next evolution” of the Salesforce1 Platform. It brought together Force.com, Heroku Enterprise, and the previously announced Lightning user interface, in addition to a learning resource called Trailhead, which includes tutorials and guides.

    App Cloud falls under the Platform-as-a-Service (PaaS) category aimed at enterprise businesses focusing on building apps, whether they are for company use or for customers. It’s essentially a consolidation of several of Salesforce’s products that unifies the experience and makes things less confusing for enterprises and developers.

    The company just announced the updated App Cloud with the general availability of Heroku Enterprise. From the Salesforce blog:

    Since launching App Cloud in 2015, we’ve noticed many of our customers growing their business by creating a superior customer experience through digital technology. Apartment List has saved renters time and money through an elegant, multi-device app experience. KLM Royal Dutch Airlines engaged fliers through social and mobile tools they already use. So in September 2015, we announced Heroku Enterprise as the next step in helping organizations create the new Internet consumer experience.

    Since then, the Age of the Customer has exploded–with businesses of all sizes racing to build and deliver the elegant, unified and digital customer experience once only seen from the Ubers of the world. Our mission with App Cloud is to give everyone, from citizen developers to CIOs, the tools to deliver modern and innovative customer experiences. Heroku Enterprise is a key part of how we enable that, joining App Cloud’s already best-in-class stable of services that range from the democratizing power of point-and-click programming tools to extra levels of trust and control around business-critical applications.

    You can learn more about Heroku Enterprise features here.

    Salesforce will host a webinar about App Cloud and Heroku Enterprise on February 18.

  • Salesforce Announces Global Launch of SalesforceIQ CRM for Small Businesses

    Salesforce Announces Global Launch of SalesforceIQ CRM for Small Businesses

    Back in September, Salesforce unveiled SalesforceIQ, which it referred to as “the future of selling for every business.”

    It was designed to help both large and small businesses and included two SalesforceIQ products: SalesforceIQ for Small Business and SalesforceIQ for Sales Cloud’s iOS, Android, and Chrome apps. The former is obviously geared toward small businesses, helping them manage deals, accelerate pipelines, and guiding them through the sales process. SalesforceIQ for Sales Cloud sees relationship intelligence integrated into sales reps’ email.

    At first, SalesforceIQ for Small Business was available in the U.S., Canada, and Australia. The company announced today that it is now available worldwide and that it is now called SalesforceIQ CRM from SalesforceIQ for Small Business.

    The product, the company says, makes the predictive capabilities of Relationship Intelligence available to all.

    SalesforceIQ CEO Steve Loughlin says, “As small business owners ourselves, we knew all too well that salespeople don’t have the time or the resources to keep track of all of the crucial information on their customers and prospects. To solve this problem, we developed Relationship Intelligence technology that automatically captures, analyzes and surfaces information for customer relationships from email, calendars and more. Relationship Intelligence seeks out the patterns needed to surface insights into future outcomes and proactively recommends actions for teams to build stronger relationships with customers and accelerate sales.”

    “Startup customers, such as Peerspace and Storyful, have been leveraging SalesforceIQ to work more efficiently, with the technology matching their fast-growing pace,” a spokesperson for Salesforce tells WebProNews. “A survey of current customers found 70 percent increased the number of deals closed per month and on average saved over 4 hours per week from manual data entry using SalesforceIQ.”

    The company is offering the product to businesses with a fourteen-day free trial.

    Image via Salesforce

  • Amazon Q3 Earnings Reported; Sales up 23% to $25.4 Billion

    Amazon released its Q3 earnings report, including a 23% increase in sales year-over-year at $25.4 billion.

    Net income was $79 million ($0.17 per diluted share) , compared with net loss of $437 million, or $0.95 per diluted share, in third quarter 2014.

    Operating cash flow was up 72% at $9.8 billion with free cash flow increasing to $5.4 billion.

    CEO Jeff Bezos said, “For the first time, we’re recommending you bring home a six-pack for the whole family. At a price of $50 for one or $250 for a six-pack, Fire sets a new bar for what customers should expect from a low-cost tablet. This is one more step in our mission to bring customers premium products at non-premium prices. Fire is the #1 best-selling product on Amazon.com since launch, and based on the strength of the customer response, we are building millions more than we’d already planned.”

    Here’s the release in its entirety:

    SEATTLE–(BUSINESS WIRE)–Oct. 22, 2015– Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its third quarter ended September 30, 2015.

    Operating cash flow increased 72% to $9.8 billion for the trailing twelve months, compared with $5.7 billion for the trailing twelve months ended September 30, 2014. Free cash flow increased to $5.4 billion for the trailing twelve months, compared with $1.1 billion for the trailing twelve months ended September 30, 2014. Additional measures of free cash flow can be found in the “Supplemental Financial Information and Business Metrics.”

    Common shares outstanding plus shares underlying stock-based awards totaled 489 million on September 30, 2015, compared with 481 million one year ago.

    Net sales increased 23% to $25.4 billion in the third quarter, compared with $20.6 billion in third quarter 2014. Excluding the $1.3 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 30% compared to third quarter 2014.

    Operating income was $406 million in the third quarter, compared with operating loss of $544 million in third quarter 2014.

    Net income was $79 million in the third quarter, or $0.17 per diluted share, compared with net loss of $437 million, or $0.95 per diluted share, in third quarter 2014.

    “For the first time, we’re recommending you bring home a six-pack for the whole family,” said Jeff Bezos, founder and CEO of Amazon.com. “At a price of$50 for one or $250 for a six-pack, Fire sets a new bar for what customers should expect from a low-cost tablet. This is one more step in our mission to bring customers premium products at non-premium prices. Fire is the #1 best-selling product on Amazon.com since launch, and based on the strength of the customer response, we are building millions more than we’d already planned.”

    Highlights

    • Amazon introduced four new tablets, including Fire, which has the best display on any tablet under $50 and is also available for an even lower price when purchased in a six-pack; Fire HD, the incredibly thin and light 8” and 10.1” tablets designed from the ground up for entertainment; and Fire Kids Edition, a tablet built for kids and their parents — now under $100.
    • Amazon introduced three new Fire TV devices, all with Alexa integration. The new Fire TV is 75% more powerful and has the best-in-class Wi-Fi and 4K Ultra HD — and is still less than $100. The new Fire TV Stick with Voice Remote adds voice search — and costs less than $50. Fire TV Gaming Edition combines the new Fire TV, new game controller, a 32GB microSD card, and two games — Shovel Knight and Disney’s DuckTales — all for under $140.
    • Amazon launched Fire TV and Fire TV Stick for Japanese customers, which provides easy, instant access to Prime Video, Amazon Video, Hulu, GYAO!, Netflix, YouTube.com, Niconico, Video Market, and more. In addition to the device, Amazon launched Prime Video on Amazon.co.jp, exclusively for Prime members, with thousands of popular Japanese and U.S. movies and TV shows, anime series, music concerts, and variety shows, plus Amazon’s own award-winning originals.
    • Alexa, the brain behind Echo, continues to get smarter with new features including support for shared Google calendars, integration of additional connected home devices from SmartThings and Insteon, NCAA football scores and schedules, and more.
    • Amazon announced new investments from the $100 million Alexa Fund, including Petnet, the creator of the SmartFeeder, an app-enabled intelligent feeding appliance; Musaic, a high-resolution wireless HiFi system that combines home automation to create a connected smart home; and Rachio, maker of a smart sprinkler controller that helps customers intelligently water their yards.
    • Amazon Dash Button has received an overwhelmingly positive customer response and selection continues to grow; customers can now choose from over 500 products from 29 popular brands. Dash Replenishment Service (DRS) now includes 15 device makers, such as General Electric,Samsung, and Oster. The first DRS-enabled devices are expected to ship later this year.
    • Amazon announced Amazon Underground, a new app for Android phones that includes the same functionality of the Amazon mobile shopping app plus over ten thousand dollars’ worth of apps, games, and in-app items, for free.
    • Amazon Studios’ critically-acclaimed series, Transparent, won five Emmys, including Jeffrey Tambor’s award for Outstanding Lead Actor in a Comedy Series and Jill Soloway’s award for Outstanding Directing for a Comedy Series.
    • Amazon announced an agreement with Jeremy Clarkson, Richard Hammond, James May, and the trio’s longtime executive producer, Andy Wilman, to make a new car show exclusively for Prime members worldwide. The award-winning team has committed to three seasons.
    • Amazon Studios recently debuted new original series Red Oaks, Hand of God, and Wishenpoof, with more content coming soon, including the much anticipated The Man in the High Castle and season two of Transparent and Tumble Leaf. In addition, Amazon has announced 12 pilots that are scheduled to debut later this year.
    • Amazon.co.uk launched Prime Music, giving U.K. Prime members over one million songs and hundreds of playlists to stream and download for free.
    • Prime Music expanded its catalog in the U.S. and U.K. with the addition of artists from Universal Music Group, including Katy Perry, Lana Del Rey, Lady Gaga, The Weeknd, Of Monsters and Men, Ellie Goulding, and many more award-winning popular and legendary artists.
    • Prime Now added eight metro areas in the past quarter. Prime members can now choose from tens of thousands of daily essentials with free two-hour and paid one-hour delivery in 17 locations around the world.
    • Amazon launched Amazon Pantry in Japan and Germany. Amazon Pantry offers Prime members a different way to shop, allowing them to purchase daily essentials in everyday sizes and have items delivered for a low, flat-rate fee per Amazon Pantry box.
    • Amazon introduced Handmade at Amazon, featuring genuinely handcrafted products sold directly from artisans around the world.
    • Customers in both the U.K. and France rated Amazon as their top retailer based on separate surveys conducted by Havas and OC&C Strategy Consultants.
    • Amazon continues to expand its international categories with the launch of the Business, Industrial and Scientific Supplies store for Japan, U.K.,Germany, France, Italy, and Spain with hundreds of thousands of items available for businesses. Additionally, Amazon launched Grocery for Italy,France, and Spain with thousands of food products and household essentials from local producers and international brands.
    • Amazon expects to create over 100,000 seasonal positions in North America, and over 40,000 across its European Fulfillment Network this holiday season. Last year, Amazon converted tens of thousands of temporary employees into regular, full-time roles, and expects to do the same this year.
    • Since the fulfillment center tour program launched last year, over 26,000 people have visited one of the 18 facilities where tours are offered worldwide.
    • Launched in late June, Amazon.com.mx has expanded selection to 32 million items, added three new categories, started offering monthly installments for select purchases, and expanded delivery on weekends and holidays to over 70% of zip codes in Mexico City.
    • Amazon.in continues to be India’s largest store with over 30 million products, having added an average of over 40,000 products a day so far in 2015.
    • In the past year, the number of sellers on the Amazon.in platform has increased more than 250%, and nearly 90% of Indian sellers are using Amazon’s logistics and warehousing services. To serve this growing storage need, Amazon.in has nearly tripled its fulfillment capacity year-over-year.
    • In the third quarter, active customers on Amazon.in grew over 230% year-over-year.
    • So far, Amazon.in’s 2015 Diwali season is our largest ever, with daily sales of approximately 4x the prior year.
    • Amazon launched Kindle Unlimited on Amazon.in with over one million titles for 199 rupees a month, less than the average price of a single print book.
    • Amazon Web Services (AWS) hosted re:Invent, its fourth annual customer and partner conference, with more than 19,000 attendees and 38,000 streaming participants.
    • Accenture and AWS announced the formation of the Accenture AWS Business Group, a team of dedicated professionals from both Accenture and AWS that will help enterprise customers more easily migrate their existing applications and build new applications for the AWS Cloud.
    • AWS introduced Amazon QuickSight, a very fast, cloud-powered business intelligence (BI) service that makes it easy for all employees, regardless of their technical skill, to build visualizations, perform ad-hoc analysis, and quickly get business insights from their data at 1/10th the cost of traditional solutions. QuickSight integrates automatically with AWS data services and uses a new, Super-fast, Parallel, In-memory Calculation Engine (“SPICE”) to perform advanced calculations, render visualizations rapidly, and scale to hundreds of thousands of users.
    • AWS launched new capabilities to make it faster, easier, and more cost-effective to move data from on-premises into the AWS Cloud. AWS Snowball is a petabyte-scale data transport appliance that can securely transfer 50 TB of data per appliance into and out of AWS for as little as 1/5th the cost of high-speed Internet. Amazon Kinesis Firehose is a fully-managed service that captures streaming data from hundreds of thousands of different sources and automatically loads it into Amazon S3 or Amazon Redshift for near real-time data analysis.
    • AWS announced new database tools and services that make it easier for enterprises to bring databases to AWS and break free from the cost and complexity of traditional commercial databases. The AWS Database Migration Service monitors the progress of database migrations, notifying customers of any issues and automatically provisioning a host replacement in the event of a failure. The AWS Schema Conversion Tool ports database schemas and stored procedures from one database platform to another, so customers can move their applications from Oracle and SQL Server to Amazon Aurora, MySQL, MariaDB, and soon PostgreSQL. In the first week after AWS re:Invent, more than 1,000 customers have signed up to use AWS’s new Database Migration Service.
    • In just four months since becoming generally available in July, Amazon Aurora has become the fastest-growing service in the history of AWS.
    • AWS launched AWS IoT, a managed cloud platform that lets billions of connected devices — such as mobile phones, cars, factory floors, aircraft engines, sensor grids, and more — easily and securely interact with cloud applications and other devices. AWS IoT can support trillions of messages, and can process, route, and keep track of those messages to AWS endpoints and to other devices reliably and securely, even when the devices aren’t connected.
    • AWS announced three new services and capabilities to make it easier for enterprises to build and manage secure, compliant applications on the AWS Cloud: Amazon Inspector is a service that automatically assesses how well customers’ applications follow security best practices and provides a detailed report to help fix any vulnerabilities found; AWS Config Rules is a new set of cloud governance capabilities that allow IT Administrators to define guidelines for provisioning and configuring AWS resources and then continuously monitor compliance with those guidelines; and AWS WAF is a web application firewall that protects applications from common web exploits by giving customers control over which traffic to allow or block to their web applications by defining customizable web security rules.

    Financial Guidance

    The following forward-looking statements reflect Amazon.com’s expectations as of October 22, 2015, 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 and online commerce, and the various factors detailed below.

    Fourth Quarter 2015 Guidance

    • Net sales are expected to be between $33.50 billion and $36.75 billion, or to grow between 14% and 25% compared with fourth quarter 2014.
    • Operating income is expected to be between $80 million and $1.28 billion, compared to $591 million in fourth quarter 2014.
    • This guidance includes approximately $620 million for stock-based compensation and amortization of intangible assets, and 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 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.

    AMAZON.COM, INC.
    Consolidated Statements of Cash Flows
    (in millions)
    (unaudited)
    Three Months Ended Nine Months Ended Twelve Months Ended
    September 30, September 30, September 30,
    2015 2014 2015 2014 2015 2014
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 10,269 $ 5,057 $ 14,557 $ 8,658 $ 5,258 $ 3,872
    OPERATING ACTIVITIES:
    Net income (loss) 79 (437 ) 114 (455 ) 328 (216 )
    Adjustments to reconcile net income (loss) to net cash from operating activities:
    Depreciation of property and equipment, including internal-use software and website development, and other amortization, including capitalized content costs 1,599 1,247 4,529 3,366 5,908 4,329
    Stock-based compensation 544 377 1,513 1,089 1,921 1,414
    Other operating expense (income), net 34 31 120 93 156 133
    Losses (gains) on sales of marketable securities, net 2 (3 ) 4 (4 ) 4 (3 )
    Other expense (income), net 56 42 166 (16 ) 244 36
    Deferred income taxes (63 ) (270 ) (108 ) (503 ) 76 (613 )
    Excess tax benefits from stock-based compensation (95 ) — (212 ) (121 ) (96 ) (199 )
    Changes in operating assets and liabilities:
    Inventories (1,537 ) (845 ) (844 ) (54 ) (1,983 ) (1,383 )
    Accounts receivable, net and other (588 ) (362 ) (577 ) 66 (1,681 ) (1,173 )
    Accounts payable 2,030 1,724 (1,846 ) (3,294 ) 3,207 1,834
    Accrued expenses and other 143 4 (925 ) (742 ) 525 847
    Additions to unearned revenue 1,779 1,069 4,979 3,055 6,358 3,874
    Amortization of previously unearned revenue (1,373 ) (811 ) (3,805 ) (2,353 ) (5,144 ) (3,175 )
    Net cash provided by (used in) operating activities 2,610 1,766 3,108 127 9,823 5,705
    INVESTING ACTIVITIES:
    Purchases of property and equipment, including internal-use software and website development (1,195 ) (1,378 ) (3,280 ) (3,748 ) (4,424 ) (4,628 )
    Acquisitions, net of cash acquired, and other (105 ) (860 ) (478 ) (926 ) (531 ) (986 )
    Sales and maturities of marketable securities 1,045 1,439 1,890 2,994 2,244 3,509
    Purchases of marketable securities (1,122 ) (147 ) (2,732 ) (920 ) (4,354 ) (1,339 )
    Net cash provided by (used in) investing activities (1,377 ) (946 ) (4,600 ) (2,600 ) (7,065 ) (3,444 )
    FINANCING ACTIVITIES:
    Excess tax benefits from stock-based compensation 95 — 212 121 96 199
    Proceeds from long-term debt and other 33 28 260 379 6,241 628
    Repayments of long-term debt and other (181 ) (84 ) (712 ) (331 ) (894 ) (371 )
    Principal repayments of capital lease obligations (656 ) (343 ) (1,738 ) (878 ) (2,144 ) (1,103 )
    Principal repayments of finance lease obligations (21 ) (13 ) (95 ) (68 ) (163 ) (73 )
    Net cash provided by (used in) financing activities (730 ) (412 ) (2,073 ) (777 ) 3,136 (720 )
    Foreign-currency effect on cash and cash equivalents (63 ) (207 ) (283 ) (150 ) (443 ) (155 )
    Net increase (decrease) in cash and cash equivalents 440 201 (3,848 ) (3,400 ) 5,451 1,386
    CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,709 $ 5,258 $ 10,709 $ 5,258 $ 10,709 $ 5,258
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest on long-term debt $ 7 $ 7 $ 177 $ 56 $ 212 $ 93
    Cash paid for income taxes (net of refunds) 80 38 200 148 230 173
    Property and equipment acquired under capital leases 1,047 1,158 3,385 2,794 4,599 3,347
    Property and equipment acquired under build-to-suit leases 125 343 381 707 595 920
    AMAZON.COM, INC.
    Consolidated Statements of Operations
    (in millions, except per share data)
    (unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2015 2014 2015 2014
    Net product sales $ 18,463 $ 16,022 $ 52,650 $ 46,978
    Net service sales 6,895 4,557 18,609 12,681
    Total net sales 25,358 20,579 71,259 59,659
    Operating expenses (1):
    Cost of sales 16,755 14,627 47,310 42,080
    Fulfillment 3,230 2,643 8,865 7,342
    Marketing 1,264 993 3,496 2,806
    Technology and content 3,197 2,423 8,971 6,639
    General and administrative 463 406 1,357 1,110
    Other operating expense (income), net 43 31 136 94
    Total operating expenses 24,952 21,123 70,135 60,071
    Income (loss) from operations 406 (544 ) 1,124 (412 )
    Interest income 13 9 37 31
    Interest expense (116 ) (49 ) (344 ) (136 )
    Other income (expense), net (56 ) (50 ) (187 ) (23 )
    Total non-operating income (expense) (159 ) (90 ) (494 ) (128 )
    Income (loss) before income taxes 247 (634 ) 630 (540 )
    Benefit (provision) for income taxes (161 ) 205 (498 ) 38
    Equity-method investment activity, net of tax (7 ) (8 ) (18 ) 47
    Net income (loss) $ 79 $ (437 ) $ 114 $ (455 )
    Basic earnings per share $ 0.17 $ (0.95 ) $ 0.24 $ (0.99 )
    Diluted earnings per share $ 0.17 $ (0.95 ) $ 0.24 $ (0.99 )
    Weighted average shares used in computation of earnings per share:
    Basic 468 463 467 461
    Diluted 478 463 476 461
    _____________
    (1) Includes stock-based compensation as follows:
    Fulfillment $ 122 $ 93 $ 344 $ 278
    Marketing 48 32 133 91
    Technology and content 309 204 861 579
    General and administrative 65 48 175 141
    AMAZON.COM, INC.
    Consolidated Statements of Comprehensive Income (Loss)
    (in millions)
    (unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2015 2014 2015 2014
    Net income (loss) $ 79 $ (437 ) $ 114 $ (455 )
    Other comprehensive income (loss):
    Foreign currency translation adjustments, net of tax of $4, $(1), $3, and $0 (56 ) (248 ) (170 ) (209 )
    Net change in unrealized gains (losses) on available-for-sale securities:
    Unrealized gains (losses), net of tax of $3, $2, $(5), and $1 (3 ) (1 ) 3 2
    Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $(1), $(1), $(1), and $(1) 1 (2 ) 3 (2 )
    Net unrealized gains (losses) on available-for-sale securities (2 ) (3 ) 6 —
    Total other comprehensive income (loss) (58 ) (251 ) (164 ) (209 )
    Comprehensive income (loss) $ 21 $ (688 ) $ (50 ) $ (664 )
    AMAZON.COM, INC.
    Segment Information
    (in millions)
    (unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2015 2014 2015 2014
    North America
    Net sales $ 15,006 $ 11,699 $ 42,208 $ 33,499
    Segment operating expenses (1) 14,478 11,759 40,461 32,940
    Segment operating income (loss) $ 528 $ (60 ) $ 1,747 $ 559
    International
    Net sales $ 8,267 $ 7,711 $ 23,577 $ 22,936
    Segment operating expenses (1) 8,323 7,885 23,728 23,144
    Segment operating income (loss) $ (56 ) $ (174 ) $ (151 ) $ (208 )
    AWS
    Net sales $ 2,085 $ 1,169 $ 5,474 $ 3,224
    Segment operating expenses (1) 1,564 1,071 4,297 2,804

    Segment operating income (loss)

    		 $ 521 $ 98 $ 1,177 $ 420
    Consolidated
    Net sales $ 25,358 $ 20,579 $ 71,259 $ 59,659
    Segment operating expenses (1) 24,365 20,715 68,486 58,888
    Segment operating income (loss) 993 (136 ) 2,773 771
    Stock-based compensation (544 ) (377 ) (1,513 ) (1,089 )
    Other operating income (expense), net (43 ) (31 ) (136 ) (94 )
    Income (loss) from operations 406 (544 ) 1,124 (412 )
    Total non-operating income (expense) (159 ) (90 ) (494 ) (128 )
    Benefit (provision) for income taxes (161 ) 205 (498 ) 38
    Equity-method investment activity, net of tax (7 ) (8 ) (18 ) 47
    Net income (loss) $ 79 $ (437 ) $ 114 $ (455 )
    Segment Highlights:
    Y/Y net sales growth:
    North America 28 % 23 % 26 % 24 %
    International 7 14 3 17
    AWS 78 43 70 50
    Consolidated 23 20 19 22
    Net sales mix:
    North America 59 % 57 % 59 % 56 %
    International 33 37 33 39
    AWS 8 6 8 5
    Consolidated 100 % 100 % 100 % 100 %

    ______________________________

    (1) Excludes stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.
    AMAZON.COM, INC.
    Supplemental Net Sales Information
    (in millions)
    (unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2015 2014 2015 2014
    Net Sales:
    North America
    Media $ 2,963 $ 2,734 $ 8,552 $ 8,022
    Electronics and other general merchandise 11,840 8,793 33,077 24,988
    Other (1) 203 172 579 489
    Total North America $ 15,006 $ 11,699 $ 42,208 $ 33,499
    International
    Media $ 2,320 $ 2,510 $ 6,734 $ 7,532
    Electronics and other general merchandise 5,901 5,160 16,705 15,260
    Other (1) 46 41 138 144
    Total International $ 8,267 $ 7,711 $ 23,577 $ 22,936
    Year-over-year Percentage Growth:
    North America
    Media 8 % 5 % 7 % 10 %
    Electronics and other general merchandise 35 31 32 29
    Other 18 20 19 19
    Total North America 28 23 26 24
    International
    Media (8 )% 4 % (11 )% 5 %
    Electronics and other general merchandise 14 20 9 24
    Other 10 (18 ) (4 ) (1 )
    Total International 7 14 3 17
    Year-over-year Percentage Growth, excluding the effect of foreign exchange rates:
    North America
    Media 9 % 5 % 7 % 10 %
    Electronics and other general merchandise 35 31 33 29
    Other 18 20 18 19
    Total North America 29 23 26 24
    International
    Media 6 % 3 % 4 % 4 %
    Electronics and other general merchandise 32 19 28 22
    Other 26 (19 ) 11 (3 )
    Total International 24 13 20 15

    ______________________________

    (1) Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements.
    AMAZON.COM, INC.
    Consolidated Balance Sheets
    (in millions, except per share data)
    September 30, 2015 December 31, 2014
    (unaudited)

    ASSETS
    Current assets:
    Cash and cash equivalents $ 10,709 $ 14,557
    Marketable securities 3,719 2,859
    Inventories 8,981 8,299
    Accounts receivable, net and other 5,440 5,612
    Total current assets 28,849 31,327
    Property and equipment, net 20,636 16,967
    Goodwill 3,529 3,319
    Other assets 3,216 2,892
    Total assets $ 56,230 $ 54,505

    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 14,437 $ 16,459
    Accrued expenses and other 9,157 9,807
    Unearned revenue 3,063 1,823
    Total current liabilities 26,657 28,089
    Long-term debt 8,243 8,265
    Other long-term liabilities 8,900 7,410
    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 — 492 and 488
    Outstanding shares — 469 and 465 5 5
    Treasury stock, at cost (1,837 ) (1,837 )
    Additional paid-in capital 12,874 11,135
    Accumulated other comprehensive loss (675 ) (511 )
    Retained earnings 2,063 1,949
    Total stockholders’ equity 12,430 10,741
    Total liabilities and stockholders’ equity $ 56,230 $ 54,505
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except per share data)
    (unaudited)
    Y/Y %
    Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Change
    Cash Flows and Shares
    Operating cash flow — trailing twelve months (TTM) $ 5,705 $ 6,842 $ 7,845 $ 8,980 $ 9,823 72 %
    Purchases of property and equipment (incl. internal-use software & website development) — TTM $ 4,628 $ 4,893 $ 4,684 $ 4,607 $ 4,424 (4 )%
    Principal repayments of capital lease obligations — TTM $ 1,103 $ 1,285 $ 1,537 $ 1,832 $ 2,144 94 %
    Principal repayments of finance lease obligations — TTM $ 73 $ 135 $ 132 $ 155 $ 163 125 %
    Property and equipment acquired under capital leases — TTM $ 3,347 $ 4,008 $ 4,246 $ 4,710 $ 4,599 37 %
    Free cash flow — TTM (1) $ 1,077 $ 1,949 $ 3,161 $ 4,373 $ 5,399 401 %
    Free cash flow — TTM Y/Y growth (decline) 178 % (4 )% 112 % 321 % 401 % N/A
    Invested capital (2) $ 18,715 $ 21,021 $ 23,090 $ 25,289 $ 27,425 47 %
    Free cash flow less lease principal repayments — TTM (3) $ (99 ) $ 529 $ 1,492 $ 2,386 $ 3,092 N/A
    Free cash flow less finance lease principal repayments and capital acquired under capital leases — TTM (4) $ (2,343 ) $ (2,194 ) $ (1,217 ) $ (492 ) $ 637 N/A
    Common shares and stock-based awards outstanding 481 483 483 488 489 2 %
    Common shares outstanding 463 465 466 468 469 1 %
    Stock awards outstanding 18 18 17 20 20 13 %
    Stock awards outstanding — % of common shares outstanding 3.9 % 3.8 % 3.8 % 4.4 % 4.3 % N/A
    Results of Operations
    Worldwide (WW) net sales $ 20,579 $ 29,328 $ 22,717 $ 23,185 $ 25,358 23 %
    WW net sales — Y/Y growth, excluding F/X 20 % 18 % 22 % 27 % 30 % N/A
    WW net sales — TTM $ 85,246 $ 88,988 $ 91,963 $ 95,808 $ 100,588 18 %
    WW net sales — TTM Y/Y growth, excluding F/X 22 % 20 % 20 % 22 % 24 % N/A
    Operating income (loss) $ (544 ) $ 591 $ 255 $ 464 $ 406 N/A
    Operating income/loss — Y/Y growth (decline), excluding F/X N/A 22 % 90 % N/A N/A N/A
    Operating margin — % of WW net sales (2.6 )% 2.0 % 1.1 % 2.0 % 1.6 % N/A
    Operating income — TTM $ 97 $ 178 $ 287 $ 765 $ 1,715 N/A
    Operating income — TTM Y/Y growth (decline), excluding F/X (94 )% (79 )% (56 )% 35 % N/A N/A
    Operating margin — TTM % of WW net sales 0.1 % 0.2 % 0.3 % 0.8 % 1.7 % N/A
    Net income (loss) $ (437 ) $ 214 $ (57 ) $ 92 $ 79 N/A
    Net income (loss) per diluted share $ (0.95 ) $ 0.45 $ (0.12 ) $ 0.19 $ 0.17 N/A
    Net income (loss) — TTM $ (216 ) $ (241 ) $ (405 ) $ (188 ) $ 328 N/A
    Net income (loss) per diluted share — TTM $ (0.47 ) $ (0.52 ) $ (0.88 ) $ (0.41 ) $ 0.69 N/A

    ______________________________
    (1)

    “Free cash flow” is defined as net cash provided by operating activities less cash expenditures for purchases of property and equipment, including internal-use software and website development.
    (2) Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.
    (3) “Free cash flow less lease principal repayments” is defined as net cash provided by operating activities, less (i) purchases of property and equipment, including internal-use software and website development, (ii) principal repayments of capital lease obligations, and (iii) principal repayments of finance lease obligations. Free cash flow less lease principal repayments approximates the actual payments of cash for our capital and finance leases.
    (4) “Free cash flow less finance lease principal repayments and capital acquired under capital leases” is defined as net cash provided by operating activities, less (i) purchases of property and equipment, including internal-use software and website development, (ii) principal repayments of finance lease obligations, and (iii) property and equipment acquired under capital leases. In this measure, property and equipment acquired under capital leases is reflected as if these assets had been purchased for cash, which is not the case as these assets have been leased.
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions)
    (unaudited)
    Y/Y %
    Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Change
    Segments
    North America Segment:
    Net sales $ 11,699 $ 17,333 $ 13,406 $ 13,796 $ 15,006 28 %
    Net sales — Y/Y growth, excluding F/X 23 % 21 % 24 % 26 % 29 % N/A
    Net sales — TTM $ 50,834 $ 53,432 $ 56,233 $ 59,540 24 %
    Operating income (loss) $ (60 ) $ 733 $ 517 $ 703 $ 528 N/A
    Operating income/loss — Y/Y growth, excluding F/X 77 % 111 % N/A N/A
    Operating margin — % of North America net sales (0.5 )% 4.2 % 3.9 % 5.1 % 3.5 % N/A
    Operating income — TTM $ 1,292 $ 1,520 $ 1,893 $ 2,480 N/A
    Operating margin — TTM % of North America net sales 2.5 % 2.8 % 3.4 % 4.2 % N/A
    International Segment:
    Net sales $ 7,711 $ 10,575 $ 7,745 $ 7,565 $ 8,267 7 %
    Net sales — Y/Y growth, excluding F/X 13 % 12 % 14 % 22 % 24 % N/A
    Net sales — TTM $ 33,510 $ 33,371 $ 33,598 $ 34,154 3 %
    Net sales — TTM % of WW net sales 38 % 36 % 35 % 34 % N/A
    Operating income (loss) $ (174 ) $ 65 $ (76 ) $ (19 ) $ (56 ) (68 )%
    Operating income/loss — Y/Y growth (decline), excluding F/X N/A N/A N/A N/A
    Operating margin — % of International net sales (2.3 )% 0.6 % (1.0 )% (0.2 )% (0.7 )% N/A
    Operating income (loss) — TTM $ (144 ) $ (188 ) $ (205 ) $ (86 ) N/A
    Operating margin — TTM % of International net sales (0.4 )% (0.6 )% (0.6 )% (0.3 )% N/A
    AWS Segment:
    Net sales $ 1,169 $ 1,420 $ 1,566 $ 1,824 $ 2,085 78 %
    Net sales — Y/Y growth, excluding F/X 43 % 47 % 49 % 81 % 78 % N/A
    Net sales — TTM 4,644 5,160 $ 5,977 $ 6,894 65 %
    Net sales — TTM % of WW net sales 5 % 6 % 6 % 7 % N/A
    Operating income $ 98 $ 240 $ 265 $ 391 $ 521 432 %
    Operating income — Y/Y growth (decline), excluding F/X (13 )% 314 % 353 % N/A
    Operating margin — % of AWS net sales 8.4 % 16.9 % 16.9 % 21.4 % 25.0 % N/A
    Operating income — TTM 660 680 $ 993 $ 1,417 N/A
    Operating margin — TTM % of AWS net sales 14.2 % 13.2 % 16.6 % 20.6 % N/A
    Consolidated Segments:
    Operating expenses (5) $ 20,715 $ 28,290 $ 22,011 $ 22,110 $ 24,365 18 %
    Operating expenses — TTM (5) $ 83,599 $ 87,180 $ 89,951 $ 93,126 $ 96,777 16 %
    Operating income (loss) $ (136 ) $ 1,038 $ 706 $ 1,075 $ 993 N/A
    Operating income/loss — Y/Y growth (decline), excluding F/X (151 )% 22 % 45 % 168 % N/A N/A
    Operating margin — % of Consolidated net sales (0.7 )% 3.5 % 3.1 % 4.6 % 3.9 % N/A
    Operating income — TTM $ 1,647 $ 1,808 $ 2,012 $ 2,682 $ 3,811 131 %
    Operating income — TTM Y/Y growth (decline), excluding F/X (12 )% (10 )% (1 )% 34 % 134 % N/A
    Operating margin — TTM % of Consolidated net sales 1.9 % 2.0 % 2.2 % 2.8 % 3.8 % N/A

    ______________________________

    (5) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except inventory turnover, accounts payable days and employee data)
    (unaudited)
    Y/Y %
    Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Change
    Supplemental
    Supplemental North America Segment Net Sales:
    Media $ 2,734 $ 3,544 $ 2,969 $ 2,620 $ 2,963 8 %
    Media — Y/Y growth, excluding F/X 5 % 1 % 5 % 7 % 9 % N/A
    Media — TTM $ 11,536 $ 11,567 $ 11,711 $ 11,867 $ 12,096 5 %
    Electronics and other general merchandise $ 8,793 $ 13,529 $ 10,250 $ 10,987 $ 11,840 35 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 31 % 27 % 31 % 32 % 35 % N/A
    Electronics and other general merchandise — TTM $ 35,636 $ 38,517 $ 40,938 $ 43,559 $ 46,606 31 %
    Electronics and other general merchandise — TTM % of North America net sales 74 % 76 % 77 % 77 % 78 % N/A
    Other $ 172 $ 260 $ 187 $ 189 $ 203 18 %
    Supplemental International Segment Net Sales:
    Media $ 2,510 $ 3,406 $ 2,320 $ 2,094 $ 2,320 (8 )%
    Media — Y/Y growth, excluding F/X 3 % (1 )% 2 % 3 % 6 % N/A
    Media — TTM $ 11,246 $ 10,938 $ 10,615 $ 10,329 $ 10,140 (10 )%
    Electronics and other general merchandise $ 5,160 $ 7,109 $ 5,378 $ 5,425 $ 5,901 14 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 19 % 19 % 21 % 31 % 32 % N/A
    Electronics and other general merchandise — TTM $ 21,737 $ 22,369 $ 22,559 $ 23,072 $ 23,814 10 %
    Electronics and other general merchandise — TTM % of International net sales 65 % 67 % 68 % 69 % 70 % N/A
    Other $ 41 $ 60 $ 47 $ 46 $ 46 10 %
    Balance Sheet
    Cash and marketable securities — ending $ 6,883 $ 17,416 $ 13,781 $ 14,001 $ 14,428 110 %
    Inventory, net — ending $ 7,316 $ 8,299 $ 7,369 $ 7,470 $ 8,981 23 %
    Inventory turnover, average — TTM 8.9 8.6 8.8 8.9 8.6 (3 )%
    Property and equipment, net — ending $ 15,702 $ 16,967 $ 17,736 $ 19,479 $ 20,636 31 %
    Accounts payable — ending $ 11,811 $ 16,459 $ 11,917 $ 12,391 $ 14,437 22 %
    Accounts payable days — ending 74 73 70 74 79 7 %
    Other
    WW shipping revenue $ 1,048 $ 1,701 $ 1,299 $ 1,399 $ 1,494 43 %
    WW shipping revenue — % of net sales (6) 5.4 % 6.1 % 6.1 % 6.6 % 6.4 % N/A
    WW shipping costs $ 2,020 $ 3,049 $ 2,309 $ 2,340 $ 2,720 35 %
    WW shipping costs — % of net sales (6) 10.4 % 10.9 % 10.9 % 11.0 % 11.7 % N/A
    WW net shipping costs $ 972 $ 1,348 $ 1,010 $ 941 $ 1,226 26 %
    WW net shipping costs — % of net sales (6) 5.0 % 4.8 % 4.8 % 4.4 % 5.3 % N/A
    WW paid units — Y/Y growth 21 % 20 % 20 % 22 % 26 % N/A
    WW seller unit mix — % of WW paid units 42 % 43 % 44 % 45 % 46 % N/A
    Employees (full-time and part-time; excludes contractors & temporary personnel) 149,500 154,100 165,000 183,100 222,400 49 %

    ______________________________

    (6) Includes North America and International segment net sales.

    Amazon.com, Inc.
    Certain Definitions

    Customer Accounts

    • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Payments customers, AWS customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

    Seller Accounts

    • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

    AWS Customers

    • References to AWS customers mean unique AWS customer accounts, which are unique e-mail addresses that are eligible to use AWS services. This includes AWS accounts in the AWS free tier. Multiple users accessing AWS services via one account are counted as a single account. Customers are considered active when they have had AWS usage activity during the preceding one-month period.

    Units

    Source: Amazon.com, Inc

    Image via Amazon

  • Salesforce Kicks Off Dreamforce By Unveiling SalesforceIQ, Salesforce IoT Cloud

    Salesforce Kicks Off Dreamforce By Unveiling SalesforceIQ, Salesforce IoT Cloud

    Salesforce opened its big Dreamforce conference on Tuesday with 160,000 registered attendees. The event kicked off with two major announcements from the company – SalesforceIQ and the Salesforce IoT Cloud.

    Salesforce IQ

    Salesforce calls SalesforceIQ “the future of selling for every business.” That might be a bit much, but it is designed to help both large and small businesses.

    “Powered by groundbreaking Relationship Intelligence technology, SalesforceIQ utilizes advanced data science to analyze company relationships with prospects, customers and partners, and surface insights to drive businesses forward,” the company says.

    With the announcement comes the introduction of two SalesforceIQ products: SalesforceIQ for Small Business and SalesforceIQ for Sales Cloud’s iOS, Android, and Chrome apps. The former is obviously geared toward small businesses, helping them manage deals, accelerate pipelines, and guiding them through the sales process. SalesforceIQ for Sales Cloud sees relationship intelligence integrated into sales reps’ email.

    SalesforceIQ for Small Business is generally available now in the U.S., Canada, and Australia. It will run you $25 per user per month.

    SalesforceIQ for Sales Cloud is in beta and free to Sales Cloud users in English. Pricing will be announced when it becomes generally available early next year. It will also open up to additional languages.

    Salesforce IoT Cloud

    The Salesforce IoT Cloud connects “billions” of events from devices, sensors, apps, etc. from the Internet of Things to Salesforce to give businesses insights from these things so they can take the right actions for customers when they make sense.

    As businesses are already struggling to make sense of the data they do have, it’s going to be increasingly important to understand customers as they use more and more connected-devices. Tools like this will continue to be more imperative.

    “The IoT Cloud is powered by Thunder, a massively scalable, real-time event processing engine built on a modern architecture and frameworks that can ingest billions of event streams. With IoT Cloud, business users can use intuitive, point-and-click tools to define, modify and set rules and logic for events that can trigger actions across the Salesforce Customer Success Platform.”

    There isn’t a release date on this product at this point. It will reportedly begin pilot in the second half of next year before opening up to general availability later in 2016.

    Image via Salesforce

  • Salesforce Community Cloud Gets Buy Button

    Salesforce Community Cloud Gets Buy Button

    Buy buttons are all the rage right now, and the latest to jump on the trend is Salesforce with its Community Cloud.

    The company launched Community Cloud roughly a year ago aimed at enabling companies to create their own LinkedIn-like communities, which are connected to their own business processes. With the new announcement, it’s getting an ecommerce element.

    “The new e-commerce capabilities enable communities of customers to discover, research, discuss and buy products in a single location while introducing a new sales channel for businesses,” a spokesperson for Salesforce said in an email.

    “Now, companies can put a buy button right where their customers are already gathered and engaged,” they added. “Customers including PonoMusic and Avid Technology are already deploying custom e-commerce solutions.”

    Essentially, it’s a way for companies to offer a similar experience to what the social giants like Facebook, Twitter, and Pinterest are starting to offer, from their own communities.

    Salesforce points to numbers from a eMarketer report showing that ecommerce sales are slated to reach $349.1 billion this year.

    The company also announced new Lightning components, which are generally available with the current release of Salesforce and are included in all Community Cloud licenses.

    “With new e-commerce Lightning Components from Salesforce partners like CloudCraze, Demandware and Bigcommerce, companies will be able to seamlessly incorporate e-commerce into their communities,” the company said in an announcement. “Lightning Components are reusable building blocks that enable companies to quickly add rich new capabilities into their communities without programming. The Winter ‘16 release of Community Builder will enable customers to easily drag and drop Lightning Components into any community.”

    AppExchange for Components is also live and available for everyone. Partner components on the AppExchange are priced individually on a per user or per Salesforce instance basis, the company said. New ecommerce Lightning Components from partners are expected to be generally available early next year.

    Image via Salesforce

  • Apple Disappoints On iPhone Sales

    Apple Disappoints On iPhone Sales

    Apple just released its quarterly earnings report. The company surpassed Wall Street estimates on revenue and earnings per share, but iPhone sales were not on par with expectations. iPad sales were also down 18%.

    The company sold 47.5 million iPhones during the quarter. Analysts had expected closer to 49 or 50 million.

    CEO Tim Cook said, “We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch. he excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.”

    Apple shares began to sink after the report’s release.

    Here’s the company’s full earnings announcement:

    CUPERTINO, California — July 21, 2015 — Apple® today announced financial results for its fiscal 2015 third quarter ended June 27, 2015. The Company posted quarterly revenue of $49.6 billion and quarterly net profit of $10.7 billion, or $1.85 per diluted share. These results compare to revenue of $37.4 billion and net profit of $7.7 billion, or $1.28 per diluted share, in the year-ago quarter. Gross margin was 39.7 percent compared to 39.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.

    The growth was fueled by record third quarter sales of iPhone® and Mac®, all-time record revenue from services and the successful launch of Apple Watch™.

    “We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch,” said Tim Cook, Apple’s CEO. “The excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.”

    “In the third quarter our year-over-year growth rate accelerated from the first half of fiscal 2015, with revenue up 33 percent and earnings per share up 45 percent,” said Luca Maestri, Apple’s CFO. “We generated very strong operating cash flow of $15 billion, and we returned over $13 billion to shareholders through our capital return program.”

    Apple is providing the following guidance for its fiscal 2015 fourth quarter:

    • revenue between $49 billion and $51 billion
    • gross margin between 38.5 percent and 39.5 percent
    • operating expenses between $5.85 billion and $5.95 billion
    • other income/(expense) of $400 million
    • tax rate of 26.3 percent

    Apple’s board of directors has declared a cash dividend of $.52 per share of the Company’s common stock. The dividend is payable on August 13, 2015, to shareholders of record as of the close of business on August 10, 2015.

    Apple will provide live streaming of its Q3 2015 financial results conference call beginning at 2:00 p.m. PDT on July 21, 2015 at www.apple.com/quicktime/qtv/earningsq315. This webcast will also be available for replay for approximately two weeks thereafter.

    This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 27, 2014, its Form 10-Q for the fiscal quarter ended December 27, 2014, its Form 10-Q for the fiscal quarter ended March 28, 2015, and its Form 10-Q for the fiscal quarter ended June 27, 2015 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

    Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, the Mac and Apple Watch. Apple’s three software platforms — iOS, OS X and watchOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

  • Salesforce Looks At The State Of Sales

    Salesforce Looks At The State Of Sales

    Salesforce just released its 2015 State of Sales Report looking at industry trends after surveying over 2,300 sales leaders around the world. It looks at priorities, behaviors, and technology in use by sales teams and finds that the best performing teams are more likely to maximize technology, especially when it comes to analytics and mobile.

    “Technology is rapidly becoming the difference between big quarters and big misses,” said Mike Rosenbaum, executive vice president of Sales Cloud at Salesforce. “The companies who deliver strong sales results not only use modern CRM platforms to gain critical insight into all the customer touchpoints, but are also deploying newer technologies like sales analytics to sell smarter and mobile to respond anytime, anywhere.”

    The report finds that high-performing sales teams are three and a half times more likely to use sales analytics than under-performing teams, and predictive analytics represents “the next phase of analytics innovation.” 19% of those polled are currently using predictive analytics, but Salesforce expects adoption to grow by 135% over the next twelve to eighteen months.

    High-performing sales teams are more than twice as likely to be “heavy tech adopters” than moderate and under-performing teams. Technology accelerates sales processes three times more often for high-performers than for under-performers, it finds.

    “Mobile is becoming a key accelerator for sales,” the company says. “Inspired by consumer adoption, mobile devices and apps are now becoming mainstream for business users,” Today’s highest performing sales reps use mobile apps for everything from lead management to sales forecasting.”

    According to the report, the top sales organizations are about five times more likely to rate their mobile sales capabilities as “outstanding” or “very good,” and 60% of the high-performing teams currently use or are planning to use a mobile sales app. Among those surveyed, mobile sales app use will more than double in the next two years. Over half currently deliver or plan to deliver sales directly via a mobile app in the next two years. A surprising 83% of all sales teams are currently using or planning to use wearables in some form in the next two years.

    “Sales success now begins with a collaborative culture,” Salesforce says. “Creating a culture where sales is the collective responsibility of the entire organization is critical to success. In many cases, that means breaking down silos and unifying sales and marketing processes to get a complete view of the customer.”

    Those with high-performing sales teams are three times as likely to view sales as the responsibility of the entire company. These high-performing teams also largely (93%) rate employee satisfaction as very important.

    You can find the full report here.

    Earlier this week, we looked at another report for the company which examined CPMs across leading social platforms.

  • Target Job Cuts: Company Outlines Plan to Restructure, Invest in Technology

    Target Job Cuts: Company Outlines Plan to Restructure, Invest in Technology

    Target has announced a corporate restructuring plan that will see it ax several thousand jobs – but the focus will be at the headquarters level and not at the company’s 1,800+ retail locations.

    In order to “fuel growth and drive profitability”, Target is looking to cut costs to the tune of $2 billion.

    “These savings will be realized through operations, technology and process improvements; supply chain and sourcing efficiencies; and corporate restructuring,” says the company.

    This will include some job cuts, which will come primarily from corporate locations in Minneapolis and India – which employ around 26,000 people in all – according to Reuters.

    “Following a thorough, strategic review of our business, coupled with a careful evaluation of the changing retail landscape, we have identified the key initiatives that will put Target on a clear path to growth,” said Chairman and CEO Brian Cornell in a statement. “We’re focused on our future and building the capabilities that will take us further, faster. Redefining Target will require a renewed emphasis on prioritization and innovation, and above all else, putting our guests first in everything we do.”

    Apart from the corporate restructuring, Target has also announced a new focus on a “channel-agnostic” approach – meaning more focus on online sales and technology.

    “The retailer is taking a channel-agnostic approach to growing its business, driving a total Target experience across stores, online and mobile. Guests who shop Target in stores and online generate three times the sales compared to guests who shop in stores only. Continued enhancements in technology, supply chain and inventory management will create a shopping experience that is rooted in ease and inspiration. This will help spur Target’s continued annual growth in digital channel sales of 40 percent, as well as contribute to a total projected sales growth of 2 to 3 percent and comparable sales growth of 1.5 to 2.5 percent in 2015,” said the company in a press release.

    Target says it’ll invest at least $1 billion in tech.

    Target recently killed its online streaming service Target Ticket. It also took a swipe at Amazon by lowering its free shipping threshold – months after Amazon raised its.

    Image via Wikimedia Commons

  • Amazon Reports 20% Sales Increase, $544 Million Loss

    Amazon just released its earnings report for the third quarter. Net sales were up 20% year-over-year at $20.58 Billion, which is a bit under analysts’ expectations. Earnings per share came in at – $0.95, which is significantly less than expected.

    Investors weren’t thrilled with Q2, and Q3 appears to be an even bigger disappointment.

    CEO Jeff Bezos had this to say: “As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever. In addition to our already low prices, we will offer more than 15,000 Lightning Deals with early access to select deals for Prime members, hundreds of millions of products across dozens of categories, curated gift lists like Holiday Toy List and Electronics Holiday Gift Guide, new features like #AmazonWishList, and a great new lineup of products like Kindle Voyage and Fire HD Kids Edition. And if you order your gifts on AmazonSmile, we’ll donate a percentage of your purchase price to your favorite charity.”

    What a statement. I don’t think investors were satisfied with that, as the stock quickly began to tank ahead of the conference call.

    Here’s the release in its entirety:

    SEATTLE–(BUSINESS WIRE)–Oct. 23, 2014– Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its third quarter ended September 30, 2014.

    Operating cash flow increased 15% to $5.71 billion for the trailing twelve months, compared with $4.98 billion for the trailing twelve months ended September 30, 2013. Free cash flow increased to $1.08 billionfor the trailing twelve months, compared with $388 million for the trailing twelve months ended September 30, 2013. Free cash flow for the trailing twelve months ended September 30, 2013 includes cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

    Common shares outstanding plus shares underlying stock-based awards totaled 481 million on September 30, 2014, compared with 475 million one year ago.

    Net sales increased 20% to $20.58 billion in the third quarter, compared with $17.09 billion in third quarter 2013. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on net sales was $13 million.

    Operating loss was $544 million in the third quarter, compared with operating loss of $25 million in third quarter 2013.

    Net loss was $437 million in the third quarter, or $0.95 per diluted share, compared with net loss of $41 million, or $0.09 per diluted share, in third quarter 2013.

    “As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever,” said Jeff Bezos, founder and CEO of Amazon.com. “In addition to our already low prices, we will offer more than 15,000 Lightning Deals with early access to select deals for Prime members, hundreds of millions of products across dozens of categories, curated gift lists like Holiday Toy List and Electronics Holiday Gift Guide, new features like #AmazonWishList, and a great new lineup of products like Kindle Voyage and Fire HD Kids Edition. And if you order your gifts on AmazonSmile, we’ll donate a percentage of your purchase price to your favorite charity.”

    Highlights

    • Amazon announced the new Kindle Voyage, our thinnest, most advanced Kindle ever. Kindle Voyage has our highest resolution, highest contrast, and brightest display, reimagined page turns, and all of the features customers love about Kindle — books in seconds, no eyestrain or glare, readability in bright sunlight, and battery life measured in weeks, not hours. Amazon also launched the all-new $79 Kindle with a 20% faster processor, twice the storage, and new touch interface. Both e-readers feature customer favorites Kindle FreeTime, Goodreads, and Smart Lookup, plus new features like Word Wise, Family Library, FreeTime Unlimited, and more. These features will also be made available on Kindle Paperwhite as part of a free, over-the-air software update.
    • Amazon introduced the all-new Fire HD — the most powerful tablet under $100. Fire HD features a quad-core processor, front- and rear-facing cameras, an HD display, incredible reliability, and a world-class ecosystem of exclusive features, services, and content. Fire HD is available in five color choices and in 6” and 7” sizes.
    • Amazon introduced Fire HD Kids Edition, the first tablet built from the ground up for kids and parents, and featuring the first-ever 2-year worry-free guarantee — if anything happens, Amazonwill replace it for free, no questions asked. Fire HD Kids Edition is a real tablet, not a toy — it features a quad-core processor, a vivid HD display, front- and rear-facing cameras, Dolby Digital Audio, a kid-proof case, and access to Amazon’s unmatched content ecosystem. Fire HD Kids Edition also comes with a year of FreeTime Unlimited, which provides unlimited access to 5,000 age-appropriate books, movies, TV shows, educational apps, and games.
    • Amazon introduced the all-new Fire HDX 8.9, which combines a startlingly light design and stunning HDX display with a new, more powerful processor, exclusive Dolby Atmos and the latest Dolby Audio, and the all-new Fire OS 4 “Sangria,” Amazon’s next-generation software and services that power Amazon Fire devices.
    • Amazon Fire TV is now the best-selling streaming box on Amazon for the U.S., U.K., and Germany.
    • Amazon Game Studios unveiled its latest round of games launching this year exclusively on Amazon Fire tablets and Fire phone — Til Morning’s Light, CreepStorm, and Tales From Deep Space. These are creative, hand-crafted games that are fun to play, deliver interesting new customer experiences, and utilize exclusive Amazon content and technology, such as Fire phone’s Dynamic Perspective, Amazon AppStream, and comiXology.
    • Amazon announced that all 10 episodes of the critically-acclaimed dark comedy series Transparentare now available for Prime Instant Video customers in the U.S., U.K., and Germany. Since its debut, Transparent is the #1 ranked TV series on Prime Instant Video. Also proving popular with critics, the new show clocked in a near perfect score on Rotten Tomatoes with a 98% critic rating, and a 91 metascore on Metacritic, making Transparent one of TV’s top three highest-ranked, currently-airing shows.
    • Amazon announced it will premiere all 10 episodes of the second season of Garry Trudeau’s critically-acclaimed political comedy series Alpha House exclusively on Prime Instant Video starting tomorrow. Additionally, two more original pilots, dramatic thriller Hand of God and coming-of-age comedy Red Oaks, will return for full seasons following rave customer reviews. Amazon Studios has also greenlit five additional kids pilots for 2015: The Stinky & Dirty Show, Buddy: Tech Detective, Niko and the Sword of Light, Table 58, and Just Add Magic.
    • Amazon launched KDP Kids and Kindle Kids’ Book Creator to help children’s book authors prepare, publish, and promote both illustrated and chapter books in Kindle Stores worldwide.
    • Amazon acquired Twitch Interactive, Inc. With an average of over 55 million unique monthly visitors in the last quarter, and content produced by more than one million broadcasters per month, Twitch is the leading live video platform and community for gamers.
    • Amazon Prime members now receive 30 minutes of early access to select Lightning Deals onAmazon.com and daily sales events on MyHabit.com. By taking advantage of this early access, members can find great deals this holiday and all year long.
    • AmazonFresh expanded its service to Brooklyn. For a limited time, Prime members in eligibleBrooklyn areas can use AmazonFresh for free, getting access to same-day and early next-day delivery of fresh groceries as well as over 500,000 Amazon.com items.
    • Amazon launched Local Register, a mobile app and secure credit card reader, that enables individuals and small businesses to quickly and easily accept credit and debit cards from a smartphone or tablet at an industry-leading low, flat rate with no hidden fees or long-term contracts. Local Register customers also benefit from access to the Amazon.com award-winning, fully-dedicated customer support team, and in-app reporting tools.
    • Amazon launched the 3D Printed Products store, a marketplace that gives customers access to more than 200 unique print-on-demand products, many that can be customized by material, size, style, and color, and personalized with text and image imprints. The store includes convenient search tools, interactive 3D preview functionality, and a product personalization widget.
    • Purdue University and Amazon launched the Purdue Student Store on Amazon, a co-branded experience where students can purchase lower-cost textbooks and other college essentials.Amazon also will bring staffed customer order pickup and drop-off locations to Purdue’s campus, as well as expedited shipping benefits, in early 2015.
    • Amazon launched Pay with Amazon in India to help sellers of all sizes across the country grow their online businesses. Sellers can outsource their financial transactions to a world-class payments platform, and customers can shop with confidence due to a 100% buyer protection guarantee. This new Amazon service will further aid and support the growth and integration of small and medium businesses in the new digital economy. Pay with Amazon is mobile-optimized across all operating systems including Android, iOS, and Windows.
    • Amazon.in became the exclusive marketplace in India to find Xbox One, Xbox 360, Kinect, Xbox Live, Xbox Accessories, and all Microsoft-published Xbox game titles. With the roll-out of Xbox One, Amazon unveiled Release Day Delivery, a service committed to delivering customers new product offerings on their release day. Microsoft’s offerings join other global products including Coke Zero, Blackberry Passport, and the first Android One phone that have launched exclusively inIndia on Amazon.in.
    • Amazon Web Services (AWS) announced the AWS Directory Service, making it easier for enterprise customers to integrate their AWS environments with existing on-premises access control systems and security policies.
    • To help customers build more secure and efficient cloud environments, AWS announced it is offering four of its popular AWS Trusted Advisor security checks for free. AWS Trusted Advisor is an automated service that inspects a customer’s AWS environment and finds opportunities for customers to save money, improve system performance and reliability, and close security gaps. Since the beginning of 2013, customers have viewed more than 1.7 million AWS Trusted Advisor recommendations, and realized more than $300 million in estimated cost reductions.
    • AWS announced the launch of its AWS EU (Frankfurt) Region, the second AWS Region in Europe and the 11th AWS Region globally. This allows organizations who want to ensure that their data resides inside of Germany the ability to do so.
    • With over 350 significant service and feature releases year-to-date, and substantial price reductions (28% to 51% depending on the service) for customers starting in April 2014, AWS continues to grow strongly, with usage growth close to 90% year-over-year for the third quarter.

    Financial Guidance

    The following forward-looking statements reflect Amazon.com’s expectations as of October 23, 2014, 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 consumer spending, world events, the rate of growth of the Internet and online commerce, and the various factors detailed below.

    Fourth Quarter 2014 Guidance

    • Net sales are expected to be between $27.3 billion and $30.3 billion, or to grow between 7% and 18% compared with fourth quarter 2013.
    • Operating income (loss) is expected to be between $(570) million and $430 million, compared to$510 million in fourth quarter 2013.
    • This guidance includes approximately $470 million for stock-based compensation and amortization of intangible assets, and 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 p.m. PT/5 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.cominvests in new business opportunities and the timing of those investments, the mix of products 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 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.

    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 phone, Fire tablets, and Fire TV are some of the products and services pioneered by Amazon.

    AMAZON.COM, INC.
    Consolidated Statements of Cash Flows
    (in millions)
    (unaudited)
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,    		 Twelve Months Ended
    September 30,
    2014 2013 2014 2013 2014 2013
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 5,057 $ 3,704 $ 8,658 $ 8,084 $ 3,872 $ 2,980
    OPERATING ACTIVITIES:
    Net income (loss) (437 ) (41 ) (455 ) 34 (216 ) 132
    Adjustments to reconcile net income (loss) to net cash from operating activities:
    Depreciation of property and equipment, including internal-use software and website development, and other amortization 1,247 834 3,366 2,291 4,329 2,953
    Stock-based compensation 377 281 1,089 808 1,414 1,043
    Other operating expense (income), net 31 11 93 74 133 110
    Losses (gains) on sales of marketable securities, net (3 ) 1 (4 ) 1 (3 ) —
    Other expense (income), net 42 5 (16 ) 115 36 214
    Deferred income taxes (270 ) 11 (503 ) (47 ) (613 ) (195 )
    Excess tax benefits from stock-based compensation — — (121 ) — (199 ) (239 )
    Changes in operating assets and liabilities:
    Inventories (845 ) (586 ) (54 ) (80 ) (1,383 ) (1,054 )
    Accounts receivable, net and other (362 ) (125 ) 66 393 (1,173 ) (632 )
    Accounts payable 1,724 947 (3,294 ) (3,240 ) 1,834 1,686
    Accrued expenses and other 4 (72 ) (742 ) (853 ) 847 558
    Additions to unearned revenue 1,069 672 3,055 1,872 3,874 2,417
    Amortization of previously unearned revenue (811 ) (550 ) (2,353 ) (1,471 ) (3,175 ) (2,016 )
    Net cash provided by (used in) operating activities 1,766 1,388 127 (103 ) 5,705 4,977
    INVESTING ACTIVITIES:
    Purchases of property and equipment, including internal-use software and website development (1,378 ) (1,038 ) (3,748 ) (2,565 ) (4,628 ) (4,589 )
    Acquisitions, net of cash acquired, and other (860 ) (1 ) (926 ) (252 ) (986 ) (287 )
    Sales and maturities of marketable securities and other investments 1,439 494 2,994 1,791 3,509 2,296
    Purchases of marketable securities and other investments (147 ) (518 ) (920 ) (2,406 ) (1,339 ) (3,934 )
    Net cash provided by (used in) investing activities (946 ) (1,063 ) (2,600 ) (3,432 ) (3,444 ) (6,514 )
    FINANCING ACTIVITIES:
    Excess tax benefits from stock-based compensation — — 121 — 199 239
    Proceeds from long-term debt and other 28 25 379 132 628 3,189
    Repayments of long-term debt, capital lease, and finance lease obligations (440 ) (255 ) (1,277 ) (728 ) (1,547 ) (858 )
    Net cash provided by (used in) financing activities (412 ) (230 ) (777 ) (596 ) (720 ) 2,570
    Foreign-currency effect on cash and cash equivalents (207 ) 73 (150 ) (81 ) (155 ) (141 )
    Net increase (decrease) in cash and cash equivalents 201 168 (3,400 ) (4,212 ) 1,386 892
    CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,258 $ 3,872 $ 5,258 $ 3,872 $ 5,258 $ 3,872
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest on long-term debt $ 7 $ 8 $ 56 $ 60 $ 93 $ 70
    Cash paid for income taxes (net of refunds) 38 23 148 143 173 195
    Property and equipment acquired under capital leases 1,158 526 2,794 1,313 3,347 1,552
    Property and equipment acquired under build-to-suit leases 343 269 707 663 920 647
    AMAZON.COM, INC.
    Consolidated Statements of Operations
    (in millions, except per share data)
    (unaudited)
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    2014 2013 2014 2013
    Net product sales $ 16,022 $ 13,808 $ 46,978 $ 39,831
    Net services sales 4,557 3,284 12,681 9,034
    Total net sales 20,579 17,092 59,659 48,865
    Operating expenses (1):
    Cost of sales 14,627 12,366 42,080 35,375
    Fulfillment 2,643 2,034 7,342 5,667
    Marketing 993 694 2,806 2,001
    Technology and content 2,423 1,734 6,639 4,703
    General and administrative 406 278 1,110 810
    Other operating expense (income), net 31 11 94 74
    Total operating expenses 21,123 17,117 60,071 48,630
    Income (loss) from operations (544 ) (25 ) (412 ) 235
    Interest income 9 9 31 28
    Interest expense (49 ) (36 ) (136 ) (102 )
    Other income (expense), net (50 ) 9 (23 ) (107 )
    Total non-operating income (expense) (90 ) (18 ) (128 ) (181 )
    Income (loss) before income taxes (634 ) (43 ) (540 ) 54
    Benefit (provision) for income taxes 205 12 38 18
    Equity-method investment activity, net of tax (8 ) (10 ) 47 (38 )
    Net income (loss) $ (437 ) $ (41 ) $ (455 ) $ 34
    Basic earnings per share $ (0.95 ) $ (0.09 ) $ (0.99 ) $ 0.08
    Diluted earnings per share $ (0.95 ) $ (0.09 ) $ (0.99 ) $ 0.07
    Weighted average shares used in computation of earnings per share:
    Basic 463 457 461 456
    Diluted 463 457 461 464
    _____________
    (1) Includes stock-based compensation as follows:
    Fulfillment $ 93 $ 70 $ 278 $ 213
    Marketing 32 23 91 63
    Technology and content 204 154 579 428
    General and administrative 48 34 141 104
    AMAZON.COM, INC.
    Consolidated Statements of Comprehensive Income (Loss)
    (in millions)
    (unaudited)
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    2014 2013 2014 2013
    Net income (loss) $ (437 ) $ (41 ) $ (455 ) $ 34
    Other comprehensive income (loss):
    Foreign currency translation adjustments, net of tax of $(1), $(1), $0 and $(14) (248 ) 111 (209 ) 41
    Net change in unrealized gains on available-for-sale securities:
    Unrealized gains (losses), net of tax of $2, $(1), $1 and $3 (1 ) 1 2 (8 )
    Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $(1), $0, $(1) and $(1) (2 ) 1 (2 ) —
    Net unrealized gains (losses) on available-for-sale securities (3 ) 2 — (8 )
    Total other comprehensive income (loss) (251 ) 113 (209 ) 33
    Comprehensive income (loss) $ (688 ) $ 72 $ (664 ) $ 67
    AMAZON.COM, INC.
    Segment Information
    (in millions)
    (unaudited)
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    2014 2013 2014 2013
    North America
    Net sales $ 12,867 $ 10,301 $ 36,722 $ 29,186
    Segment operating expenses (1) 12,779 10,006 35,634 28,024
    Segment operating income $ 88 $ 295 $ 1,088 $ 1,162
    International
    Net sales $ 7,712 $ 6,791 $ 22,937 $ 19,679
    Segment operating expenses (1) 7,936 6,819 23,254 19,724
    Segment operating income (loss) $ (224 ) $ (28 ) $ (317 ) $ (45 )
    Consolidated
    Net sales $ 20,579 $ 17,092 $ 59,659 $ 48,865
    Segment operating expenses (1) 20,715 16,825 58,888 47,748
    Segment operating income (loss) (136 ) 267 771 1,117
    Stock-based compensation (377 ) (281 ) (1,089 ) (808 )
    Other operating income (expense), net (31 ) (11 ) (94 ) (74 )
    Income (loss) from operations (544 ) (25 ) (412 ) 235
    Total non-operating income (expense) (90 ) (18 ) (128 ) (181 )
    Benefit (provision) for income taxes 205 12 38 18
    Equity-method investment activity, net of tax (8 ) (10 ) 47 (38 )
    Net income (loss) $ (437 ) $ (41 ) $ (455 ) $ 34
    Segment Highlights:
    Y/Y net sales growth:
    North America 25 % 31 % 26 % 29 %
    International 14 15 17 15
    Consolidated 20 24 22 23
    Y/Y segment operating income/loss growth (decline):
    North America (70 )% 1 % (6 )% 18 %
    International 685 (52 ) 611 (854 )
    Consolidated (151 ) 15 (31 ) 13
    Net sales mix:
    North America 63 % 60 % 62 % 60 %
    International 37 40 38 40
    100 % 100 % 100 % 100 %
    _____________
    (1)  Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.
    AMAZON.COM, INC.
    Supplemental Net Sales Information
    (in millions)
    (unaudited)
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    2014 2013 2014 2013
    Net Sales:
    North America
    Media $ 2,734 $ 2,609 $ 8,023 $ 7,295
    Electronics and other general merchandise 8,793 6,732 24,988 19,337
    Other (1) 1,340 960 3,711 2,554
    Total North America $ 12,867 $ 10,301 $ 36,722 $ 29,186
    International
    Media $ 2,510 $ 2,424 $ 7,532 $ 7,193
    Electronics and other general merchandise 5,160 4,316 15,260 12,340
    Other (1) 42 51 145 146
    Total International $ 7,712 $ 6,791 $ 22,937 $ 19,679
    Consolidated
    Media $ 5,244 $ 5,033 $ 15,555 $ 14,488
    Electronics and other general merchandise 13,953 11,048 40,248 31,677
    Other (1) 1,382 1,011 3,856 2,700
    Total consolidated $ 20,579 $ 17,092 $ 59,659 $ 48,865
    Year-over-year Percentage Growth:
    North America
    Media 5 % 18 % 10 % 16 %
    Electronics and other general merchandise 31 33 29 31
    Other 40 58 45 61
    Total North America 25 31 26 29
    International
    Media 4 % 2 % 5 % 1 %
    Electronics and other general merchandise 20 23 24 24
    Other (17 ) 28 (1 ) 21
    Total International 14 15 17 15
    Consolidated
    Media 4 % 9 % 7 % 8 %
    Electronics and other general merchandise 26 29 27 28
    Other 37 56 43 59
    Total consolidated 20 24 22 23
    Year-over-year Percentage Growth:
    Excluding the effect of foreign exchange rates
    International
    Media 3 % 9 % 4 % 7 %
    Electronics and other general merchandise 19 28 22 30
    Other (19 ) 32 (3 ) 26
    Total International 13 20 15 20
    Consolidated
    Media 4 % 13 % 7 % 12 %
    Electronics and other general merchandise 26 31 26 30
    Other 37 56 43 59
    Total consolidated 20 26 22 25
    Consolidated Net Sales Mix:
    Media 25 % 29 % 26 % 30 %
    Electronics and other general merchandise 68 65 67 65
    Other 7 6 7 5
    Total consolidated 100 % 100 % 100 % 100 %
    _____________
    (1)  Includes sales from non-retail activities, such as AWS sales, which are included in the North America segment, and advertising services and our co-branded credit card agreements, which are included in both segments.
    AMAZON.COM, INC.
    Consolidated Balance Sheets
    (in millions, except per share data)
    September 30, 2014 December 31, 2013
    (unaudited)
    ASSETS
    Current assets:
    Cash and cash equivalents $ 5,258 $ 8,658
    Marketable securities 1,625 3,789
    Inventories 7,316 7,411
    Accounts receivable, net and other 4,373 4,767
    Total current assets 18,572 24,625
    Property and equipment, net 15,702 10,949
    Goodwill 3,332 2,655
    Other assets 2,813 1,930
    Total assets $ 40,419 $ 40,159
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 11,811 $ 15,133
    Accrued expenses and other 7,217 6,688
    Unearned revenue 1,814 1,159
    Total current liabilities 20,842 22,980
    Long-term debt 3,099 3,191
    Other long-term liabilities 6,142 4,242
    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 — 487 and 483
    Outstanding shares — 463 and 459 5 5
    Treasury stock, at cost (1,837 ) (1,837 )
    Additional paid-in capital 10,827 9,573
    Accumulated other comprehensive loss (394 ) (185 )
    Retained earnings 1,735 2,190
    Total stockholders’ equity 10,336 9,746
    Total liabilities and stockholders’ equity $ 40,419 $ 40,159
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except per share data)
    (unaudited)
    Y/Y %
    Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Change
    Cash Flows and Shares
    Operating cash flow — trailing twelve months (TTM) $ 4,977 $ 5,475 $ 5,345 $ 5,327 $ 5,705 15 %
    Purchases of property and equipment (incl. internal-use software & website development) — TTM $ 4,589 $ 3,444 $ 3,854 $ 4,288 $ 4,628 1 %
    Free cash flow (operating cash flow less purchases of property and equipment) — TTM $ 388 $ 2,031 $ 1,491 $ 1,039 $ 1,077 178 %
    Free cash flow — TTM Y/Y growth (decline) (63 )% 414 % 744 % 292 % 178 % N/A
    Invested capital (1) $ 14,306 $ 15,749 $ 16,681 $ 17,743 $ 18,715 31 %
    Return on invested capital (2) 3 % 13 % 9 % 6 % 6 % N/A
    Common shares and stock-based awards outstanding 475 476 476 480 481 1 %
    Common shares outstanding 458 459 460 462 463 1 %
    Stock awards outstanding 17 17 16 18 18 4 %
    Stock awards outstanding — % of common shares outstanding 3.8 % 3.6 % 3.5 % 3.9 % 3.9 % N/A
    Results of Operations
    Worldwide (WW) net sales $ 17,092 $ 25,587 $ 19,741 $ 19,340 $ 20,579 20 %
    WW net sales — Y/Y growth, excluding F/X 26 % 22 % 23 % 22 % 20 % N/A
    WW net sales — TTM $ 70,133 $ 74,452 $ 78,124 $ 81,759 $ 85,246 22 %
    WW net sales — TTM Y/Y growth, excluding F/X 25 % 24 % 24 % 23 % 22 % N/A
    Operating income (loss) $ (25 ) $ 510 $ 146 $ (15 ) $ (544 ) N/A
    Operating income/loss — Y/Y growth (decline), excluding F/X (33 )% 24 % (29 )% (158 )% N/A N/A
    Operating margin — % of WW net sales (0.1 )% 2.0 % 0.7 % (0.1 )% (2.6 )% N/A
    Operating income — TTM $ 640 $ 745 $ 710 $ 617 $ 97 (85 )%
    Operating income — TTM Y/Y growth (decline), excluding F/X 27 % 14 % 7 % (11 )% (94 )% N/A
    Operating margin — TTM % of WW net sales 0.9 % 1.0 % 0.9 % 0.8 % 0.1 % N/A
    Net income (loss) $ (41 ) $ 239 $ 108 $ (126 ) $ (437 ) 979 %
    Net income (loss) per diluted share $ (0.09 ) $ 0.51 $ 0.23 $ (0.27 ) $ (0.95 ) 966 %
    Net income (loss) — TTM $ 132 $ 274 $ 299 $ 181 $ (216 ) (264 )%
    Net income (loss) per diluted share — TTM $ 0.28 $ 0.59 $ 0.64 $ 0.39 $ (0.47 ) (262 )%
    Segments
    North America Segment:
    Net sales $ 10,301 $ 15,331 $ 11,858 $ 11,998 $ 12,867 25 %
    Net sales — Y/Y growth, excluding F/X 31 % 26 % 26 % 26 % 25 % N/A
    Net sales — TTM $ 41,361 $ 44,517 $ 46,984 $ 49,487 $ 52,053 26 %
    Operating income $ 295 $ 725 $ 562 $ 438 $ 88 (70 )%
    Operating margin — % of North America net sales 2.9 % 4.7 % 4.7 % 3.7 % 0.7 % N/A
    Operating income — TTM $ 1,770 $ 1,886 $ 1,992 $ 2,020 $ 1,813 2 %
    Operating income — TTM Y/Y growth, excluding F/X 40 % 18 % 17 % 14 % 2 % N/A
    Operating margin — TTM % of North America net sales 4.3 % 4.2 % 4.2 % 4.1 % 3.5 % N/A
    International Segment:
    Net sales $ 6,791 $ 10,256 $ 7,883 $ 7,342 $ 7,712 14 %
    Net sales — Y/Y growth, excluding F/X 20 % 15 % 18 % 14 % 13 % N/A
    Net sales — TTM $ 28,772 $ 29,935 $ 31,140 $ 32,272 $ 33,193 15 %
    Net sales — TTM % of WW net sales 41 % 40 % 40 % 39 % 39 % N/A
    Operating income (loss) $ (28 ) $ 151 $ (60 ) $ (34 ) $ (224 ) 685 %
    Operating margin — % of International net sales (0.4 )% 1.5 % (0.8 )% (0.5 )% (2.9 )% N/A
    Operating income (loss) — TTM $ 25 $ 107 $ 63 $ 29 $ (166 ) (754 )%
    Operating income/loss — TTM Y/Y growth (decline), excluding F/X (56 )% 106 % 770 % N/A (877 )% N/A
    Operating margin — TTM % of International net sales 0.1 % 0.4 % 0.2 % 0.1 % (0.5 )% N/A
    Consolidated Segments:
    Operating expenses (3) $ 16,825 $ 24,711 $ 19,239 $ 18,936 $ 20,715 23 %
    Operating expenses — TTM (3) $ 68,338 $ 72,459 $ 76,069 $ 79,710 $ 83,599 22 %
    Operating income (loss) $ 267 $ 876 $ 502 $ 404 $ (136 ) (151 )%
    Operating margin — % of Consolidated net sales 1.6 % 3.4 % 2.5 % 2.1 % (0.7 )% N/A
    Operating income — TTM $ 1,795 $ 1,993 $ 2,055 $ 2,049 $ 1,647 (8 )%
    Operating income — TTM Y/Y growth (decline), excluding F/X 26 % 21 % 20 % 14 % (12 )% N/A
    Operating margin — TTM % of Consolidated net sales 2.6 % 2.7 % 2.6 % 2.5 % 1.9 % N/A
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except inventory turnover, accounts payable days and employee data)
    (unaudited)
    Y/Y %
    Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Change
    Supplemental
    Supplemental North America Segment Net Sales:
    Media $ 2,609 $ 3,513 $ 2,825 $ 2,464 $ 2,734 5 %
    Media — Y/Y growth, excluding F/X 18 % 21 % 13 % 14 % 5 % N/A
    Media — TTM $ 10,199 $ 10,809 $ 11,121 $ 11,411 $ 11,536 13 %
    Electronics and other general merchandise $ 6,732 $ 10,648 $ 7,829 $ 8,366 $ 8,793 31 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 33 % 25 % 28 % 29 % 31 % N/A
    Electronics and other general merchandise — TTM $ 27,840 $ 29,985 $ 31,686 $ 33,575 $ 35,636 28 %
    Electronics and other general merchandise — TTM % of North America net sales 67 % 67 % 67 % 68 % 68 % N/A
    Other $ 960 $ 1,170 $ 1,204 $ 1,168 $ 1,340 40 %
    Other — TTM $ 3,322 $ 3,723 $ 4,177 $ 4,501 $ 4,881 47 %
    Supplemental International Segment Net Sales:
    Media $ 2,424 $ 3,714 $ 2,642 $ 2,380 $ 2,510 4 %
    Media — Y/Y growth, excluding F/X 9 % 6 % 4 % 4 % 3 % N/A
    Media — TTM $ 10,803 $ 10,907 $ 11,004 $ 11,160 $ 11,246 4 %
    Electronics and other general merchandise $ 4,316 $ 6,478 $ 5,188 $ 4,912 $ 5,160 20 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 28 % 21 % 26 % 20 % 19 % N/A
    Electronics and other general merchandise — TTM $ 17,771 $ 18,817 $ 19,919 $ 20,894 $ 21,737 22 %
    Electronics and other general merchandise — TTM % of International net sales 62 % 63 % 64 % 65 % 65 % N/A
    Other $ 51 $ 64 $ 53 $ 50 $ 42 (17 )%
    Other — TTM $ 198 $ 211 $ 217 $ 218 $ 210 6 %
    Supplemental Worldwide Net Sales:
    Media $ 5,033 $ 7,227 $ 5,467 $ 4,844 $ 5,244 4 %
    Media — Y/Y growth, excluding F/X 13 % 13 % 8 % 9 % 4 % N/A
    Media — TTM $ 21,002 $ 21,716 $ 22,125 $ 22,571 $ 22,782 8 %
    Electronics and other general merchandise $ 11,048 $ 17,126 $ 13,017 $ 13,278 $ 13,953 26 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 31 % 24 % 27 % 26 % 26 % N/A
    Electronics and other general merchandise — TTM $ 45,611 $ 48,802 $ 51,605 $ 54,469 $ 57,373 26 %
    Electronics and other general merchandise — TTM % of WW net sales 65 % 66 % 66 % 67 % 67 % N/A
    Other $ 1,011 $ 1,234 $ 1,257 $ 1,218 $ 1,382 37 %
    Other — TTM $ 3,520 $ 3,934 $ 4,394 $ 4,719 $ 5,091 45 %
    Balance Sheet
    Cash and marketable securities $ 7,689 $ 12,447 $ 8,666 $ 7,986 $ 6,883 (10 )%
    Inventory, net — ending $ 6,068 $ 7,411 $ 6,716 $ 6,644 $ 7,316 21 %
    Inventory turnover, average — TTM 9.2 8.9 9.1 9.1 8.9 (3 )%
    Property and equipment, net $ 9,991 $ 10,949 $ 12,267 $ 14,089 $ 15,702 57 %
    Accounts payable — ending $ 10,037 $ 15,133 $ 10,590 $ 10,457 $ 11,811 18 %
    Accounts payable days — ending 75 74 68 71 74 (1 )%
    Other
    WW shipping revenue $ 721 $ 1,137 $ 849 $ 889 $ 1,048 45 %
    WW shipping costs $ 1,532 $ 2,344 $ 1,829 $ 1,812 $ 2,020 32 %
    WW net shipping costs $ 811 $ 1,207 $ 980 $ 923 $ 972 20 %
    WW net shipping costs — % of WW net sales 4.7 % 4.7 % 5.0 % 4.8 % 4.7 % N/A
    Employees (full-time and part-time; excludes contractors & temporary personnel) 109,800 117,300 124,600 132,600 149,500 36 %
    _____________
    (1)  Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.
    (2)  TTM Free Cash Flow divided by Invested Capital.
    (3)  Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

    Amazon.com, Inc.
    Certain Definitions

    Customer Accounts

    • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

    Seller Accounts

    • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

    Registered Developers

    • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

    Units

     

    Source: Amazon.com, Inc.

    Image via Amazon

  • Amazon Reports 23% Sales Increase, $126 Million Loss

    Amazon Reports 23% Sales Increase, $126 Million Loss

    Amazon just released its earnings report for the second quarter. Net sales were up 23% year over year at $19.34 billion, which is in tune with analysts’ expectations, though earnings per share were – $0.27, which is a greater loss than expected. Stock immediately started going down.

    Operating cash flow was up 18% year-over-year at $5.33 billion, while free cash flow was up to $1.04 billion compared to $265 million last year. Operating loss was $15 million, compared to $79 million last year. Net loss was $126 million compared to $7 million last year.

    CEO Jeff Bezos said, “We continue working hard on making the Amazon customer experience better and better. We’ve recently introduced Sunday delivery coverage to 25% of the U.S. population, launched European cross-border Two-Day Delivery for Prime, launched Prime Music with over one million songs, created three original kids TV series, added world-class parental controls to Fire TV with FreeTime, and launched Kindle Unlimited, an eBook subscription service. For our AWS customers we launched Amazon Zocalo, T2 instances, an SSD-backed EBS volume, Amazon Cognito, Amazon Mobile Analytics, and the AWS Mobile SDK, and we substantially reduced prices. And today customers all over the U.S. will begin receiving their new Fire phones — including Firefly, Dynamic Perspective, and one full year of Prime — we can’t wait to get them in customers’ hands.”

    The company’s guidance has net sales at between $19.7 billion and $21.5 billion for the third quarter, or growing between 15% and 26% year-over-year.

    The company said on the conference call that it believes creating value for customers will ultimately create value for shareholders in the long run (or something to that effect).

    The Prime price increase hasn’t had a negative effect on subscriptions, according to the company. It points out that subscriptions are growing, and that it had more in Q2 this year than that of last year.

    It’s going to be in heavy production on some of its original video pilots in Q3, which will cost over $100 million.

    Here’s the release in its entirety:

    SEATTLE–(BUSINESS WIRE)–Jul. 24, 2014– Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its second quarter ended June 30, 2014.

    Operating cash flow increased 18% to $5.33 billion for the trailing twelve months, compared with $4.53 billion for the trailing twelve months ended June 30, 2013. Free cash flow increased to $1.04 billion for the trailing twelve months, compared with $265 million for the trailing twelve months ended June 30, 2013. Free cash flow for the trailing twelve months ended June 30, 2013, includes cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

    Common shares outstanding plus shares underlying stock-based awards totaled 480 million on June 30, 2014, compared with 474 million one year ago.

    Net sales increased 23% to $19.34 billion in the second quarter, compared with $15.70 billion in second quarter 2013. Excluding the $237 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 22% compared with second quarter 2013.

    Operating loss was $15 million in the second quarter, compared with operating income of $79 million in second quarter 2013. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating loss was $31 million.

    Net loss was $126 million in the second quarter, or $0.27 per diluted share, compared with net loss of $7 million, or $0.02 per diluted share, in second quarter 2013.

    “We continue working hard on making the Amazon customer experience better and better,” said Jeff Bezos, founder and CEO ofAmazon.com. “We’ve recently introduced Sunday delivery coverage to 25% of the U.S. population, launched European cross-border Two-Day Delivery for Prime, launched Prime Music with over one million songs, created three original kids TV series, added world-class parental controls to Fire TV with FreeTime, and launched Kindle Unlimited, an eBook subscription service. For our AWS customers we launched Amazon Zocalo, T2 instances, an SSD-backed EBS volume, Amazon Cognito, Amazon Mobile Analytics, and the AWS Mobile SDK, and we substantially reduced prices. And today customers all over the U.S. will begin receiving their new Fire phones — including Firefly, Dynamic Perspective, and one full year of Prime — we can’t wait to get them in customers’ hands.”

    Highlights

    • Amazon introduced Fire phone, offering instant access to Amazon’s vast content ecosystem and exclusive features like the Mayday button, ASAP, Second Screen, X-Ray, Dynamic Perspective, Firefly, free unlimited photo storage, and more. Fire phone ships today and is available exclusively on AT&T — the nation’s most reliable 4G LTE network. Customers can order at www.amazon.com/Fire-phone, www.att.com, and in AT&T retail locations nationwide. Fire phone with 32GB is available for $199 with a two-year contract or zero down and $27.09 a month with AT&T Next 18.
    • Fire phone is the only smartphone with Dynamic Perspective and Firefly. Dynamic Perspective uses a new sensor system to respond to the way customers hold, view, and move Fire phone, enabling experiences not possible on other smartphones. Firefly quickly recognizes things in the real world — web and email addresses, phone numbers, QR and bar codes, movies, music, and millions of products, and lets users take action in seconds — all with the simple press of the Firefly button.
    • Amazon launched the Dynamic Perspective SDK and the Firefly SDK. The Dynamic Perspective SDK gives developers access to algorithms that identify the X, Y, and Z coordinates of the user’s head, enabling a whole new class of apps and games. The Firefly SDK allows developers to extend the use of the Firefly button to enable new actions for customers.
    • Amazon announced that Amazon Appstore selection has nearly tripled over the past year and developers continue to report strong monetization from the apps they offer in the store. Since Fire phone launched, the rate of app submissions to the Amazon Appstore has more than doubled as developers have already begun finding innovative uses of the phone’s enhanced carousel, Dynamic Perspective, and Firefly.
    • Amazon Game Studios announced two new games — Saber’s Edge and To-Fu Fury — created exclusively for Amazon’s new Fire phone. Saber’s Edge and To-Fu Fury are co-developed with partners, Hibernum and HotGen as part of Amazon Game Studios’ mission to build fun, immersive games from the ground up for Amazon devices.
    • Amazon FreeTime is now available on Fire TV, bringing revolutionary parental controls that are simple and easy to use. FreeTime gives kids an experience designed just for them, with character search and content all their own. It gives parents peace of mind and control, enabling them to explicitly pick what content is available in FreeTime and set time limits by content type. FreeTime Unlimited brings thousands of apps, games, movies, and TV shows, and removes in-app purchasing and ads.
    • Fire TV sales have significantly exceeded our sales forecast and we are working hard to increase our manufacturing output. Fire TV app selection has more than doubled since launch due to strong engagement from developers. Recent additions include MLB TV Premium, WWE Network, Animal Planet Live, and Grand Theft Auto.
    • Amazon introduced Prime Music, a new service that offers Prime members unlimited, ad-free access to over a million songs at no additional cost to their membership. In the week following its introduction, Prime members streamed tens of millions of songs — that’s millions of hours of music — and added tens of millions of songs and more than a million Prime Playlists to their music libraries, for free.
    • Amazon Studios introduced Amazon’s first two original children’s series: Tumble Leaf and Creative Galaxy, exclusively to Prime Instant Video, and will add a third, Annedroids, tomorrow. The first six episodes of each show are available this summer, with additional episodes to follow later this year. In addition, Amazon Studios has greenlit five additional new pilots — the dramatic thriller Hysteria, dramatic comedy Really, one hour drama Hand of God, and comedies The Cosmopolitans and Red Oaks — as part of its third pilot season debuting next month on Amazon Instant Video.
    • Amazon expanded Whispersync for Voice to include Kindle reading apps for iOS and Android, providing a seamless listening experience for Audible content right inside the Kindle app. Users can switch instantly between reading a Kindle book and listening to the companion audiobook from Audible — all with just one tap, without leaving the book.
    • Amazon introduced Kindle Unlimited — a new subscription service which allows customers to freely read as much as they want from over 600,000 Kindle books, and listen as much as they want to thousands of Audible audiobooks, all for only $9.99 a month. Finding a great book is easy, and there are never any due dates — just look for the Kindle Unlimited logo on eligible titles and click “Read for Free.” Customers can choose from best sellers like The Hunger Games, Diary of a Wimpy Kid, and The Lord of the Rings.
    • More customers are using the Shop by Vehicle feature in the Amazon Automotive store than ever before. Over one million customers added their car, truck, or motorcycle to their Amazon Garage during the quarter to find products specifically designed to fit their vehicle, bringing the total count of active customers with a vehicle in the Amazon Garage to over 14 million.
    • AmazonFresh continued to expand its service in the Los Angeles and San Francisco areas. AmazonFresh customers in Orange County, Berkeley, Oakland, and Silicon Valley now get same-day and early next-day delivery of fresh groceries as well as over 500,000 Amazon.com items.
    • Amazon has expanded Sunday delivery to 18 additional cities since launching in the Los Angeles and New York metro areas. Since Sunday delivery launched, millions of packages have been delivered on Sundays to Amazon customers. Amazon Prime members, who receive unlimited two-day shipping on millions of items, can order as late as Friday and receive their packages on Sunday, for free.
    • Amazon announced enhancements to its European cross border delivery network. Amazon.co.uk and Amazon.de Prime members now have access to free Two-Day Delivery for approximately one million additional products stored in Amazon’s European fulfillment centers located outside their respective countries.
    • Since launching the India marketplace website, Amazon.in, one year ago, Amazon has rapidly expanded selection to serve customers in India, averaging a launch of one new category every 13 days. With Amazon.in customers can shop from India’s largest store with ease and confidence from over 17 million products from a rapidly growing group of small and medium businesses.
    • The AWS team grew by thousands of employees this past year, expanding AWS infrastructure, enterprise and public sector sales capabilities and allowing the team to innovate at an accelerating pace.
    • With 250 significant service and feature releases year-to-date, and substantial price reductions for customers starting in the second quarter (28% to 51% depending on the service), AWS continues to grow strongly, with usage growth close to 90% year-over-year in the second quarter.
    • AWS announced a new general purpose instance type for Amazon Elastic Compute Cloud (EC2). With On Demand Instance prices starting at $0.013 per hour, the new T2 instances are the lowest-cost Amazon EC2 instance option and are ideal for Web servers, developer environments, and small databases.
    • AWS announced several new capabilities to make it easier for developers to build, deploy, and scale mobile applications, including Amazon Cognito for identity management and syncing, Amazon Mobile Analytics to visualize and understand app usage data, and an AWS Mobile SDK, which provides easy, mobile-optimized access to other AWS services to power mobile apps that can scale from tens to hundreds of millions of users.
    • AWS announced Amazon Zocalo, a fully managed, secure enterprise storage and sharing service with strong administrative controls and feedback capabilities that improve user productivity. With Amazon Zocalo, customers can store, share, and gather feedback on documents, spreadsheets, presentations, webpages, images, PDFs, or text files — from the device of their choice.
    • AWS further enhanced its reliable, secure block storage service, Amazon Elastic Block Store (EBS), announcing new encryption capabilities, introducing a new lower-cost SSD-backed EBS volume type, and reducing prices on EBS Provisioned IOPS volumes by 35 percent.

    Financial Guidance

    The following forward-looking statements reflect Amazon.com’s expectations as of July 24, 2014, 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 consumer spending, world events, the rate of growth of the Internet and online commerce, and the various factors detailed below.

    Third Quarter 2014 Guidance

    • Net sales are expected to be between $19.7 billion and $21.5 billion, or to grow between 15% and 26% compared with third quarter 2013.
    • Operating loss is expected to be between $810 million and $410 million, compared to $25 million in third quarter 2013.
    • This guidance includes approximately $410 million for stock-based compensation and amortization of intangible assets, and 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 p.m. PT/5 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 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 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.

    About Amazon.com

    Amazon opened on the World Wide Web in July 1995. The company is guided by three principles: customer obsession rather than competitor focus, passion for invention, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire phone, Fire tablets, and Fire TV are some of the products and services pioneered by Amazon.

    AMAZON.COM, INC.
    Consolidated Statements of Cash Flows
    (in millions)
    (unaudited)
    Three Months Ended
    June 30,    		 Six Months Ended
    June 30,    		 Twelve Months Ended
    June 30,
    2014 2013 2014 2013 2014 2013
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 5,074 $ 4,481 $ 8,658 $ 8,084 $ 3,704 $ 2,335
    OPERATING ACTIVITIES:
    Net income (loss) (126 ) (7 ) (18 ) 75 181 (101 )
    Adjustments to reconcile net income (loss) to net cash from operating activities:
    Depreciation of property and equipment, including internal-use software and website development, and other amortization 1,109 756 2,119 1,457 3,916 2,673
    Stock-based compensation 391 298 711 526 1,318 978
    Other operating expense (income), net 28 32 62 63 113 139
    Losses (gains) on sales of marketable securities, net (1 ) — (1 ) — 1 (6 )
    Other expense (income), net (8 ) 42 (57 ) 110 (1 ) 367
    Deferred income taxes (49 ) 21 (234 ) (58 ) (332 ) (243 )
    Excess tax benefits from stock-based compensation — — (121 ) — (199 ) (304 )
    Changes in operating assets and liabilities:
    Inventories 92 (30 ) 791 505 (1,124 ) (1,116 )
    Accounts receivable, net and other (299 ) (211 ) 428 518 (936 ) (922 )
    Accounts payable (344 ) — (5,018 ) (4,187 ) 1,056 1,962
    Accrued expenses and other (15 ) (77 ) (746 ) (780 ) 770 728
    Additions to unearned revenue 894 516 1,986 1,200 3,477 2,217
    Amortization of previously unearned revenue (810 ) (460 ) (1,542 ) (921 ) (2,913 ) (1,840 )
    Net cash provided by (used in) operating activities 862 880 (1,640 ) (1,492 ) 5,327 4,532
    INVESTING ACTIVITIES:
    Purchases of property and equipment, including internal-use software and website development (1,290 ) (855 ) (2,370 ) (1,526 ) (4,288 ) (4,267 )
    Acquisitions, net of cash acquired, and other (67 ) (148 ) (66 ) (251 ) (127 ) (323 )
    Sales and maturities of marketable securities and other investments 962 696 1,555 1,296 2,565 2,544
    Purchases of marketable securities and other investments (336 ) (1,113 ) (773 ) (1,888 ) (1,710 ) (3,774 )
    Net cash provided by (used in) investing activities (731 ) (1,420 ) (1,654 ) (2,369 ) (3,560 ) (5,820 )
    FINANCING ACTIVITIES:
    Excess tax benefits from stock-based compensation — — 121 — 199 304
    Proceeds from long-term debt and other 286 81 351 107 627 3,274
    Repayments of long-term debt, capital lease, and finance lease obligations (475 ) (290 ) (836 ) (473 ) (1,363 ) (748 )
    Net cash provided by (used in) financing activities (189 ) (209 ) (364 ) (366 ) (537 ) 2,830
    Foreign-currency effect on cash and cash equivalents 41 (28 ) 57 (153 ) 123 (173 )
    Net increase (decrease) in cash and cash equivalents (17 ) (777 ) (3,601 ) (4,380 ) 1,353 1,369
    CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,057 $ 3,704 $ 5,057 $ 3,704 $ 5,057 $ 3,704
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest on long-term debt $ 31 $ 39 $ 49 $ 52 $ 94 $ 68
    Cash paid for income taxes (net of refunds) 71 34 109 120 158 193
    Property and equipment acquired under capital leases 920 447 1,636 787 2,716 1,233
    Property and equipment acquired under build-to-suit leases 237 244 363 394 846 392
    AMAZON.COM, INC.
    Consolidated Statements of Operations
    (in millions, except per share data)
    (unaudited)
    Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
    2014 2013 2014 2013
    Net product sales $ 15,251 $ 12,752 $ 30,956 $ 26,023
    Net services sales 4,089 2,952 8,125 5,751
    Total net sales 19,340 15,704 39,081 31,774
    Operating expenses (1):
    Cost of sales 13,399 11,209 27,453 23,010
    Fulfillment 2,382 1,837 4,699 3,633
    Marketing 943 675 1,813 1,307
    Technology and content 2,226 1,586 4,217 2,969
    General and administrative 377 286 704 531
    Other operating expense (income), net 28 32 63 64
    Total operating expenses 19,355 15,625 38,949 31,514
    Income (loss) from operations (15 ) 79 132 260
    Interest income 11 9 21 19
    Interest expense (45 ) (33 ) (87 ) (66 )
    Other income (expense), net 22 (38 ) 27 (115 )
    Total non-operating income (expense) (12 ) (62 ) (39 ) (162 )
    Income (loss) before income taxes (27 ) 17 93 98
    Benefit (provision) for income taxes (94 ) (13 ) (167 ) 6
    Equity-method investment activity, net of tax (5 ) (11 ) 56 (29 )
    Net income (loss) $ (126 ) $ (7 ) $ (18 ) $ 75
    Basic earnings per share $ (0.27 ) $ (0.02 ) $ (0.04 ) $ 0.16
    Diluted earnings per share $ (0.27 ) $ (0.02 ) $ (0.04 ) $ 0.16
    Weighted average shares used in computation of earnings per share:
    Basic 461 456 460 455
    Diluted 461 456 460 463
    ______________________________
    (1) Includes stock-based compensation as follows:
    Fulfillment $ 104 $ 81 $ 184 $ 142
    Marketing 32 24 59 40
    Technology and content 206 155 375 274
    General and administrative 49 38 93 70
    AMAZON.COM, INC.
    Consolidated Statements of Comprehensive Income (Loss)
    (in millions)
    (unaudited)
    Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
    2014 2013 2014 2013
    Net income (loss) $ (126 ) $ (7 ) $ (18 ) $ 75
    Other comprehensive income (loss):
    Foreign currency translation adjustments, net of tax of $0, $(4), $1 and $(13) 11 7 39 (71 )
    Net change in unrealized gains on available-for-sale securities:
    Unrealized gains (losses), net of tax of $0, $3, $(1) and $4 3 (7 ) 4 (9 )
    Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $0, $0, $0 and $0 (1 ) — (1 ) —
    Net unrealized gains (losses) on available-for-sale securities 2 (7 ) 3 (9 )
    Total other comprehensive income (loss) 13 — 42 (80 )
    Comprehensive income (loss) $ (113 ) $ (7 ) $ 24 $ (5 )
    AMAZON.COM, INC.
    Segment Information
    (in millions)
    (unaudited)
    Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
    2014 2013 2014 2013
    North America
    Net sales $ 11,998 $ 9,495 $ 23,856 $ 18,886
    Segment operating expenses (1) 11,560 9,086 22,856 18,020
    Segment operating income $ 438 $ 409 $ 1,000 $ 866
    International
    Net sales $ 7,342 $ 6,209 $ 15,225 $ 12,888
    Segment operating expenses (1) 7,376 6,209 15,319 12,904
    Segment operating income (loss) $ (34 ) $ — $ (94 ) $ (16 )
    Consolidated
    Net sales $ 19,340 $ 15,704 $ 39,081 $ 31,774
    Segment operating expenses (1) 18,936 15,295 38,175 30,924
    Segment operating income 404 409 906 850
    Stock-based compensation (391 ) (298 ) (711 ) (526 )
    Other operating income (expense), net (28 ) (32 ) (63 ) (64 )
    Income (loss) from operations (15 ) 79 132 260
    Total non-operating income (expense) (12 ) (62 ) (39 ) (162 )
    Benefit (provision) for income taxes (94 ) (13 ) (167 ) 6
    Equity-method investment activity, net of tax (5 ) (11 ) 56 (29 )
    Net income (loss) $ (126 ) $ (7 ) $ (18 ) $ 75
    Segment Highlights:
    Y/Y net sales growth:
    North America 26 % 30 % 26 % 28 %
    International 18 13 18 14
    Consolidated 23 22 23 22
    Y/Y segment operating income/loss growth (decline):
    North America 7 % 19 % 15 % 25 %
    International N/A (99 ) 481 (125 )
    Consolidated (1 ) 14 7 12
    Net sales mix:
    North America 62 % 60 % 61 % 59 %
    International 38 40 39 41
    100 % 100 % 100 % 100 %
    ______________________________
    (1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.
    AMAZON.COM, INC.
    Supplemental Net Sales Information
    (in millions)
    (unaudited)
    Three Months Ended
    June 30,    		 Six Months Ended
    June 30,
    2014 2013 2014 2013
    Net Sales:
    North America
    Media $ 2,464 $ 2,173 $ 5,289 $ 4,686
    Electronics and other general merchandise 8,366 6,478 16,196 12,606
    Other (1) 1,168 844 2,371 1,594
    Total North America $ 11,998 $ 9,495 $ 23,856 $ 18,886
    International
    Media $ 2,380 $ 2,224 $ 5,022 $ 4,769
    Electronics and other general merchandise 4,912 3,937 10,100 8,024
    Other (1) 50 48 103 95
    Total International $ 7,342 $ 6,209 $ 15,225 $ 12,888
    Consolidated
    Media $ 4,844 $ 4,397 $ 10,311 $ 9,455
    Electronics and other general merchandise 13,278 10,415 26,296 20,629
    Other (1) 1,218 892 2,474 1,690
    Total consolidated $ 19,340 $ 15,704 $ 39,081 $ 31,774
    Year-over-year Percentage Growth:
    North America
    Media 13 % 16 % 13 % 15 %
    Electronics and other general merchandise 29 31 28 30
    Other 38 64 49 64
    Total North America 26 30 26 28
    International
    Media 7 % (1) % 5 % — %
    Electronics and other general merchandise 25 22 26 25
    Other 4 22 8 18
    Total International 18 13 18 14
    Consolidated
    Media 10 % 7 % 9 % 7 %
    Electronics and other general merchandise 27 28 27 28
    Other 37 61 46 60
    Total consolidated 23 22 23 22
    Year-over-year Percentage Growth:
    Excluding the effect of exchange rates
    International
    Media 4 % 7 % 4 % 7 %
    Electronics and other general merchandise 20 29 23 31
    Other (1)   27 5 22
    Total International 14 20 16 21
    Consolidated
    Media 9 % 11 % 8 % 11 %
    Electronics and other general merchandise 26 30 27 30
    Other 36 61 46 61
    Total consolidated 22 25 22 25
    Consolidated Net Sales Mix:
    Media 25 % 28 % 27 % 30 %
    Electronics and other general merchandise 69 66 67 65
    Other 6 6 6 5
    Total consolidated 100 % 100 % 100 % 100 %
    ______________________________
    (1) Includes sales from non-retail activities, such as AWS sales, which are included in the North America segment, and advertising services and our co-branded credit card agreements, which are included in both segments.
    AMAZON.COM, INC.
    Consolidated Balance Sheets
    (in millions, except per share data)
    June 30, 2014 December 31, 2013
    (unaudited)
    ASSETS
    Current assets:
    Cash and cash equivalents $ 5,057 $ 8,658
    Marketable securities 2,929 3,789
    Inventories 6,644 7,411
    Accounts receivable, net and other 4,125 4,767
    Total current assets 18,755 24,625
    Property and equipment, net 14,089 10,949
    Goodwill 2,677 2,655
    Other assets 2,377 1,930
    Total assets $ 37,898 $ 40,159
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 10,457 $ 15,133
    Accrued expenses and other 6,688 6,688
    Unearned revenue 1,606 1,159
    Total current liabilities 18,751 22,980
    Long-term debt 3,119 3,191
    Other long-term liabilities 5,426 4,242
    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 — 486 and 483
    Outstanding shares — 462 and 459 5 5
    Treasury stock, at cost (1,837 ) (1,837 )
    Additional paid-in capital 10,405 9,573
    Accumulated other comprehensive loss (143 ) (185 )
    Retained earnings 2,172 2,190
    Total stockholders’ equity 10,602 9,746
    Total liabilities and stockholders’ equity $ 37,898 $ 40,159
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except per share data)
    (unaudited)
    Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Y/Y %
    Change
    Cash Flows and Shares
    Operating cash flow — trailing twelve months (TTM) $ 4,532 $ 4,977 $ 5,475 $ 5,345 $ 5,327 18 %
    Purchases of property and equipment (incl. internal-use software & website development) — TTM $ 4,267 $ 4,589 $ 3,444 $ 3,854 $ 4,288 1 %
    Free cash flow (operating cash flow less purchases of property and equipment) — TTM $ 265 $ 388 $ 2,031 $ 1,491 $ 1,039 292 %
    Free cash flow — TTM Y/Y growth (decline) (76 )% (63 )% 414 % 744 % 292 % N/A
    Invested capital (1) $ 13,115 $ 14,306 $ 15,749 $ 16,681 $ 17,743 35 %
    Return on invested capital (2) 2 % 3 % 13 % 9 % 6 % N/A
    Common shares and stock-based awards outstanding 474 475 476 476 480 1 %
    Common shares outstanding 457 458 459 460 462 1 %
    Stock awards outstanding 17 17 17 16 18 4 %
    Stock awards outstanding — % of common shares outstanding 3.8 % 3.8 % 3.6 % 3.5 % 3.9 % N/A
    Results of Operations
    Worldwide (WW) net sales $ 15,704 $ 17,092 $ 25,587 $ 19,741 $ 19,340 23 %
    WW net sales — Y/Y growth, excluding F/X 25 % 26 % 22 % 23 % 22 % N/A
    WW net sales — TTM $ 66,848 $ 70,133 $ 74,452 $ 78,124 $ 81,759 22 %
    WW net sales — TTM Y/Y growth, excluding F/X 25 % 25 % 24 % 24 % 23 % N/A
    Operating income (loss) $ 79 $ (25 ) $ 510 $ 146 $ (15 ) (118 )%
    Operating income/loss — Y/Y growth (decline), excluding F/X (9 )% (33 )% 24 % (29 )% (158 )% N/A
    Operating margin — % of WW net sales 0.5 % (0.1 )% 2.0 % 0.7 % (0.1 )% N/A
    Operating income — TTM $ 637 $ 640 $ 745 $ 710 $ 617 (3 )%
    Operating income — TTM Y/Y growth, excluding F/X 3 % 27 % 14 % 7 % (11 )% N/A
    Operating margin — TTM % of WW net sales 1.0 % 0.9 % 1.0 % 0.9 % 0.8 % N/A
    Net income (loss) $ (7 ) $ (41 ) $ 239 $ 108 $ (126 ) N/A
    Net income (loss) per diluted share $ (0.02 ) $ (0.09 ) $ 0.51 $ 0.23 $ (0.27 ) N/A
    Net income (loss) — TTM $ (101 ) $ 132 $ 274 $ 299 $ 181 N/A
    Net income (loss) per diluted share — TTM $ (0.22 ) $ 0.28 $ 0.59 $ 0.64 $ 0.39 N/A
    Segments
    North America Segment:
    Net sales $ 9,495 $ 10,301 $ 15,331 $ 11,858 $ 11,998 26 %
    Net sales — Y/Y growth, excluding F/X 30 % 31 % 26 % 26 % 26 % N/A
    Net sales — TTM $ 38,945 $ 41,361 $ 44,517 $ 46,984 $ 49,487 27 %
    Operating income $ 409 $ 295 $ 725 $ 562 $ 438 7 %
    Operating margin — % of North America net sales 4.3 % 2.9 % 4.7 % 4.7 % 3.7 % N/A
    Operating income — TTM $ 1,766 $ 1,770 $ 1,886 $ 1,992 $ 2,020 14 %
    Operating income — TTM Y/Y growth, excluding F/X 58 % 40 % 18 % 17 % 14 % N/A
    Operating margin — TTM % of North America net sales 4.5 % 4.3 % 4.2 % 4.2 % 4.1 % N/A
    International Segment:
    Net sales $ 6,209 $ 6,791 $ 10,256 $ 7,883 $ 7,342 18 %
    Net sales — Y/Y growth, excluding F/X 20 % 20 % 15 % 18 % 14 % N/A
    Net sales — TTM $ 27,903 $ 28,772 $ 29,935 $ 31,140 $ 32,272 16 %
    Net sales — TTM % of WW net sales 42 % 41 % 40 % 40 % 39 % N/A
    Operating income (loss) $ — $ (28 ) $ 151 $ (60 ) $ (34 ) N/A
    Operating margin — % of International net sales — % (0.4 )% 1.5 % (0.8 )% (0.5 )% N/A
    Operating income (loss) — TTM $ (6 ) $ 25 $ 107 $ 63 $ 29 N/A
    Operating income/loss — TTM Y/Y growth (decline), excluding F/X (82 )% (56 )% 106 % 770 % N/A N/A
    Operating margin — TTM % of International net sales — % 0.1 % 0.4 % 0.2 % 0.1 % N/A
    Consolidated Segments:
    Operating expenses (3) $ 15,295 $ 16,825 $ 24,711 $ 19,239 $ 18,936 24 %
    Operating expenses — TTM (3) $ 65,087 $ 68,338 $ 72,459 $ 76,069 $ 79,710 22 %
    Operating income $ 409 $ 267 $ 876 $ 502 $ 404 (1 )%
    Operating margin — % of Consolidated net sales 2.6 % 1.6 % 3.4 % 2.5 % 2.1 % N/A
    Operating income — TTM $ 1,760 $ 1,795 $ 1,993 $ 2,055 $ 2,049 16 %
    Operating income — TTM Y/Y growth, excluding F/X 21 % 26 % 21 % 20 % 14 % N/A
    Operating margin — TTM % of Consolidated net sales 2.6 % 2.6 % 2.7 % 2.6 % 2.5 % N/A
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except inventory turnover, accounts payable days and employee data)
    (unaudited)
    Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Y/Y %
    Change
    Supplemental
    Supplemental North America Segment Net Sales:
    Media $ 2,173 $ 2,609 $ 3,513 $ 2,825 $ 2,464 13 %
    Media — Y/Y growth, excluding F/X 16 % 18 % 21 % 13 % 14 % N/A
    Media — TTM $ 9,805 $ 10,199 $ 10,809 $ 11,121 $ 11,411 16 %
    Electronics and other general merchandise $ 6,478 $ 6,732 $ 10,648 $ 7,829 $ 8,366 29 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 31 % 33 % 25 % 28 % 29 % N/A
    Electronics and other general merchandise — TTM $ 26,169 $ 27,840 $ 29,985 $ 31,686 $ 33,575 28 %
    Electronics and other general merchandise — TTM % of North America net sales 67 % 67 % 67 % 67 % 68 % N/A
    Other $ 844 $ 960 $ 1,170 $ 1,204 $ 1,168 38 %
    Other — TTM $ 2,971 $ 3,322 $ 3,723 $ 4,177 $ 4,501 51 %
    Supplemental International Segment Net Sales:
    Media $ 2,224 $ 2,424 $ 3,714 $ 2,642 $ 2,380 7 %
    Media — Y/Y growth, excluding F/X 7 % 9 % 6 % 4 % 4 % N/A
    Media — TTM $ 10,764 $ 10,803 $ 10,907 $ 11,004 $ 11,160 4 %
    Electronics and other general merchandise $ 3,937 $ 4,316 $ 6,478 $ 5,188 $ 4,912 25 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 29 % 28 % 21 % 26 % 20 % N/A
    Electronics and other general merchandise — TTM $ 16,952 $ 17,771 $ 18,817 $ 19,919 $ 20,894 23 %
    Electronics and other general merchandise — TTM % of International net sales 61 % 62 % 63 % 64 % 65 % N/A
    Other $ 48 $ 51 $ 64 $ 53 $ 50 4 %
    Other — TTM $ 187 $ 198 $ 211 $ 217 $ 218 17 %
    Supplemental Worldwide Net Sales:
    Media $ 4,397 $ 5,033 $ 7,227 $ 5,467 $ 4,844 10 %
    Media — Y/Y growth, excluding F/X 11 % 13 % 13 % 8 % 9 % N/A
    Media — TTM $ 20,569 $ 21,002 $ 21,716 $ 22,125 $ 22,571 10 %
    Electronics and other general merchandise $ 10,415 $ 11,048 $ 17,126 $ 13,017 $ 13,278 27 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 30 % 31 % 24 % 27 % 26 % N/A
    Electronics and other general merchandise — TTM $ 43,121 $ 45,611 $ 48,802 $ 51,605 $ 54,469 26 %
    Electronics and other general merchandise — TTM % of WW net sales 65 % 65 % 66 % 66 % 67 % N/A
    Other $ 892 $ 1,011 $ 1,234 $ 1,257 $ 1,218 37 %
    Other — TTM $ 3,158 $ 3,520 $ 3,934 $ 4,394 $ 4,719 49 %
    Balance Sheet
    Cash and marketable securities $ 7,463 $ 7,689 $ 12,447 $ 8,666 $ 7,986 7 %
    Inventory, net — ending $ 5,420 $ 6,068 $ 7,411 $ 6,716 $ 6,644 23 %
    Inventory turnover, average — TTM 9.4 9.2 8.9 9.1 9.1 (3 )%
    Property and equipment, net $ 8,789 $ 9,991 $ 10,949 $ 12,267 $ 14,089 60 %
    Accounts payable — ending $ 8,990 $ 10,037 $ 15,133 $ 10,590 $ 10,457 16 %
    Accounts payable days — ending 73 75 74 68 71 (3 )%
    Other
    WW shipping revenue $ 646 $ 721 $ 1,137 $ 849 $ 889 38 %
    WW shipping costs $ 1,364 $ 1,532 $ 2,344 $ 1,829 $ 1,812 33 %
    WW net shipping costs $ 718 $ 811 $ 1,207 $ 980 $ 923 29 %
    WW net shipping costs — % of WW net sales 4.6 % 4.7 % 4.7 % 5.0 % 4.8 % N/A
    Employees (full-time and part-time; excludes contractors & temporary personnel) 97,000 109,800 117,300 124,600 132,600 37 %
    ______________________________
    (1) Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.
    (2) TTM Free Cash Flow divided by Invested Capital.
    (3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

    Amazon.com, Inc.
    Certain Definitions

    Customer Accounts

    • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

    Seller Accounts

    • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

    Registered Developers

    • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

    Units

     

    Source: Amazon.com, Inc.

     

    Image via Amazon

  • Salesforce Takes Wearable Computing To Enterprise With Salesforce Wear

    Salesforce Takes Wearable Computing To Enterprise With Salesforce Wear

    Salesforce announced the launch of a new Salesforce Wear developer pack as it aims to bring enterprise services to wearable computing devices. The pack will help developers get companies connected to their customers through apps for wearables.

    The company has already partnered with ARM, Fitbit, Pebble, Philips, Samsung, and others to get started. Its building support for Android Wear, ARM, Fitbit, Google Glass, Myo from Thalmic, Nymi from Bionym, OMsignal, Pebble, Philips, and Samsung Gear 2.

    About 50 million wearable devices are expected to be sold this year, with that number predicted to be more like 180 million in 2018.

    “Wearables are the next phase of the mobile revolution,” said Daniel Debow, SVP, emerging technologies, salesforce.com. “With Salesforce Wear, companies can now capture the massive opportunity these devices offer to connect with customers in new ways.”

    The company is envisioning “connected 1:1 experiences,” contextually aware sales apps, faster and safer service resolution, and of course, “endless possibilities”.

    “With a connected wearable, going to a favorite casino, resort or amusement park will mean never having to pull out your wallet, juggle a hotel card key or search for an app,” the company says. “What if it was possible to anticipate needs and give VIP treatment to any visitor? With wearable devices like a wristband seamlessly connected to customer data, destinations can deliver customized journeys for every guest.”

    The developer pack is available to over 1.5 million Salesforce1 developers. It’s included with all user licenses of Salesforce CRM and the Salesforce Platform.

    Image via PR Newswire

  • Small SUVs Are Leading Spring Auto Sales

    Small SUVs Are Leading Spring Auto Sales

    This year’s spring auto sales season is off to a good start, with new a Autodata Corp. report showing that nearly 1.4 million motor vehicles were sold in the U.S. during April. This represents an 8% increase in sales from the same period last year.

    According to an Associated Press report, car manufacturers are hoping that these increased sales will last well beyond the spring. The Autodata Corp report predicts that vehicle sales will remain robust throughout the year and that total-year sales will increase year-over-year to around 16 million, up slightly from last year’s 15.6 million U.S. vehicles sold.

    Nissan was the big winner during April, with sales up 18.3% over April 2012 sales. Chrysler and Toyota also saw big sales boosts last month, with 14% and 13% sales increases, respectively.

    “Sales momentum from March rolled into April pushing the industry to its best back-to-back monthly sales pace since fall of 2007,” said Bill Fay, VP and general manager at Toyota division group. “For Toyota, truck sales continue to soar. Tundra is a highlight with double-digit gains as comfort, safety and technology of the all-new model remain a strong draw for consumers.”

    Other manufacturers did not fare as well during April. Ford vehicle sales were down slightly year-over-year and Volkswagen saw a full 8.4% drop in sales from last April.

    The news comes just as Ford last week announced that CEO Alan Mullaly will be stepping down from company leadership in July. The company’s “One Ford” business plan will stay in place, with the company evolving to focus more on SUVs and other popular vehicles.

    The April sales numbers show that U.S. car buyers are looking for more crossover vehicles such as small SUVs. According to the AP report, small SUVs made up around 16% of all U.S. auto sales during April. This percentage is up 2% from April 2012.

    The April sales boost is also encouraging for the motor vehicle industry as a whole, which has seen stagnant sales through the early months of the year. According to the AP report, January auto sales were down 3% from 2012 levels.

    Image via Ford

  • Amazon Earnings Released, Sales Up 23% At $19.74 Billion

    Amazon just released its Q1 earnings report with net sales for the quarter at $19.74 billion, up 23% year-over-year. A report earlier this week indicates that the company is taking a sales hit in states that have implemented online sales tax.

    Net income increased to $108 million from $82 million for the same period last year.

    CEO Jeff Bezos said, “We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start. Our device team launched Fire TV, offering great content, including our recently announced exclusive deal with HBO, and innovative features like unified voice search, which we’re delighted is being adopted by so many new partners, including Netflix, HBO Go, Hulu Plus, Crackle and Showtime Anytime. The team is working hard to keep Fire TV in stock. Our retail team launched Prime Pantry, a new option available only to Prime members offering exclusive access to everyday essentials in non-bulk sizes — ranging from breakfast foods and popular soft drinks, to cleaning and personal care items. And, our AWS team significantly lowered prices on EC2, S3 and RDS, saving AWS customers hundreds of millions of dollars over the next several months alone.”

    Here’s the release in its entirety:

    SEATTLE–(BUSINESS WIRE)–Apr. 24, 2014– Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2014.

    Operating cash flow increased 26% to $5.35 billion for the trailing twelve months, compared with $4.25 billion for the trailing twelve months ended March 31, 2013. Free cash flow increased to $1.49 billion for the trailing twelve months, compared with $177 million for the trailing twelve months ended March 31, 2013. Free cash flow for the trailing twelve months ended March 31, 2013 includes cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

    Common shares outstanding plus shares underlying stock-based awards totaled 476 million on March 31, 2014, compared with 471 million one year ago.

    Net sales increased 23% to $19.74 billion in the first quarter, compared with $16.07 billion in first quarter 2013. Excluding the $10 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 23% compared with first quarter 2013.

    Operating income decreased 19% to $146 million in the first quarter, compared with $181 million in first quarter 2013. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $18 million.

    Net income increased to $108 million in the first quarter, or $0.23 per diluted share, compared with $82 million, or$0.18 per diluted share, in first quarter 2013.

    “We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start,” said Jeff Bezos, founder and CEO of Amazon.com. “Our device team launched Fire TV, offering great content, including our recently announced exclusive deal with HBO, and innovative features like unified voice search, which we’re delighted is being adopted by so many new partners, including Netflix, HBO Go, Hulu Plus, Crackle and Showtime Anytime. The team is working hard to keep Fire TV in stock. Our retail team launched Prime Pantry, a new option available only to Prime members offering exclusive access to everyday essentials in non-bulk sizes — ranging from breakfast foods and popular soft drinks, to cleaning and personal care items. And, our AWS team significantly lowered prices on EC2, S3 and RDS, saving AWS customers hundreds of millions of dollars over the next several months alone.”

    Highlights

    • Amazon introduced Fire TV, a tiny box that plugs into your HDTV for easy and instant access to Netflix, Prime Instant Video, Hulu Plus, WatchESPN, Showtime Anytime, low-cost video rentals, and much more, offering an open ecosystem of over 200,000 movies and TV episodes. Fire TV also provides access to games from EA, Disney, Gameloft, Mojang, 2K, Amazon Game Studios, and more. The device offers voice search (that actually works!) to instantly find movies and TV shows, as well as the new ASAP feature which predicts the movies and TV episodes customers will want to watch and prepares them for playback.
    • Amazon announced that HBO Go will become available for Fire TV, targeting a launch by year-end.
    • With the launch of Fire TV, Amazon released new developer tools that allow developers to quickly and easily optimize PC, console or Android mobile apps and games for the new Fire TV. The new tools include sample code, as well as documentation and guidelines to help developers design and build living room experiences, including how to manage the input for the Fire game controller and Fire TV remote.
    • Amazon Game Studios introduced Sev Zero, the Studios’ first game built from the ground up for Fire TV. Sev Zero combines a fast-action third-person shooter experience with the calculated strategy of tower defense gameplay for a fun, big screen experience.
    • Amazon announced that video streams on Prime Instant Video nearly tripled year over year.
    • Amazon announced a content licensing agreement with HBO, making Prime Instant Video the exclusive online-only subscription home for select HBO programming, including The Sopranos, Six Feet Under, The Wire, Big Love, Deadwood, Eastbound and Down, Family Tree, Enlightened, Treme, early seasons ofBoardwalk Empire and True Blood, as well as mini-series like Band of Brothers, John Adams, and more. The first wave of content will arrive on Prime Instant Video May 21.
    • In addition, Prime Instant Video is now the exclusive online-only subscription home for FOX’s 24, BBC America’s Orphan Black, FX’s The Americans, and MTV’s Teen Wolf.
    • Amazon introduced Prime Instant Video for the U.K. and Germany, offering thousands of popular movies and TV episodes available for unlimited streaming to Prime members. Prime members also continue to receive unlimited One-Day Delivery on millions of items and access to 500,000 Kindle books to borrow from the Kindle Owners’ Lending Library.
    • Amazon Studios greenlit six original pilots for full seasons available exclusively to Prime members — The After, Bosch, Gortimer Gibbon’s Life on Normal Street, Mozart in the Jungle, Transparent and Wishenpoof!will become the next Amazon Original Series following rave customer reviews of the pilot episodes. In addition, Garry Trudeau’s political series Alpha House will return for a second season.
    • Amazon Studios announced it has greenlit two new pilots — the half hour dramatic comedy The Cosmopolitans, from Whit Stillman, and the one hour drama Hand of God from Executive Producers Marc Forster, Ben Watkins, Ron Perlman, Brian Wilkins and Jeff King — for its third pilot season debuting later this year on Amazon Instant Video.
    • Amazon now offers U.S. fulfillment center tours open to the public. Visit www.amazon.com/fctours for information on available tour locations, dates and times.
    • Amazon introduced Prime Pantry, a new service available only to Prime members offering exclusive access to low-priced everyday essentials in everyday sizes. Available nationally, Prime customers can buy as much or as little as they want and have items conveniently delivered to their home. Selection includes popular soft drinks and bottled water, a new range of paper and laundry products in popular pack sizes, single boxes of breakfast cereal, potato chips, convenience-sized personal care products and more. There’s a flat $5.99 delivery fee per Prime Pantry box.
    • Amazon introduced Dash, an easy-to-use shopping device that allows Prime Fresh customers, and their families, to effortlessly shop hundreds of thousands of items — ranging from groceries to household essentials — from anywhere in their home without having to browse the AmazonFresh website or app. Dash works directly with a customer’s AmazonFresh account — simply scan items or say the items you want and Dash finds it for you using voice search that actually works.
    • Amazon Fashion and Shopbop are joining with Vogue and Born Free, a private sector-led initiative with the sole objective of ending mother-to-child HIV transmission by December 31, 2015, to create the Born Free Collection. Amazon Fashion will sponsor the launch event and support the initiative through on-site messaging and social programming. The collaboration, featuring pieces for both women and children from 22 notable female designers, is based on the works of Kenyan-born, New York-based visual artistWangechi Mutu and is available exclusively on Shopbop. All profits from sales of the Collection will benefit Born Free.
    • Amazon introduced Flow to the Amazon app for iPhone. Flow offers customers a convenient way to search for products they need to restock in their home without typing, scanning a barcode or taking a photo — simply move your phone over packaged goods you need to restock and the Amazon app recognizes the products and saves them in your search history, where they can be added to the shopping cart or saved for later.
    • The launch of Amazon Student on Amazon.co.uk was announced, offering students six months of free Prime One-Day Delivery on millions of items, including books, laptops, housewares, kitchen equipment and more. At the end of the six-month free trial, students can convert to a discounted Amazon Prime membership for just £39 per year — less than half the standard cost of Amazon Prime.
    • Amazon.in continued its rapid pace of category expansion, launching apparel, shoes, video games, music, luggage & bags, health & personal care, and sports, fitness and outdoors stores.
    • Amazon Publishing announced the launch of a new German-language publishing program under theAmazon Publishing umbrella. The European Amazon Publishing team will acquire German-language fiction for publication in Kindle and print editions available on Amazon.
    • Amazon announced that it has reached an agreement to acquire comiXology, the company that revolutionized the digital comics reading experience with their immersive Guided View technology and makes discovering, buying, and reading comic books and graphic novels easier and more fun than ever before. The acquisition is expected to close in the second quarter of 2014.
    • Amazon Web Services (AWS) announced its 42nd price reduction, lowering prices for Amazon Simple Storage Service (S3) by an average of 51 percent, reducing Amazon Elastic Compute Cloud (EC2) prices by up to 40 percent and lowering Amazon Relational Database Service (RDS) prices by an average of 28 percent. To help customers continue to optimize their costs, AWS also introduced Cost Explorer, with advanced reporting, analytics and visualization tools that allow customers to easily view their costs, analyze trends and identify spending patterns.
    • AWS announced that all four of AWS’s infrastructure Regions in the U.S., including AWS GovCloud (U.S.), have received a Department of Defense (DoD) Provisional Authorization, which recognizes the ability of AWS to meet the stringent security and compliance requirements to run DoD applications. This certification simplifies and speeds the process for DoD agencies to evaluate and adopt AWS, allowing more DoD agencies to use AWS’s secure, compliant infrastructure.
    • AWS continued to expand the AWS Activate program, which helps startups launch and quickly scale their businesses on AWS. With AWS credits, training, support, forums, and exclusive offers from AWS partners, AWS Activate makes it easy for new companies to join some of the world’s fastest-growing startups who use AWS.
    • AWS announced the broad availability of Amazon WorkSpaces, a fully managed desktop computing service in the cloud that allows end-users to access the documents, applications and resources they need with the device of their choice.
    • AWS announced the broad availability of Amazon AppStream, a service that allows developers to stream resource–intensive applications, such as 3D games or interactive HD applications, from the cloud to a broad range of devices.

    Financial Guidance

    The following forward-looking statements reflect Amazon.com’s expectations as of April 24, 2014, 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 consumer spending, world events, the rate of growth of the Internet and online commerce, and the various factors detailed below.

    Second Quarter 2014 Guidance

    • Net sales are expected to be between $18.1 billion and $19.8 billion, or to grow between 15% and 26% compared with second quarter 2013.
    • Operating income (loss) is expected to be between $(455) million and $(55) million, compared to $79 million in second quarter 2013.
    • This guidance includes approximately $455 million for stock-based compensation and amortization of intangible assets, and 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 p.m. PT/5 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 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 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.

    About Amazon.com

    Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web inJuly 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. Amazon Fire TV is a tiny box that plugs into your HDTV for easy and instant access to Netflix, Prime Instant Video, Hulu Plus, WatchESPN, SHOWTIME, low-cost video rentals, and much more. Kindle Paperwhite is the world’s best-selling and most advanced e-reader. It features new display technology with higher contrast, the next generation built-in light, a faster processor, the latest touch technology, and exclusive new features designed from the ground up for readers. Kindle, the lightest and smallest Kindle, features improved fonts and faster page turns. The new Kindle Fire HDX features a stunning exclusive 7” or 8.9” HDX display, a quad-core 2.2 GHz processor, 2x more memory, and 11 hours of battery life, as well as exclusive new features of Fire OS 3.0 including X-Ray for Music, Second Screen, Prime Instant Video downloads, and the revolutionary new Mayday button. The all-new Kindle Fire HD includes an HD display, high-performance processor and dual speakers at a breakthrough price.

    Amazon and its affiliates operate websites, including www.amazon.com, www.amazon.co.uk, www.amazon.de,www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, www.amazon.es,www.amazon.com.br, www.amazon.in, www.amazon.com.mx, and www.amazon.com.au. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

    AMAZON.COM, INC.
    Consolidated Statements of Cash Flows
    (in millions)
    (unaudited)
    Three Months Ended
    March 31,    		 Twelve Months Ended
    March 31,
    2014 2013 2014 2013
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 8,658 $ 8,084 $ 4,481 $ 2,288
    OPERATING ACTIVITIES:
    Net income (loss) 108 82 299 (87 )
    Adjustments to reconcile net income (loss) to net cash from operating activities:
    Depreciation of property and equipment, including internal-use software and website development, and other amortization 1,010 700 3,563 2,402
    Stock-based compensation 321 229 1,226 901
    Other operating expense (income), net 35 31 117 139
    Losses (gains) on sales of marketable securities, net — — 2 (7 )
    Other expense (income), net (50 ) 68 48 306
    Deferred income taxes (185 ) (80 ) (261 ) (307 )
    Excess tax benefits from stock-based compensation (121 ) — (199 ) (390 )
    Changes in operating assets and liabilities:
    Inventories 699 535 (1,245 ) (1,211 )
    Accounts receivable, net and other 727 729 (849 ) (877 )
    Accounts payable (4,675 ) (4,187 ) 1,400 2,141
    Accrued expenses and other (731 ) (703 ) 708 864
    Additions to unearned revenue 1,092 684 3,100 2,083
    Amortization of previously unearned revenue (732 ) (460 ) (2,564 ) (1,712 )
    Net cash provided by (used in) operating activities (2,502 ) (2,372 ) 5,345 4,245
    INVESTING ACTIVITIES:
    Purchases of property and equipment, including internal-use software and website development (1,080 ) (670 ) (3,854 ) (4,068 )
    Acquisitions, net of cash acquired, and other — (103 ) (208 ) (798 )
    Sales and maturities of marketable securities and other investments 593 599 2,299 3,098
    Purchases of marketable securities and other investments (437 ) (776 ) (2,487 ) (3,227 )
    Net cash provided by (used in) investing activities (924 ) (950 ) (4,250 ) (4,995 )
    FINANCING ACTIVITIES:
    Excess tax benefits from stock-based compensation 121 — 199 390
    Proceeds from long-term debt and other 65 25 426 3,319
    Repayments of long-term debt, capital lease, and finance lease obligations (361 ) (182 ) (1,182 ) (603 )
    Net cash provided by (used in) financing activities (175 ) (157 ) (557 ) 3,106
    Foreign-currency effect on cash and cash equivalents 17 (124 ) 55 (163 )
    Net increase (decrease) in cash and cash equivalents (3,584 ) (3,603 ) 593 2,193
    CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,074 $ 4,481 $ 5,074 $ 4,481
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest on long-term debt $ 18 $ 13 $ 102 $ 37
    Cash paid for income taxes (net of refunds) 38 86 121 179
    Property and equipment acquired under capital leases 716 340 2,243 993
    Property and equipment acquired under build-to-suit leases 126 150 852 163
    AMAZON.COM, INC.
    Consolidated Statements of Operations
    (in millions, except per share data)
    (unaudited)
    Three Months Ended
    March 31,
    2014 2013
    Net product sales $ 15,705 $ 13,271
    Net services sales 4,036 2,799
    Total net sales 19,741 16,070
    Operating expenses (1):
    Cost of sales 14,055 11,801
    Fulfillment 2,317 1,796
    Marketing 870 632
    Technology and content 1,991 1,383
    General and administrative 327 246
    Other operating expense (income), net 35 31
    Total operating expenses 19,595 15,889
    Income from operations 146 181
    Interest income 11 10
    Interest expense (42 ) (33 )
    Other income (expense), net 5 (77 )
    Total non-operating income (expense) (26 ) (100 )
    Income before income taxes 120 81
    Benefit (provision) for income taxes (73 ) 18
    Equity-method investment activity, net of tax 61 (17 )
    Net income $ 108 $ 82
    Basic earnings per share $ 0.23 $ 0.18
    Diluted earnings per share $ 0.23 $ 0.18
    Weighted average shares used in computation of earnings per share:
    Basic 460 455
    Diluted 468 463
    _____________
    (1) Includes stock-based compensation as follows:
    Fulfillment $ 81 $ 61
    Marketing 27 16
    Technology and content 169 120
    General and administrative 44 32
    AMAZON.COM, INC.
    Consolidated Statements of Comprehensive Income
    (in millions)
    (unaudited)
    Three Months Ended
    March 31,
    2014 2013
    Net income $ 108 $ 82
    Other comprehensive income (loss):
    Foreign currency translation adjustments, net of tax of $0 and $(9) 27 (78 )
    Net change in unrealized gains on available-for-sale securities:
    Unrealized gains (losses), net of tax of $(1) and $1 1 (2 )
    Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $0 and $0 — —
    Net unrealized gains (losses) on available-for-sale securities 1 (2 )
    Total other comprehensive income (loss) 28 (80 )
    Comprehensive income $ 136 $ 2
    AMAZON.COM, INC.
    Segment Information
    (in millions)
    (unaudited)
    Three Months Ended
    March 31,
    2014 2013
    North America
    Net sales $ 11,858 $ 9,391
    Segment operating expenses (1) 11,296 8,934
    Segment operating income $ 562 $ 457
    International
    Net sales $ 7,883 $ 6,679
    Segment operating expenses (1) 7,943 6,695
    Segment operating income (loss) $ (60 ) $ (16 )
    Consolidated
    Net sales $ 19,741 $ 16,070
    Segment operating expenses (1) 19,239 15,629
    Segment operating income 502 441
    Stock-based compensation (321 ) (229 )
    Other operating income (expense), net (35 ) (31 )
    Income from operations 146 181
    Total non-operating income (expense) (26 ) (100 )
    Benefit (provision) for income taxes (73 ) 18
    Equity-method investment activity, net of tax 61 (17 )
    Net income $ 108 $ 82
    Segment Highlights:
    Y/Y net sales growth:
    North America 26 % 26 %
    International 18 16
    Consolidated 23 22
    Y/Y segment operating income/loss growth (decline):
    North America 23 % 31 %
    International 269 (133 )
    Consolidated 14 11
    Net sales mix:
    North America 60 % 58 %
    International 40 42
    100 % 100 %

    ______________________________

    (1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.

    AMAZON.COM, INC.
    Supplemental Net Sales Information
    (in millions)
    (unaudited)
    Three Months Ended
    March 31,
    2014 2013
    Net Sales:
    North America
    Media $ 2,825 $ 2,513
    Electronics and other general merchandise 7,829 6,128
    Other (1) 1,204 750
    Total North America $ 11,858 $ 9,391
    International
    Media $ 2,642 $ 2,545
    Electronics and other general merchandise 5,188 4,086
    Other (1) 53 48
    Total International $ 7,883 $ 6,679
    Consolidated
    Media $ 5,467 $ 5,058
    Electronics and other general merchandise 13,017 10,214
    Other (1) 1,257 798
    Total consolidated $ 19,741 $ 16,070
    Year-over-year Percentage Growth:
    North America
    Media 12 % 14 %
    Electronics and other general merchandise 28 28
    Other 60 64
    Total North America 26 26
    International
    Media 4 % 1 %
    Electronics and other general merchandise 27 28
    Other 13 14
    Total International 18 16
    Consolidated
    Media 8 % 7 %
    Electronics and other general merchandise 27 28
    Other 58 59
    Total consolidated 23 22
    Year-over-year Percentage Growth:
    Excluding the effect of exchange rates
    International
    Media 4 % 7 %
    Electronics and other general merchandise 26 32
    Other 11 18
    Total International 18 21
    Consolidated
    Media 8 % 10 %
    Electronics and other general merchandise 27 30
    Other 58 60
    Total consolidated 23 24
    Consolidated Net Sales Mix:
    Media 28 % 31 %
    Electronics and other general merchandise 66 64
    Other 6 5
    Total consolidated 100 % 100 %

    ______________________________

    (1) Includes sales from non-retail activities, such as AWS sales, which are included in the North America segment, and advertising services and our co-branded credit card agreements, which are included in both segments.

    AMAZON.COM, INC.
    Consolidated Balance Sheets
    (in millions, except per share data)
    March 31,

    2014

    		 December 31,

    2013
    (unaudited)
    ASSETS
    Current assets:
    Cash and cash equivalents $ 5,074 $ 8,658
    Marketable securities 3,592 3,789
    Inventories 6,716 7,411
    Accounts receivable, net and other 3,945 4,767
    Total current assets 19,327 24,625
    Property and equipment, net 12,267 10,949
    Goodwill 2,653 2,655
    Other assets 2,117 1,930
    Total assets $ 36,364 $ 40,159
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 10,590 $ 15,133
    Accrued expenses and other 6,251 6,688
    Unearned revenue 1,516 1,159
    Total current liabilities 18,357 22,980
    Long-term debt 3,147 3,191
    Other long-term liabilities 4,532 4,242
    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 — 484 and 483
    Outstanding shares — 460 and 459 5 5
    Treasury stock, at cost (1,837 ) (1,837 )
    Additional paid-in capital 10,019 9,573
    Accumulated other comprehensive loss (157 ) (185 )
    Retained earnings 2,298 2,190
    Total stockholders’ equity 10,328 9,746
    Total liabilities and stockholders’ equity $ 36,364 $ 40,159
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except per share data)
    (unaudited)
    Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Y/Y %Change
    Cash Flows and Shares
    Operating cash flow — trailing twelve months (TTM) $ 4,245 $ 4,532 $ 4,977 $ 5,475 $ 5,345 26 %
    Purchases of property and equipment (incl. internal-use software & website development) — TTM $ 4,068 $ 4,267 $ 4,589 $ 3,444 $ 3,854 (5 )%
    Free cash flow (operating cash flow less purchases of property and equipment) — TTM $ 177 $ 265 $ 388 $ 2,031 $ 1,491 744 %
    Free cash flow — TTM Y/Y growth (decline) (85 )% (76 )% (63 )% 414 % 744 % N/A
    Invested capital (1) $ 12,019 $ 13,115 $ 14,306 $ 15,749 $ 16,681 39 %
    Return on invested capital (2) 1 % 2 % 3 % 13 % 9 % N/A
    Common shares and stock-based awards outstanding 471 474 475 476 476 1 %
    Common shares outstanding 455 457 458 459 460 1 %
    Stock awards outstanding 16 17 17 17 16 3 %
    Stock awards outstanding — % of common shares outstanding 3.4 % 3.8 % 3.8 % 3.6 % 3.5 % N/A
    Results of Operations
    Worldwide (WW) net sales $ 16,070 $ 15,704 $ 17,092 $ 25,587 $ 19,741 23 %
    WW net sales — Y/Y growth, excluding F/X 24 % 25 % 26 % 22 % 23 % N/A
    WW net sales — TTM $ 63,978 $ 66,848 $ 70,133 $ 74,452 $ 78,124 22 %
    WW net sales — TTM Y/Y growth, excluding F/X 27 % 25 % 25 % 24 % 24 % N/A
    Operating income (loss) $ 181 $ 79 $ (25 ) $ 510 $ 146 (19 )%
    Operating income — Y/Y growth (decline), excluding F/X 1 % (9 )% (33 )% 24 % (29 )% N/A
    Operating margin — % of WW net sales 1.1 % 0.5 % (0.1 )% 2.0 % 0.7 % N/A
    Operating income — TTM $ 665 $ 637 $ 640 $ 745 $ 710 7 %
    Operating income — TTM Y/Y growth (decline), excluding F/X (6 )% 3 % 27 % 14 % 7 % N/A
    Operating margin — TTM % of WW net sales 1.0 % 1.0 % 0.9 % 1.0 % 0.9 % N/A
    Net income (loss) $ 82 $ (7 ) $ (41 ) $ 239 $ 108 31 %
    Net income (loss) per diluted share $ 0.18 $ (0.02 ) $ (0.09 ) $ 0.51 $ 0.23 29 %
    Net income (loss) — TTM $ (87 ) $ (101 ) $ 132 $ 274 $ 299 N/A
    Net income (loss) per diluted share — TTM $ (0.19 ) $ (0.22 ) $ 0.28 $ 0.59 $ 0.64 N/A
    Segments
    North America Segment:
    Net sales $ 9,391 $ 9,495 $ 10,301 $ 15,331 $ 11,858 26 %
    Net sales — Y/Y growth, excluding F/X 26 % 30 % 31 % 26 % 26 % N/A
    Net sales — TTM $ 36,777 $ 38,945 $ 41,361 $ 44,517 $ 46,984 28 %
    Operating income $ 457 $ 409 $ 295 $ 725 $ 562 23 %
    Operating margin — % of North America net sales 4.9 % 4.3 % 2.9 % 4.7 % 4.7 % N/A
    Operating income — TTM $ 1,700 $ 1,766 $ 1,770 $ 1,886 $ 1,992 17 %
    Operating income — TTM Y/Y growth, excluding F/X 72 % 58 % 40 % 18 % 17 % N/A
    Operating margin — TTM % of North America net sales 4.6 % 4.5 % 4.3 % 4.2 % 4.2 % N/A
    International Segment:
    Net sales $ 6,679 $ 6,209 $ 6,791 $ 10,256 $ 7,883 18 %
    Net sales — Y/Y growth, excluding F/X 21 % 20 % 20 % 15 % 18 % N/A
    Net sales — TTM $ 27,201 $ 27,903 $ 28,772 $ 29,935 $ 31,140 14 %
    Net sales — TTM % of WW net sales 43 % 42 % 41 % 40 % 40 % N/A
    Operating income (loss) $ (16 ) $ — $ (28 ) $ 151 $ (60 ) 269 %
    Operating margin — % of International net sales (0.2 )% — % (0.4 )% 1.5 % (0.8 )% N/A
    Operating income (loss) — TTM $ 11 $ (6 ) $ 25 $ 107 $ 63 493 %
    Operating income/loss — TTM Y/Y growth (decline), excluding F/X (83 )% (82 )% (56 )% 106 % 770 % N/A
    Operating margin — TTM % of International net sales — % — % 0.1 % 0.4 % 0.2 % N/A
    Consolidated Segments:
    Operating expenses (3) $ 15,629 $ 15,295 $ 16,825 $ 24,711 $ 19,239 23 %
    Operating expenses — TTM (3) $ 62,267 $ 65,087 $ 68,338 $ 72,459 $ 76,069 22 %
    Operating income $ 441 $ 409 $ 267 $ 876 $ 502 14 %
    Operating margin — % of Consolidated net sales 2.7 % 2.6 % 1.6 % 3.4 % 2.5 % N/A
    Operating income — TTM $ 1,711 $ 1,760 $ 1,795 $ 1,993 $ 2,055 20 %
    Operating income — TTM Y/Y growth, excluding F/X 15 % 21 % 26 % 21 % 20 % N/A
    Operating margin — TTM % of Consolidated net sales 2.7 % 2.6 % 2.6 % 2.7 % 2.6 % N/A
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except inventory turnover, accounts payable days and employee data)
    (unaudited)
    Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Y/Y %Change
    Supplemental
    Supplemental North America Segment Net Sales:
    Media $ 2,513 $ 2,173 $ 2,609 $ 3,513 $ 2,825 12 %
    Media — Y/Y growth, excluding F/X 14 % 16 % 18 % 21 % 13 % N/A
    Media — TTM $ 9,506 $ 9,805 $ 10,199 $ 10,809 $ 11,121 17 %
    Electronics and other general merchandise $ 6,128 $ 6,478 $ 6,732 $ 10,648 $ 7,829 28 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 28 % 31 % 33 % 25 % 28 % N/A
    Electronics and other general merchandise — TTM $ 24,629 $ 26,169 $ 27,840 $ 29,985 $ 31,686 29 %
    Electronics and other general merchandise — TTM % of North America net sales 67 % 67 % 67 % 67 % 67 % N/A
    Other $ 750 $ 844 $ 960 $ 1,170 $ 1,204 60 %
    Other — TTM $ 2,642 $ 2,971 $ 3,322 $ 3,723 $ 4,177 58 %
    Supplemental International Segment Net Sales:
    Media $ 2,545 $ 2,224 $ 2,424 $ 3,714 $ 2,642 4 %
    Media — Y/Y growth, excluding F/X 7 % 7 % 9 % 6 % 4 % N/A
    Media — TTM $ 10,785 $ 10,764 $ 10,803 $ 10,907 $ 11,004 2 %
    Electronics and other general merchandise $ 4,086 $ 3,937 $ 4,316 $ 6,478 $ 5,188 27 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 32 % 29 % 28 % 21 % 26 % N/A
    Electronics and other general merchandise — TTM $ 16,238 $ 16,952 $ 17,771 $ 18,817 $ 19,919 23 %
    Electronics and other general merchandise — TTM % of International net sales 60 % 61 % 62 % 63 % 64 % N/A
    Other $ 48 $ 48 $ 51 $ 64 $ 53 13 %
    Other — TTM $ 178 $ 187 $ 198 $ 211 $ 217 22 %
    Supplemental Worldwide Net Sales:
    Media $ 5,058 $ 4,397 $ 5,033 $ 7,227 $ 5,467 8 %
    Media — Y/Y growth, excluding F/X 10 % 11 % 13 % 13 % 8 % N/A
    Media — TTM $ 20,291 $ 20,569 $ 21,002 $ 21,716 $ 22,125 9 %
    Electronics and other general merchandise $ 10,214 $ 10,415 $ 11,048 $ 17,126 $ 13,017 27 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 30 % 30 % 31 % 24 % 27 % N/A
    Electronics and other general merchandise — TTM $ 40,867 $ 43,121 $ 45,611 $ 48,802 $ 51,605 26 %
    Electronics and other general merchandise — TTM % of WW net sales 64 % 65 % 65 % 66 % 66 % N/A
    Other $ 798 $ 892 $ 1,011 $ 1,234 $ 1,257 58 %
    Other — TTM $ 2,820 $ 3,158 $ 3,520 $ 3,934 $ 4,394 56 %
    Balance Sheet
    Cash and marketable securities $ 7,895 $ 7,463 $ 7,689 $ 12,447 $ 8,666 10 %
    Inventory, net — ending $ 5,395 $ 5,420 $ 6,068 $ 7,411 $ 6,716 24 %
    Inventory turnover, average — TTM 9.5 9.4 9.2 8.9 9.1 (4 )%
    Property and equipment, net $ 7,674 $ 8,789 $ 9,991 $ 10,949 $ 12,267 60 %
    Accounts payable — ending $ 8,916 $ 8,990 $ 10,037 $ 15,133 $ 10,590 19 %
    Accounts payable days — ending 68 73 75 74 68 — %
    Other
    WW shipping revenue $ 633 $ 646 $ 721 $ 1,137 $ 849 34 %
    WW shipping costs $ 1,396 $ 1,364 $ 1,532 $ 2,344 $ 1,829 31 %
    WW net shipping costs $ 763 $ 718 $ 811 $ 1,207 $ 980 28 %
    WW net shipping costs — % of WW net sales 4.7 % 4.6 % 4.7 % 4.7 % 5.0 % N/A
    Employees (full-time and part-time; excludes contractors & temporary personnel) 91,300 97,000 109,800 117,300 124,600 36 %
    ______________________________
    (1) Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.
    (2) TTM Free Cash Flow divided by Invested Capital.
    (3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

    Amazon.com, Inc.

    Certain Definitions

    Customer Accounts

    • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

    Seller Accounts

    • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

    Registered Developers

    • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

    Units

     

    Source: Amazon.com, Inc.

    Image via Amazon

  • GameStop Partners With IBM And Texas A&M, Launches GameStop Technology Institute

    GameStop is the Starbucks of gaming. There’s one on every corner and they at least pretend to serve your every need. Unlike Starbucks, however, GameStop’s bread and butter – video games – are increasingly moving to the digital space where GameStop is cut out of the profit loop. Now the retailer is partnering with some of the best tech minds in the country to find a solution.

    GameStop announced today that it’s partnering with IBM and Texas A&M University to launch the GameStop Technology Institute. With this new endeavor, GameStop will attempt “to discover and deliver business innovation and technology solutions to better address the needs of today’s empowered consumer.” In other words, physical game sales aren’t going to cut it anymore and GameStop needs to find other revenue streams to stay afloat.

    “Now more than ever, GameStop’s internal rate of change must continue to exceed the rate of change occurring within the retail environments in which we compete,” said Paul Raines, chief executive officer for GameStop. “The launch of GTI represents GameStop’s commitment to cultivate innovation within the retail industry, as well as lead the charge in discovering new technology advancements to drive positive customer experiences.”

    GameStop will be utilizing IBM’s Design Lab and BlueMix to “build new mobile and cloud applications that integrate with GameStop’s existing systems.” These new applications will link a customer’s online and in-store activities to remove any barriers that may get in the way of a smooth customer experience.

    “We are excited to collaborate with GameStop to bring the power of our cloud development platforms and design teams to the greater GameStop community,” said Steve Robinson, General Manager of IBM Cloud Platform Services. “This cloud partnership will integrate existing systems into a new class of applications to build even deeper relationships for GameStop with their clients and will help GameStop lead the next phase of retailing by restoring the balance between physical and digital commerce platforms.”

    As for Texas A&M’s contribution, GameStop will be partnering with the university’s Center for Retailing Studies to “focus on retail research, consumer technology and the evolving consumer experience at the intersection of the two.”

    The GameStop Technology Institute will be led by GameStop CIO Jeff Donaldson who will serve as senior vice president of GTI.

    “As GameStop continues to transform its business beyond video gaming and into the technology space, we formed GTI to address our growing need for new innovation as a specialty retailer,” said Donaldson. “As we begin our partnership with IBM and Texas A&M University, GTI’s initial focus will be on the digitization of the physical retail space which would allow customers to interact with the brick-n-mortar store environment in ways that mimic interaction with digital platforms.”

    The establishment of the GameStop Technology Institute is a pretty good move on the part of GameStop. The retailer is facing increased pressure from consumers and its retail partners in the face of increasing digital game sales. Through these new partnerships, GameStop might be able to keep consumers engaged with their retail environment, and more importantly, keep publishers happy.

    Image via Wikimedia Commons

  • Tesla Sales Jeopardized in New Jersey

    Tesla Sales Jeopardized in New Jersey

    It’s clear now that Tesla Motors is a threat to traditional automakers. The company’s luxury Tesla Model S receive the highest safety rating ever from the National Highway Traffic Safety Administration and was recently named Consumer Reports top car of 2014. All this from an electric car that is pushing the auto industry toward future technology.

    More than just pressuring the auto industry, however, the very way that Tesla is doing business is threatening to flip the U.S. car sales industry on its head. While most car companies in the U.S. use dealership franchises to sell vehicles, Tesla instead prefers to sell directly to consumers. Tesla this week was banned from doing just that by a New Jersey regulation requiring car sales be performed through franchises, rather than through company stores or online.

    The New Jersey Motor Vehicle Commission (NJMVC) this week passed a new regulation requiring the dealership middlemen for car sales. This is despite the fact that New Jersey had already issued two dealer licenses for Tesla store locations within New Jersey. Under the new regulation Tesla may be forced to stop selling its vehicles out of those stores.

    Shortly before the new rule was approved Tesla released a missive on its blog condemning Governor Chris Christie’s administration for going back on assurances that the matter would be settled in the New Jersey legislature. From the blog post:

    Unfortunately, Monday we received news that Governor Christie’s administration has gone back on its word to delay a proposed anti-Tesla regulation so that the matter could be handled through a fair process in the Legislature. The Administration has decided to go outside the legislative process by expediting a rule proposal that would completely change the law in New Jersey. This new rule, if adopted, would curtail Tesla’s sales operations and jeopardize our existing retail licenses in the state. Having previously issued two dealer licenses to Tesla, this regulation would be a complete reversal to the long standing position of NJMVC on Tesla’s stores. Indeed, the Administration and the NJMVC are thwarting the Legislature and going beyond their authority to implement the state’s laws at the behest of a special interest group looking to protect its monopoly at the expense of New Jersey consumers. This is an affront to the very concept of a free market.

    New Jersey is not the only state to require car companies to use middlemen for car sales. Though Tesla is working hard with state governments to change current law throughout the nation, other groups such as the New Jersey Coalition of Automotive Retailers are fighting just as hard to keep the current car sales model alive.

    For its part, the New Jersey Coalition of Automotive Retailers has issued a response to Tesla’s accusations via its Facebook page. The organization suggests that Tesla either start using dealership middlemen like everyone else or work to change New Jersey law.

    Post by New Jersey Coalition of Automotive Retailers.

    Image via Tesla

  • Hybrid Cars Are On The Rise – And So Are Sales

    Since the U.S. recession began, many folks have looked for ways to downsize, to cut costs, and conserve. All of this could explain the jump in sales of smaller, more fuel-efficient cars beginning in January of this year. Cutting vehicle costs creates a big reduction in those monthly bills, which is most likely why automakers saw a 7.6 percent increase in Hybrid car sales from a year ago.

    Hybrids use electric batteries to supplement their gas engines and are a normal, fuel efficient car that has two motors – an electric motor and a gasoline powered motor.

    These popular Hybrids are the most gasoline efficient of all cars averaging 48 to 60 mpg. Although other fuel efficient cars can get up to 36 mpg, their prices are remaining lower than the Hybrids, which cost between $19,000 and $25,000, and a fuel efficient car, like the Honda Civic, costs in the $14,000 to $17,000 range.

    So why Hybrids, you may ask? Mostly it’s the electric motor that saves even more fuel than a fuel-efficient car.

    Electric motors use no energy during idle, and they turn off, using less fuel than gas motors at low speeds. Gas motors do better at high speeds and can deliver more power. So, during rush hour stop and go traffic, the electric motor works great, but at higher speeds, the gas motor kicks in to offer added power and pep on the highway.

    Hybrids also offer a serious reduction in those nasty emissions that are creating greenhouse gasses. In the city, where smog and pollution is the worst, they make a huge dent in their carbon contribution while the electric motor is engaged.

    A hybrid cuts emissions by 25 to 35 percent over even the most fuel-efficient gas powered vehicles.

    Another huge benefit to Hybrids, which is drawing a lot of customers, is that the gas motor turns on to charge the batteries, never leaving you stranded and looking for a charge for your exclusively electric powered car.

    More incentive is that the motors and batteries in Hybrids do not require maintenance over the life of the vehicle and the engine doesn’t need any more maintenance than in any other car.

    Many auto experts suggest that Hybrids are the transitional vehicle meant to bring consumer attention to the environmental crisi in reducing emissions, while technology for hydrogen or methane fuel cell powered cars of the future are available.

    Image via YouTube

  • BlackBerry Files to Block Typo Keyboard Case Sales

    Just after the new year began, BlackBerry filed a lawsuit against iPhone case-maker Typo. The company’s product, the Typo iPhone Keyboard Case, snaps on to modern iPhones to give them a physical keyboard. The case is a solution for consumers who prefer the physical keyboards of BlackBerry’s past designs, but who also prefer the software that Apple’s iOS provides.

    Today InfoWorld reported that as part of the lawsuit BlackBerry has filed a motion to block sales of the Typo iPhone Keyboard Case in the U.S. BlackBerry is asking that Typo be barred from making or selling its case in the U.S., claiming that it is a “blatant” ripoff of BlackBerry keyboard designs. The company also claims that the founders of Typo were long-time BlackBerry device users who have cited BlackBerry explicitly as the design inspiration for the iPhone case.

    BlackBerry’s lawsuit concerns two different design patents it holds with regards to its smartphone keyboards. One specifically describes a keyboard “optimized for use with the thumbs.” Typo’s keyboard case sports a keyboard with sloped keys very similar to BlackBoard keyboard designs.

    According to InfoWorld, Typo has responded to BlackBerry’s filing by claiming BlackBerry’s case is without merit. Typo has indicated that it intends to defend its product in court.

    Lending a tabloid edge to this story is the fact that Typo was co-founded by TV/radio personality Ryan Seacrest, along with Show Media CEO Laurence Hallier. The Typo website states that one of the goals for the Typo keyboard is to eliminate the need for some professionals to carry both an iPhone and a BlackBerry device, which could lend credence to BlackBerry’s claim that the iPhone case could cause irreparable harm to BlackBerry sales.

    Image via Typo

  • Driverless Car Sales to Reach Nearly 12 Million in 2035

    Driverless Car Sales to Reach Nearly 12 Million in 2035

    Driverless car technology is here, and many analysts believe it is not a question of if, but when such technology will become dominant on U.S. roadways. Market research firm IHS today waded into the issue with a new report predicting just when driverless cars will begin to become popular with consumers.

    According to IHS, driverless car technology will gradually be implemented into vehicle designs. Consumers will soon be able to get cars with limited self-driving capabilities to be used only in certain driving conditions, and fully autonomous vehicles that still have human controls will come later.

    The new report predicts that self-driving car sales will reach only 230,000 in the year 2025, though sales will quickly balloon to nearly 12 million by the year 2035. IHS believes there will be 54 million autonomous vehicles in use worldwide by 2035, with an increasing portion of sales coming from self-driving cars that do not also have human controls.

    Though the IHS report does mention the current roadblock of a lack of regulation for the vehicles, it also looks ahead to the troubles the technology will face once governments have laid a framework for their use. These risks include the need for extremely reliable software and protection against potential cyber attacks. Despite these risks, autonomous vehicles will almost certainly reduce accident rates, as the problem of distracted drivers is eliminated.

    “There are several benefits from self-driving cars to society, drivers and pedestrians,” said Egil Juliussen, a co-author of the report and a principal analyst for infotainment and autonomous driver assisted systems at IHS. “Accident rates will plunge to near zero for SDCs, although other cars will crash into SDCs, but as the market share of SDCs on the highway grows, overall accident rates will decline steadily. Traffic congestion and air pollution per car should also decline because SDCs can be programmed to be more efficient in their driving patterns.”