Amazon Com Inc

Amazon reported Q3 2024 net income of $15.3B ($1.43 diluted EPS) on total net sales of $158.9B, up 11.0% YoY, with operating income rising to $17.4B from $11.2B.

Total net sales increased 11.0% YoY to $158.9B, which management attributes to increased unit sales, including sales by third-party sellers, advertising sales, and subscription services, with AWS growth reflecting increased customer usage partially offset by pricing changes primarily driven by long-term customer contracts. Operating income rose to $17.4B from $11.2B, and net income rose to $15.3B from $9.9B.

Reported net income of $15.3B includes a $598M benefit from the change in estimated useful lives of servers, or $0.06 per diluted share. Other income (expense), net was $(27)M in Q3 2024 versus $1.0B in Q3 2023, and included a marketable equity securities valuation loss of $(348)M from the Rivian equity investment in Q3 2024 versus a $1.2B gain in Q3 2023. The income tax provision for the nine months ended September 30, 2024 was $6.9B and included $2.4B of net discrete tax benefits primarily attributable to excess tax benefits from stock-based compensation.

Operating cash flow was 1.7x net income attributable to the parent (cash conversion); free cash flow of $3.4B (derived as operating cash flow minus the absolute selected capex cash-flow amount; not an issuer-defined or discretionary-cash measure).

Capital expenditures $22.6B (prior $12.5B) (selected cash-flow amount, not necessarily total capital investment).

Financing cash flow for 2024-07-01 to 2024-09-30 was an outflow of $2,758,000,000, compared with an outflow of $8,948,000,000 for 2023-07-01 to 2023-09-30. Both periods had net outflows.

“We have a $15.0 billion unsecured revolving credit facility with a syndicate of lenders (the “Credit Agreement”), with a term that extends to November 2028 and may be extended for one or more additional one-year terms subject to approval by the lenders.”

— Filing statement

Period net income attributable to the parent / period-end equity, not annualized: 5.9% (prior at 2023-09-30: 5.4%); period net income attributable to the parent / period-end assets, not annualized: 2.6%.

Fourth Quarter 2024 Guidance: Net sales are expected to be between $181.5 billion and $188.5 billion, or to grow between 7% and 11% compared with fourth quarter 2023, anticipating an unfavorable impact of approximately 10 basis points from foreign exchange rates. Operating income is expected to be between $16.0 billion and $20.0 billion, compared with $13.2 billion in fourth quarter 2023. This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded.

“Net sales are expected to be between $181.5 billion and $188.5 billion, or to grow between 7% and 11% compared with fourth quarter 2023.”

— Amazon.com, Inc.Verified in filing

Leverage: Identified debt as of 2024-09-30 (carrying amount): long-term debt including current maturities of $60.5B; noncurrent long-term debt of $54.9B; current portion of long-term debt of $5.2B; short-term borrowings of $88.0M. The reported scopes overlap; no non-overlapping subtotal is established. Total debt, net debt and debt-to-equity are therefore not stated.

Liquidity: Cash, cash equivalents, and marketable securities at fair value were $88.1B as of September 30, 2024, versus $86.8B as of December 31, 2023. There were no borrowings outstanding under the two unsecured revolving credit facilities or the commercial paper programs as of September 30, 2024, and unused letters of credit were $8.4B. Management states it believes cash flows from operations and these balances, as well as borrowing arrangements, will be sufficient to meet anticipated operating cash needs for at least the next twelve months.

Cash flow: Cash flow — operating $26.0B, investing $-16.9B, financing $-2.8B.

Working capital: Current assets $175.8B vs. current liabilities $161.5B (current ratio 1.09x). Prior reported balance sheet as of 2023-12-31: $172.4B vs. $164.9B (1.05x).