Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses “Fulfillment,” “Technology and content,” “Sales and marketing,” and “General and administrative” based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology infrastructure costs are allocated to the AWS segment based on usage. The majority of the remaining non-infrastructure technology costs are incurred in the U.S. and are allocated to our North America segment. There are no internal revenue transactions between our reportable segments. These segments reflect the way our chief operating decision maker evaluates the Company’s business performance and manages its operations.

North America

The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through North America-focused online and physical stores. This segment includes export sales from these online stores.

International

The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through internationally-focused online stores. This segment includes export sales from these internationally-focused online stores (including export sales from these online stores to customers in the U.S., Mexico, and Canada), but excludes export sales from our North America-focused online stores.

AWS

The AWS segment consists of amounts earned from global sales of compute, storage, database, and other services for start-ups, enterprises, government agencies, and academic institutions.

Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2022		2021		2022
North America
Net sales	$	67,550	$	74,430	$	131,916	$	143,674
Operating expenses	64,403		75,057		125,319		145,869
Operating income (loss)	$	3,147	$	(627)	$	6,597	$	(2,195)
International
Net sales	$	30,721	$	27,065	$	61,370	$	55,824
Operating expenses	30,359		28,836		59,756		58,876
Operating income (loss)	$	362	$	(1,771)	$	1,614	$	(3,052)
AWS
Net sales	$	14,809	$	19,739	$	28,312	$	38,180
Operating expenses	10,616		14,024		19,956		25,947
Operating income	$	4,193	$	5,715	$	8,356	$	12,233
Consolidated
Net sales	$	113,080	$	121,234	$	221,598	$	237,678
Operating expenses	105,378		117,917		205,031		230,692
Operating income	7,702		3,317		16,567		6,986
Total non-operating income (expense)	932		(5,970)		2,335		(14,904)
Benefit (provision) for income taxes	(868)		637		(3,024)		2,059
Equity-method investment activity, net of tax	12		(12)		7		(13)
Net income (loss)	$	7,778	$	(2,028)	$	15,885	$	(5,872)

Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions):    

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2022		2021		2022
Net Sales:
Online stores (1)	$	53,157	$	50,855	$	106,058	$	101,984
Physical stores (2)	4,198		4,721		8,118		9,312
Third-party seller services (3)	25,085		27,376		48,794		52,711
Subscription services (4)	7,917		8,716		15,497		17,126
Advertising services (5)	7,451		8,757		13,832		16,634
AWS	14,809		19,739		28,312		38,180
Other (6)	463		1,070		987		1,731
Consolidated	$	113,080	$	121,234	$	221,598	$	237,678

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(1)Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, videos, games, music, and software. These product sales include digital products sold on a transactional basis. Digital product subscriptions that provide unlimited viewing or usage rights are included in “Subscription services.”

(2)Includes product sales where our customers physically select items in a store. Sales to customers who order goods online for delivery or pickup at our physical stores are included in “Online stores.”

(3)Includes commissions and any related fulfillment and shipping fees, and other third-party seller services.

(4)Includes annual and monthly fees associated with Amazon Prime memberships, as well as digital video, audiobook, digital music, e-book, and other non-AWS subscription services.

(5)Includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.

(6)Includes sales related to various other offerings, such as certain licensing and distribution of video content and shipping services, and our co-branded credit card agreements.