Segment Information

3 Months Ended

Mar. 31, 2023

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 March 31,
	2022		2023
North America
Net sales	$	69,244	$	76,881
Operating expenses	70,812		75,983
Operating income (loss)	$	(1,568)	$	898
International
Net sales	$	28,759	$	29,123
Operating expenses	30,040		30,370
Operating loss	$	(1,281)	$	(1,247)
AWS
Net sales	$	18,441	$	21,354
Operating expenses	11,923		16,231
Operating income	$	6,518	$	5,123
Consolidated
Net sales	$	116,444	$	127,358
Operating expenses	112,775		122,584
Operating income	3,669		4,774
Total non-operating expense	(8,934)		(655)
Benefit (provision) for income taxes	1,422		(948)
Equity-method investment activity, net of tax	(1)		1
Net income (loss)	$	(3,844)	$	3,172

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

	Three Months Ended March 31,
	2022		2023
Net Sales:
Online stores (1)	$	51,129	$	51,096
Physical stores (2)	4,591		4,895
Third-party seller services (3)	25,335		29,820
Subscription services (4)	8,410		9,657
Advertising services (5)	7,877		9,509
AWS	18,441		21,354
Other (6)	661		1,027
Consolidated	$	116,444	$	127,358

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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, shipping services, and health care services, and our co-branded credit card agreements.