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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ____________________________________
FORM 10-Q
____________________________________ 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to             .
Commission File No. 000-22513
____________________________________
AMAZON.COM, INC.
(Exact name of registrant as specified in its charter)
 ____________________________________
Delaware 91-1646860
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
410 Terry Avenue North, Seattle, Washington 98109-5210
(206) 266-1000
(Address and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, par value $.01 per shareAMZNNasdaq Global Select Market
____________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
10,495,566,881 shares of common stock, par value $0.01 per share, outstanding as of July 24, 2024


Table of Contents
AMAZON.COM, INC.
FORM 10-Q
For the Quarterly Period Ended June 30, 2024
INDEX
 
  Page
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
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,
202320242023202420232024
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD$49,734 $73,332 $54,253 $73,890 $37,700 $50,067 
OPERATING ACTIVITIES:
Net income6,750 13,485 9,922 23,916 13,072 44,419 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other11,589 12,038 22,712 23,722 45,724 49,673 
Stock-based compensation7,127 6,722 11,875 11,683 23,037 23,831 
Non-operating expense (income), net47 (95)581 2,639 2,754 1,310 
Deferred income taxes(2,744)(785)(3,216)(1,723)(7,408)(4,383)
Changes in operating assets and liabilities:
Inventories(2,373)(3,085)(2,002)(1,309)1,910 2,142 
Accounts receivable, net and other(2,041)(2,209)2,683 1,475 (2,686)(9,556)
Other assets(3,126)(3,055)(6,329)(5,756)(14,542)(11,692)
Accounts payable3,029 6,005 (8,235)(5,277)391 8,431 
Accrued expenses and other(1,938)(4,147)(7,701)(7,075)(1,944)(1,802)
Unearned revenue156 407 974 1,975 1,533 5,579 
Net cash provided by (used in) operating activities16,476 25,281 21,264 44,270 61,841 107,952 
INVESTING ACTIVITIES:
Purchases of property and equipment(11,455)(17,620)(25,662)(32,545)(58,632)(59,612)
Proceeds from property and equipment sales and incentives1,043 1,227 2,180 2,217 4,669 4,633 
Acquisitions, net of cash acquired, non-marketable investments, and other(316)(571)(3,829)(3,925)(5,545)(5,935)
Sales and maturities of marketable securities1,551 3,265 2,666 4,657 8,906 7,618 
Purchases of marketable securities(496)(8,439)(834)(10,404)(1,306)(11,058)
Net cash provided by (used in) investing activities(9,673)(22,138)(25,479)(40,000)(51,908)(64,354)
FINANCING ACTIVITIES:
Proceeds from short-term debt, and other4,399 525 17,179 863 40,124 1,813 
Repayments of short-term debt, and other(7,641)(229)(11,244)(633)(34,957)(15,066)
Proceeds from long-term debt    8,342  
Repayments of long-term debt(2,000)(4,169)(3,386)(4,499)(4,643)(4,789)
Principal repayments of finance leases(1,220)(538)(2,600)(1,308)(5,705)(3,092)
Principal repayments of financing obligations(77)(79)(134)(169)(244)(306)
Net cash provided by (used in) financing activities(6,539)(4,490)(185)(5,746)2,917 (21,440)
Foreign currency effect on cash, cash equivalents, and restricted cash69 (312)214 (741)(483)(552)
Net increase (decrease) in cash, cash equivalents, and restricted cash333 (1,659)(4,186)(2,217)12,367 21,606 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD$50,067 $71,673 $50,067 $71,673 $50,067 $71,673 
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
  
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202420232024
Net product sales$59,032 $61,569 $116,013 $122,484 
Net service sales75,351 86,408 145,728 168,806 
Total net sales134,383 147,977 261,741 291,290 
Operating expenses:
Cost of sales69,373 73,785 137,164 146,418 
Fulfillment21,305 23,566 42,210 45,883 
Technology and infrastructure21,931 22,304 42,381 42,728 
Sales and marketing10,745 10,512 20,917 20,174 
General and administrative3,202 3,041 6,245 5,783 
Other operating expense (income), net146 97 369 325 
Total operating expenses126,702 133,305 249,286 261,311 
Operating income7,681 14,672 12,455 29,979 
Interest income661 1,180 1,272 2,173 
Interest expense(840)(589)(1,663)(1,233)
Other income (expense), net61 (18)(382)(2,691)
Total non-operating income (expense)(118)573 (773)(1,751)
Income before income taxes7,563 15,245 11,682 28,228 
Provision for income taxes(804)(1,767)(1,752)(4,234)
Equity-method investment activity, net of tax(9)7 (8)(78)
Net income$6,750 $13,485 $9,922 $23,916 
Basic earnings per share$0.66 $1.29 $0.97 $2.30 
Diluted earnings per share$0.65 $1.26 $0.95 $2.24 
Weighted-average shares used in computation of earnings per share:
Basic10,285 10,447 10,268 10,420 
Diluted10,449 10,708 10,398 10,689 
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited) 
  
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202420232024
Net income$6,750 $13,485 $9,922 $23,916 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $(22), $58, $(32), and $88
264 (637)650 (1,733)
Available-for-sale debt securities:
Change in net unrealized gains (losses), net of tax of $(5), $(69), $(34), and $(227)
17 241 112 777 
Less: reclassification adjustment for losses included in “Other income (expense), net,” net of tax of $(5), $(1), $(15), and $(1)
12 3 45 4 
Net change29 244 157 781 
Other, net of tax of $0, $(1), $0, and $(2)
 (2) (1)
Total other comprehensive income (loss)293 (395)807 (953)
Comprehensive income$7,043 $13,090 $10,729 $22,963 
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data) 
December 31, 2023June 30, 2024
 (unaudited)
ASSETS
Current assets:
Cash and cash equivalents$73,387 $71,178 
Marketable securities13,393 17,914 
Inventories33,318 34,109 
Accounts receivable, net and other52,253 50,106 
Total current assets172,351 173,307 
Property and equipment, net204,177 220,717 
Operating leases72,513 74,575 
Goodwill22,789 22,879 
Other assets56,024 63,340 
Total assets$527,854 $554,818 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$84,981 $81,817 
Accrued expenses and other64,709 60,351 
Unearned revenue15,227 16,004 
Total current liabilities164,917 158,172 
Long-term lease liabilities77,297 78,084 
Long-term debt58,314 54,889 
Other long-term liabilities25,451 27,226 
Commitments and contingencies (Note 4)
Stockholders’ equity:
Preferred stock ($0.01 par value; 500 shares authorized; no shares issued or outstanding)
  
Common stock ($0.01 par value; 100,000 shares authorized; 10,898 and 11,005 shares issued; 10,383 and 10,490 shares outstanding)
109 110 
Treasury stock, at cost(7,837)(7,837)
Additional paid-in capital99,025 110,633 
Accumulated other comprehensive income (loss)(3,040)(3,993)
Retained earnings113,618 137,534 
Total stockholders’ equity201,875 236,447 
Total liabilities and stockholders’ equity$527,854 $554,818 
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 — ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES
Unaudited Interim Financial Information
We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2024 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2023 Annual Report on Form 10-K.
Prior Period Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation. “Other assets” were reclassified out of “Accounts receivable, net and other” on our consolidated statements of cash flows.
Principles of Consolidation
The consolidated financial statements include the accounts of Amazon.com, Inc. and its consolidated entities (collectively, the “Company”), consisting of its wholly-owned subsidiaries and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and certain entities that support our health care services and seller lending financing activities. Intercompany balances and transactions between consolidated entities are eliminated.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, impairment of property and equipment and operating leases, valuation and impairment of investments, self-insurance liabilities, and viewing patterns of capitalized video content. Actual results could differ materially from these estimates.
We review the useful lives of equipment on an ongoing basis, and effective January 1, 2024 we changed our estimate of the useful lives for our servers from five to six years. The longer useful lives are due to continuous improvements in our hardware, software, and data center designs. The effect of this change in estimate for Q2 2024, based on servers that were included in “Property and equipment, net” as of March 31, 2024 and those acquired during the three months ended June 30, 2024, was a reduction in depreciation and amortization expense of $786 million and a benefit to net income of $601 million, or $0.06 per basic share and $0.06 per diluted share. The effect of this change in estimate for the six months ended June 30, 2024, based on servers that were included in “Property and equipment, net” as of December 31, 2023 and those acquired during the six months ended June 30, 2024, was a reduction in depreciation and amortization expense of $1.7 billion and a benefit to net income of $1.3 billion, or $0.12 per basic share and $0.12 per diluted share.
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Supplemental Cash Flow Information
The following table shows supplemental cash flow information (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
Twelve Months Ended
June 30,
202320242023202420232024
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt, net of capitalized interest$954 $680 $1,356 $949 $2,289 $2,201 
Cash paid for operating leases2,528 2,844 4,995 6,176 9,173 11,634 
Cash paid for interest on finance leases77 72 158 146 330 296 
Cash paid for interest on financing obligations41 50 100 114 194 210 
Cash paid for income taxes, net of refunds3,735 5,700 4,354 6,158 6,791 12,983 
Assets acquired under operating leases4,104 3,911 7,730 7,664 19,254 13,986 
Property and equipment acquired under finance leases, net of remeasurements and modifications240 181 248 223 696 617 
Property and equipment recognized during the construction period of build-to-suit lease arrangements84 31 215 68 1,051 210 
Property and equipment derecognized after the construction period of build-to-suit lease arrangements, with the associated leases recognized as operating
  720  4,766 654 
Earnings Per Share
Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect.
The following table shows the calculation of diluted shares (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202420232024
Shares used in computation of basic earnings per share10,285 10,447 10,268 10,420 
Total dilutive effect of outstanding stock awards164 261 130 269 
Shares used in computation of diluted earnings per share10,449 10,708 10,398 10,689 
Other Income (Expense), Net
Other income (expense), net” is as follows (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202420232024
Marketable equity securities valuation gains (losses)$299 $443 $(181)$(1,683)
Equity warrant valuation gains (losses)(220)(271)(161)(501)
Upward adjustments relating to equity investments in private companies10 6 26 11 
Foreign currency gains (losses)9 (138)79 (212)
Other, net(37)(58)(145)(306)
Total other income (expense), net61 (18)(382)(2,691)
Included in “Other income (expense), net” is a marketable equity securities valuation gain (loss) of $187 million and $391 million in Q2 2023 and Q2 2024, and $(280) million and $(1.6) billion for the six months ended June 30, 2023 and 2024, from our equity investment in Rivian Automotive, Inc. (“Rivian”). As of June 30, 2024, we held 158 million shares of Rivian’s Class A common stock, representing an approximate 16% ownership interest, and an approximate 15% voting interest. We determined that we have the ability to exercise significant influence over Rivian through our equity investment, our commercial arrangement for the purchase of electric vehicles and jointly-owned intellectual property, and one of our employees serving on Rivian’s board of directors. We elected the fair value option to account for our equity investment in Rivian, which is included
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in “Marketable securities” on our consolidated balance sheets, and had a fair value of $3.7 billion and $2.1 billion as of December 31, 2023 and June 30, 2024.
Required summarized financial information of Rivian as disclosed in its most recent SEC filings is as follows (in millions):
Three Months Ended March 31,
20232024
Revenues$661 $1,204 
Gross profit(535)(527)
Loss from operations(1,433)(1,484)
Net loss(1,349)(1,446)
Inventories
Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. The inventory valuation allowance, representing a write-down of inventory, was $3.0 billion and $2.6 billion as of December 31, 2023 and June 30, 2024.
Accounts Receivable, Net and Other
Included in “Accounts receivable, net and other” on our consolidated balance sheets are receivables primarily related to customers, vendors, and sellers, as well as prepaid expenses and other current assets. As of December 31, 2023 and June 30, 2024, customer receivables, net, were $34.1 billion and $33.1 billion, vendor receivables, net, were $8.5 billion and $7.8 billion, seller receivables, net, were $1.0 billion and $0.3 billion, and other receivables, net, were $3.3 billion and $3.0 billion. Seller receivables are amounts due from sellers related to our seller lending program, which provides funding to sellers primarily to procure inventory. Prepaid expenses and other current assets were $5.4 billion and $5.9 billion as of December 31, 2023 and June 30, 2024.
We estimate losses on receivables based on expected losses, including our historical experience of actual losses. The allowance for doubtful accounts was $1.7 billion as of December 31, 2023 and June 30, 2024.
Digital Video and Music Content
The total capitalized costs of video, which is primarily released content, and music as of December 31, 2023 and June 30, 2024 were $17.4 billion and $18.4 billion. Total video and music expense was $4.4 billion and $4.6 billion in Q2 2023 and Q2 2024, and $8.4 billion and $9.2 billion for the six months ended June 30, 2023 and 2024.
Unearned Revenue
Unearned revenue is recorded when payments are received or due in advance of performing our service obligations and is recognized over the service period. Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships. Our total unearned revenue as of December 31, 2023 was $20.9 billion, of which $9.8 billion was recognized as revenue during the six months ended June 30, 2024. Included in “Other long-term liabilities” on our consolidated balance sheets was $5.7 billion and $6.7 billion of unearned revenue as of December 31, 2023 and June 30, 2024.
Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that have not yet been recognized in our consolidated financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were $156.6 billion as of June 30, 2024. The weighted-average remaining life of our long-term contracts is 3.9 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.
Accounting Pronouncements Not Yet Adopted
In December 2023, the Financial Accounting Standards Board issued an Accounting Standards Update (“ASU”) amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted, and can be applied on either a prospective or retroactive basis. We are currently evaluating the ASU to determine its impact on our income tax disclosures.
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Note 2 — FINANCIAL INSTRUMENTS
Cash, Cash Equivalents, Restricted Cash, and Marketable Securities
As of December 31, 2023 and June 30, 2024, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S. and foreign government and agency securities, other investment grade securities, and marketable equity securities. Cash equivalents and marketable securities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:
Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.
Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.
We measure the fair value of money market funds and certain marketable equity securities based on quoted prices in active markets for identical assets or liabilities. Other marketable securities were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.
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The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):
 December 31, 2023June 30, 2024
  
Total
Estimated
Fair Value
Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Total
Estimated
Fair Value
Cash$11,706 $10,194 $— $— $10,194 
Level 1 securities:
Money market funds39,160 21,631 — — 21,631 
Equity securities (1)4,658 3,017 
Level 2 securities:
Foreign government and agency securities505 19   19 
U.S. government and agency securities1,699 1,967 1 (80)1,888 
Corporate debt securities27,805 51,577  (110)51,467 
Asset-backed securities1,646 1,320  (33)1,287 
Other debt securities104 87  (3)84 
$87,283 $86,795 $1 $(226)$89,587 
Less: Restricted cash, cash equivalents, and marketable securities (2)(503)(495)
Total cash, cash equivalents, and marketable securities$86,780 $89,092 
___________________
(1)The related unrealized gain (loss) recorded in “Other income (expense), net” was $284 million and $443 million in Q2 2023 and Q2 2024, and $(195) million and $(1.7) billion for the six months ended June 30, 2023 and 2024.
(2)We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable debt securities primarily as collateral for real estate, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. We classify cash, cash equivalents, and marketable debt securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 4 — Commitments and Contingencies.”
The following table summarizes the remaining contractual maturities of our cash equivalents and marketable debt securities as of June 30, 2024 (in millions):
Amortized
Cost
Estimated
Fair Value
Due within one year$72,253 $72,204 
Due after one year through five years3,220 3,101 
Due after five years through ten years356 345 
Due after ten years772 726 
Total$76,601 $76,376 
Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.
Non-Marketable Investments
We hold equity warrants giving us the right to acquire stock of other companies. As of December 31, 2023 and June 30, 2024, these warrants had a fair value of $2.2 billion and $2.1 billion, with gains and losses recognized in “Other income (expense), net” on our consolidated statements of operations. These warrants are classified as Level 2 and 3 assets.
As of December 31, 2023 and June 30, 2024, equity investments not accounted for under the equity-method and without readily determinable fair values had a carrying value of $754 million and $815 million, with adjustments recognized in “Other income (expense), net” on our consolidated statements of operations.
In Q3 2023, we invested in a $1.25 billion note from Anthropic, PBC, which is convertible to equity. In Q1 2024, we invested $2.75 billion in a second convertible note. The notes are classified as available for sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive income (loss).” The notes are classified as Level 3 assets. We also have a commercial arrangement primarily for the provision of AWS cloud services, which includes the use of AWS chips.
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All non-marketable investments are recorded within “Other assets” on our consolidated balance sheets.
Consolidated Statements of Cash Flows Reconciliation
The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statements of cash flows (in millions):
December 31, 2023June 30, 2024
Cash and cash equivalents$73,387 $71,178 
Restricted cash included in accounts receivable, net and other497 491 
Restricted cash included in other assets6 4 
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows$73,890 $71,673 
Note 3 — LEASES
We have entered into non-cancellable operating and finance leases for fulfillment network, data center, office, and physical store facilities as well as server and networking equipment, aircraft, and vehicles. Gross assets acquired under finance leases, including those where title transfers at the end of the lease, are recorded in “Property and equipment, net” and were $62.5 billion and $59.5 billion as of December 31, 2023 and June 30, 2024. Accumulated amortization associated with finance leases was $44.7 billion and $43.5 billion as of December 31, 2023 and June 30, 2024.
Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2023202420232024
Operating lease cost$2,608 $2,921 $5,120 $5,750 
Finance lease cost:
Amortization of lease assets1,539 948 3,085 1,889 
Interest on lease liabilities76 72 156 145 
Finance lease cost1,615 1,020 3,241 2,034 
Variable lease cost494 592 1,012 1,227 
Total lease cost$4,717 $4,533 $9,373 $9,011 
Other information about lease amounts recognized in our consolidated financial statements is as follows:
 December 31, 2023June 30, 2024
Weighted-average remaining lease term – operating leases11.3 years10.9 years
Weighted-average remaining lease term – finance leases11.9 years12.0 years
Weighted-average discount rate – operating leases3.3 %3.4 %
Weighted-average discount rate – finance leases2.7 %2.9 %
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Our lease liabilities were as follows (in millions):
December 31, 2023
 Operating LeasesFinance LeasesTotal
Gross lease liabilities$90,777 $14,106 $104,883 
Less: imputed interest(15,138)(1,997)(17,135)
Present value of lease liabilities75,639 12,109 87,748 
Less: current portion of lease liabilities(8,419)(2,032)(10,451)
Total long-term lease liabilities$67,220 $10,077 $77,297 
June 30, 2024
 Operating LeasesFinance LeasesTotal
Gross lease liabilities$93,266 $12,807 $106,073 
Less: imputed interest(15,834)(1,980)(17,814)
Present value of lease liabilities77,432 10,827 88,259 
Less: current portion of lease liabilities(8,736)(1,439)(10,175)
Total long-term lease liabilities$68,696 $9,388 $78,084 
Note 4 — COMMITMENTS AND CONTINGENCIES
Commitments
The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of June 30, 2024 (in millions): 
 Six Months Ended December 31,Year Ended December 31,  
 20242025202620272028ThereafterTotal
Long-term debt principal and interest$5,530 $6,929 $4,582 $10,403 $3,644 $60,176 $91,264 
Operating lease liabilities6,247 10,766 10,021 9,160 8,353 48,719 93,266 
Finance lease liabilities, including interest913 1,463 1,378 1,176 1,045 6,832 12,807 
Financing obligations, including interest (1)206 488 496 504 511 6,728 8,933 
Leases not yet commenced1,110 2,852 2,900 2,984 3,062 26,939 39,847 
Unconditional purchase obligations (2)4,739 5,969 4,180 3,226 2,584 11,710 32,408 
Other commitments (3)2,049 1,955 1,216 801 745 10,021 16,787 
Total commitments$20,794 $30,422 $24,773 $28,254 $19,944 $171,125 $295,312 
___________________
(1)Includes non-cancellable financing obligations for fulfillment network and data center facilities. Excluding interest, current financing obligations of $271 million and $289 million are recorded within “Accrued expenses and other” and $6.6 billion and $6.9 billion are recorded within “Other long-term liabilities” as of December 31, 2023 and June 30, 2024. The weighted-average remaining term of the financing obligations was 17.0 years and 16.6 years and the weighted-average imputed interest rate was 3.1% and 3.0% as of December 31, 2023 and June 30, 2024.
(2)Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content, procure energy, and license software that are not reflected on the consolidated balance sheets. For those agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified. Renewable energy agreements based on actual generation without a fixed or minimum volume commitment are not included. These agreements also provide the right to receive renewable energy certificates for no additional consideration.
(3)Includes asset retirement obligations, liabilities associated with digital media content agreements with initial terms greater than one year, and the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that are under construction. Excludes approximately $5.6 billion of income tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any.
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Other Contingencies
We are disputing claims and denials of refunds or credits, and monitoring or evaluating potential claims, related to various non-income taxes (such as sales, value added, consumption, service, and similar taxes), including in jurisdictions in which we already collect and remit these taxes. These non-income tax controversies typically include (i) the taxability of products and services, including cross-border intercompany transactions, (ii) collection and withholding on transactions with third parties, including as a result of evolving requirements imposed on marketplaces with respect to third-party sellers, and (iii) the adequacy of compliance with reporting obligations, including evolving documentation requirements. Due to the inherent complexity and uncertainty of these matters and the judicial and regulatory processes in certain jurisdictions, the final outcome of any such controversies may be materially different from our expectations.
Legal Proceedings
The Company is involved from time to time in claims, proceedings, and litigation, including the matters described in Item 8 of Part II, “Financial Statements and Supplementary Data — Note 7 — Commitments and Contingencies — Legal Proceedings” of our 2023 Annual Report on Form 10-K and in Item 1 of Part I, “Financial Statements — Note 4 — Commitments and Contingencies — Legal Proceedings” of our Quarterly Report on Form 10-Q for the period ended March 31, 2024, as supplemented by the following:
Beginning in March 2020 with Frame-Wilson v. Amazon.com, Inc. filed in the United States District Court for the Western District of Washington (“W.D. Wash.”), private litigants have filed a number of cases in the U.S. and Canada alleging, among other things, price fixing arrangements between Amazon.com, Inc. and vendors and third-party sellers in Amazon’s stores, monopolization and attempted monopolization, and consumer protection and unjust enrichment claims. Attorneys General for the District of Columbia and California brought similar suits in May 2021 and September 2022 in the Superior Court of the District of Columbia and the California Superior Court for the County of San Francisco, respectively. Some of the private cases include allegations of several distinct purported classes, including consumers who purchased a product through Amazon’s stores and consumers who purchased a product offered by Amazon through another e-commerce retailer. The complaints seek billions of dollars of alleged damages, treble damages, punitive damages, injunctive relief, civil penalties, attorneys’ fees, and costs. The Federal Trade Commission and a number of state Attorneys General filed a similar lawsuit in September 2023 in the W.D. Wash. alleging violations of federal antitrust and state antitrust and consumer protection laws. That complaint alleges, among other things, that Amazon has a monopoly in markets for online superstores and marketplace services, and unlawfully maintains those monopolies through anticompetitive practices relating to our pricing policies, advertising practices, the structure of Prime, and promotion of our own products on our website. The complaint seeks injunctive and structural relief, an unspecified amount of damages, and costs. In May 2024, the Attorney General of Arizona filed a complaint in the Superior Court of Arizona in Maricopa County alleging that Amazon’s practices related to pricing and the Featured Offers in its stores violate state antitrust and consumer protection laws. That complaint also seeks injunctive relief, an unspecified amount of damages, civil penalties, and costs. Amazon’s motions to dismiss were granted in part and denied in part in Frame-Wilson in March 2022 and March 2023, De Coster v. Amazon.com, Inc. (W.D. Wash.) in January 2023, and the California Attorney General’s lawsuit in March 2023. All three courts dismissed claims alleging that Amazon’s pricing policies are inherently illegal and denied dismissal of claims alleging that Amazon’s pricing policies are an unlawful restraint of trade. In March 2022, the DC Superior Court dismissed the DC Attorney General’s lawsuit in its entirety; the dismissal is under appeal. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters.
In March 2024, R2 Semiconductor Inc. filed a complaint against Amazon Web Services EMEA SARL in the Düsseldorf Regional Court in Germany. The complaint alleges, among other things, that use of certain Intel processors by AWS EC2 instances infringes European Patent No. 3,376,653 B1, entitled “Over Voltage Protection of a Switching Converter.” The complaint seeks an injunction, an unspecified amount of damages, and other relief. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.
In addition, we are regularly subject to claims, litigation, and other proceedings, including potential regulatory proceedings, involving patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, privacy and data protection, consumer protection, commercial disputes, goods and services offered by us and by third parties, and other matters.
The outcomes of our legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. We evaluate, on a regular basis, developments in our legal proceedings and other contingencies that could affect the amount of liability, including amounts in excess of any previous accruals and reasonably possible losses disclosed, and make adjustments and changes to our accruals and disclosures as appropriate. For the matters we disclose that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. Until the final resolution of such matters, if any of our estimates and assumptions change or prove to have been incorrect, we may experience losses in excess of the
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amounts recorded, which could have a material effect on our business, consolidated financial position, results of operations, or cash flows.
See also “Note 7 — Income Taxes.”
Note 5 — DEBT
As of June 30, 2024, we had $62.5 billion of unsecured senior notes outstanding (the “Notes”) and $183 million of borrowings under our secured revolving credit facility. Our total long-term debt obligations are as follows (in millions):
Maturities (1)Stated Interest RatesEffective Interest RatesDecember 31, 2023June 30, 2024
2014 Notes issuance of $6.0 billion
2024 - 2044
3.80% - 4.95%
3.90% - 5.12%
4,000 4,000 
2017 Notes issuance of $17.0 billion
2024 - 2057
2.80% - 5.20%
2.95% - 4.33%
15,000 15,000 
2020 Notes issuance of $10.0 billion
2025 - 2060
0.80% - 2.70%
0.88% - 2.77%
9,000 9,000 
2021 Notes issuance of $18.5 billion
2026 - 2061
1.00% - 3.25%
1.14% - 3.31%
17,500 15,000 
April 2022 Notes issuance of $12.8 billion
2025 - 2062
3.00% - 4.10%
3.13% - 4.15%
12,750 11,250 
December 2022 Notes issuance of $8.3 billion
2024 - 2032
4.55% - 4.70%
4.61% - 4.83%
8,250 8,250 
Credit Facility682 183 
Total face value of long-term debt67,182 62,683 
Unamortized discount and issuance costs, net(374)(365)
Less: current portion of long-term debt(8,494)(7,429)
Long-term debt$58,314 $54,889 
___________________
(1) The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, and December 2022 Notes were 11.1, 13.6, 17.0, 14.7, 13.4, and 4.4 years as of June 30, 2024. The combined weighted-average remaining life of the Notes was 12.9 years as of June 30, 2024.
Interest on the Notes is payable semi-annually in arrears. We may redeem the Notes at any time in whole, or from time to time, in part at specified redemption prices. We are not subject to any financial covenants under the Notes. The estimated fair value of the Notes was approximately $60.6 billion and $54.5 billion as of December 31, 2023 and June 30, 2024, which is based on quoted prices for our debt as of those dates.
As of June 30, 2024, we had a $240 million secured revolving credit facility with a lender that was secured by certain seller receivables, which we decreased from $1.5 billion to $352 million in March 2024 and further decreased to $240 million in May 2024 (the “Credit Facility”). The Credit Facility bore interest based on the daily Secured Overnight Financing Rate plus 1.25%, and had a commitment fee of up to 0.45% on the undrawn portion. There were $682 million and $183 million of borrowings outstanding under the Credit Facility as of December 31, 2023 and June 30, 2024, which had an interest rate of 6.6%. We reclassified all of the $352 million outstanding as of March 31, 2024 to be included with the current portion of long-term debt within “Accrued expenses and other” on our consolidated balance sheets. As of December 31, 2023 and June 30, 2024, we had pledged $806 million and $290 million of our cash and seller receivables as collateral for debt related to our Credit Facility. The estimated fair value of the Credit Facility, which was based on Level 2 inputs, approximated its carrying value as of December 31, 2023 and June 30, 2024. In July 2024, we repaid outstanding borrowings and terminated the Credit Facility.
In January 2023, we entered into an $8.0 billion unsecured 364-day term loan with a syndicate of lenders (the “Term Loan”), maturing in January 2024 and bearing interest at the Secured Overnight Financing Rate specified in the Term Loan plus 0.75%. The Term Loan was classified as short-term debt and included within “Accrued expenses and other” on our consolidated balance sheets. As of December 31, 2023, the entire amount of the Term Loan had been repaid.
We have U.S. Dollar and Euro commercial paper programs (the “Commercial Paper Programs”) under which we may from time to time issue unsecured commercial paper up to a total of $20.0 billion (including up to €3.0 billion) at the date of issue, with individual maturities that may vary but will not exceed 397 days from the date of issue. There were no borrowings outstanding under the Commercial Paper Programs as of December 31, 2023 and June 30, 2024. We use the net proceeds from the issuance of commercial paper for general corporate purposes.
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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 if approved by the lenders. The interest rate applicable to outstanding balances under the Credit Agreement is the applicable benchmark rate specified in the Credit Agreement plus 0.45%, with a commitment fee of 0.03% on the undrawn portion of the credit facility. There were no borrowings outstanding under the Credit Agreement as of December 31, 2023 and June 30, 2024.
We have a $5.0 billion unsecured 364-day revolving credit facility with a syndicate of lenders (the “Short-Term Credit Agreement”), which matures in October 2024 and may be extended for one additional period of 364 days if approved by the lenders. The interest rate applicable to outstanding balances under the Short-Term Credit Agreement is the Secured Overnight Financing Rate specified in the Short-Term Credit Agreement plus 0.45%, with a commitment fee of 0.03% on the undrawn portion. There were no borrowings outstanding under the Short-Term Credit Agreement as of December 31, 2023 and June 30, 2024.
We also utilize other short-term credit facilities for working capital purposes. There were $147 million and $76 million of borrowings outstanding under these facilities as of December 31, 2023 and June 30, 2024, which were included in “Accrued expenses and other” on our consolidated balance sheets. In addition, we had $7.8 billion of unused letters of credit as of June 30, 2024.
Note 6 — STOCKHOLDERS’ EQUITY
Stock Repurchase Activity
In March 2022, the Board of Directors authorized a program to repurchase up to $10.0 billion of our common stock, with no fixed expiration. There were no repurchases of our common stock during the six months ended June 30, 2023 or 2024. As of June 30, 2024, we have $6.1 billion remaining under the repurchase program.
Stock Award Plans
Employees vest in restricted stock unit awards over the corresponding service term, generally between two and five years. The majority of restricted stock unit awards are granted at the date of hire or in Q2 as part of the annual compensation review and primarily vest semi-annually in Q2 and Q4 of the relevant compensation year.
Stock Award Activity
Common shares outstanding plus shares underlying outstanding stock awards totaled 10.8 billion and 10.9 billion as of December 31, 2023 and June 30, 2024. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. Stock-based compensation expense is as follows (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202420232024
Cost of sales$251 $266 $416 $440 
Fulfillment932 944 1,535 1,580 
Technology and infrastructure4,043 3,670 6,617 6,442 
Sales and marketing1,303 1,224 2,296 2,156 
General and administrative598 618 1,011 1,065 
Total stock-based compensation expense$7,127 $6,722 $11,875 $11,683 
The following table summarizes our restricted stock unit activity for the six months ended June 30, 2024 (in millions):
Number of UnitsWeighted-Average
Grant-Date
Fair Value
Outstanding as of December 31, 2023405.8 $125 
Units granted105.0 180 
Units vested(107.3)132 
Units forfeited(23.0)130 
Outstanding as of June 30, 2024380.5 138 
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Scheduled vesting for outstanding restricted stock units as of June 30, 2024, is as follows (in millions):
 Six Months Ended December 31,Year Ended December 31,  
 20242025202620272028ThereafterTotal
Scheduled vesting — restricted stock units104.4 149.3 88.7 28.8 6.1 3.2 380.5 
As of June 30, 2024, there was $22.1 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on an accelerated basis with more than half of the compensation expected to be expensed in the next twelve months, and has a remaining weighted-average recognition period of 1.0 year. The estimated forfeiture rate as of December 31, 2023 and June 30, 2024 was 26.1% and 25.8%.
Changes in Stockholders’ Equity
The following table shows changes in stockholders’ equity (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202420232024
Total beginning stockholders’ equity$154,526 $216,661 $146,043 $201,875 
Beginning common stock108 109 108 109 
Stock-based compensation and issuance of employee benefit plan stock 1  1 
Ending common stock108 110 108 110 
Beginning and ending treasury stock(7,837)(7,837)(7,837)(7,837)
Beginning additional paid-in capital79,863 103,938 75,066 99,025 
Stock-based compensation and issuance of employee benefit plan stock7,033 6,695 11,830 11,608 
Ending additional paid-in capital86,896 110,633 86,896 110,633 
Beginning accumulated other comprehensive income (loss)(3,973)(3,598)(4,487)(3,040)
Other comprehensive income (loss)293 (395)807 (953)
Ending accumulated other comprehensive income (loss)(3,680)(3,993)(3,680)(3,993)
Beginning retained earnings86,365 124,049 83,193 113,618 
Net income6,750 13,485 9,922 23,916 
Ending retained earnings93,115 137,534 93,115 137,534 
Total ending stockholders’ equity$168,602 $236,447 $168,602 $236,447 
Note 7 — INCOME TAXES
Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.
Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, changes in how we do business, acquisitions, investments, developments in tax controversies, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, foreign currency gains (losses), changes in statutes, regulations, case law, and administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax benefits are not recognized. Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax
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income is lower. In addition, we record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions.
For 2024, we estimate that our effective tax rate will be favorably impacted by the U.S. federal research and development credit and foreign income deduction and adversely affected by state income taxes. In addition, valuation gains and losses from our equity investment in Rivian impact our pre-tax income and may cause variability in our effective tax rate.
Our income tax provision for the six months ended June 30, 2023 was $1.8 billion, which included $306 million of net discrete tax benefits, consisting of $805 million resulting from a change in the estimated qualifying expenditures associated with our 2022 U.S. federal R&D credit and a related increase in our foreign income deduction tax benefit, partially offset by discrete tax expense related to shortfalls from stock-based compensation. Our income tax provision for the six months ended June 30, 2024 was $4.2 billion, which included $1.9 billion of net discrete tax benefits primarily attributable to excess tax benefits from stock-based compensation.
Cash paid for income taxes, net of refunds was $3.7 billion and $5.7 billion in Q2 2023 and Q2 2024, and $4.4 billion and $6.2 billion for the six months ended June 30, 2023 and 2024.
As of December 31, 2023 and June 30, 2024, income tax contingencies were approximately $5.2 billion and $5.6 billion. Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax contingencies. Due to various factors, including the inherent complexities and uncertainties of the judicial, administrative, and regulatory processes in certain jurisdictions, the timing of the resolution of income tax controversies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next twelve months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax controversies in one or more jurisdictions. These assessments or settlements could result in changes to our contingencies related to positions on prior years’ tax filings.
We are under examination, or may be subject to examination, by the Internal Revenue Service for the calendar year 2016 and thereafter. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating losses with respect to years under examination as well as subsequent periods.
We are also subject to taxation in various states and other foreign jurisdictions including China, France, Germany, India, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities in respect of these particular jurisdictions primarily for 2011 and thereafter. We are currently disputing tax assessments in multiple jurisdictions, including with respect to the allocation and characterization of income.
In September 2022, the Luxembourg tax authority (“LTA”) denied the tax basis of certain intangible assets that we distributed from Luxembourg to the U.S. in 2021. When we are assessed by the LTA, we will need to remit taxes related to this matter. We believe the LTA’s position is without merit, we intend to defend ourselves vigorously in this matter, and we expect to recoup taxes paid.
The Indian tax authority (“ITA”) has asserted that tax applies to cloud services fees paid to Amazon in the U.S. We will need to remit taxes related to this matter until it is resolved, which payments could be significant in the aggregate. We believe the ITA’s position is without merit, we are defending our position vigorously, and we expect to recoup taxes paid. If this matter is adversely resolved, we could recognize significant additional tax expense, including for taxes previously paid. 
Note 8 — 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 infrastructure,” “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 costs recorded in “Technology and infrastructure” are incurred in the U.S. and are included in our North America and AWS segments. The majority of infrastructure costs recorded in “Technology and infrastructure” are allocated to the AWS segment based on usage. There are no internal revenue transactions between our reportable segments. Our chief operating decision maker (“CODM”) regularly reviews consolidated net sales, consolidated operating expenses, and consolidated operating income (loss) by segment. Amounts included in consolidated operating expenses include “Cost of sales,” “Fulfillment,” “Technology and infrastructure,” “Sales and marketing,” “General and administrative,” and “Other operating expense (income), net.” Our CODM manages our business by reviewing annual forecasts and consolidated results by segment on a quarterly basis.
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North America
The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services 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 advertising and subscription services 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 is as follows (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202420232024
North America
Net sales$82,546 $90,033 $159,427 $176,374 
Operating expenses79,335 84,968 155,318 166,326 
Operating income$3,211 $5,065 $4,109 $10,048 
International
Net sales$29,697 $31,663 $58,820 $63,598 
Operating expenses30,592 31,390 60,962 62,422 
Operating income (loss)$(895)$273 $(2,142)$1,176 
AWS
Net sales$22,140 $26,281 $43,494 $51,318 
Operating expenses16,775 16,947 33,006 32,563 
Operating income$5,365 $9,334 $10,488 $18,755 
Consolidated
Net sales$134,383 $147,977 $261,741 $291,290 
Operating expenses126,702 133,305 249,286 261,311 
Operating income7,681 14,672 12,455 29,979 
Total non-operating income (expense)(118)573 (773)(1,751)
Provision for income taxes(804)(1,767)(1,752)(4,234)
Equity-method investment activity, net of tax(9)7 (8)(78)
Net income$6,750 $13,485 $9,922 $23,916 
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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,
2023202420232024
Net Sales:
Online stores (1)$52,966 $55,392 $104,062 $110,062 
Physical stores (2)5,024 5,206 9,919 10,408 
Third-party seller services (3)32,332 36,201 62,152 70,797 
Advertising services (4)10,683 12,771 20,192 24,595 
Subscription services (5)9,894 10,866 19,551 21,588 
AWS22,140 26,281 43,494 51,318 
Other (6)1,344 1,260 2,371 2,522 
Consolidated$134,383 $147,977 $261,741 $291,290 
____________________________
(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 media content 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 sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.
(5)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.
(6)Includes sales related to various other offerings, such as health care services, certain licensing and distribution of video content, and shipping services, and our co-branded credit card agreements.
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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding guidance, industry prospects, or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results and outcomes could differ materially for a variety of reasons, including, among others, fluctuations in foreign exchange rates, changes in global economic conditions and customer demand and spending, inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of claims, litigation, government investigations, and other proceedings, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, variability in demand, the degree to which we enter into, maintain, and develop commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity. In addition, global economic and geopolitical conditions and additional or unforeseen circumstances, developments, or events may give rise to or amplify many of these risks. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results or outcomes to differ significantly from management’s expectations, are described in greater detail in Item 1A of Part II, “Risk Factors.”
For additional information, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” of our 2023 Annual Report on Form 10-K.
Critical Accounting Estimates
The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the Company. Based on this definition, we have identified the critical accounting estimates addressed below. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results. For additional information, see Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures” of our 2023 Annual Report on Form 10-K and Item 1 of Part I, “Financial Statements — Note 1 — Accounting Policies and Supplemental Disclosures,” of this Form 10-Q. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.
Inventories
Inventories, consisting of products available for sale, are primarily accounted for using the first-in first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. These assumptions about future disposition of inventory are inherently uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future. As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of June 30, 2024, we would have recorded an additional cost of sales of approximately $360 million.
In addition, we enter into supplier commitments for certain electronic device components and certain products. These commitments are based on forecasted customer demand. If we reduce these commitments, we may incur additional costs.
Income Taxes
We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Tax laws, regulations, administrative practices, principles, and interpretations in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. There are many transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. In addition, our actual and forecasted earnings are subject to
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change due to economic, political, and other conditions and significant judgment is required in determining our ability to use our deferred tax assets.
Our effective tax rates could be affected by numerous factors, such as changes in our business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, the relative amount of our foreign earnings, including earnings being lower than anticipated in jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates, losses incurred in jurisdictions for which we are not able to realize related tax benefits, the applicability of special tax regimes, changes in foreign exchange rates, changes in our stock price, changes to our forecasts of income and loss and the mix of jurisdictions to which they relate, changes in our deferred tax assets and liabilities and their valuation, changes in the laws, regulations, administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions. In addition, a number of countries have enacted or are actively pursuing changes to their tax laws applicable to corporate multinationals.
We are also currently subject to tax controversies in various jurisdictions, and these jurisdictions may assess additional income tax liabilities against us. Developments in an audit, investigation, or other tax controversy could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods. We regularly assess the likelihood of an adverse outcome resulting from these proceedings to determine the adequacy of our tax accruals. Although we believe our tax estimates are reasonable, the final outcome of audits, investigations, and any other tax controversies could be materially different from our historical income tax provisions and accruals.
Liquidity and Capital Resources
Cash flow information is as follows (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
Twelve Months Ended
June 30,
202320242023202420232024
Cash provided by (used in):
Operating activities$16,476 $25,281 $21,264 $44,270 $61,841 $107,952 
Investing activities(9,673)(22,138)(25,479)(40,000)(51,908)(64,354)
Financing activities(6,539)(4,490)(185)(5,746)2,917 (21,440)
Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $86.8 billion and $89.1 billion as of December 31, 2023 and June 30, 2024. Amounts held in foreign currencies were $23.5 billion and $18.4 billion as of December 31, 2023 and June 30, 2024. Our foreign currency balances include British Pounds, Canadian Dollars, Euros, Indian Rupees, and Japanese Yen.
Cash provided by (used in) operating activities was $16.5 billion and $25.3 billion for Q2 2023 and Q2 2024, and $21.3 billion and $44.3 billion for the six months ended June 30, 2023 and 2024. Our operating cash flows result primarily from cash received from our consumer, seller, developer, enterprise, and content creator customers, and advertisers, offset by cash payments we make for products and services, employee compensation, payment processing and related transaction costs, operating leases, and interest payments. Cash received from our customers and other activities generally corresponds to our net sales. The increase in operating cash flow for the trailing twelve months ended June 30, 2024, compared to the comparable prior year period, was due to an increase in net income, excluding non-cash expenses, and changes in working capital. Working capital at any specific point in time is subject to many variables, including variability in demand, inventory management and category expansion, the timing of cash receipts and payments, customer and vendor payment terms, and fluctuations in foreign exchange rates.
Cash provided by (used in) investing activities corresponds with cash capital expenditures, including leasehold improvements, incentives received from property and equipment vendors, proceeds from asset sales, cash outlays for acquisitions, investments in other companies and intellectual property rights, and purchases, sales, and maturities of marketable securities. Cash provided by (used in) investing activities was $(9.7) billion and $(22.1) billion for Q2 2023 and Q2 2024, and $(25.5) billion and $(40.0) billion for the six months ended June 30, 2023 and 2024, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures. Cash capital expenditures were $10.4 billion and $16.4 billion during Q2 2023 and Q2 2024, and $23.5 billion and $30.3 billion for the six months ended June 30, 2023 and 2024, which primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth) and in additional capacity to support our fulfillment network. We expect cash capital expenditures to meaningfully increase in 2024, primarily driven by investments in technology infrastructure. We made cash payments, net of acquired cash, related to acquisition and other investment activity of $316 million and $571 million during Q2 2023 and Q2 2024, and $3.8 billion and $3.9 billion for the six months ended June 30, 2023 and 2024. We funded the acquisition of 1Life
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Healthcare, Inc. (One Medical) in 2023 with cash on hand. In Q3 2023, we invested $1.25 billion in a convertible note from Anthropic. In Q1 2024, we invested $2.75 billion in a second convertible note.
Cash provided by (used in) financing activities was $(6.5) billion and $(4.5) billion for Q2 2023 and Q2 2024, and $(185) million and $(5.7) billion for the six months ended June 30, 2023 and 2024. Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term debt of $4.4 billion and $525 million for Q2 2023 and Q2 2024, and $17.2 billion and $863 million for the six months ended June 30, 2023 and 2024. Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $10.9 billion and $5.0 billion in Q2 2023 and Q2 2024, and $17.4 billion and $6.6 billion for the six months ended June 30, 2023 and 2024. Property and equipment acquired under finance leases was $240 million and $181 million during Q2 2023 and Q2 2024, and $248 million and $223 million for the six months ended June 30, 2023 and 2024.
We had no borrowings outstanding under the two unsecured revolving credit facilities or the commercial paper programs, and we had $183 million of borrowings outstanding under our Credit Facility as of June 30, 2024. See Item 1 of Part I, “Financial Statements — Note 5 — Debt” for additional information.
Certain foreign subsidiary earnings and losses are subject to current U.S. taxation and the subsequent repatriation of those earnings is not subject to tax in the U.S. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts.
Our U.S. taxable income is reduced by accelerated depreciation deductions and increased by the impact of capitalized research and development expenses. U.S. tax rules provide for enhanced accelerated depreciation deductions by allowing us to expense a portion of qualified property, primarily equipment. These enhanced deductions are scheduled to phase out annually from 2023 through 2026. Additionally, effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes, which delays the deductibility of these expenses. Cash paid for U.S. (federal and state) and foreign income taxes (net of refunds) totaled $3.7 billion and $5.7 billion for Q2 2023 and Q2 2024, and $4.4 billion and $6.2 billion for the six months ended June 30, 2023 and 2024.
As of December 31, 2023 and June 30, 2024, restricted cash, cash equivalents, and marketable securities were $503 million and $495 million. See Item 1 of Part I, “Financial Statements — Note 4 — Commitments and Contingencies” and “Financial Statements — Note 5 — Debt” for additional discussion of our principal contractual commitments, as well as our pledged assets. Additionally, we have purchase obligations and open purchase orders, including for inventory and capital expenditures, that support normal operations and are primarily due in the next twelve months. These purchase obligations and open purchase orders are generally cancellable in full or in part through the contractual provisions.
We believe that cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, as well as our borrowing arrangements, will be sufficient to meet our anticipated operating cash needs for at least the next twelve months. However, any projections of future cash needs and cash flows are subject to substantial uncertainty. See Item 1A of Part II, “Risk Factors.” We continually evaluate opportunities to sell additional equity or debt securities, obtain credit facilities, obtain finance and operating lease arrangements, enter into financing obligations, repurchase common stock, pay dividends, or repurchase, refinance, or otherwise restructure our debt for strategic reasons or to further strengthen our financial position.
The sale of additional equity or convertible debt securities would be dilutive to our shareholders. In addition, we will, from time to time, consider the acquisition of, or investment in, complementary businesses, products, services, capital infrastructure, and technologies, which might affect our liquidity requirements or cause us to secure additional financing, or issue additional equity or debt securities. There can be no assurance that additional credit lines or financing instruments will be available in amounts or on terms acceptable to us, if at all. In addition, economic conditions and actions by policymaking bodies are contributing to changing interest rates and significant capital market volatility, which, along with any increases in our borrowing levels, could increase our future borrowing costs.
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Results of Operations
We have organized our operations into three segments: North America, International, and AWS. These segments reflect the way the Company evaluates its business performance and manages its operations. See Item 1 of Part I, “Financial Statements — Note 8 — Segment Information.”
Overview
Macroeconomic factors, including inflation, increased interest rates, significant capital market and supply chain volatility, and global economic and geopolitical developments, have direct and indirect impacts on our results of operations that are difficult to isolate and quantify. In addition, changes in fuel, utility, and food costs, interest rates, and economic outlook may impact customer demand and our ability to forecast consumer spending patterns. We expect some or all of these factors to continue to impact our operations into Q3 2024.
Net Sales
Net sales include product and service sales. Product sales represent revenue from the sale of products and related shipping fees and digital media content where we record revenue gross. Service sales primarily represent third-party seller fees, which includes commissions and any related fulfillment and shipping fees, AWS sales, advertising services, Amazon Prime membership fees, and certain digital media content subscriptions. Net sales information is as follows (in millions):
  
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202420232024
Net Sales:
North America$82,546 $90,033 $159,427 $176,374 
International29,697 31,663 58,820 63,598 
AWS22,140 26,281 43,494 51,318 
Consolidated$134,383 $147,977 $261,741 $291,290 
Year-over-year Percentage Growth:
North America11 %%11 %11 %
International10 
AWS12