Item 1. Financial Statements

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Item 1. Financial Statements

AMAZON.COM, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	Three Months Ended March 31,			Twelve Months Ended March 31,
		2023		2024		2023		2024
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD		$	54,253	$	73,890	$	36,599	$	49,734
OPERATING ACTIVITIES:
Net income		3,172		10,431		4,294		37,684
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 other		11,123		11,684		43,851		49,224
Stock-based compensation		4,748		4,961		21,119		24,236

Non-operating expense (income), net		534		2,734		8,811		1,452
Deferred income taxes		(472)		(938)		(6,619)		(6,342)
Changes in operating assets and liabilities:
Inventories		371		1,776		393		2,854
Accounts receivable, net and other		4,724		3,684		(4,361)		(9,388)
Other assets		(3,203)		(2,701)		(14,499)		(11,763)
Accounts payable		(11,264)		(11,282)		1,061		5,455
Accrued expenses and other		(5,763)		(2,928)		(1,418)		407
Unearned revenue		818		1,568		1,698		5,328
Net cash provided by (used in) operating activities		4,788		18,989		54,330		99,147
INVESTING ACTIVITIES:
Purchases of property and equipment		(14,207)		(14,925)		(62,901)		(53,447)
Proceeds from property and equipment sales and incentives		1,137		990		5,252		4,449
Acquisitions, net of cash acquired, non-marketable investments, and other		(3,513)		(3,354)		(5,488)		(5,680)
Sales and maturities of marketable securities		1,115		1,392		9,963		5,904
Purchases of marketable securities		(338)		(1,965)		(1,139)		(3,115)
Net cash provided by (used in) investing activities		(15,806)		(17,862)		(54,313)		(51,889)
FINANCING ACTIVITIES:
Common stock repurchased		—		—		(3,334)		—
Proceeds from short-term debt, and other		12,780		338		40,590		5,687
Repayments of short-term debt, and other		(3,603)		(404)		(34,926)		(22,478)
Proceeds from long-term debt		—		—		21,166		—
Repayments of long-term debt		(1,386)		(330)		(2,644)		(2,620)
Principal repayments of finance leases		(1,380)		(770)		(6,544)		(3,774)
Principal repayments of financing obligations		(57)		(90)		(226)		(304)
Net cash provided by (used in) financing activities		6,354		(1,256)		14,082		(23,489)
Foreign currency effect on cash, cash equivalents, and restricted cash		145		(429)		(964)		(171)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(4,519)		(558)		13,135		23,598
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD		$	49,734	$	73,332	$	49,734	$	73,332

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 March 31,
		2023		2024
Net product sales		$	56,981	$	60,915
Net service sales		70,377		82,398
Total net sales		127,358		143,313
Operating expenses:
Cost of sales		67,791		72,633
Fulfillment		20,905		22,317
Technology and infrastructure		20,450		20,424
Sales and marketing		10,172		9,662
General and administrative		3,043		2,742
Other operating expense (income), net		223		228
Total operating expenses		122,584		128,006
Operating income		4,774		15,307
Interest income		611		993
Interest expense		(823)		(644)
Other income (expense), net		(443)		(2,673)
Total non-operating expense		(655)		(2,324)
Income before income taxes		4,119		12,983
Provision for income taxes		(948)		(2,467)
Equity-method investment activity, net of tax		1		(85)
Net income		$	3,172	$	10,431
Basic earnings per share		$	0.31	$	1.00
Diluted earnings per share		$	0.31	$	0.98
Weighted-average shares used in computation of earnings per share:
Basic		10,250		10,393
Diluted		10,347		10,670

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 March 31,
		2023		2024
Net income		$	3,172	$	10,431
Other comprehensive income (loss):

Foreign currency translation adjustments, net of tax of $(10) and $30		386		(1,096)



Available-for-sale debt securities:
Change in net unrealized gains (losses), net of tax of $(29) and $(158)		95		536

Less: reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $(10) and $0		33		1

Net change		128		537
Other, net of tax of $0 and $(1)		—		1
Total other comprehensive income (loss)		514		(558)
Comprehensive income		$	3,686	$	9,873

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, 2023		March 31, 2024
			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	73,387	$	72,852
Marketable securities	13,393		12,222
Inventories	33,318		31,147
Accounts receivable, net and other	52,253		47,768
Total current assets	172,351		163,989
Property and equipment, net	204,177		209,950
Operating leases	72,513		73,313
Goodwill	22,789		22,770
Other assets	56,024		60,947
Total assets	$	527,854	$	530,969
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	84,981	$	73,068
Accrued expenses and other	64,709		63,970
Unearned revenue	15,227		15,927
Total current liabilities	164,917		152,965
Long-term lease liabilities	77,297		77,052
Long-term debt	58,314		57,634
Other long-term liabilities	25,451		26,657
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 10,918 shares issued; 10,383 and 10,403 shares outstanding)	109		109
Treasury stock, at cost	(7,837)		(7,837)
Additional paid-in capital	99,025		103,938
Accumulated other comprehensive income (loss)	(3,040)		(3,598)
Retained earnings	113,618		124,049
Total stockholders’ equity	201,875		216,661
Total liabilities and stockholders’ equity	$	527,854	$	530,969

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 Q1 2024, based on servers that were included in “Property and equipment, net” as of December 31, 2023 and those acquired during the three months ended March 31, 2024, was a reduction in depreciation and amortization expense of $897 million and a benefit to net income of $695 million, or $0.07 per basic share and $0.07 per diluted share.

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Supplemental Cash Flow Information

The following table shows supplemental cash flow information (in millions):


	Three Months Ended March 31,				Twelve Months Ended March 31,
	2023		2024			2023		2024
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt, net of capitalized interest	$	402	$	269		$	1,684	$	2,475
Cash paid for operating leases	2,467		3,332			8,733		11,318
Cash paid for interest on finance leases	81		74			348		301
Cash paid for interest on financing obligations	59		64			208		201
Cash paid for income taxes, net of refunds	619		458			6,201		11,018
Assets acquired under operating leases	3,626		3,753			20,251		14,179
Property and equipment acquired under finance leases, net of remeasurements and modifications	8		42			517		676
Property and equipment recognized during the construction period of build-to-suit lease arrangements	131		37			1,953		263
Property and equipment derecognized after the construction period of build-to-suit lease arrangements, with the associated leases recognized as operating	720		—			5,845		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 March 31,
	2023	2024
Shares used in computation of basic earnings per share	10,250	10,393
Total dilutive effect of outstanding stock awards	97	277
Shares used in computation of diluted earnings per share	10,347	10,670

Other Income (Expense), Net

“Other income (expense), net” is as follows (in millions):


	Three Months Ended March 31,
	2023		2024
Marketable equity securities valuation gains (losses)	$	(480)	$	(2,126)
Equity warrant valuation gains (losses)	59		(230)
Upward adjustments relating to equity investments in private companies	16		5
Foreign currency gains (losses)	70		(74)
Other, net	(108)		(248)
Total other income (expense), net	(443)		(2,673)

Included in “Other income (expense), net” is a marketable equity securities valuation gain (loss) of $(467) million and $(2.0) billion in Q1 2023 and Q1 2024, from our equity investment in Rivian Automotive, Inc. (“Rivian”). As of March 31, 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 in “Marketable securities” on our consolidated balance sheets, and had a fair value of $3.7 billion and $1.7 billion as of December 31, 2023 and March 31, 2024.

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Required summarized financial information of Rivian as disclosed in its most recent SEC filings is as follows (in millions):


	Twelve Months Ended December 31,
	2022		2023
Revenues	$	1,658	$	4,434
Gross profit	(3,123)		(2,030)
Loss from operations	(6,856)		(5,739)
Net loss	(6,752)		(5,432)

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 March 31, 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 March 31, 2024, customer receivables, net, were $34.1 billion and $31.8 billion, vendor receivables, net, were $8.5 billion and $6.7 billion, seller receivables, net, were $1.0 billion and $0.6 billion, and other receivables, net, were $3.3 billion and $3.1 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 $5.6 billion as of December 31, 2023 and March 31, 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 March 31, 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 March 31, 2024 were $17.4 billion and $17.9 billion. Total video and music expense was $4.0 billion and $4.6 billion in Q1 2023 and Q1 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 $6.1 billion was recognized as revenue during the three months ended March 31, 2024. Included in “Other long-term liabilities” on our consolidated balance sheets was $5.7 billion and $6.4 billion of unearned revenue as of December 31, 2023 and March 31, 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 $157.7 billion as of March 31, 2024. The weighted-average remaining life of our long-term contracts is 4.1 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 March 31, 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, 2023		March 31, 2024
	Total Estimated Fair Value		Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Total Estimated Fair Value
Cash	$	11,706	$	11,633	$	—	$	—	$	11,633
Level 1 securities:
Money market funds	39,160		28,676		—		—		28,676
Equity securities (1)	4,658								2,575
Level 2 securities:
Foreign government and agency securities	505		19		—		—		19
U.S. government and agency securities	1,699		2,641		1		(89)		2,553
Corporate debt securities	27,805		38,636		—		(146)		38,490
Asset-backed securities	1,646		1,554		—		(45)		1,509
Other debt securities	104		102		—		(3)		99

	$	87,283	$	83,261	$	1	$	(283)	$	85,554
Less: Restricted cash, cash equivalents, and marketable securities (2)	(503)								(480)
Total cash, cash equivalents, and marketable securities	$	86,780							$	85,074

(1)The related unrealized gain (loss) recorded in “Other income (expense), net” was $(479) million and $(2.1) billion in Q1 2023 and Q1 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 March 31, 2024 (in millions):


	Amortized Cost		Estimated Fair Value
Due within one year	$	66,539	$	66,481
Due after one year through five years	3,810		3,652
Due after five years through ten years	404		389
Due after ten years	875		824
Total	$	71,628	$	71,346

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 March 31, 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 March 31, 2024, equity investments not accounted for under the equity-method and without readily determinable fair values had a carrying value of $754 million and $801 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, 2023		March 31, 2024
Cash and cash equivalents	$	73,387	$	72,852
Restricted cash included in accounts receivable, net and other	497		474
Restricted cash included in other assets	6		6
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	73,890	$	73,332

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 $60.9 billion as of December 31, 2023 and March 31, 2024. Accumulated amortization associated with finance leases was $44.7 billion and $44.0 billion as of December 31, 2023 and March 31, 2024.

Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions):


	Three Months Ended March 31,
	2023		2024
Operating lease cost	$	2,512	$	2,829
Finance lease cost:
Amortization of lease assets	1,546		941
Interest on lease liabilities	80		73
Finance lease cost	1,626		1,014

Variable lease cost	518		635
Total lease cost	$	4,656	$	4,478

Other information about lease amounts recognized in our consolidated financial statements is as follows:


	December 31, 2023		March 31, 2024
Weighted-average remaining lease term – operating leases	11.3 years		11.2 years
Weighted-average remaining lease term – finance leases	11.9 years		12.0 years
Weighted-average discount rate – operating leases	3.3	%	3.3	%
Weighted-average discount rate – finance leases	2.7	%	2.8	%

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Our lease liabilities were as follows (in millions):


	December 31, 2023
	Operating Leases		Finance Leases		Total
Gross lease liabilities	$	90,777	$	14,106	$	104,883
Less: imputed interest	(15,138)		(1,997)		(17,135)
Present value of lease liabilities	75,639		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


	March 31, 2024
	Operating Leases		Finance Leases		Total
Gross lease liabilities	$	91,419	$	13,262	$	104,681
Less: imputed interest	(15,400)		(2,022)		(17,422)
Present value of lease liabilities	76,019		11,240		87,259
Less: current portion of lease liabilities	(8,581)		(1,626)		(10,207)
Total long-term lease liabilities	$	67,438	$	9,614	$	77,052

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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 March 31, 2024 (in millions):


	Nine Months Ended December 31,		Year Ended December 31,
	2024		2025		2026		2027		2028		Thereafter		Total
Long-term debt principal and interest	$	10,335	$	7,011	$	4,679	$	10,403	$	3,644	$	60,176	$	96,248
Operating lease liabilities	8,202		10,276		9,531		8,708		7,908		46,794		91,419
Finance lease liabilities, including interest	1,478		1,460		1,376		1,156		1,024		6,768		13,262
Financing obligations, including interest (1)	319		466		473		481		488		6,330		8,557
Leases not yet commenced	1,692		2,579		2,712		2,759		2,893		24,187		36,822
Unconditional purchase obligations (2)	7,322		8,278		6,336		4,862		2,341		10,730		39,869
Other commitments (3)	2,690		1,634		1,168		767		689		9,436		16,384
Total commitments	$	32,038	$	31,704	$	26,275	$	29,136	$	18,987	$	164,421	$	302,561

(1)Includes non-cancellable financing obligations for fulfillment network and data center facilities. Excluding interest, current financing obligations of $271 million and $269 million are recorded within “Accrued expenses and other” and $6.6 billion and $6.5 billion are recorded within “Other long-term liabilities” as of December 31, 2023 and March 31, 2024. The weighted-average remaining term of the financing obligations was 17.0 years and 16.7 years and the weighted-average imputed interest rate was 3.1% as of December 31, 2023 and March 31, 2024.

(2)Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content that are not reflected on the consolidated balance sheets, and certain products offered in our Whole Foods Market stores. For those digital media content 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 $5.5 billion of income tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any.

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, as supplemented by the following:

In May 2018, Rensselaer Polytechnic Institute and CF Dynamic Advances LLC filed a complaint against Amazon.com, Inc. in the United States District Court for the Northern District of New York. The complaint alleged, among other things, that “Alexa Voice Software and Alexa enabled devices” infringe U.S. Patent No. 7,177,798, entitled “Natural Language Interface Using Constrained Intermediate Dictionary of Results.” The complaint sought an injunction, an unspecified amount of damages, enhanced damages, an ongoing royalty, interest, attorneys’ fees, and costs. In March 2023, the plaintiffs alleged in

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their damages report that in the event of a finding of liability Amazon could be subject to $140 million to $267 million in damages. In March 2024, the district court granted summary judgment ruling that the patent is invalid and dismissed the case. In April 2024, the plaintiffs filed a notice of appeal. We dispute the allegations of wrongdoing and will continue to defend ourselves vigorously in this matter.

In December 2018, Kove IO, Inc. filed a complaint against Amazon Web Services, Inc. in the United States District Court for the Northern District of Illinois. The complaint alleged, among other things, that Amazon S3 and DynamoDB infringe U.S. Patent Nos. 7,814,170 and 7,103,640, each entitled “Network Distributed Tracking Wire Transfer Protocol”; and 7,233,978, entitled “Method and Apparatus for Managing Location Information in a Network Separate from the Data to Which the Location Information Pertains.” The complaint sought an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief. In April 2024, a jury found that Amazon infringed the asserted patents and awarded Kove $525 million in damages. We disagree with the jury’s findings, intend to appeal the jury verdict, and will continue 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 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 March 31, 2024, we had $66.5 billion of unsecured senior notes outstanding (the “Notes”) and $352 million of borrowings under our secured revolving credit facility. Our total long-term debt obligations are as follows (in millions):


	Maturities (1)	Stated Interest Rates	Effective Interest Rates	December 31, 2023		March 31, 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	2024 - 2061	0.45% - 3.25%	0.57% - 3.31%	17,500		17,500
April 2022 Notes issuance of $12.8 billion	2024 - 2062	2.73% - 4.10%	2.83% - 4.15%	12,750		12,750
December 2022 Notes issuance of $8.3 billion	2024 - 2032	4.55% - 4.70%	4.61% - 4.83%	8,250		8,250
Credit Facility				682		352

Total face value of long-term debt				67,182		66,852
Unamortized discount and issuance costs, net				(374)		(370)
Less: current portion of long-term debt				(8,494)		(8,848)
Long-term debt				$	58,314	$	57,634

(1) The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, and December 2022 Notes were 11.3, 13.9, 17.3, 12.8, 12.0, and 4.6 years as of March 31, 2024. The combined weighted-average remaining life of the Notes was 12.4 years as of March 31, 2024.

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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 $59.4 billion as of December 31, 2023 and March 31, 2024, which is based on quoted prices for our debt as of those dates.

We have a $352 million secured revolving credit facility with a lender that is secured by certain seller receivables, which we decreased from $1.5 billion to $352 million in March 2024 and we may from time to time increase in the future subject to lender approval (the “Credit Facility”). The Credit Facility is available until August 2025, bears interest based on the daily Secured Overnight Financing Rate plus 1.25%, and has a commitment fee of up to 0.45% on the undrawn portion. There were $682 million and $352 million of borrowings outstanding under the Credit Facility as of December 31, 2023 and March 31, 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 March 31, 2024, we have pledged $806 million and $466 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 is based on Level 2 inputs, approximated its carrying value as of December 31, 2023 and March 31, 2024.

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 March 31, 2024. We use the net proceeds from the issuance of commercial paper for general corporate purposes.

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 March 31, 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 March 31, 2024.

We also utilize other short-term credit facilities for working capital purposes. There were $147 million and $50 million of borrowings outstanding under these facilities as of December 31, 2023 and March 31, 2024, which were included in “Accrued expenses and other” on our consolidated balance sheets. In addition, we had $8.5 billion of unused letters of credit as of March 31, 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 three months ended March 31, 2023 or 2024. As of March 31, 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.

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Stock Award Activity

Common shares outstanding plus shares underlying outstanding stock awards totaled 10.8 billion as of December 31, 2023 and March 31, 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 March 31,
	2023		2024
Cost of sales	$	165	$	174
Fulfillment	603		636
Technology and infrastructure	2,574		2,772
Sales and marketing	993		932
General and administrative	413		447
Total stock-based compensation expense	$	4,748	$	4,961

The following table summarizes our restricted stock unit activity for the three months ended March 31, 2024 (in millions):


	Number of Units	Weighted-Average Grant-Date Fair Value
Outstanding as of December 31, 2023	405.8	$	125
Units granted	10.7	166
Units vested	(20.0)	140
Units forfeited	(11.6)	126
Outstanding as of March 31, 2024	384.9	126

Scheduled vesting for outstanding restricted stock units as of March 31, 2024, is as follows (in millions):


	Nine Months Ended December 31,	Year Ended December 31,
	2024	2025	2026	2027	2028	Thereafter	Total
Scheduled vesting — restricted stock units	195.0	122.0	50.1	14.0	2.1	1.7	384.9

As of March 31, 2024, there was $14.7 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 0.9 years. The estimated forfeiture rate as of December 31, 2023 and March 31, 2024 was 26.1%.

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Changes in Stockholders’ Equity

The following table shows changes in stockholders’ equity (in millions):


	Three Months Ended March 31,
	2023		2024
Total beginning stockholders’ equity	$	146,043	$	201,875



Beginning and ending common stock	108		109



Beginning and ending treasury stock	(7,837)		(7,837)

Beginning additional paid-in capital	75,066		99,025
Stock-based compensation and issuance of employee benefit plan stock	4,797		4,913
Ending additional paid-in capital	79,863		103,938

Beginning accumulated other comprehensive income (loss)	(4,487)		(3,040)
Other comprehensive income (loss)	514		(558)
Ending accumulated other comprehensive income (loss)	(3,973)		(3,598)

Beginning retained earnings	83,193		113,618

Net income	3,172		10,431
Ending retained earnings	86,365		124,049

Total ending stockholders’ equity	$	154,526	$	216,661

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 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 three months ended March 31, 2023 was $948 million, which included $48 million of net discrete tax expense. Our income tax provision for the three months ended March 31, 2024 was $2.5 billion, which included $558 million of net discrete tax benefits.

Cash paid for income taxes, net of refunds was $619 million and $458 million in Q1 2023 and Q1 2024.

As of December 31, 2023 and March 31, 2024, income tax contingencies were approximately $5.2 billion and $5.5 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

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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.

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.

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


	Three Months Ended March 31,
		2023		2024
North America
Net sales		$	76,881	$	86,341
Operating expenses		75,983		81,358
Operating income		$	898	$	4,983

International
Net sales		$	29,123	$	31,935
Operating expenses		30,370		31,032
Operating income (loss)		$	(1,247)	$	903

AWS
Net sales		$	21,354	$	25,037
Operating expenses		16,231		15,616
Operating income		$	5,123	$	9,421

Consolidated
Net sales		$	127,358	$	143,313
Operating expenses		122,584		128,006
Operating income		4,774		15,307
Total non-operating expense		(655)		(2,324)
Provision for income taxes		(948)		(2,467)
Equity-method investment activity, net of tax		1		(85)
Net income		$	3,172	$	10,431

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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 March 31,
		2023		2024
Net Sales:
Online stores (1)		$	51,096	$	54,670
Physical stores (2)		4,895		5,202
Third-party seller services (3)		29,820		34,596
Advertising services (4)		9,509		11,824
Subscription services (5)		9,657		10,722
AWS		21,354		25,037
Other (6)		1,027		1,262
Consolidated		$	127,358	$	143,313

(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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