Amazon celebrates net income of $33.4 billion in 2021

Amazon.com, Inc. has announced financial results for its fourth quarter ended December 31, 2021. It has also announced that Prime membership will rise in the US to cover the continued expansion of Prime member benefits as well as the rise in wages and transportation costs.

• Operating cash flow decreased 30% to $46.3 billion for the trailing twelve months, compared with $66.1 billion for the trailing twelve months ended December 31, 2020.
• Free cash flow decreased to an outflow of $9.1 billion for the trailing twelve months, compared with an inflow of $31.0 billion for the trailing twelve months ended December 31, 2020.
• Free cash flow less principal repayments of finance leases and financing obligations decreased to an outflow of $20.4 billion for the trailing twelve months, compared with an inflow of $20.3 billion for the trailing twelve months ended December 31, 2020.
• Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations decreased to an outflow of $14.3 billion for the trailing twelve months, compared with an inflow of $21.4 billion for the trailing twelve months ended December 31, 2020.
• Common shares outstanding plus shares underlying stock-based awards totaled 523 million on December 31, 2021, compared with 518 million one year ago.

Fourth Quarter 2021

• Net sales increased 9% to $137.4 billion in the fourth quarter, compared with $125.6 billion in fourth quarter 2020. Excluding the $1.3 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 10% compared with fourth quarter 2020.
• Operating income decreased to $3.5 billion in the fourth quarter, compared with $6.9 billion in fourth quarter 2020.
• Net income increased to $14.3 billion in the fourth quarter, or $27.75 per diluted share, compared with $7.2 billion, or $14.09 per diluted share, in fourth quarter 2020. Fourth quarter 2021 net income includes a pre-tax valuation gain of $11.8 billion included in non-operating income from our common stock investment in Rivian Automotive, Inc., which completed an initial public offering in November.

Full Year 2021

• Net sales increased 22% to $469.8 billion, compared with $386.1 billion in 2020. Excluding the $3.8 billion favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 21% compared with 2020.
• Operating income increased to $24.9 billion, compared with operating income of $22.9 billion in 2020.
• Net income increased $33.4 billion, or $64.81 per diluted share, compared with net income of $21.3 billion, or $41.83 per diluted share, in 2020.

“A big thank you to employees across Amazon who overcame another quarter of COVID-related challenges and delivered for customers this holiday season. Given the extraordinary growth we saw in 2020 when customers predominantly stayed home, and the fact that we’ve continued to grow on top of that in 2021, our Retail teammates have effectively operated in peak mode for almost two years. It’s been a tremendous effort, and I’m appreciative and proud of how hard our teams have worked to serve customers,” said Andy Jassy, Amazon CEO. “As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron. Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic. When you combine how we’re staffing and scaling our fulfillment network to bring even faster delivery to more customers…there’s a lot to look forward to in the months and years ahead.”

Amazon has also announced it will increase the price of a Prime membership in the U.S., with the monthly fee going from $12.99 to $14.99, and the annual membership from $119 to $139. This is the first time Amazon has raised the price of Prime since 2018. For new Prime members, the price change will go into effect on February 18, 2022, and for current Prime members, the new price will apply after March 25, 2022, on the date of their next renewal.