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Amazon (AMZN) CEO Jeff Bezos steps down as Q4 2020 earnings results come in

As Amazon's Q4 2020 earnings come in, CEO Jeff Bezos will step down from his role and transition to a new Executive Chair position.

Ozzie Mejia

February 2, 2021 1:40 PM

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Amazon posted a record quarter, surpassing $100 billion in revenue for the first time in its history. This is in response to continued demand for online shopping driven by the ongoing COVID-19 pandemic. In an interesting twist, company CEO Jeff Bezos will be stepping down from his current role and will transition to an Executive Chair position.

Amazon (AMZN) Q4 2020 earnings results

Highlights

• Cash
  • Operating cash flow increased 72% to $66.1 billion for Q4 2020 vs. $38.5 billion for Q4 2019.
  • Free cash flow increased to $31.0 billion for Q4 2020 vs. $25.8 billion for Q4 2019.
  • Free cash flow less principal repayments of finance leases and financing obligations at $20.3 billion in Q4 2020 vs. $16.2 billion for Q4 2019.
• Profitability
  • Net sales increased 44% to $125.6 billion for Q4 2020 vs. $87.4 billion for Q4 2019. This excludes the $1.7 billion favorable impact from year-over-year changes in foreign exchange rates.
  • Operating income increased to $6.9 billion for Q4 2020 vs. $3.9 billion for Q4 2019.
  • Net income increased to $7.2 billion, or $14.09 per diluted share, for Q4 2020 vs. $3.3 billion, or $6.47 per diluted share, for Q4 2019.

Summary

The following is taken from the Amazon Investor Relations website:

Amazon is also announcing today that Jeff Bezos will transition to the role of Executive Chair in the third quarter of 2021 and Andy Jassy will become Chief Executive Officer at that time.

"Amazon is what it is because of invention. We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more,” said Jeff Bezos, Amazon founder and CEO. “If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition."

Highlights

• Amazon is monitoring the availability of the COVID-19 vaccine and will seek to advocate for its distribution on behalf of its workers. In the meantime, testing will ramp up in an effort to keep front-line employees safe.
• Amazon announced a new Housing Equity Fund, which will commit $2 billion USD to preserve and create over 20,000 affordable housing units in Washington State's Puget Sound region; Arlington, VA; and Nashville TN.
• Amazon became the world's largest purchaser of renewable energy, reaffirming its commitment to reaching net-zero carbon before 2040.
• The 2020 holiday season was the best ever for independent businesses selling on Amazon. Sales grew over 50 percent year-to-year with sellers surpassing $4.8 billion USD in worldwide sales from Black Friday through Cyber Monday.
• Amazon Pharmacy launched, allowing customers to browse and purchase medications through a secure pharmacy profile. They can also manage their prescriptions through Amazon.
• Amazon Fire TV has reached over 50 million monthly active users. New deals were secured through new streaming providers, like HBO Max, Discovery+, and Xfinity. Netflix is also available to all Echo Show users.
• Amazon Web Services expanded its outreach, thanks to deals with financial service providers like JPMorgan Chase, Itaú Unibanco (Latin America’s largest bank), Standard Chartered Bank, and Nationwide; media and entertainment conglomerates like Metro-Goldwyn-Mayer (MGM), Thomson Reuters, and ViacomCBS; technology companies like Arm and Twitter; travel companies like Boom Technology, Inc. (Boom Supersonic) and Star Alliance (the world’s largest airline alliance); retail giants like Mercado Libre (Latin America’s largest online commerce and payments provider) and Zalando (Europe’s largest online fashion and lifestyle platform); power and utility companies like Siemens Smart Infrastructure (a Siemens AG business group that focuses on energy distribution and intelligent buildings); and automotive groups like The BMW Group.

Outlook

From the Amazon Q4 2020 earnings report:

• Net sales are expected to be between $100.0 billion and $106.0 billion, or to grow between 33% and 40% compared with first quarter 2020. This guidance anticipates a favorable impact of approximately 300 basis points from foreign exchange rates.
• Operating income is expected to be between $3.0 billion and $6.5 billion, compared with $4.0 billion in first quarter 2020. This guidance assumes approximately $2.0 billion of costs related to COVID-19.
• This guidance assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded.

Amazon will have a conference call via webcast on Tuesday, February 2 at 2:30 p.m. PT/5:30 p.m. ET to discuss the Q4 2020 earnings report. Be sure to keep it on Shacknews for ongoing coverage of the latest quarterly earnings from across the tech sphere.

Ozzie Mejia

Senior Editor

Ozzie has been playing video games since picking up his first NES controller at age 5. He has been into games ever since, only briefly stepping away during his college years. But he was pulled back in after spending years in QA circles for both THQ and Activision, mostly spending time helping to push forward the Guitar Hero series at its peak. Ozzie has become a big fan of platformers, puzzle games, shooters, and RPGs, just to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can't enjoy a good story with a fresh Cherry Coke?