4 ms·
«They are not wildly profitable (if at all).» Often repeated, but wrong. Their financials might show almost no net income (just $3B) but that's just because th
by mrb 8y ago
«They are not wildly profitable (if at all).»
Often repeated, but wrong. Their financials might show almost no net income (just $3B) but that's just because they choose to reinvest every dollar of gross profits into themselves to grow.
Just look at their income statement: in 2017 they invested $23B into "R&D". These are profits they could have just taken.
Obviously, reinvesting in themselves has been a fantastic choice. That's how they were able to grow their revenues ~10× over the last 10 years ($20B to $180B)...
As long as reinvesting works so well, you will keep seeing a "meager" net income of $3B yearly.
- baybal2 8y agoYou can expect that these RnD expenses just being regular opex. Classic dotcom era trick
- sjg007 8y agoI wonder if the irs would crack down on this.
- mrb 8y agoHighly doubtful. You don't even have to trust the word of their financial auditors to get convinced. Just knowing that AMZN's growth over the last 10+ years was entirely self-funded is clear evidence they have cash laying around to reinvest into the company.