Amazon.com Inc. (NASDAQ:AMZN)

Current Income Tax Expense

The current income tax expense exhibits an overall upward trend from 2020 through 2024. Beginning at $3,417 million in 2020, it increased to $5,101 million in 2021 and remained relatively steady at $4,931 million in 2022. A notable surge occurred in 2023 with the value rising sharply to $12,996 million, followed by a further moderate increase to $13,913 million in 2024. This pattern indicates rising current tax obligations, particularly significant in the latter two periods.

Deferred Income Tax Expense

The deferred income tax changes reveal consistent negative values, representing deferred tax benefits or reductions in tax liabilities over the years. The amount decreased from -$554 million in 2020 to -$310 million in 2021, followed by a pronounced increase in magnitude to -$8,148 million in 2022. In subsequent years, 2023 and 2024, the deferred tax benefit lessened slightly to -$5,876 million and -$4,648 million respectively. This indicates considerable fluctuations, with a peak deferred tax benefit occurring in 2022 and a partial reversal or reduction of this benefit in the later years.

Provision (Benefit) for Income Taxes, Net

The net provision for income taxes, combining current and deferred components, exhibits volatility. Starting at $2,863 million in 2020, the net tax provision increased substantially to $4,791 million in 2021. A significant shift is observed in 2022 when the net tax benefit turned negative at -$3,217 million, indicating an overall income tax benefit rather than an expense. In 2023, this reversed considerably to a net tax provision of $7,120 million, continuing to rise to $9,265 million in 2024. This fluctuation suggests significant changes in tax circumstances or accounting estimates during this period, especially the unusual benefit in 2022.

Summary and Insights

The current tax expense has shown a consistent increase, particularly after 2021, reflecting growing taxable income or changes in tax rates or policies. The deferred tax expense demonstrated more variability with a major spike in benefits in 2022, which may be attributable to changes in deferred tax asset or liability valuations or tax planning strategies. The net provision for income taxes aligns with these trends, showing substantial volatility with a net tax benefit in 2022 followed by a reversion to higher expense levels thereafter. These patterns highlight dynamic tax accounting impacts and possible adjustments in tax strategies or regulatory environments influencing the income tax expense over the analyzed periods.

Federal Statutory Tax Rate

The federal statutory tax rate remained constant at 21% throughout the period from 2020 to 2024, indicating no legislative changes affecting the statutory tax framework for the company during these years.

Effective Tax Rate

The effective tax rate demonstrated notable volatility over the analyzed period. Starting at 11.84% in 2020, it slightly increased to 12.56% in 2021. A substantial spike occurred in 2022, with the effective tax rate escalating sharply to 54.19%, which significantly deviates from the statutory rate.

After 2022, the effective tax rate decreased markedly to 18.96% in 2023, moving closer to the statutory rate but still below it. In 2024, it further decreased to 13.5%, indicating a return toward lower effective tax burdens, albeit still beneath the steady statutory rate of 21%.

This pattern suggests the company experienced extraordinary tax-related events or adjustments in 2022, such as one-time charges, tax credits, or changes in deferred tax assets/liabilities, leading to a temporarily elevated tax expense relative to profits. The following years show partial normalization of the effective tax rate, though it did not revert to levels seen at the start of the period.

Loss Carryforwards

The U.S. federal and state loss carryforwards show an increasing trend from 245 million USD in 2020 to 692 million USD in 2024. Conversely, foreign loss carryforwards decreased significantly from 3,876 million USD in 2020 to 2,687 million USD in 2024, after some fluctuations during the intermediary years.

Accrued Liabilities, Reserves, and Other Expenses

There is a steady increase in accrued liabilities, reserves, and other expenses, rising from 2,457 million USD in 2020 to 4,254 million USD in 2024, suggesting growing obligations or provisions over the period.

Stock-Based Compensation

Stock-based compensation expenses rose substantially from 2,033 million USD in 2020 to a peak of 5,279 million USD in 2023, before declining to 4,089 million USD in 2024. This indicates increased equity-based remuneration followed by a cost reduction in the latest year.

Depreciation and Amortization

The depreciation and amortization expense displayed an initial drop from 1,886 million USD in 2020 to 941 million USD in 2021 but subsequently increased steadily to 1,133 million USD in 2024. This suggests initial asset base adjustments followed by gradual growth in asset depreciation.

Operating Lease Liabilities

Operating lease liabilities increased substantially over the period from 10,183 million USD in 2020 to 20,921 million USD in 2024, indicative of rising lease commitments.

Capitalized Research and Development

Capitalized research and development expenses began being reported in 2022 at 6,824 million USD and then showed a strong upward trend reaching 22,701 million USD by 2024. This reflects significant investment in long-term R&D activities capitalized on the balance sheet.

Other Items (Assets and Liabilities)

Other items on the asset side increased irregularly, with values at 559 million USD in 2020 and jumping to 1,688 million USD in 2024. Meanwhile, the corresponding liabilities or reductions in other items steadily increased negatively from -893 million USD in 2020 to -3,323 million USD in 2024, suggesting rising offsetting entries or provisions.

Tax Credits

Tax credits exhibited consistent growth from 207 million USD in 2020 to 1,773 million USD in 2024, reflecting increasing tax benefits available to the company.

Deferred Tax Assets and Valuation Allowances

Gross deferred tax assets grew significantly from 21,446 million USD in 2020 to 59,938 million USD in 2024. Valuation allowances decreased in magnitude from -5,803 million USD to -4,893 million USD, indicating a reduction in the portion of deferred tax assets that may not be realized. Consequently, net deferred tax assets increased markedly from 15,643 million USD in 2020 to 55,045 million USD in 2024.

Depreciation and Amortization (Deferred Tax Liabilities)

The negative figure for depreciation and amortization related deferred tax liabilities deepened from -5,508 million USD in 2020 to -16,240 million USD in 2024, paralleling the upward trend in property and equipment assets and associated deferred taxes.

Operating Lease Assets and Deferred Tax Liabilities

Operating lease assets showed increasing negative balances from -9,539 million USD to -19,517 million USD, consistent with rising lease liabilities. Deferred tax liabilities also expanded significantly from -16,509 million USD in 2020 to -39,080 million USD in 2024, reflecting increased future tax obligations.

Assets Held for Investment

Assets held for investment showed a decline from -569 million USD to -4,019 million USD by 2021 before data is unavailable for subsequent years, preventing further trend analysis.

Net Deferred Tax Assets (Liabilities) Post Valuation Allowance

Initially negative net deferred tax assets (866 million USD in 2020 and 494 million USD in 2021) turned positive at 7,513 million USD in 2022 and further increased to 15,965 million USD in 2024, indicating a significant improvement in the net tax position after valuation allowances.

The analysis of the financial data reveals several notable trends and patterns over the five-year period.

Total Assets

Both reported and adjusted total assets exhibit consistent growth throughout the period. Reported total assets increased from approximately 321 billion USD in 2020 to nearly 625 billion USD in 2024, showing robust expansion. Adjusted total assets follow a similar trend but display slightly lower values from 2022 onward, indicating some adjustments reduced asset values by a small margin in recent years.

Total Liabilities

Total liabilities, both reported and adjusted, also increased steadily but at a slower pace compared to total assets. Reported liabilities rose from around 228 billion USD in 2020 to about 339 billion USD in 2024. Adjusted liabilities nearly mirror reported liabilities, with negligible differences, suggesting limited impact from adjustments on liabilities.

Stockholders’ Equity

Reported stockholders’ equity shows a substantial increase, particularly from 2022 onward, growing from approximately 93 billion USD in 2020 to nearly 286 billion USD in 2024. Adjusted equity figures follow the same upward trajectory but are consistently lower than reported equity, with the gap increasing over time. This divergence points to the adjustments primarily reducing equity values, especially noticeable in 2022 when adjusted equity dropped relative to reported equity.

Net Income (Loss)

Net income figures demonstrate variability with strong positive results in most years, except for 2022. Reported net income increased significantly from about 21 billion USD in 2020 to nearly 59 billion USD in 2024, despite the noticeable loss in 2022 of approximately 2.7 billion USD. Adjusted net income shows similar trends but reveals a larger loss in 2022, approximately 10.9 billion USD, indicating that the adjustments had a considerable impact on profitability that year. Post-2022 recovery is evident, though adjusted net income remains slightly lower than reported figures through 2023 and 2024.

Net Profit Margin Trends

The reported net profit margin demonstrates an initial increase from 5.53% in 2020 to 7.1% in 2021, followed by a notable decline to -0.53% in 2022. This negative margin is then reversed with a recovery to 5.29% in 2023 and further growth to 9.29% in 2024. The adjusted net profit margin follows a similar trajectory but with a more pronounced negative dip in 2022 at -2.11%. Despite this downturn, it recovers gradually to 4.27% in 2023 and 8.56% in 2024. These patterns indicate a period of financial challenge during 2022 with strong subsequent recovery.

Total Asset Turnover Patterns

The reported total asset turnover ratio shows a consistent slight decline over the years, decreasing from 1.2 in 2020 to 1.02 in 2024. Conversely, the adjusted total asset turnover ratio remains relatively stable, maintaining at 1.2 in 2020 and dipping only slightly to 1.05 by 2024. The slight discrepancy between reported and adjusted figures in the later years suggests some adjustments have a modest positive effect on perceived asset efficiency.

Financial Leverage Developments

Both reported and adjusted financial leverage ratios exhibit a downward trend, starting at approximately 3.44 and 3.41 in 2020, respectively, and declining to 2.19 and 2.26 by 2024. The adjusted leverage ratio is slightly higher than the reported ratio in 2022 and 2023, indicating adjustments that marginally increase leverage estimates during these years. Overall, the decrease in financial leverage points to reduced reliance on debt financing or a strengthening equity base over the period.

Return on Equity (ROE) Analysis

The reported ROE increases from 22.84% in 2020 to a peak of 24.13% in 2021 before sharply falling to -1.86% in 2022. It then recovers to 15.07% in 2023 and 20.72% in 2024. The adjusted ROE exhibits a more severe decline in 2022, reaching -7.85%, and a less pronounced rebound to 13.01% in 2023 and 20.22% in 2024. These trends reflect significant volatility with a sharp downturn during 2022, followed by a substantial recovery that nearly returns to pre-downturn levels by 2024.

Return on Assets (ROA) Trends

Reported ROA rises from 6.64% in 2020 to 7.93% in 2021, then drops to a negative figure of -0.59% in 2022, recoverings to 5.76% in 2023 and 9.48% in 2024. Adjusted ROA displays a similar pattern but with a deeper trough at -2.39% in 2022 and a steadier climb thereafter to 4.77% in 2023 and 8.97% in 2024. Both metrics suggest declining asset profitability in 2022 with a recovery through 2023 and 2024, consistent with other profitability indicators.

Overall Insights

The financial data reflect a period of considerable operational and financial stress in 2022, marked by negative margins and returns. This is followed by a recovery period manifested through improvements across all key profitability, efficiency, and leverage ratios through 2023 and 2024. The adjustments applied to reported data tend to exacerbate the negative effects observed during 2022 but appear to moderate differences in subsequent years. Declining financial leverage alongside recovery in profitability indicates possible strategic shifts in capital structure and operational performance. The asset turnover ratios suggest relatively stable asset utilization despite fluctuating profitability.

Net Income Trends

The reported net income showed a strong increase from 21,331 million USD in 2020 to 33,364 million USD in 2021, followed by a sharp reversal to a loss of 2,722 million USD in 2022. The recovery in 2023 was notable, with reported net income rising to 30,425 million USD and further increasing substantially to 59,248 million USD in 2024.

The adjusted net income mirrored this pattern but with larger fluctuations in the negative range during 2022. Adjusted net income was 20,777 million USD in 2020 and increased to 33,054 million USD in 2021. However, it declined to a more pronounced loss of 10,870 million USD in 2022 before recovering to 24,549 million USD in 2023 and further growing to 54,600 million USD in 2024.

Profit Margin Analysis

The reported net profit margin increased from 5.53% in 2020 to 7.10% in 2021, reflecting improved profitability. This was followed by a decrease to a negative margin of -0.53% in 2022. The margin recovered to 5.29% in 2023 and exhibited a significant jump to 9.29% in 2024, indicating a strong enhancement in profitability relative to revenue.

The adjusted net profit margin exhibited a similar trend but consistently remained lower than the reported margin. It started at 5.38% in 2020, increased to 7.04% in 2021, dropped more steeply to -2.11% in 2022, then rose to 4.27% in 2023 and improved markedly to 8.56% in 2024.

Overall Observations

The cycles of earnings demonstrate significant volatility particularly in 2022, with both reported and adjusted figures showing losses during this period. The subsequent recovery in 2023 and strong performance in 2024 suggest effective management responses or changes in operational factors. Adjusted figures indicate that deferred or non-recurring tax effects had a material impact on reported profitability, particularly evident in the greater magnitude of adjusted losses and lower adjusted profit margins during the downturn.

The positive trend in 2024 across both reported and adjusted metrics suggests robust profitability improvements, potentially driven by operational efficiency, revenue growth, or favorable tax adjustments. The consistently higher reported margins compared to adjusted margins over the periods indicates some degree of tax benefit reflected in reported results.

Reported Total Assets

The reported total assets have shown a consistent upward trend over the five-year period, increasing from $321,195 million in 2020 to $624,894 million in 2024. This represents a significant growth more than doubling the asset base over these years.

Adjusted Total Assets

The adjusted total assets, which take into account deferred income tax adjustments, also show a rising trend, increasing from $321,195 million in 2020 to $608,929 million in 2024. The adjusted figures are consistently slightly lower than the reported total assets starting from 2022, indicating the impact of deferred tax adjustments on asset valuation.

Reported Total Asset Turnover

The reported total asset turnover ratio reveals a gradual decline from 1.20 in 2020 to 1.02 in 2024. This indicates a decreasing efficiency in generating sales revenue from the asset base over time.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio follows a similar downward trend but remains slightly higher than the reported ratio starting in 2022. It decreased from 1.20 in 2020 to 1.05 in 2024, suggesting that while asset utilization efficiency is declining, the adjustment for deferred taxes slightly increases the apparent turnover.

Overall Observations

Both reported and adjusted total assets demonstrate substantial growth, suggesting asset expansion and investment. However, the declining asset turnover ratios indicate that the company is experiencing reduced efficiency in generating revenues from its asset base. The adjustment for deferred income tax slightly alters asset valuations and turnover ratios but does not change the overall pattern of decreasing efficiency and increasing asset size.

Total Assets

The reported total assets demonstrate a consistent upward trend from 2020 through 2024, increasing from $321,195 million to $624,894 million. The adjusted total assets also show growth over the period, but are slightly lower than the reported figures starting from 2022, indicating some deferred income tax adjustments impacting asset valuation. The growth in adjusted total assets remains robust, rising from $321,195 million in 2020 to $608,929 million in 2024.

Stockholders’ Equity

Reported stockholders’ equity has increased substantially over the five-year span, nearly tripling from $93,404 million in 2020 to $285,970 million in 2024. The adjusted stockholders’ equity follows a similar growth pattern but consistently remains below the reported equity figures from 2022 onward, reflecting adjustments related to deferred income taxes. Despite this, adjusted equity expands significantly, reaching $270,005 million in 2024 from $94,270 million in 2020, indicating strong equity growth after tax adjustments.

Financial Leverage

Reported financial leverage, defined as the ratio of total assets to stockholders' equity, has declined steadily over the period, from 3.44 in 2020 to 2.19 in 2024. This suggests a decreasing reliance on debt or liabilities relative to equity. The adjusted financial leverage shows a slightly different pattern with a small increase in 2022 (3.29) compared to 2021 (3.03), before declining again to 2.26 by 2024. The consistent decline in leverage in later years, both reported and adjusted, points to improved financial stability and reduced risk profile over time.

Overall Insights

The data reveals strong growth in both assets and equity, with adjustments for deferred income taxes moderately reducing the asset and equity bases compared to reported values. The decreasing financial leverage ratios imply a company strategy oriented toward strengthening equity and managing liabilities more conservatively. The deferred tax adjustments introduce some variability in reported financial ratios, but the overall trends remain indicative of healthy financial expansion and improving capital structure.

The analysis of the financial data over the five-year period reveals several significant trends concerning income, equity, and returns.

Net Income (Reported vs. Adjusted)

Reported net income shows notable volatility, with strong positive performance in 2020 and 2021, a marked decline into a loss in 2022, followed by a pronounced recovery in 2023 and a substantial increase in 2024. Adjusted net income follows a similar pattern but indicates a more severe loss in 2022 and a comparatively lower rebound in subsequent years. This divergence suggests that deferred income tax adjustments have a material impact during periods of loss and recovery, potentially reflecting differences in tax treatment or one-time tax events.

Stockholders’ Equity (Reported vs. Adjusted)

Both reported and adjusted stockholders’ equity display a consistent upward trajectory throughout the period. Reported equity grows from approximately $93.4 billion in 2020 to $286.0 billion in 2024, while adjusted equity also increases significantly but at a slower pace, reaching $270.0 billion in 2024. The growing gap between reported and adjusted equity from 2022 onward indicates that tax-related adjustments and deferred items increasingly influence the equity base, likely reflecting changes in liabilities or asset valuations linked to tax effects.

Return on Equity (ROE) (Reported vs. Adjusted)

Reported ROE mirrors net income trends, with strong returns above 20% in 2020 and 2021, a negative return in 2022 indicating a loss, followed by moderate recovery. Adjusted ROE is consistently lower than reported ROE during the periods analyzed, especially in 2022 when it shows a more pronounced negative return. By 2024, both reported and adjusted ROE approach similar high levels around 20%, suggesting improved profitability and efficient capital utilization after adjusting for tax-related items.

Overall, the data indicates that the company experienced a difficult year in 2022, as reflected by losses and negative returns, but substantial recovery and growth resumed in 2023 and 2024. Deferred income tax adjustments significantly impact the financial metrics during periods of volatility, particularly net income and ROE, highlighting the importance of tax considerations in evaluating underlying operational performance. The sustained growth in equity points to strong capital accumulation despite these fluctuations.

Reported Net Income (Loss)

The reported net income exhibited significant variability over the observed periods. It increased from $21,331 million in 2020 to $33,364 million in 2021, followed by a marked decline to a net loss of $2,722 million in 2022. Subsequently, the company rebounded strongly, reporting net incomes of $30,425 million in 2023 and $59,248 million in 2024, indicating a robust recovery and growth in profitability.

Adjusted Net Income (Loss)

The adjusted net income trends broadly mirrored those of the reported figures, though with more pronounced fluctuations. Starting at $20,777 million in 2020, the adjusted net income rose to $33,054 million in 2021 before sharply declining to an adjusted net loss of $10,870 million in 2022. Recovery was observed in the subsequent years with adjusted net incomes of $24,549 million in 2023 and $54,600 million in 2024. The wider negative adjustment in 2022 suggests significant deferred tax impacts or non-recurring tax adjustments affecting that year.

Reported Total Assets

Total assets reported showed consistent growth over the five-year span. The assets increased steadily from $321,195 million in 2020 to $624,894 million in 2024, reflecting substantial asset base expansion, potentially due to investment, acquisitions, or organic growth strategies.

Adjusted Total Assets

Adjusted total assets also increased consistently but were marginally lower than the reported figures starting in 2022, with values moving from $321,195 million in 2020 to $608,929 million in 2024. The adjustment may indicate the exclusion or reclassification of certain deferred tax assets or valuation adjustments impacting the asset base.

Reported Return on Assets (ROA)

The reported ROA followed the net income trend, increasing from 6.64% in 2020 to 7.93% in 2021, then declining sharply to a negative 0.59% in 2022. It improved to 5.76% in 2023 and further increased to 9.48% in 2024. This pattern reflects the profit volatility, with significant losses in 2022 decreasing asset profitability followed by recovery in subsequent years.

Adjusted Return on Assets (ROA)

The adjusted ROA was consistently slightly lower than the reported ROA, starting at 6.47% in 2020 and peaking at 7.86% in 2021. A deeper negative impact is observed in 2022 with an ROA of negative 2.39%, suggesting more pronounced adjustment effects. The metric recovered to 4.77% in 2023 and reached 8.97% in 2024. The adjustments highlight the influence of deferred taxes or other tax-related items on the company's operational profitability measures.