Amazon (AMZN 0.01%) reported fourth-quarter 2021 results after the market close on Thursday, Feb. 3 that pleased investors. Shares of the e-commerce and cloud-computing leader gained 14.2% in Thursday's after-hours trading session.

The market's reaction is largely attributable to fourth-quarter operating income coming in higher than the company's guidance, along with earnings that crushed the Wall Street consensus estimate. Investors were also probably satisfied with the company's first-quarter outlook.

Here's an overview of Amazon's fourth quarter and guidance.

Amazon packages moving on conveyor belts in a distribution center.

Image source: Amazon.

1. Revenue grew 9%

Amazon's net quarterly sales grew 9% year over year to $137.4 billion, which was in line with the $137.4 billion Wall Street had expected. That result came near the high end of the company's guidance range of $130 billion to $140 billion. Excluding the $1.3 billion headwind from foreign-currency exchange, revenue increased 10% from the year-ago period.

For context, in the third quarter, Amazon's revenue increased 15% year over year to $110.8 billion.

Here's how fourth-quarter revenue broke down by segment:


Q4 2021 Revenue 

Change YOY

North America

$82.4 billion



$37.3 billion


Amazon Web Services (AWS)

$17.8 billion



$137.4 billion


Data source: Amazon. YOY = year over year. 

Amazon's revenue growth was driven by a powerful performance by the company's AWS cloud-computing business. 

The North America business also contributed to year-over-year growth. Its performance is impressive because it faced a tough comparable: It grew 40% year over year in the fourth quarter of 2020. That quarter got a tailwind from the fact that "the pandemic was raging and vaccines had only begun to roll out at the very tail end of the quarter/year," as I wrote in my earnings preview. In other words, many people were still avoiding brick-and-mortar shopping as much as possible.

In addition, the company's fourth-quarter 2020 e-commerce results got a boost from its annual Prime Day event occurring in October 2020, whereas in 2021, this event took place in the second quarter (June).

2. Operating income fell 49% -- but beat guidance

Operating income decreased 49% year over year to $3.5 billion. Nonetheless, this result exceeded Amazon's guidance range of $0 to $3 billion -- thanks entirely to its fast-growing and super-profitable AWS business.


Q4 2021 Operating Income

Change YOY

North America

($206 million)

N/A. Down from $2.9 billion in the year-ago period.


($1.6 billion)

N/A. Down from $363 million in the year-ago period.


$5.3 billion



$3.5 billion


Data source: Amazon. YOY = year over year.

3. EPS nearly doubled, but...

Net income jumped 99% year over year to $14.3 billion, which translated to earnings per share (EPS) surging 97% to $27.75. This result demolished the analyst consensus estimate of $3.58 per share. (The consensus was $3.74 at the time of my earnings preview two weeks ago.) 

But as Amazon noted in its earnings release, the quarter's 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 [IPO] in November."

4. Operating cash flow declined 30%

Operating cash flow fell 30% year over year to $46.3 billion for the trailing 12 months (in other words, for the full-year 2021). Free cash flow was negative $9.1 billion for the year, compared to positive $31 billion in 2020. Investors should focus on operating cash flow because free cash flow will vary considerably, depending upon how much investing for growth Amazon is doing in any given time period.

Investors shouldn't be concerned that the company's 2021 operating cash flow declined 30% from 2020. Economic factors -- specifically, inflationary pressures -- largely beyond the company's control have been at play. As with most companies, Amazon's logistics costs have risen due to pandemic-driven global supply-chain bottlenecks. Moreover, employee wages have increased, driven by the low-unemployment-rate environment.

5. U.S. Prime membership is increasing to $139 annually and $14.99 monthly

Amazon is raising the price of its Prime membership in the United States. For new members, the new price will go into effect on Feb. 18, and for current members, the new price will apply after March 25 or the date of their next renewal.

The monthly membership fee will increase from $12.99 to $14.99, and the annual membership from $119 to $139. 

6. First-quarter 2022 revenue is expected to grow 3% to 8%

For the first quarter of 2022, Amazon guided for net sales in the range of $112 billion to $117 billion, which would equate to year-over-year growth of 3% to 8%. Going into the report, Wall Street was modeling for Q1 revenue of $120.1 billion, so Amazon's guidance came in a little lighter than analysts had been expecting.

Amazon (which doesn't provide earnings guidance) also expects that its Q1 operating income will be between $3 billion and $6 billion, compared with $8.9 billion in the year-ago period. "This guidance includes approximately $1.0 billion lower depreciation expense due to increases in the estimated useful lives of our servers and networking equipment beginning on January 1, 2022," the company said in its earnings release.

For additional context, going into the report, Wall Street had been modeling for Q1 EPS to decline 40% year over year to $9.50.

In short, Amazon turned in a better quarter than many investors were probably expecting.