Good day, and welcome to the Amazon Quarterly Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Rob Eldridge. Please go ahead, sir.
Hello, and welcome to our Q4 twenty ten financial results conference call. Joining us is Tom Szkutak, our CFO. We will be available for questions after our prepared remarks. Following discussion and responses to your questions reflect management's views as of today, January 27, 2011 only and will include forward looking statements. Actual results may differ materially.
Additional information about factors that could potentially impact our financial results is included in today's press release and our filings with the SEC, including our most recent annual report on Form 10 ks. As you listen to today's call, we encourage you to have our press release in front of you, which includes our financial results, as well as metrics and commentary on the quarter. During this call, we will discuss certain non GAAP financial measures. In our press release, slides accompanying this webcast and our filings with the SEC, each of which is posted on our IR website, you will find additional disclosures regarding these non GAAP measures, including reconciliations of these the comparable period of 2,009. Now, I'll turn the call over
to Tom. Thanks, Rob. I'll begin with comments on our 4th quarter financial results. Trailing 12 month operating cash flow increased 6% to $3,500,000,000 Trailing 12 month free cash flow decreased 14 percent to $2,520,000,000 Return on invested capital was 34%, down from 66%, ROIC is TTM free cash flow divided by average total assets minus current liabilities excluding the current portion of long term debt over 5 quarter ends. The combination of common stock and stock based awards outstanding was 465,000,000 shares compared with 461,000,000 shares.
Worldwide revenue grew 36 percent to $12,950,000,000 or 37% excluding the $139,000,000 unfavorable impact from
fast
vast selection of free shipping offers including Amazon Prime. Media revenue increased to 5,230,000,000 up 12% or 13% excluding foreign exchange rates. EGM revenue increased to $7,390,000,000 up 60% or 62% excluding foreign exchange rates. Worldwide EGM increased to 57% of worldwide sales, up from 48%. Worldwide unit growth was 43%.
Active customer accounts exceeded 130,000,000. Worldwide active seller accounts were more than 2,000,000. Seller units were 30% of total units. Consolidated gross profit grew 33 percent to $2,630,000,000 and gross margin was 20.3%. Now I'll discuss operating expenses excluding stock based compensation.
Fulfillment, marketing, technology and content and G and A combined was $2,010,000,000 or 15.5 percent of sales, up 101 basis points year over year. Fulfillment was $1,060,000,000 or 8.2 percent of revenue compared with 7.7%. Tech and content was $456,000,000 or 3.5 percent of revenue compared with 3.1%. Marketing was 368,000,000 dollars or 2.8 percent of revenue consistent with prior year. Now, we'll talk about our segment results and consistent with prior periods, we do allocate segments or stock based compensation or other operating expense line item.
In the North America segment, revenue grew 45 percent to $7,210,000,000 Media revenue grew 13 percent to $2,370,000,000 EGM revenue grew 71 percent to 4,560,000,000 representing 63 percent of North America revenues up from 54%. North America segment operating income increased 6% to $295,000,000 a 4.1 percent operating margin. In the international In the international segment, revenue grew 26 percent to $5,740,000,000 revenue growth was 29% adjusting for the 100 and $43,000,000 year over year unfavorable foreign exchange impact during the quarter. Media revenue grew 11% to 2.87 dollars or 13% excluding FX
and EGM
revenue grew 46 percent to 2,830,000,000 or 50% excluding foreign exchange. EGM now represents 49 of international revenues up from 43%. International segment operating income increased 3% to $327,000,000 a 5.7% operating margin. Excluding the unfavorable impact from foreign exchange rates, international segment operating income increased 16%. CSOI grew 4% to 622,000,000 or 4.8 percent of revenue, down 140 6 basis points year over year.
Excluding the $18,000,000 unfavorable impact from foreign exchange, CSOI grew 7%. Unlike CSOI, GAAP operating income includes stock based compensation expense and other operating expense. GAAP operating income was relatively flat at 474 $1,000,000 or 3.7 percent of net sales. Our income tax expense was $84,000,000 in Q4 or 17% rate for the quarter. GAAP net income was $416,000,000 or $0.91 per diluted share compared with 384,000,000 dollars
0.8
$34,200,000,000 North America revenue grew 45 percent to $18,701,000,000 and international grew 33% to 15,500,000,000, 34% growth excluding year over year changes in foreign exchange rates. Consolidated segment operating income or CSOI grew 23 percent to $1,940,000,000 or 25 percent excluding $28,000,000 of unfavorable year over year impact from foreign exchange and operating margin decreased 75 basis points to 5.7%. GAAP operating income grew 25 percent to 1,410,000,000 or 4.1 percent of net sales. Turning to the balance sheet, cash and marketable securities increased $2,400,000,000 year over year to $8,760,000,000 Inventory increased 48% to 3 $200,000,000 and inventory turns were 11.4, down from 12.2 turns a year ago as we expanded selection, improve 2 turns a year ago as we expanded selection, improved in stock levels, and introduced new product categories. Accounts payable increased 44 percent to $8,078,000,000 The increase in capital expenditures reflects additional investments in support of continued business growth, including investments in technology infrastructure, including Amazon Web Services, capacity to support our fulfillment operations and investments in corporate office space.
I'll conclude my portion of today's call with guidance. Incorporated into our guidance are the order trends that we've seen to date and what we believe today to be appropriately conservative assumptions. Our results are inherently unpredictable and may be materially affected by many factors, including a high level of uncertainty surrounding rate fluctuations, as well as the global economy and consumer spending. It's not possible to accurately predict demand and therefore our actual results could differ materially from our guidance. As we describe in more detail in our public filings, issues such as settling intercompany balances and foreign currencies amongst our subsidiaries, unfavorable resolution of legal matters and changes to our tax rates can all have material effect on guidance.
Our guidance further assumes that we don't conclude any additional business acquisitions or investments, record any further revisions to stock based compensation estimates, and that foreign exchange rates remain approximately where 11, we expect net sales of between 9 point $1,000,000,000 $9,900,000,000 a growth of between 28% to 39%. This guidance anticipates approximately 140 basis points 385,000,000 or between 34% decline and 2% decline. This includes approximately $140,000,000 for stock based compensation and amortization of intangible assets. We anticipate consolidated segment operating income, which excludes stock based compensation and other operating expense to be between $400,000,000 $525,000,000 or between 21% decline and 4% growth. We remain heads create lasting value for shareholders.
Thanks. With that, Rob, let's move to questions.
Great. Thanks, Tom. Let's move on with the Q and A portion of the call. Operator, will you please remind our listeners how to initiate a question?
Thank you. We will take our first question from Mark Mahaney with Citi. Please go ahead.
Great, thanks. Can you hear me?
Hello? Yes, we can hear you, Mark.
Sorry about that. Two questions. First, on the gross margin trends down a little bit year over year. Would that have been impacted by the strong sale of Kindle devices in the Q4? And secondly, could you just talk broadly about the subscribe and save offering that you have and what to what extent you've seen cross selling into more kind of consumer staple items amongst your customer base?
Thank you.
Sure. In terms of gross margins, you are seeing some volatility. If you look at the individual quarters from 2010. You saw that we were down a bit in Q1, up the next two quarters slightly and then down a little bit in Q4, about approximately 45 basis points. And we haven't been talking much about gross margins to the bottom again.
And the reason we're doing that is because of the mix of business. And so what you're seeing there in gross margins in Q4 we have a very broad mix of businesses and geographies that are going into that number. And again, you're seeing some volatility in the individual quarters. But again, we're very pleased with what we saw in Q4 in terms of growth and overall performance of the business and reflects a very heavy investment load to support the growth that we expect. In terms of subscribe and save, could you repeat the question again?
What kind of impact have you seen, what
kind of adoption rate have you seen for that and just broadly your penetration of kind of consumer staples spending amongst the Amazon customer base? Thank you.
Sure. Subscription saves is going very well. It's something that certainly customers like a lot and we're getting that benefit in the consumer portion of the consumer category today. Again, it's something that we're excited about and customers are excited about. So, we're happy to offer it to them.
We will take our next We
will take our next question
from James Mitchell with Goldman Sachs. Please go ahead. Great. Thank you for taking my questions. If I
could ask just two questions about revenue growth. And I don't want to sound critical of revenue growth because the absolute growth rate is very high. But just digging into 2 components, first of all, is there any big obvious reason why international growth decelerated while domestic growth accelerated? And than paperback than paperback sales and paperback sales continue to grow, is there a big obvious reason why total media sales are growing at 13% rather than a slightly faster number. I assume that the agency accounting for e books is part of that perhaps?
Okay. In terms of overall growth, we are very pleased with what we saw. Just to kind of frame up that discussion a bit, we saw 40% growth year over year, total year 2010, which is the best growth rate we've seen since 2000. We saw Q4 growth rates overall of 37% on a local currency basis, which matches our best growth rate for any Q4 we've had on a local currency basis since 2000. And then unit growth was 43%, which certainly going back several years, we haven't seen a quarter any quarter that's had that the international growth specifically, if you look back to last year, we did have very strong media growth in international in Q4.
You'll see that it's up 26% on a local currency basis, which is one of the strongest quarters we've had, and we're overlapping in that. There were some new releases that were in Q4 last year, most notably the Windows 7 release 1, Dan Brown's book in Germany is another. Those are a few examples, but there were a few releases that were in there. The other piece too that we haven't certainly difficult to quantify, but there was certainly some impact from some of the weather that we saw in Europe during of December. But again, we're very pleased with the growth that we saw in Q4 in total, including international, and we're happy with what we see there.
In terms of some of your questions surrounding media, again, we're seeing good paperbacks continue to grow year over year. So again, we're seeing very strong growth there. So again, very pleased with the growth we're seeing across the business.
Is there a drag on
the media growth from the accounting for the agency e books?
Could you say that again?
It's the fact that
some of the e books are being sold on an agency rather than the consignment basis this year acting as a drag on growth temporarily in terms of
your reported revenue?
Certainly, the agency piece is included in the numbers that we've reported today, but in terms of the impact, we're not breaking that out. But again, we're very excited with the growth that we're seeing within books, e books specifically and physical books are going well as well.
Thank you.
We will take our next question from Spencer Wang with Credit Suisse. Please go
ahead. Thanks for taking the question. I guess two quick ones. First, Tom, for the Q1 guidance, it would seem like your operating income guidance implies that you're still reinvesting in the business. Could you just give us a little bit more color on, is it still fulfillment centers, is it tech and content, all of the above?
And then secondly, with Love Films acquisition, can you just walk us through the rationale and how you'll integrate that with perhaps your other video on demand businesses? Thanks.
Sure. In terms of the guidance, let me just put that in context. Context. Probably the best way to do it is just again a reminder on that we had very strong growth, the best growth we've seen in 10 years, 4th quarter matched the best on a local currency basis growth, match the best 4th quarter we've had since 2000, and again, very strong unit growth best we've seen. With all that growth, we had to add a lot of capacity, most of which was in the second half of last year.
We had a fulfillment capacity to support our retail business. We added fulfillment capacity to support our growing Fulfilled by Amazon business as part of our seller business. We added a lot of infrastructure capacity to support our fast growing AWS business as well as our retail business. And so when you those are reflected and when you look at our Q4 results and our 20 10 results, those are reflected in the CapEx numbers that you're seeing and those are reflected in the fulfillment as well as the tech and content lines when you look at our operating expense line items. And so because it was largely back half of the year loaded, you're seeing more that in Q1.
So that's reflected in the growth rate. Now the question will be, we're not giving guidance beyond Q1, but what will this mean going forward? And so one of the things that we're doing is certainly when you look at our Q1 guidance, you look at our top line guidance, we're cautiously optimistic about Q1 with very strong growth and we'll have to see how much we invest throughout the year in 2011 based on that. But again, I'm very, very happy with the capital we're able to deploy. You should keep in mind that with the sheer amount of capacity that we added in 20 1 and it's not we don't get the optimum productivity on day 1.
So, what that means is we get productivity on those operations, we get returns on those assets that we deploy over a period of time. But if you look at our history, we've gotten very good returns on that capital. And so to me, I'm very pleased to put that capital in place. And if we have to add more in 2011, it would be a high quality problem.
Great. And on LoveFilm?
LoveFilm, we think it's just a very exciting opportunity. We've had a close association with that business for some time. We're very pleased to be able to offer customers in the video space within Europe their offerings. So again, we're very excited about it and you have to stay tuned on that one.
Thanks, Tom.
We will take our next question from Doug Anute with Barclays Capital. Please go ahead.
Great. Thanks for taking the question. 2 things. First, I just wanted to ask in terms of the risk expecting for 1Q, can you give us a sense of how much you're anticipating from I which you ran within the last week or so? Thanks.
In terms of the guidance for Q1, LoveFilm or Quincy, which haven't closed yet are not reflected in guidance. So those are not in our Q1 numbers. In terms of LivingSocial, we're very pleased with the investment that we've made there in terms of any commentary on the recent deal, the recent one day offer that they had. We're very excited that they offered Amazon gift certificates and we think it's great for customers and we're happy to enable that.
Thanks, Tom.
We'll take our next
like other revenue in North America slowed pretty significantly and I realize that's a decent part of other. Any commentary on what was the main driver of that slower growth? And second on grocery, can you give us a little more insight on your initiatives there and the potential cost impact from expanding those categories? Thanks. Sure.
In terms of, AWS, we're extremely pleased with how AWS is going. It's growing at a very fast rate. We're investing in that business to support that growth rate. You're correct from Q3 to Q4. From Q3 to Q4.
Keep in mind that there's a number of things in there including AWS that tend to be a little lumpy, but we did see actually an acceleration of growth in AWS from Q3 to Q4. So built into that number, it actually accelerated. So again, we're very pleased with the growth that we're seeing there. In terms of grocery, we have 2 things that you probably could be referring to. 1 is our goods business, which is within our consumer business that we're very pleased with that we have on Amazon dot com as well as some other sites.
In addition to that, we have a local test here in Seattle called Amazon Fresh. Again, that is a test that we've been conducting. We're pleased with how the test is going, but again it's a test and we'll continue to see how that goes and see if we invest further on that test. Again, we do a number of tests in different parts of our business and that happens to be one of them. And we have a great team that's working on it, but you'll have to stay tuned to see if we do more there.
Great. Thanks.
We'll take our next question from Youssef Squali with Jefferies. Please go ahead.
Thank you very much. Two quick questions. 1, Tom, can you tell us how many distribution centers you actually
had at the end of this at the end of 2010? I know you're not going to guide to 2011 since you're guiding to Q1. Are you planning to open any distribution centers? And what's your CapEx for Q1? Sure.
In terms of we had approximately 52 at the end of 2010, we added 13 last year. We will add more fulfillment centers this year. We haven't said in our saying how many yet, because again we're trying to determine what the growth rate will be and based on what we're seeing in Q1 we're certainly cautiously optimistic, which is reflected in the growth rate you see for guidance for Q1. So, we'll have to wait and see and we'll be back with you as we go throughout the year. But just to be clear, again, I mentioned in one of the other questions, I think it'd be a very high quality problem.
And the reason why I say that is what our teams are doing around the world right now, which is the same thing we've been doing for the last 15 or 16 years in working with our various fulfillment centers is, even though we're not fully utilized in some of these new assets that we deployed in 2010 or our productivity is not optimum, that team is working will work to utilize those assets as we continue to grow. We'll get better productivity as we go just like we have in our other fulfillment centers around the world that we've had experience with. So, we're very excited about that. And so, when you think about these new fulfillment centers, even though they can be a little bit dilutive in the short term by looking at our fulfillment expense, The reason why I'm very excited about it is you can just look at our return on invested capital. If you take our return invested capital at the end of 2010, we had approximately $7,400,000,000 of invested capital, that's a 5 point average over the last 5 quarters.
If you take out cash and marketable securities of those same periods, that's about $6,500,000,000 So we have about $900,000,000 of invested capital and even with our heavier spend in CapEx last year, we generated $2,500,000 of free cash flow. So we have an excess of 2.50% return on our invested capital ex cash and marketable securities. And so, again, that's a full business, includes a lot of things over a period of time. But if you think about that capacity, where we need it because of growth, we're certainly very happy. We do it judiciously and make sure we do it appropriately, but very happy to deploy that capital to get great returns for shareholders over time.
And again, returns that we've gotten are certainly historical, not predictive, but again, we're very happy to deploy that capital and I feel very good about it.
Don, are you quantifying CapEx for Q1 or anything?
No, we haven't quantified the CapEx for Q1, I apologize. But again, we will do what we need to do to support the growth in both infrastructure and fulfillment.
We will take our next question from Colin Sebastian with Lazard Capital Markets. Please go ahead.
Good afternoon. One follow-up on the gross margins. I think historically, historically Amazon's pricing philosophy has been to be a price follower. And I guess I'm curious if perhaps you're loosening that strategy up a bit maybe to be a price leader in more categories? Thanks.
In terms of
In terms of pricing, we've
had a number of different strategies over the course of our history, but certainly our objective is to have great values for customers over all
of our selection,
over all of our geographies, and that hasn't changed. And so, we're very excited to offer customers that. It's the reason certainly one of the drivers for the growth that we've been able to have over our history. And so, one of the
things that we do do
is, when we enter a new category and add selection within that category, we price it day 1 as competitively as we can. So in other words, we price it competitively day 1 based on the intelligence we have. And sometimes that means that it's low gross margin because we're just entering those particular categories with those particular items. And so that's something we've been really doing for a number of years and we like that strategy.
Thank you.
We will take our next question from Ben Schachter with Macquarie. Please go ahead.
There's a lot of interest in how the Kindle ecosystem actually impacts the margin. I was wondering if you could just help us understand, one question would be all in Kindle hardware and software, the whole thing together. How is that impacting gross margin? And then, overall, how should we think about how that the agency model and the e books, how that's going to impact margin? And then, just one quick one.
There's been some speculation about the potential to bundle services with Amazon Prime. I was wondering if you could tell us how you think about that and is that something that may be interesting in the future? Thanks.
Sure. First of all, we have a long standing practice of not breaking out any individual products or categories. But what I can say about Kendall is, it's growing very fast. We're extremely pleased with what we're seeing. We sold millions of devices in Q4.
The content business, the content part of it is growing very fast, as evidenced by some of the comments we put in the earnings release so far, quarter to date, this quarter, again Q1, we have Kindle paperbacks, which is really exciting. And so, that business is going very well. And with the opportunity we see there, we're continuing to invest in that business. We think it's a very good business for us and we're excited about the long term opportunity there.
We will take our next question from Justin Post with Bank of America Merrill Lynch. Please go ahead.
Thank you. One quick follow-up. Maybe you could explain why Kendall is a better business for Amazon? And then secondly, you talked about gross margin maybe not being the best way to measure the company. Maybe you could explain why operating margin is better?
And do you have individual management targets as far as compensation or as a company as a whole on where you want to get to for operating margins? Thanks.
I'm not sure I understood the first part of your question related to Kindle.
I guess I'm asking why Kindle is a better business than your traditional book selling and media business?
Well, we happen to like both. We're even though we're extremely excited about our Kindle business, our physical book business continues to grow as well. And so we're very excited about both parts of our business. And again, we think when I was mentioning Kindle, we just think it's a great opportunity for us. It has great tracks right now.
Customers like it. We're able to offer so many titles right now in a physical book is you can't from a service perspective with our model, it's very difficult to get it to a customer now. And with Kimbell, we can do that in less than 60 seconds. You can carry around your library with you very lightly. And so, we think it's just great for customers.
And we're seeing that the growth both in terms of devices and content is just fantastic. And so we're continuing to invest and continuing to improve that experience for customers. In terms of gross margins versus operating margins, we actually don't focus a lot on individual percentages, whether it be gross margins or operating margins. We're focused ultimately over the long term on free cash flow, free cash flow per share, we'd like to look at return on invested capital. I mentioned earlier what our return investment capital is today.
That includes appropriately so the cash marketable securities that we have in that balance, but certainly if you if we were to deploy that cash and return that to shareholders over time, you can see the underlying returns on invested capital ex cash are very high and in excess of 2 50 percent right now. And so, we think it's a very efficient capital business and we think that we've certainly liked the model that we have and the opportunity that it brings to shareholders over the long term.
We will take our next question from Jeetal Patel with Deutsche Bank Securities. Please go ahead.
Hey, guys. A couple of quarters. A couple of questions. First of all, I guess, when you look at the Kindle side of the equation, do you believe that the proliferation of Kindle apps across devices, not just your own device, is helping to increase the overall consumption of books across the industry or Amazon? And then second, I guess as it relates to international, where do you stand in terms of pan European fulfillment capabilities, say shipping from Germany into the Netherlands, into Scandinavia, etcetera.
In terms of Kindle apps, we think it's good for customers that they can read their book, their Kindle books on their Kindle as well as many other devices. And so, that's what you see today. We have these apps, so that it's easy for customers to be able to do that. Customers like that feature and you should expect us to continue to expand that over time. So, how much is contributing to overall growth is hard to say, but again, customers responding to the best selection that we have, the good prices, the great prices we have for Kindle content, the ease of which they can carry it around with them with a great convenience on the device, the Kindle device itself.
So we're very excited about it. In terms of fulfillment, we continue to work with our fulfillment to make it as seamless as possible for customers. That's really what it's all about in each of the geographies we're in, and we'll continue to do so. So wherever we can make that service within Europe better for customers, we will. It will come from whatever fulfillment center makes sense.
If I may ask a follow-up, but just you've had tremendous growth in customers over the past year, about $24,000,000 or so. Do you think that your lifetime kind of value of the customer equation has changed, particularly as you looked at you have initiatives like Kindle and Prime. Do you think that the economics have changed obviously for the better that you're acquiring more aggressively? Is that how we should think about some of these newer initiatives that you've had over the last several years that have been certainly pretty impactful? No, I think
not commenting on the lifetime value of customers, but we continue to offer new things for customers Prime a number of years ago, which continues to grow. Prime a number of years ago, which continues to grow because we want to make sure that we give great service to customers. Many of our digital initiatives are around how do we make sure we get customers not only great price and great selection, but they get to have their content immediately. And so, those are things that it always with us, we start with the customer first. That's where our focus is.
We found that by aligning with the customer, it's been great for customers as well as great for shareholders over time. And so that's the focus that we've had and the driver behind the initiatives over the past several years.
Next question please.
We'll take our next question from Jim Friedland with Cowen and Company. Please go ahead.
Thanks. A question on marketing. If we look at marketing as a percentage of revenues this year, it was up and I believe you said one of the main reasons was the inclusion of Zappos. And as we think about your marketing spend in 2011, is that the sort of seasonality and pattern that we should look for or is anything changing in your approach to marketing? Thanks.
Well, we did yes, certainly we added continue to support the Zappos marketing spend in 2010 was a part of it. We're always looking for ways to reach customers through our marketing spend. We also did, you probably noticed a fair amount of Kindle ads during 2010, primarily starting for the most part heavier after Q1 of last year, which we saw response to. So again, those are some of the dynamics to think about.
Okay, great. Thank you.
We'll take our next question from Steve Weinstein with Pacific Crest. Please go ahead.
Great. Thank you. I had a question on Prime membership. None of it's been active in the U. S.
For quite a long time now. Are you still seeing new members adopting Prime at a rapid rate and I'm wondering when you think that may plateau as far as penetration in terms of the existing
customer base? It's a good question. We are seeing adoption of Prime in our geographies continue to grow nicely. And we customers like Prime, they like the service element of Prime. We have different offerings depending on the geography that we're offering it in.
In the U. S, you can get express 2 day shipping for free. You get one day and also some other offers in terms of weekend offers as well. So again, there's some interesting service element to that and customers are responding very well to it, both existing customers as well as sorry, existing Prime members as well as new Prime members. So, it's going very well.
I guess, I'm asking, I mean, do you think you're reaching any sort of ceiling in terms of how many U. S. Made out? No.
Again, hard to tell when that would happen, but that's certainly that's not what we're experiencing. Great. Thank you.
We'll take our next question Heath Terry with Canaccord. Please go ahead.
Great. Thank you. I was wondering if you could give us a sense, is there a way to quantify the amount of time necessary for the recently opened distribution facilities to get to the same utilization level that you're seeing in the rest of the business? And what kind of impact do you think that has on operating margins to the extent that you can kind of quantify that for us? And in light of the investments in
business. Sure. In terms of when these fulfillment centers will reach their optimum utilization and productivity. We're still getting productivity on existing fulfillment centers that we had for quite some time. So, it'll be something that will evolve over a longer period of time.
But again, if you look at the returns that we've gotten on these, the previous fulfillment centers that we've launched, they've been great uses of capital. So, we're very happy about that. And in terms of your question on double digit operating margins, we've said for a long time and nothing's changed in that regard. We think that certainly double digit operating margins are possible. If it means that we have some high single digit operating margin that maximizes free cash flow.
We're certainly okay with that and have room to go there. But we're certainly focused on how do we get the best free cash flow, free cash flow per share, while getting great efficiency on our invested capital. And so nothing has changed there. Great. Thanks, Tom.
We will take our last question from Sandeep Agarwal with
Tom, in our assessment, there are many international markets which have grown
healthier than the growth you achieved
in Q4. And I know it is a blended growth number and probably some FX dynamics. But are you seeing any basically local e commerce players getting stronger in international market? And secondly, any early signs of traction for the launch of the site in Italy? Thank you.
We're again, we grew 29% on a local currency basis for international, 26% on a dollar basis, challenging compare from Q4 of 2,009, where we certainly from a media perspective had one of our best growth rates that we've had in any quarter previously. EGM grew at 50% on a local currency basis, so very strong growth. And again, we have a long standing practice of not talking about other companies, but we're very pleased with what our international team is doing. We have a great opportunity there for further growth. In terms of Italy, very early, but pleased with what we're seeing so far and like the opportunity there.
Thank you. Thank
you. This will conclude today's question and answer session. Mr. Eldridge, I'll turn the conference back over to you.
Thanks. Well, thanks everybody
for joining us on the call today and for your questions. A replay will be available on our Investor Relations website at least through the end of the quarter. We appreciate your interest in Amazon and look forward to talking with you again next quarter. Thanks everyone.