12 Words From Amazon CEO Andy Jassy That Should Have Artificial Intelligence (AI) Investors Cheering Amazon’s (NASDAQ: AMZN) second-quarter earnings had investors on edge, fixated above all else on the company’s capital expenditure (capex) outlook.
This figure came in at roughly $220 billion for the full year, a meaningful increase from the previously stated $200 billion
According to management, higher memory costs are driving the surge. The question hanging over Amazon’s financials is whether such heavy spending can still be justified. During the earnings call, Amazon CEO Andy Jassy made some comments that offer a pointed answer.
How are capex and free cash flow related? Heavy capital spending and free cash flow are linked by a simple accounting equation. Free cash flow equals cash generated from operations minus capital expenditures.