On Thursday, Amazon released its third-quarter financial results, coming in below Wall Street projections for both earnings per share and overall revenue while investors worried about high cash consumption.
However, the filing contained a major positive result as the cloud division, Amazon Web Services, topped revenue forecasts with a 39 percent jump over the same period last year.
The financial figures break down as follows:
- Net sales climbed 12 percent to reach $201.9 billion, falling short of the $202.2 billion FactSet analyst consensus.
- Fully diluted earnings per share landed at $1.89, missing the $1.97 anticipated by analysts.
- AWS revenue hit $45.98 billion, beating the $45.29 billion expected by analysts, while operating income for the unit rose to $17.8 billion from $11.4 billion in the third quarter of 2025.
The most painful detail in the update was a negative free cash flow of $42.4 billion over the trailing 12 months, showing expenses exceeded generated cash. This contrasts with a positive free cash flow of $14.8 billion for the trailing 12 months ending September 30, 2025.
Management stated that heavy investments in artificial intelligence fueled the massive spending. With one quarter remaining in the fiscal year, Amazon confirmed its projection that cash capital expenditures for 2026 will total about $220 billion.
For context, the firm projected fourth-quarter net sales between $240 billion and $247 billion. Because the final quarter is normally the largest due to holiday shopping, Amazon anticipates spending nearly as much on capital expenditures for the full year as its projected fourth-quarter sales total.
