Amazon disclosed its third-quarter financial results on Thursday, revealing that it fell short of analysts’ projections for both total revenue and earnings per share. The report also contained other concerning figures that alarmed investors, particularly regarding the significant cash outflow the company is experiencing. However, there was a notable highlight: its cloud division, Amazon Web Services (AWS), surpassed revenue expectations, achieving an impressive 39% growth compared to the same quarter last year.
The key figures are as follows: Net sales rose by 12% to $201.9 billion, while analysts had anticipated $202.2 billion, according to hinews. The fully diluted earnings per share stood at $1.89, falling short of the expected $1.97. AWS sales amounted to $45.98 billion, exceeding the forecast of $45.29 billion. Furthermore, Amazon reported that AWS operating income increased to $17.8 billion, up from $11.4 billion in the third quarter of 2025.
However, the most significant concern highlighted in the report was the free cash flow, which plummeted to a negative $42.4 billion over the trailing twelve months, indicating that the company is spending considerably more cash than it is generating. This contrasts sharply with the positive free cash flow of $14.8 billion reported for the twelve months ending September 30, 2025. The substantial expenditures were primarily attributed to Amazon’s investments in artificial intelligence, as stated by the company.
With only one quarter remaining in its fiscal year, Amazon reaffirmed its expectation to conclude 2026 with cash capital expenditures of approximately $220 billion. To provide context, the company has projected fourth-quarter net sales to be between $240 billion and $247 billion. The fourth quarter is typically the most lucrative for retailers, largely due to the holiday shopping season. This indicates that Amazon anticipates spending nearly as much on capital expenditures, primarily for AI, throughout the entire year as it expects to generate from sales in the fourth quarter alone.
