Amazon shared its financial results for the third quarter on Thursday, missing Wall Street projections for both total revenue and earnings per share. TechCrunch reports that despite the broader misses and worries over high spending, the company posted a massive bright spot in its cloud computing division.
Key takeaways
- Net sales reached $201.9 billion, falling just short of FactSet expectations of $202.2 billion.
- Fully diluted earnings per share landed at $1.89 against a projected $1.97.
- AWS sales hit $45.98 billion, beating the estimated $45.29 billion.
- Free cash flow dropped to a negative of $42.4 billion for the trailing 12 months.
How did Amazon third-quarter earnings perform overall?
Net sales climbed 12 percent compared to the same period in the previous year. Even though sales reached $201.9 billion, the total failed to hit the $202.2 billion target that analysts tracked by FactSet anticipated. Earnings per share also fell short at $1.89 instead of the expected $1.97.
Investors also reacted to murky numbers regarding cash burn. Free cash flow dropped to a negative of $42.4 billion for the trailing 12 months ending September 30. That figure marks a sharp decline from the positive $42.4 billion contrast, or rather, the positive $14.8 billion recorded in the prior year.
What drove the heavy spending and AWS revenue?
Amazon Web Services provided the major positive news in the report. AWS sales grew 39 percent year-over-year to $45.98 billion, surpassing the $45.29 billion expected by analysts. Operating income for the cloud unit jumped to $17.8 billion from $11.4 billion in the third quarter of 2025.
The heavy spending that scared investors stems largely from AI investments. The company reiterated plans to finish 2026 with cash capital expenditures of roughly $220 billion. Management forecast fourth-quarter net sales between $240 billion and $247 billion, meaning full-year capital expenditures will nearly match expected sales for the holiday-heavy fourth quarter.
What it means for investors
The latest report highlights a tense balancing act for the retail and cloud giant as heavy investments reshape its financial outlook. With massive capital expenditures planned for AI infrastructure, shareholders are watching closely to see how quickly those projects convert into sustainable returns. The stark contrast between booming cloud demand and negative free cash flow leaves the company facing intense scrutiny as it enters the final quarter of the fiscal year.
Frequently asked questions
Net sales increased by 12 percent to reach $201.9 billion, missing analyst expectations of $202.2 billion according to FactSet.
AWS sales reached $45.98 billion, beating analyst expectations of $45.29 billion, while operating income grew to $17.8 billion.
Fully diluted earnings per share were $1.89, which fell short of the $1.97 that analysts were expecting.
Free cash flow fell to a negative of $42.4 billion for the trailing 12 months, driven largely by heavy investments in AI.
Amazon reiterated that it expects to end fiscal year 2026 with cash capital expenditures of about $220 billion.
Based on reporting by TechCrunch. Read the original article
