Amazon Q3 earnings, revenue miss; AWS net sales soar
Amazon reported third-quarter earnings and net revenue that missed Wall Street estimates as it touted the growth of its Amazon Web Services cloud-computing business.
Despite the miss, the company maintained its capital expenditure forecast. It continues to expect spending will reach $220 billion this year amid aggressive investments in AI.
READ MORE: Amazon reportedly seeking $7B purchase of AI start-up Decart
Amazon's net income decreased to $20.7 billion, or $1.89 per share, in the quarter ended Sept. 30, compared with $21.2 billion, or $1.95 per share, in the year-ago period. Analysts had expected earnings of $1.96 per share, The company said the decrease was driven primarily by pre-tax gains of $9.5 billion in third quarter 2025 included in non-operating income (expense) from its investments in Anthropic.
Operating income totaled $28.1 billion. The company’s operating margin was 13.9%, which Amazon said was its highest operating margin ever.
Net sales increased 12% to $201.9 billion, missing analysts’ estimates of $202.31 billion. Excluding the $0.9 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 13% compared with the year-ago period. (Amazon noted that Prime Day occurred in the second quarter this year compared to 2025 when it fell occurred entirely in the third quarter.)
North America segment sales increased 6% year-over-year to $112.9 billion. International segment sales increased 5% year-over-year to $43.1 billion.
AWS segment sales increased 39% year-over-year to $46.0 billion. It was the unit’s fastest growth in nearly five years.
In the earnings statement, Amazon CEO Andy Jassy said that AWS’ investment in functionality and infrastructure is working, with projected revenue growth rates of over 40% both in 2027 and in 2028.
As it always done, Amazon listed its accomplishments during the quarter. In addition to numerous tech-related developments, these include offering paid rides to customers in Zoox autonomous robotaxis in Las Vegas and started testing in San Diego and Houston (Zoox is now operating in 12 U.S. cities.); plans to hire more than 300,000 seasonal, part-time, and full-time employees this holiday season; a 1.5 billion-plus investment to raise minimum starting pay for U.S. full-time operations employees; and many more. The full list is included in the company's earnings statement.
“Our broader selection and speedier delivery are helping us capture more retail market segment share with improving margins, and our newer businesses, ranging from grocery to pharmacy to Amazon Leo to Zoox are progressing encouragingly,” Jassy said.” There has never been a trillion dollar revenue business, and we may have two of them in the next 5-10 years.”
For the fourth quarter, Amazon expects net sales to be between $240.0 billion and $247.0 billion, or to grow between 12% and 16% compared with fourth quarter of 2025.
