Amazon reported booming cloud revenue but otherwise missed expectations

Amazon reported its third-quarter earnings on Thursday and missed analysts’ expectations for both its total revenue and earnings per share. There were other murky numbers in the report that scared investors, too, including how much cash the company is burning through.

But the report did have a big, bright spot: its cloud unit, Amazon Web Services, beat revenue expectations and grew a whopping 39% compared to the year-ago quarter.

Here are the numbers:

• Net sales increased 12% to $201.9 billion. But analysts were expecting $202.2 billion, according to FactSet.
• Fully diluted earnings per share were $1.89. Analysts were expecting $1.97.
• AWS sales reached $45.98 billion. Analysts were expecting $45.29 billion. In addition, Amazon said that AWS operating income grew to $17.8 billion, compared with $11.4 billion in the third quarter of 2025.

But here’s the biggest ouch of the report: Free cash flow fell to a negative of $42.4 billion for the trailing 12 months — meaning the company was spending far more cash than it generated. This compares to positive free cash flow of $14.8 billion for the trailing twelve months ended September 30, 2025.

The big spending was driven largely by Amazon’s investments in AI, the company said. With one quarter left in its fiscal year, Amazon reiterated that it still expects to end its 2026 with cash capital expenditures of about $220 billion.

To put that in perspective, the company forecast fourth-quarter net sales of between $240 billion and $247 billion. The fourth quarter is typically a retainer’s biggest, thanks to the holiday shopping season. That means Amazon expects to spend almost as much on capital expenditures, largely for AI, over the full year as it expects to bring in from sales in the fourth quarter alone.