Amazon Posts Record Operating Income as AWS Sales Grow 39 Percent in the Third Quarter

Amazon reported third quarter results on Thursday, October 29, 2026, with record operating income and the fastest AWS growth in nearly five years, for the quarter ended September 30, 2026. Net sales rose 12 percent and the cloud unit carried the quarter, even as earnings per share missed estimates and the stock fell after hours.

Net sales increased 12 percent to $201.9 billion, compared with $180.2 billion in third quarter 2025. Excluding a $0.9 billion unfavorable foreign exchange impact, net sales increased 13 percent. Amazon said growth would have been about 400 basis points higher without the Prime Day timing shift, because Prime Day fell in the second quarter this year and entirely in the third quarter in 2025.

Operating income increased to $28.1 billion, compared with $17.4 billion in third quarter 2025. Operating margin was 13.9 percent, which Amazon called its highest operating margin ever.

AWS grows 39 percent to a $184 billion run rate

AWS segment sales increased 39 percent year over year to $46.0 billion, or 39.3 percent in the release headline, to a $184 billion annualized revenue run rate. Reuters reported that AWS revenue rose 39 percent to $46 billion, compared with an analysts estimate for a 38.2 percent increase to $45.61 billion compiled by LSEG, after a 37 percent jump in the second quarter. AWS segment operating income was $17.8 billion, compared with $11.4 billion in third quarter 2025.

President and chief executive Andy Jassy said in the release that the company's AWS investment in functionality and infrastructure is working, pointing to revenue growth of over 39 percent in the quarter and projected revenue growth rates of over 40 percent in both 2027 and 2028.

Stores, earnings and the share reaction

North America segment sales increased 6 percent to $112.9 billion, and its operating income was $8.7 billion, compared with $4.8 billion a year earlier. International sales increased 5 percent to $43.1 billion, or 8 percent excluding foreign exchange, and its operating income was $1.6 billion, compared with $1.2 billion.

Net income decreased to $20.7 billion, or $1.89 per diluted share, compared with $21.2 billion, or $1.95 per diluted share, in third quarter 2025. Amazon said the decrease was driven primarily by pre tax gains of $9.5 billion in third quarter 2025 in non operating income from its investments in Anthropic. Earnings per share of $1.89 missed estimates while operating profit beat estimates, and Reuters reported that shares fell more than 7 percent in extended trading.

Guidance, spending and cash flow

For the fourth quarter, Amazon guided net sales of $240.0 billion to $247.0 billion, growth of 12 to 16 percent compared with fourth quarter 2025, and operating income of $28.5 billion to $33.5 billion, compared with $25.0 billion in fourth quarter 2025. Reuters reported the revenue guide against an analysts average estimate of $244.51 billion from LSEG. Reuters also reported that Amazon maintained its annual capital spending forecast of about $220 billion.

Operating cash flow increased 29 percent to $168.3 billion for the trailing twelve months, compared with $130.7 billion a year earlier. Free cash flow decreased to an outflow of $42.4 billion for the trailing twelve months, compared with an inflow of $14.8 billion, driven primarily by a year over year increase of $94.8 billion in purchases of property and equipment, which Amazon said primarily reflects investments in artificial intelligence.