Amazon reported booming cloud revenue, but otherwise missed expectations

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

But there is one bright spot in the report: Its cloud unit, Amazon Web Services, beat revenue expectations and saw a whopping 39% growth from last year’s 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 expected $1.97.
• AWS sales reached $45.98 billion. Analysts expected $45.29 billion. Additionally, Amazon said AWS operating profit reached $17.8 billion, up from $11.4 billion in the third quarter of 2025.

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

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

To put that into perspective, the company expects fourth-quarter net revenue to be between $240 billion and $247 billion. The fourth quarter is typically the busiest for a retailer, thanks to the holiday shopping season. That means Amazon expects to spend almost as much on capital expenditures, largely on AI, over the full year as it expects to generate sales in the fourth quarter.