Amazon Q3 2026 earnings: AWS surges but profit and sales miss estimates
Amazon's cloud unit AWS grew at its fastest pace in nearly five years, but overall profit and sales missed Wall Street forecasts and shares fell.
| Q3 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $1.89 | $2.00 | -5.5% |
| Revenue | $201.94B | $206.29B | -2.1% |
Key takeaways
- Both profit and sales came in below Wall Street forecasts, a rarer stumble for Amazon; the company pointed partly to Prime Day having shifted into the second quarter this year, which made this quarter’s year-over-year comparison tougher.
- AWS, Amazon’s cloud-computing division, was the bright spot: its sales jumped 39% from a year earlier, the fastest growth in nearly five years, as demand for AI computing capacity keeps running ahead of what Amazon can build.
- Even with the overall profit miss, operating income (profit from running the business, before taxes and investment swings) rose sharply and the company called its operating margin the highest in its history, pointing to a more efficient retail and logistics operation alongside the AWS growth.
- Advertising revenue grew but also fell short of estimates; management again blamed the Prime Day timing shift and said it expects ad growth to reaccelerate in the current quarter.
- Free cash flow over the trailing twelve months swung to a cash outflow, a reversal from the large cash generation Amazon has typically shown, mainly because the company is pouring roughly $220 billion into AI and cloud infrastructure this year; that’s the money left over after running and investing in the business, which has historically funded buybacks and balance-sheet strength.
- CEO Andy Jassy said the company’s investment in AWS infrastructure and functionality ‘is working’ and that he expects AWS’s growth rate to stay above 40% in both 2027 and 2028.
- For the current (fourth) quarter, Amazon guided to sales growth of 12% to 16% and higher operating income than a year ago, suggesting management is confident about the holiday shopping season despite this quarter’s miss.
- Shares fell after the results as investors focused on the earnings and sales misses and the shift to negative free cash flow, even as AWS’s growth impressed.
Q3 2026 in context
| Metric | Sep 2026 | Sep 2025 | Change |
|---|---|---|---|
| Revenue | $201.9B | $180.2B | +12.1% |
| Net income | $20.7B | $21.2B | -2.4% |
| Free cash flow | -$34.8B | $430M | -8201.6% |
| Diluted EPS | $1.89 | $1.95 | -3.1% |
| Gross margin | 53.2% | 50.8% | +2.4 pts |
| Operating margin | 13.9% | 9.7% | +4.2 pts |
| Net margin | 10.2% | 11.8% | -1.5 pts |
Figures for the quarter ended Sep 2026 and the quarter ended Sep 2025, as reported to the SEC.
Each company's quarter ending in calendar Q3 '26, as reported to the SEC. A peer that reported no revenue figure for that quarter is left out.
How the stock took it
Amazon.com, Inc. closed at $254.60 on Oct 28, 2026, the last session before the report, and at $240.35 on Oct 30, 2026, the first session after it — -5.6% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| Jul 30, 2026 | $226.65 | $271.58 | +19.8% |
| Apr 30, 2026 | $263.04 | $268.26 | +2.0% |
| Oct 31, 2025 | $222.86 | $254.00 | +14.0% |
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 50.8% | Trailing 12 months |
| Operating margin | 12.1% | Trailing 12 months |
| Net profit margin | 17.4% | Trailing 12 months |
| Pretax margin | 22.6% | Trailing 12 months |
| EPS | $12.43 | Trailing 12 months |
| Revenue growth (YoY) | 15.8% | Trailing 12 months |
| EPS growth (YoY) | 89.7% | Trailing 12 months |
| Return on equity | 30.5% | Trailing 12 months |
Sources: company report · Benzinga · company statement