Amazon sales rise 12% to $201.94 billion as shares fall 5%
Key Facts
Amazon reported a 12% rise in net sales to $201.94 billion in the third quarter of 2026, compared with $180.17 billion in the same period a year earlier, but the figure fell short of analysts’ estimate of $202.2 billion, according to FactSet as cited by The Associated Press. Net income was $20.69 billion, or $1.89 per share, compared with $21.19 billion and $1.95 per share a year earlier. FactSet had estimated earnings per share of $1.97. The company’s shares fell more than 5% in after-hours trading following the results, as investors focused on its core business, the news agency said. The results combined sales growth and accelerating cloud-computing activity with a decline in net income from the year-earlier level.
Operating income rose to $28.1 billion in the third quarter, from $17.4 billion a year earlier, and the operating margin was 13.9%, the highest in the company’s history, according to Amazon’s filing with the U.S. Securities and Exchange Commission. The improvement in operating profitability came alongside a year-on-year decline in net income. In cloud computing, AWS sales rose 39.3%, compared with growth of 37% in the second quarter. The Associated Press said this was the division’s fastest growth pace in about five years. AWS’s performance highlights part of the strength in operating results, alongside the decline in net income and sales that fell short of analysts’ estimates.
Chief Executive Andy Jassy said the timing of Prime Day affected the year-on-year sales comparison: the event fell entirely in the third quarter of 2025, while it shifted to the second quarter of 2026 in most large countries. The company added that third-quarter sales growth would have been about 400 basis points higher without the timing shift. That means the event’s different timing lowered the reported growth rate compared with the year-earlier period. Sales rose 12%, but remained below FactSet’s estimate of $202.2 billion. Amazon said annual growth would have been about 4 percentage points higher excluding the timing effect.
Free cash flow turned to an outflow of $42.4 billion in the 12 months ended September 30, 2026, after an inflow of $14.8 billion in the comparable 12 months ended September 30, 2025, according to the company’s filing. Amazon attributed the decline mainly to increased purchases of property and equipment related to its AI investments. Those purchases rose by $94.8 billion year on year in the period ended September 2026. The figures show capital spending expanding alongside accelerating AWS sales growth. This puts free cash flow at the center of the company’s results, alongside operating profitability and cloud-computing growth.
In preparation for the shopping season, Amazon said earlier in October that it would hire 300,000 seasonal workers in the United States, compared with 250,000 the previous year, according to The Associated Press. The hiring announcement comes as the shopping season approaches, providing a backdrop for expectations about retail demand. Reuters reported that concerns about retail demand were linked to rising household costs and inflation. Seasonal hiring figures remain an indication of the scale of the company’s operational preparations for the period. The market’s immediate response to the results focused on Amazon’s core business, while the shares fell more than 5% in after-hours trading.