Amazon reported its financial results for the third quarter of 2026. Revenue rose 12% compared to the same period last year, reaching $201.9 billion. A year earlier, revenue stood at $180.2 billion. Operating income rose 61% to $28.1 billion, while the operating margin reached a record high of 13.9%.
Net income fell slightly, from $21.2 billion to $20.7 billion this year. The decline is primarily due to a one-time paper gain of $9.5 billion on Amazon’s investment in Anthropic. This paper gain was recognized in the third quarter of last year.
AWS posts strongest growth in nearly five years
Amazon Web Services (AWS) also performed particularly well in the third quarter. The business unit reported revenue of $46 billion, representing a 39.3% increase compared to the same period last year. This marks the strongest growth in nearly five years and exceeds the 36.7% growth recorded in the previous quarter.
On an annual basis, AWS’s revenue thus totals approximately $184 billion. AWS’s operating income also rose by 55%, from $11.4 billion to $17.8 billion. As a result, it contributed 63% to Amazon’s total operating income. This occurred even though the division accounts for less than a quarter of total revenue.
AWS, Azure, and Google Cloud compared
Microsoft and Google also announced their results yesterday. Neowin compared the figures from the three cloud businesses.
- Amazon AWS: $46 billion in revenue, a 39.3% increase compared to last year.
- Microsoft Azure: $33.2 billion in revenue, a 48% increase compared to last year.
- Google Cloud: $30.7 billion in revenue, a 103% increase compared to last year.
Although AWS still generates significantly more revenue than Azure and Google Cloud, Microsoft Azure is growing faster. Google Cloud has more than doubled its revenue in just one year. These figures aren’t entirely comparable, Neowin notes, because Google Cloud’s revenue also includes services such as Google Workspace. Amazon forecasts AWS revenue growth of more than 40% for both 2027 and 2028. This is due to strong demand for its AI services.
Stock falls due to cash flow pressure
Amazon’s stock fell by nearly 7% following the announcement of the figures. Investors concluded that AI investments are putting pressure on cash flow. Free cash flow over the past 12 months turned negative at $42.4 billion, compared to a positive $14.8 billion a year earlier. Amazon also expects capital expenditures to total approximately $220 billion in 2026.
Fourth-quarter outlook
For the fourth quarter, Amazon expects revenue of between $240 billion and $247 billion. This represents growth of 12% to 16% compared to the same period last year. Operating income is expected to be between $28.5 billion and $33.5 billion.