SEATTLE – Amazon today posted fiscal third-quarter revenue and earnings that came in slightly below Wall Street’s expectations.
Net sales for the quarter ended September 30 increased 12% to nearly $202 billion, Amazon said.
Amazon posted operating income of $28.1 billion, compared to $17.4 billion in the third quarter of fiscal 2025. Operating margin was 13.9%, Amazon’s highest operating margin to date.
Its cloud computing business, Amazon Web Services, continues to boom and to generate the majority of Amazon’s operating profit. Amazon said AWS sales increased 39% to $46 billion – the segment’s fastest growth in nearly five years.
The tech giant reiterated its capital expenditure forecast for 2026, saying it continues to expect spending, largely on AI and cloud infrastructure, will reach $220 billion.
Andy Jassy, Amazon’s president and chief executive, has sought to soothe investors’ fears about Amazon’s massive investments in AI with assurances that the demand for AI products and services is growing exponentially.
On a conference call with analysts, Jassy said AWS has a backlog of $578 billion in contracted future revenue, more than double a year earlier. Amazon expects to spend “meaningfully more” on capital projects in 2027 than it does this year.
“Our AWS investment in functionality and infrastructure is working, with over 39% year-over-year revenue growth in Q3 and projected revenue growth rates of over 40% both in 2027 and in 2028,” Jassy said in a press release. “Our broader selection and speedier delivery are helping us capture more retail market segment share with improving margins, and our newer businesses – ranging from grocery to pharmacy to Amazon Leo to Zoox – are progressing encouragingly. There has never been a trillion-dollar revenue business, and we may have two of them in the next five to 10 years.”
Jassy said Amazon’s retail business, including online stores, physical stores, and third-party seller services, continues to gain market share and post improving margins.
Amazon said it delivered its fastest speeds ever for Prime members, with more than 1.5 billion items arriving same-day or overnight during the quarter.
The company continued expanding its ultra-fast delivery service, Amazon Now, which is available in more than 450 towns and cities worldwide. The number of items ordered through Amazon Now increased 10-fold from a year earlier.
Amazon also said its global grocery business is expanding, with fresh groceries and everyday essentials growing about three times faster than the rest of the store and accounting for about half of all units sold.
Online stores grew 2% to $68.5 billion, with the move of this year’s Prime Day extravaganza into the second quarter cited as a limiting factor.
Advertising grew 11% to $19.6 billion, down from 22% a year earlier, with the move of Prime Day suppressing third-quarter performance.
Amazon said fees from third-party seller services increased 9% to $46.5 billion. Subscription services, which includes Prime memberships, grew 11% to $14 billion.
