Amazon 8-K
PositiveEarningsNew guidance
AWS growth accelerated to 39% Y/Y; AI infrastructure spending pushed TTM free cash flow to a $42.4B outflow.
Filed 2026-10-29 16:05 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q3 2026 results with Q4 2026 guidance. Amazon reported its highest-ever operating margin, 13.9%, as AWS sales accelerated 39% to $46.0B, a $184B annualized revenue run rate and its fastest growth in nearly five years. Higher investment in AI infrastructure contributed to trailing-12-month free cash flow turning negative.
Key Figures
| Metric | Q3 2026 | 9M 2026 |
|---|---|---|
| Revenue | $201.9B, +12% Y/Y | $584.1B, +16% Y/Y |
| Operating income | $28.1B, +61% Y/Y | $79.4B, +44% Y/Y |
| Operating margin | 13.9%, vs 9.7% | — |
| Net income | $20.7B, -2% Y/Y | $113.6B, +101% Y/Y |
| Diluted EPS | $1.89, -3% Y/Y | $10.42, +100% Y/Y |
| Operating cash flow | $42.4B, +19% Y/Y | $113.8B, +34% Y/Y |
- Segment sales were $112.9B in North America (+6% Y/Y), $43.1B internationally (+5%; +8% excluding foreign exchange), and $46.0B at AWS (+39%). Segment operating income rose 82% to $8.7B in North America, 32% to $1.58B internationally, and 55% to $17.8B at AWS.
- Reported sales growth was 12%, or 13% excluding foreign exchange. Prime Day fell in Q2 in most large countries this year, versus Q3 last year; Amazon said Q3 growth would have been approximately 400 bp higher without that timing shift.
- For the trailing 12 months, operating cash flow was $168.3B (+29%), while free cash flow was an outflow of $42.4B vs an inflow of $14.8B. The outflow was driven primarily by a $94.8B Y/Y increase in net property and equipment purchases, which reached $210.7B and primarily reflected AI investment. Bedrock token volume grew nearly 17x Y/Y, and Fortune 500 spending on Bedrock grew nearly 7x.
Against earlier guidance (derived from earlier filings)
| Metric | Period | Earlier guidance | Actual | Result |
|---|---|---|---|---|
| Net sales | Q3 2026 | $197B-$202B; 9%-12% Y/Y growth | $201.9B | in line |
| Operating income | Q3 2026 | $22.5B-$26.5B | $28.1B | beat |
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Net sales | Q4 2026 | $240B-$247B; 12%-16% Y/Y growth | — | — |
| Operating income | Q4 2026 | $28.5B-$33.5B | — | — |
| Advertising revenue growth | Q4 2026 | High teens Y/Y | — | — |
| Cash capital expenditures | FY2026 | ≈$220B | — | Reaffirmed |
| AWS revenue growth | FY2027 | Over 40% | — | — |
| AWS revenue growth | FY2028 | Over 40% | — | — |
The Q4 sales outlook assumes an approximately 60 bp unfavorable foreign-exchange impact. Amazon’s AWS growth projections for 2027 and 2028 were stated by its CEO.
Investor Takeaways
- Watch Q4 sales, operating income and advertising revenue against the guided ranges and growth outlook; results within those levels would be consistent with Amazon’s current outlook.
- Track AWS revenue growth against the projected rate of over 40% in both 2027 and 2028, alongside Bedrock usage and customer spending; sustained growth would support the company’s AI investment case.
- Watch free cash flow and operating cash flow as AI-related capital spending continues; improvement in free cash flow would indicate that cash generation is keeping pace with investment.
The summary is written by an AI model reading the filing.
Model 005 · prompt v111 · 2026-10-29 22:37:21Z