Amazon Q3 Operating Income Jumps 61% as AWS Sales Rise 39%

Amazon.com reported a 61% increase in third-quarter operating income as rapid growth at Amazon Web Services and stronger North America profitability outweighed a slight decline in net income. Free cash flow, however, fell deeply into negative territory as property and equipment spending climbed.

The company generated Q3 2026 net sales of $201.9 billion, up 12% from $180.2 billion a year earlier, or 13% excluding foreign-exchange effects. Operating income rose to $28.1 billion from $17.4 billion, while net income declined 2% to $20.7 billion from $21.2 billion.

For the trailing 12 months, net sales increased 15% to $797.5 billion and operating income advanced 37% to $104.4 billion. Trailing-12-month net income reached $134.8 billion, up 76% year over year.

AWS leads growth and profit expansion

AWS remained Amazon’s fastest-growing reported segment. Cloud revenue increased 39% to $46.0 billion from $33.0 billion, accounting for 23% of total quarterly sales. AWS operating income rose 55% to $17.8 billion from $11.4 billion, representing the largest contribution to Amazon’s consolidated operating profit.

On a trailing-12-month basis, AWS generated $161.4 billion in sales and $61.0 billion in operating income. Both measures increased 50% and 55%, respectively, on reported and foreign-exchange-adjusted bases.

North America sales rose 6% to $112.9 billion and represented 56% of consolidated revenue. Segment operating income increased 82% to $8.7 billion from $4.8 billion, or 81% excluding currency effects. Trailing-12-month North America sales were $460.3 billion, with operating income of $37.6 billion.

International sales increased 5% to $43.1 billion, or 8% on a foreign-exchange-adjusted basis, and accounted for 21% of quarterly revenue. International operating income rose 32% to $1.6 billion from $1.2 billion, or 42% excluding currency effects. The segment produced $175.8 billion in trailing-12-month sales and $5.8 billion in operating income.

Capital spending weighs on free cash flow

Amazon’s trailing-12-month operating cash flow increased 29% to $168.3 billion. That increase was more than offset by $210.7 billion of purchases of property and equipment, net of proceeds from sales and incentives, compared with $115.9 billion in the prior-year period.

As a result, trailing-12-month free cash flow—defined by Amazon as operating cash flow less those net property and equipment purchases—fell to negative $42.4 billion from positive $14.8 billion. The presentation identified optimizing free cash flow as a long-term goal but did not provide quantitative guidance or a timetable.

Amazon also reiterated efficient dilution management as a long-term objective. Common shares outstanding increased to 10.81 billion from 10.69 billion a year earlier, while outstanding stock-based awards declined to 223 million from 268 million. Combined common shares and stock-based awards totaled 11.03 billion, compared with 10.96 billion.

The presentation did not include a forward sales or profit forecast. Amazon cautioned that future results could be affected by foreign-exchange and energy-price movements, global economic conditions, tariffs and trade policies, customer demand, inflation, interest rates, labor constraints and supply volatility, including memory-chip availability. It also cited risks related to competition, investment timing, data-center and fulfillment optimization, regulation, taxation, security incidents, litigation and geopolitical developments.