Amazon posts negative free cash flow of $42.4 billion, holds 2026 capex unchanged

Key points

• Amazon reported negative free cash flow of $42.4 billion for the trailing twelve months, up 386% year over year.
• The company kept its 2026 capital expenditure forecast at $220 billion.
• Amazon shares fell more than 7% in extended trading after results missed Wall Street expectations.

Amazon shares dropped more than 7% in extended trading on Thursday after the company's third-quarter earnings and revenue came in below Wall Street expectations. The company also reported negative free cash flow of $42.4 billion for the trailing twelve month period, a 386% year-over-year increase, after a $7.6 billion outflow in the prior quarter.

Amazon attributed the shortfall mainly to higher purchases of property and equipment tied to AI investments. It kept its 2026 capital expenditure forecast unchanged at $220 billion.

Cloud growth and spending plans

Sales in Amazon's cloud segment rose 39% year over year to $45.98 billion, beating Wall Street's forecast of $45.29 billion. CEO Andy Jassy said on an investor call that the company expects to "spend meaningfully more in 2027" and has a "clear line of sight to attractive financial returns."

Jassy said Amazon expects AWS revenue growth rates of "over 40%" next year and in 2028, adding, "Our AWS investment in functionality and infrastructure is working."

Our AWS investment in functionality and infrastructure is working.

— Andy Jassy

Retail and advertising miss

Online sales grew 2% year over year to $68.47 billion, below analysts' projected $69.68 billion. Advertising revenue fell 11% year over year to $19.64 billion, missing consensus estimates of $20.82 billion.

Amazon said both units were affected by its decision to move the annual Prime Day sale in several countries from the third quarter into the second quarter to avoid a conflict with the FIFA World Cup in July. Third-quarter net income was $20.69 billion, or $1.89 per share, down from $21.19 billion, or $1.95 per share, a year earlier, which the company said was mainly due to a $9.5 billion pre-tax gain from its Anthropic investment recorded in the 2025 third quarter.

For the fourth quarter, Amazon expects revenue of $240 billion to $247 billion, in line with the $244.5 billion consensus estimate.