Amazon reported booming cloud revenue but otherwise missed expectations
The biggest ouch of the report was its negative free cash flow of $2.4 billion.
Key points
- Amazon missed analyst expectations for third-quarter total revenue and earnings per share.
- Amazon Web Services beat revenue expectations and grew 39% from the year-ago quarter.
- Free cash flow was negative $42.4 billion for the trailing 12 months, driven largely by AI investment.
Amazon reported third-quarter earnings on Thursday that fell short of analysts' expectations for both total revenue and earnings per share, according to TechCrunch. The report also showed other figures that concerned investors, including the company's cash spending.
Cloud unit beats expectations
The bright spot in the report was Amazon Web Services, which beat revenue expectations and grew 39% compared with the year-ago quarter.
Cash flow turns negative
Free cash flow fell to negative $42.4 billion for the trailing 12 months, meaning the company spent far more cash than it generated. That compares with positive free cash flow of $14.8 billion for the trailing twelve months ended September 30, 2025.
Amazon attributed the heavy spending largely to its investments in AI. With one quarter left in its fiscal year, the company reiterated that it still expects to end 2026 with cash capital expenditures of about $220 billion, and it forecast fourth-quarter net sales of between $240 billion and $247 billion.
