Amazon posts negative free cash flow of $42.4 billion, holds 2026 capex unchanged — SkimNews
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- Amazon reported third-quarter EPS of $1.89 versus $1.96 estimated and revenue of $201.94 billion versus $202.31 billion; shares plunged more than 6% in extended trading.
- Amazon posted $42.4 billion in negative free cash flow for the trailing 12 months, its second consecutive negative quarter and a 386% year-over-year swing, primarily because of higher property-and-equipment purchases for AI investment.
- Amazon spent $77.3 billion on capital expenditures during the quarter, versus $35.1 billion a year earlier and $58.7 billion expected, while holding its 2026 forecast at $220 billion and expecting to spend meaningfully more in 2027.
- AWS revenue grew 39% year over year to $45.98 billion, beating the $45.29 billion estimate; Andy Jassy said its infrastructure investment was working, sees growth above 40% next year and in 2028, and expects AWS to reach $1 trillion in five to 10 years.
- Amazon guided to fourth-quarter revenue of $240 billion to $247 billion, but the midpoint was below Wall Street's $244.5 billion expectation.
- Amazon online sales rose 2% to $68.47 billion, below the $69.68 billion estimate, while advertising rose 11% to $19.64 billion, below $20.82 billion; both were partly affected by moving Prime Day into the second quarter.
- Amazon reported third-quarter net income of $20.69 billion, down from $21.19 billion a year earlier, primarily because the 2025 comparison included a $9.5 billion pre-tax gain from its Anthropic investment.
Why it matters: AWS supplied the growth: revenue reached $45.98 billion, grew 39% year over year and beat consensus. Amazon's retail and advertising units missed estimates, quarterly capex ran $18.6 billion above forecast, and trailing free cash flow swung 386% year over year, leaving the $220 billion 2026 spending plan under closer Wall Street scrutiny.
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