Amazon reported a $42.4 billion free cash flow outflow for the twelve months to 30 September, a swing from a $14.8 billion inflow a year earlier, as capital spending on artificial intelligence infrastructure accelerated.
Net capital outlays on property and equipment, after subtracting proceeds from asset sales and incentives, rose $94.8 billion year over year, driven mainly by AI investments, according to the Amazon.com Inc. quarterly results release (SEC filing). Operating cash flow still rose 29% to $168.3 billion over the same period.
Third-quarter net sales climbed 12% to $201.9 billion, short of the $202.2 billion analysts polled by FactSet expected, according to TechCrunch. Diluted earnings per share came in at $1.89 against a consensus of $1.97, and net income slipped to $20.7 billion from $21.2 billion.
Amazon attributed the earnings decline mainly to $9.5 billion of pre-tax gains booked in the third quarter of 2025 on its Anthropic stake, a figure Deadline also reported.
Amazon Web Services was the bright spot. Revenue rose 39% to $46.0 billion, its fastest growth in nearly five years, and segment operating income reached $17.8 billion from $11.4 billion. Chief executive Andy Jassy put the unit's annualized run rate at $184 billion and said growth would exceed 40% in both 2027 and 2028.
"Our AWS investment in functionality and infrastructure is working," Jassy said in the release.
Group operating income rose to $28.1 billion, a 13.9% margin that Amazon described as its highest ever. Advertising revenue grew 12% to $19.6 billion, slower than the more than 20% quarterly pace of recent years and down from the second quarter, Deadline reported.
Amazon guided fourth-quarter net sales to $240 billion to $247 billion, a range whose midpoint sits below the $244.5 billion analysts expected, according to Deadline. It reiterated plans for about $220 billion of cash capital expenditure in 2026, TechCrunch reported.
Shares fell as much as 9% in after-hours trading and traded below $230, after losing 4% during Thursday's session, Deadline reported. The drop came as Alphabet shares slid about 12% in their worst day on record, erasing roughly $500 billion of market value, as investors questioned returns on AI spending across the sector. GlobeTV reported earlier on Thursday that Asian markets had already slipped after Alphabet's results.
Amazon also said Prime Day moved into the second quarter in most large countries this year. Excluding that shift, third-quarter growth would have been about 4 percentage points higher.