Amazon Posts $42.4 Billion Trailing 12-Month Free Cash Flow Outflow as AWS Grows 39.3%

Amazon’s third-quarter report showed Amazon Web Services sales rising 39.3%, while a $42.4 billion trailing 12-month free cash flow outflow and holiday sales guidance below analyst estimates highlighted the scale of its investment.

Amazon shares fell 7.2% in premarket trading Oct. 30. The stock had closed down 4.25% at $243.79 in regular trading Oct. 29, before the results were released at 4:01 p.m. ET.

Amazon recorded third-quarter net sales of $201.944 billion, up 12% from a year earlier, and diluted earnings of $1.89 a share. Both were below analyst estimates of $202.2 billion in sales and $1.97 per share. Net income slipped 2% to $20.685 billion. Amazon said the net income comparison was primarily affected by $9.5 billion in pre-tax gains from Anthropic investments in the year-earlier quarter.

Amazon Web Services (AWS), the company's cloud unit, generated $45.984 billion in sales, up 39.3% and its fastest growth in nearly five years. AWS operating income climbed 55% to $17.773 billion. Amazon President and CEO Andy Jassy said he expects AWS revenue growth to exceed 40% in both 2027 and 2028.

Free cash flow was an outflow of $42.357 billion for the 12 months ended Sept. 30, compared with an inflow of $14.788 billion in the prior-year period. Amazon linked the shift primarily to a $94.8 billion year-over-year increase in net property and equipment purchases, largely tied to AI investment. The company continues to expect about $220 billion in cash capital expenditures in 2026. The results revisit the balance between cloud growth and AI investment raised in earlier coverage of AI infrastructure spending and cash flow.

Outside AWS, North America sales increased 6%. Advertising-services revenue rose 11% as reported and 12% excluding foreign-exchange changes, down from 26% adjusted growth in the second quarter. Amazon pointed to timing differences, primarily Prime Day: the event took place in the second quarter this year in most large countries, compared with the third quarter in 2025.

Amazon forecast fourth-quarter sales of $240 billion to $247 billion, putting the midpoint at $243.5 billion. Analyst estimates were $244.16 billion and $244.51 billion. The company projected fourth-quarter operating income of $28.5 billion to $33.5 billion.