Amazon reported $201.9 billion in net sales for the third quarter of 2026, marking a 12% increase from the $180.2 billion recorded during the same period last year. Strong growth in cloud computing and advertising contributed to the company’s latest financial performance.

The results, announced on October 29, showed higher operating income but a slight decline in net income. Amazon’s advertising business generated $19.6 billion in quarterly revenue, up 11% year over year.

Amazon Advertising Revenue Reaches $19.6 Billion

Advertising services remained an important part of Amazon’s business during the quarter ended September 30. Revenue from the segment increased from $17.7 billion in Q3 2025 to approximately $19.6 billion in Q3 2026.

The growth rate was 12% after excluding foreign exchange movements. However, that was slower than the 22% currency-adjusted growth reported in the same quarter last year.

Amazon said the timing of Prime Day and other factors affected the comparison. The shopping event took place in the second quarter across most major markets in 2026, while it fell entirely within the third quarter in 2025.

The company’s advertising operations include sponsored listings, display advertising and video advertising services offered to sellers, brands, publishers and other customers.

AWS Leads Amazon’s Quarterly Revenue Growth

Amazon Web Services (AWS) was one of the strongest performers in the latest results. Its revenue increased 39% year over year to $46 billion, marking its fastest growth in nearly five years.

AWS also generated $17.8 billion in operating income, compared with $11.4 billion in the third quarter of 2025. The segment’s annualized revenue run rate reached approximately $184 billion.

Across Amazon’s other major businesses, North American sales increased 6% to $112.9 billion. International revenue rose 5% to $43.1 billion, or 8% after excluding foreign exchange movements.

Operating Income Rises While Net Income Slips

Amazon’s operating income climbed to $28.1 billion from $17.4 billion a year earlier. The company reported an operating margin of 13.9%, its highest on record.

Net income moved in the opposite direction, falling to $20.7 billion from $21.2 billion in Q3 2025. Diluted earnings per share came in at $1.89, compared with $1.95 in the year-ago quarter.

Amazon attributed much of the year-over-year decline in net income to investment-related gains recorded during the third quarter of 2025.

AI Spending Puts Pressure on Free Cash Flow

Amazon’s investment in artificial intelligence infrastructure continued to influence its cash flow. Operating cash flow for the trailing 12 months increased 29% to $168.3 billion as of September 30, 2026.

However, free cash flow recorded an outflow of $42.4 billion over the same 12-month period. That compared with a positive inflow of $14.8 billion a year earlier.

The decline was primarily linked to higher spending on property, equipment and infrastructure, including investments supporting artificial intelligence. Amazon said it continued to expect approximately $220 billion in capital expenditure for 2026.

Amazon Shares and Q4 2026 Revenue Outlook

For the fourth quarter, Amazon expects net sales between $240 billion and $247 billion. That would represent year-over-year growth of approximately 12% to 16%.

The company also forecast operating income between $28.5 billion and $33.5 billion, compared with $25 billion in the fourth quarter of 2025.

Amazon expects advertising revenue to grow in the high teens year over year during Q4 2026. The forecast follows the slower currency-adjusted advertising growth recorded in the latest quarter.

The results are relevant to investors tracking AMZN, Amazon’s Nasdaq ticker, as the company balances growth in cloud computing and advertising with substantial spending on AI infrastructure.