Amazon’s third-quarter results paired higher operating income at Amazon Web Services (AWS), its cloud unit, with negative free cash flow of $42.357 billion over 12 months as equipment purchases outpaced cash from operations.
The outflow covered the 12 months ended Sept. 30, 2026, not the three-month quarter. AWS revenue reached $45.984 billion in the quarter, up 39.3% from a year earlier and its fastest growth in nearly five years. Operating income rose to $17.773 billion from $11.434 billion, while the unit’s operating margin increased to 38.7% from 34.6%.
The trailing 12-month free cash flow figure compares with positive $14.788 billion for the year ended Sept. 30, 2025. Cash generated from operations totaled $168.3 billion in the latest period, up 29% from $130.691 billion.
Net purchases of property and equipment, after proceeds from sales and incentives, reached $210.657 billion, compared with $115.903 billion a year earlier. Amazon defines free cash flow as operating cash flow less those net purchases. The company attributed the bulk of the $94.8 billion annual increase in net equipment purchases to artificial intelligence investment. Its release does not separately quantify AI-specific capital spending or returns from those investments.
Amazon expects cash capital expenditures of about $220 billion for 2026. Amazon President and CEO Andy Jassy forecast AWS revenue growth above 40% in both 2027 and 2028; those figures are management’s expectations.
The latest outflow follows Amazon’s second-quarter results, when free cash flow for the 12 months through June 30, 2026, was negative $7.604 billion. For the fourth quarter, Amazon expects net sales of $240 billion to $247 billion and operating income of $28.5 billion to $33.5 billion.
