AMZN Q3 2026 — earnings-desk

REVENUEMiss -0.1% EPSMiss -4.1%

Actuals vs. estimates

Metric	Actual	Consensus	Surprise
RevenueNet sales	$201.94B	$202.22B	▼ Miss -0.1%
EPS(GAAP diluted)	$1.89	$1.97	▼ Miss -4.1%

Net sales of $201.9 billion missed the $202.2 billion consensus by 0.1%, and GAAP diluted EPS of $1.89 missed the $1.97 estimate (both carried from the preliminary).
Q4 guidance calls for net sales of $240 billion to $247 billion and operating income of $28.5 billion to $33.5 billion; 2026 cash CapEx is still expected at approximately $220 billion.
AWS is the story: revenue of $46 billion grew 39.3%, a sixth straight quarter of acceleration, at a 38.7% operating margin, with backlog of $578 billion growing triple digits.
Management put a number on the future: AWS growth north of 40% in each of 2027 and 2028, with CapEx expected to rise meaningfully in 2027.
The one thing that matters: the headline miss is mostly calendar, since Prime Day moved into Q2 and cost about 400 basis points of Q3 growth. Underneath, operating income rose 61% and AWS is accelerating into a $578 billion backlog, and CapEx is the price of that growth.

CEO Andy Jassy said AWS can grow north of 40% in each of 2027 and 2028 and become a trillion-dollar revenue business within five to 10 years, citing visibility from large capacity reservations.
Jassy said inference already accounts for well over half of AWS AI revenue, and that most of Bedrock now runs on Trainium, which he said supports both price and margin.
CFO Brian Olsavsky said AI mix and component pricing are margin headwinds for AWS even as efficiency gains continue, and declined to guide AWS margins.
Jassy said agentic shopping by external agents is not meaningfully impacting Amazon Ads, because few customers shop that way yet.
On CapEx, Jassy said "this is a once in a lifetime opportunity" and that the company can fund the plan.

Operating quality is strong, but EPS did not follow. Operating income rose 61% to $28.1 billion at a record 13.9% margin, yet GAAP EPS of $1.89 missed, and the call did not bridge the gap below the operating line.
Earnings are being reinvested well ahead of cash. Q3 cash CapEx of $75.9 billion was about 2.7 times operating income of $28.1 billion, toward approximately $220 billion for 2026, and management expects meaningfully more in 2027.
Growth is organic and largely currency-neutral: worldwide revenue rose 12%, or 13% excluding foreign exchange.

Advertising growth is understated: the Prime Day shift cut 850 basis points from Q3 ad growth of 12%, and management expects a return to the high teens in Q4.
Fulfillment absorbed real cost inflation: shipping costs rose 11% against 12% unit growth, or 8% excluding fuel and line-haul inflation, and fuel pressure is higher in Q4 than in Q3.
The Q4 operating income guide carries Leo costs: capitalization of Leo production and launch costs slips to Q1 next year, later than the CFO had been predicting, so most are expensed in Q4.
Custom silicon demand is inflecting: revenue commitments for Graviton and Trainium each rose more than 20 times year-over-year, and Trainium will be sold outside AWS starting late 2027.

No watch items on file from a prior quarter - this is the first tracked quarter for this company.

AWS growth trajectory Baseline: AWS revenue $46 billion, up 39.3% in Q3 2026 Confirms: Q4 AWS growth at or above 39.3% Breaks: AWS growth decelerates below 39.3% Check in: Q4 2026. Source: CFO prepared remarks, Q3 2026 call
Advertising growth rebound Baseline: Ad revenue $19.6 billion, up 12%, with an 850 basis point Prime Day headwind Confirms: Q4 ad growth in the high teens as guided Breaks: Q4 ad growth stays in the low teens Check in: Q4 2026. Source: CEO prepared remarks, Q3 2026 call
AWS operating margin under AI mix Baseline: AWS operating margin 38.7% in Q3 2026 Confirms: Margin holds in the high 30s while growth stays near 40% Breaks: Margin falls meaningfully as AI mix and component costs rise Check in: Q4 2026. Source: CFO answer on AWS margins, Q3 2026 call