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Amazon

AMZN · Nasdaq

AWS earns 63% of operating income on 23% of sales

AWS was 22.8% of net sales but earned $17.8B of the $28.1B operating income, so the cloud, not the store, carries Amazon's profit.

Q3 FY2026, the quarter to Sep 30, 2026 · 10-Q filed Oct 30, 2026

Q3 FY2026 · revenue
$201.9B+12.1% on the year
Operating margin
13.9%
Net income
$20.7B
Free cash flow, quarter
-$34.8B

Largest source of revenue: Online stores, 33.9% of the total.

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Where Amazon's money goes

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Key insights · Q3 FY2026
  1. 01

    AWS earns 63% of operating income on 23% of sales

    AWS was 22.8% of net sales but earned $17.8B of the $28.1B operating income, so the cloud, not the store, carries Amazon's profit.

    Why it matters

    AWS earned $17.8B of operating income on $46.0B of sales, an operating margin of 38.7%. North America earned $8.7B on $112.9B of sales, 7.7%, and International $1.6B on $43.1B, 3.7%. Of the $28.1B total, AWS supplied 63.3%, North America 31.1% and International 5.6%.1

    The gap is widening in AWS's favor. AWS sales grew 39.3% against 1.6% for online stores, and AWS's share of net sales rose 4.45 points to 22.8%. The filing attributes the growth to "increased customer usage, partially offset by pricing changes primarily driven by long-term customer contracts."1

    AnalysisSegment margins rest on Amazon's own cost allocation. The filing says the majority of infrastructure costs are allocated to AWS based on usage, and that technology costs fall mainly in North America and AWS. The split is the company's view, not a standalone measure, but the retail segments still earn single-digit margins on more than three quarters of sales.

    AnalysisRead this way, Amazon is a large store that draws the traffic and a smaller cloud business that produces most of the profit. A shift in AWS demand or pricing now moves group operating income more than a retail change of the same dollar size would.

  2. 02

    Capital spending ran at 182% of operating cash flow

    Capital spending of $77.3B against $42.4B of operating cash flow turned free cash flow to negative $34.8B, from $430M a year earlier.

    Why it matters

    Operating cash flow rose to $42.4B from $35.5B a year earlier, but capital spending more than doubled, to $77.3B from $35.1B, equal to 38.3% of net sales. The filing says the spending primarily reflects investments in technology infrastructure, "the majority of which is to support AWS business growth", and in fulfillment capacity.1

    Spending has risen each quarter this year, from $44.2B to $54.2B to $77.3B, and free cash flow was negative in each: $18.2B, $8.8B and $34.8B below zero. The company says it expects cash capital expenditures to "meaningfully increase" next year, "primarily driven by investments in technology infrastructure."1

    Borrowing is bridging the gap. Interest expense was $1.7B against $538M a year earlier, up 214.3%, and now equals 142.5% of interest income of $1.2B. The filing ties it to debt, "including new issuances of Notes, and finance leases."1

    Amazon has run this pattern before. In the previous build cycle, capital spending reached $61.1B in one year and free cash flow was negative for two years, at $14.7B and then $16.9B below zero, before returning to $32.2B.1

    AnalysisThe scale is different this time: the peak annual spend of that earlier cycle is smaller than this single quarter's. Whether the old recovery repeats depends on the new capacity filling with paid usage, which the company presents as an expectation, not a certainty.

  3. 03

    Net income fell 2.4% while operating income rose 61.2%

    A year earlier a $10.2B investment gain lifted net income; this quarter other income was a $703M loss, masking a 61.2% rise in operating income.

    Why it matters

    Operating income rose to $28.1B from $17.4B. Below that line, other income swung from a gain of $10.2B to a loss of $703M, and total non-operating items from a gain of $10.7B to a loss of $1.2B. Income before taxes fell 4.6% to $26.9B and net income fell 2.4% to $20.7B.1

    The filing says the year-earlier gain came "primarily from upward adjustments for observable changes in price relating to our nonvoting preferred stock in Anthropic", together with gains on Anthropic convertible notes converted to preferred stock. It also warns that valuations supporting its strategic investments "could change rapidly."1

    AnalysisNet income now mixes two different things: what the stores and AWS earn, and the recorded value of stakes in AI companies, which can move either way. The fall in diluted earnings per share, to $1.89 from $1.95, comes from below the operating line. Operating income and cash flow are the cleaner read of the business this year.

  4. 04

    Services mix did most of the margin work

    Of the 4.23-point rise in operating margin to 13.9%, lower cost of sales supplied 2.38 points while services rose to 62.7% of net sales.

    Why it matters

    Operating margin was 13.9%, up 4.23 points. Cost of sales fell 2.38 points to 46.8% of net sales, other operating expense fell 1.53 points, and sales and marketing fell 0.72 points to 5.8%. Technology and infrastructure moved the other way, up 1.16 points to 17.2% of net sales.1

    Net service sales were $126.6B, 62.7% of net sales against 58.9% a year earlier, while net product sales were $75.3B. Third-party seller services grew 9.4% and online stores 1.6%. Cost of sales consists primarily of the purchase price of products and shipping, which seller fees, advertising and AWS largely do not carry.1

    AnalysisThe filing describes higher cost of sales as driven by product and shipping costs from increased sales, "partially offset by operational efficiencies", and does not split the improvement by cause. Our reading is that the shift toward services explains much of the 2.38-point drop.

    Part of the gain does not repeat. Other operating expense was $134M against $2.9B a year earlier, when it included "the settlement of a lawsuit". That line accounts for 1.53 of the 4.23 points, about 36.2% of the improvement, so the year-on-year comparison flatters the margin change.1

Sources

  1. 1.Amazon 10-Q for the period to 2026-09-30 (the filing), Oct 30, 2026, read Nov 1, 2026

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Business performance

Growth, profit and margin

Revenue went from $14.8B in FY2007 to $716.9B in FY2025, the operating margin from 4.4% to 11.2%, over 18 years.

  • Revenue$716.9B
  • Operating income$80.0B
  • Operating margin11.2%
Period
Q3 FY2026
Revenue
$201.9B
Operating income
$28.1B
Operating margin
13.9%
Net income
$20.7B
Free cash flow
-$34.8B
Business performance

Does the profit turn into cash?

Q3 FY2026: free cash flow of -$34.8B against net income of $20.7B in the quarter.

  • Operating cash flow$139.5B
  • Capital expenditure$131.8B
  • Free cash flow$7.7B
  • Net income$77.7B

Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.

Financial data and sources

How the revenue mix has shifted

Each breakdown the filing reports, as shares of revenue, for every period it restates.

Segment Information - Disaggregation of Revenue (Details). The filing restates this breakdown for 1 period.

Click a member to isolate it across the years shown.

The figures

Margins, cash and growth for the period, each with what it was computed from.

Gross margin
53.2%
Source10-Q, Derived from Net sales and Cost of sales in the 10-Q filed 2026-10-30
Operating margin
13.9%
Source10-Q, Derived from Operating income and Net sales in the 10-Q filed 2026-10-30
Net margin
10.2%
Source10-Q, Derived from Net income and Net sales in the 10-Q filed 2026-10-30
Free cash flow, quarter
-$34.8B
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-10-30
Free cash flow margin, quarter
-17.3%
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-10-30
Cash conversion, quarter
2.05x
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-10-30
Capital spending, quarter
38.3%
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-10-30
Revenue growth
+12.1%
From the record's own history, against the prior year.

Where revenue comes from

Every breakdown the filing reports for the period, with each item's share.

Revenue streams

Online stores$68.5B33.9%
Third-party seller services$46.5B23.0%
AWS$46.0B22.8%
Advertising services$19.6B9.7%
Subscription services$14.0B6.9%
Physical stores$5.7B2.8%
Other$1.6B0.8%

Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-10-30

Segments

North America$112.9B55.9%
AWS$46.0B22.8%
International$43.1B21.3%

Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-10-30

What it costs

The cost lines beneath operating income, each as a share of revenue, then the operating result.

Costs are reported by function: what it cost to make what was sold, then the expenses of selling, developing and administering.

Cost lineQ3 FY2026Of revenueSource
Total operating expenses$173.9B86.1%Source10-Q, us-gaap:CostsAndExpenses, as reported in the 10-Q filed 2026-10-30
Operating income$28.1B13.9%Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-30

Operating income by segment

Where the operating profit is earned, as the filing reports it.

Segments

AWS$17.8B63.3%
North America$8.7B31.1%
International$1.6B5.6%

Shares of operating income. Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-30

Operating figures the company states

From the text of the filing rather than its statements, each with the sentence that states it.

Contracted commitments not yet recognized (multi-year contracts, mainly AWS)
578,000,000,000 usd
As of Sep 30, 2026
View source
those commitments not yet recognized were estimated to be approximately $ 578 billion as of September 30, 2026.
Energy contracted under derivative-accounted contracts
690,000,000 megawatt-hours
As of Sep 30, 2026
View source
As of September 30, 2026, the energy contract quantities subject to derivative accounting fair value measurements were approximately 690 million megawatt-hours
Weighted-average remaining duration of energy contracts
18 years
As of Sep 30, 2026
View source
the weighted-average remaining duration of these contracts is approximately 18 years
Weighted-average remaining life of long-term contracts
6.1 years
As of Sep 30, 2026
View source
The weighted-average remaining life of our long-term contracts is 6.1 years.

The statements, as filed

The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.

Income statement23 lines, as presented in the 10-Q
LineQ3 FY2026A year earlierChangeOf revenueSource
Income Statement
Net sales$201.94B$180.17B+12%100%Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-10-30
Net product sales$75.30B$74.06B+1.7%37.3%Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax [us-gaap:ProductMember], as reported in the 10-Q filed 2026-10-30
Net service sales$126.65B$106.11B+19%62.7%Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax [us-gaap:ServiceMember], as reported in the 10-Q filed 2026-10-30
Operating expenses:
Cost of sales$94.57B$88.67B+6.7%46.8%Source10-Q, us-gaap:CostOfGoodsAndServicesSold, as reported in the 10-Q filed 2026-10-30
Fulfillment$30.00B$27.68B+8.4%14.9%Source10-Q, amzn:FulfillmentExpense, as reported in the 10-Q filed 2026-10-30
Technology and infrastructure$34.81B$28.96B+20%17.2%Source10-Q, amzn:TechnologyAndInfrastructureExpense, as reported in the 10-Q filed 2026-10-30
Sales and marketing$11.65B$11.69B-0.3%5.8%Source10-Q, us-gaap:MarketingExpense, as reported in the 10-Q filed 2026-10-30
General and administrative$2.70B$2.88B-6.1%1.3%Source10-Q, us-gaap:GeneralAndAdministrativeExpense, as reported in the 10-Q filed 2026-10-30
Other operating expense (income), net (shown as a deduction)(-$134.0M)-$2.88B-95%0.1%Source10-Q, us-gaap:OtherOperatingIncomeExpenseNet, as reported in the 10-Q filed 2026-10-30
Total operating expenses$173.87B$162.75B+6.8%86.1%Source10-Q, us-gaap:CostsAndExpenses, as reported in the 10-Q filed 2026-10-30
Income Statement
Operating income$28.08B$17.42B+61%13.9%Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-30
Interest income$1.19B$1.10B+7.9%0.6%Source10-Q, us-gaap:InvestmentIncomeInterest, as reported in the 10-Q filed 2026-10-30
Interest expense (shown as a deduction)($1.69B)$538.0M+214%0.8%Source10-Q, us-gaap:InterestExpenseNonoperating, as reported in the 10-Q filed 2026-10-30
Other income (expense), net-$703.0M$10.19B0.3%Source10-Q, us-gaap:OtherNonoperatingIncomeExpense, as reported in the 10-Q filed 2026-10-30
Total non-operating income (expense)-$1.21B$10.75B0.6%Source10-Q, us-gaap:NonoperatingIncomeExpense, as reported in the 10-Q filed 2026-10-30
Income before income taxes$26.87B$28.17B-4.6%13.3%Source10-Q, us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments, as reported in the 10-Q filed 2026-10-30
Provision for income taxes (shown as a deduction)($6.18B)$6.91B-11%3.1%Source10-Q, us-gaap:IncomeTaxExpenseBenefit, as reported in the 10-Q filed 2026-10-30
Equity-method investment activity, net of tax-$4.0M-$73.0M-95%0.0%Source10-Q, us-gaap:IncomeLossFromEquityMethodInvestments, as reported in the 10-Q filed 2026-10-30
Net income$20.69B$21.19B-2.4%10.2%Source10-Q, us-gaap:NetIncomeLoss, as reported in the 10-Q filed 2026-10-30
Basic earnings per share (in usd per share)$2$2-3.0%0.0%Source10-Q, us-gaap:EarningsPerShareBasic, as reported in the 10-Q filed 2026-10-30
Diluted earnings per share (in usd per share)$2$2-3.1%0.0%Source10-Q, us-gaap:EarningsPerShareDiluted, as reported in the 10-Q filed 2026-10-30
Weighted-average shares used in computation of earnings per share:
Basic (in shares)10,797,000,00010,674,000,000+1.2%Source10-Q, us-gaap:WeightedAverageNumberOfSharesOutstandingBasic, as reported in the 10-Q filed 2026-10-30
Diluted (in shares)10,929,000,00010,845,000,000+0.8%Source10-Q, us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding, as reported in the 10-Q filed 2026-10-30
Cash flow statement29 lines, as presented in the 10-Q

Year to date, as a quarterly filing reports it.

LineQ3 FY2026A year earlierChangeSource
Statement of Cash Flows
Cash, cash equivalents, and restricted cash, beginning of period$80.93BSource10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-10-30
Operating activities:
Net income$20.69B$21.19B-2.4%Source10-Q, us-gaap:NetIncomeLoss, as reported in the 10-Q filed 2026-10-30
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other$20.95B$16.80B+25%Source10-Q, us-gaap:DepreciationDepletionAndAmortization, as reported in the 10-Q filed 2026-10-30
Stock-based compensation$5.41B$4.85B+12%Source10-Q, us-gaap:ShareBasedCompensation, as reported in the 10-Q filed 2026-10-30
Non-operating expense (income), net (shown as a deduction)(-$694.0M)$10.11BSource10-Q, us-gaap:OtherNoncashIncomeExpense, as reported in the 10-Q filed 2026-10-30
Deferred income taxes$5.03B$10.13B-50%Source10-Q, us-gaap:DeferredIncomeTaxExpenseBenefit, as reported in the 10-Q filed 2026-10-30
Changes in operating assets and liabilities:
Inventories (shown as a deduction)($4.52B)$827.0M+446%Source10-Q, us-gaap:IncreaseDecreaseInInventories, as reported in the 10-Q filed 2026-10-30
Accounts receivable, net and other (shown as a deduction)($2.13B)$1.98B+7.6%Source10-Q, us-gaap:IncreaseDecreaseInAccountsReceivableAndOtherOperatingAssets, as reported in the 10-Q filed 2026-10-30
Other assets (shown as a deduction)($4.64B)$4.04B+15%Source10-Q, us-gaap:IncreaseDecreaseInOtherNoncurrentAssets, as reported in the 10-Q filed 2026-10-30
Accounts payable$1.50B$2.15B-30%Source10-Q, us-gaap:IncreaseDecreaseInAccountsPayable, as reported in the 10-Q filed 2026-10-30
Accrued expenses and other-$3.85B-$2.00B+92%Source10-Q, us-gaap:IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities, as reported in the 10-Q filed 2026-10-30
Unearned revenue$3.28B-$632.0MSource10-Q, us-gaap:IncreaseDecreaseInContractWithCustomerLiability, as reported in the 10-Q filed 2026-10-30
Operating activities:
Net cash provided by (used in) operating activities$42.42B$35.53B+19%Source10-Q, us-gaap:NetCashProvidedByUsedInOperatingActivities, as reported in the 10-Q filed 2026-10-30
Investing activities:
Purchases of property and equipment (shown as a deduction)($77.26B)$35.10B+120%Source10-Q, us-gaap:PaymentsToAcquireProductiveAssets, as reported in the 10-Q filed 2026-10-30
Proceeds from property and equipment sales and incentives$1.38B$867.0M+59%Source10-Q, amzn:ProceedsFromPropertyPlantAndEquipmentSalesAndIncentives, as reported in the 10-Q filed 2026-10-30
Acquisitions, net of cash acquired, non-marketable investments, and other, net (shown as a deduction)($23.99B)$786.0M+2,952%Source10-Q, us-gaap:PaymentsToAcquireBusinessesNetOfCashAcquired, as reported in the 10-Q filed 2026-10-30
Sales and maturities of marketable securities$23.68B$16.37B+45%Source10-Q, us-gaap:ProceedsFromSaleAndMaturityOfMarketableSecurities, as reported in the 10-Q filed 2026-10-30
Purchases of marketable securities (shown as a deduction)($37.46B)$7.43B+404%Source10-Q, us-gaap:PaymentsToAcquireMarketableSecurities, as reported in the 10-Q filed 2026-10-30
Net cash provided by (used in) investing activities-$113.64B-$26.07B+336%Source10-Q, us-gaap:NetCashProvidedByUsedInInvestingActivities, as reported in the 10-Q filed 2026-10-30
Financing activities:
Proceeds from short-term debt, and other$5.31B$3.22B+65%Source10-Q, us-gaap:ProceedsFromShortTermDebt, as reported in the 10-Q filed 2026-10-30
Repayments of short-term debt, and other (shown as a deduction)($3.93B)$1.83B+115%Source10-Q, us-gaap:RepaymentsOfShortTermDebt, as reported in the 10-Q filed 2026-10-30
Proceeds from long-term debt$48.10B$0Source10-Q, us-gaap:ProceedsFromIssuanceOfLongTermDebt, as reported in the 10-Q filed 2026-10-30
Repayments of long-term debt (shown as a deduction)($7.0M)$1.01B-99%Source10-Q, us-gaap:RepaymentsOfLongTermDebt, as reported in the 10-Q filed 2026-10-30
Principal repayments of finance leases (shown as a deduction)($433.0M)$351.0M+23%Source10-Q, us-gaap:FinanceLeasePrincipalPayments, as reported in the 10-Q filed 2026-10-30
Principal repayments of financing obligations (shown as a deduction)($107.0M)$82.0M+30%Source10-Q, amzn:RepaymentsOfLongTermFinancingObligations, as reported in the 10-Q filed 2026-10-30
Net cash provided by (used in) financing activities$48.94B-$44.0MSource10-Q, us-gaap:NetCashProvidedByUsedInFinancingActivities, as reported in the 10-Q filed 2026-10-30
Statement of Cash Flows
Foreign currency effect on cash, cash equivalents, and restricted cash$72.0M-$397.0MSource10-Q, us-gaap:EffectOfExchangeRateOnCashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations, as reported in the 10-Q filed 2026-10-30
Net increase (decrease) in cash, cash equivalents, and restricted cash-$22.21B$9.01BSource10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseIncludingExchangeRateEffect, as reported in the 10-Q filed 2026-10-30
Cash, cash equivalents, and restricted cash, end of period$58.71B$70.46B-17%Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-10-30
Balance sheet25 lines, as presented in the 10-Q
LineQ3 FY2026A year earlierChangeSource
Current assets:
Cash and cash equivalents$55.78BSource10-Q, us-gaap:CashAndCashEquivalentsAtCarryingValue, as reported in the 10-Q filed 2026-10-30
Marketable securities$58.44BSource10-Q, us-gaap:MarketableSecuritiesCurrent, as reported in the 10-Q filed 2026-10-30
Inventories$42.63BSource10-Q, us-gaap:InventoryNet, as reported in the 10-Q filed 2026-10-30
Accounts receivable, net and other$98.24BSource10-Q, us-gaap:AccountsReceivableNetCurrent, as reported in the 10-Q filed 2026-10-30
Total current assets$255.10BSource10-Q, us-gaap:AssetsCurrent, as reported in the 10-Q filed 2026-10-30
Assets
Property and equipment, net$508.86BSource10-Q, us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization, as reported in the 10-Q filed 2026-10-30
Operating leases$96.91BSource10-Q, us-gaap:OperatingLeaseRightOfUseAsset, as reported in the 10-Q filed 2026-10-30
Goodwill$23.74BSource10-Q, us-gaap:Goodwill, as reported in the 10-Q filed 2026-10-30
Other assets$358.78BSource10-Q, us-gaap:OtherAssetsNoncurrent, as reported in the 10-Q filed 2026-10-30
Total assets$1.24TSource10-Q, us-gaap:Assets, as reported in the 10-Q filed 2026-10-30
Current liabilities:
Accounts payable$158.72BSource10-Q, us-gaap:AccountsPayableCurrent, as reported in the 10-Q filed 2026-10-30
Accrued expenses and other$77.56BSource10-Q, us-gaap:AccruedLiabilitiesCurrent, as reported in the 10-Q filed 2026-10-30
Unearned revenue$21.71BSource10-Q, us-gaap:ContractWithCustomerLiabilityCurrent, as reported in the 10-Q filed 2026-10-30
Total current liabilities$257.98BSource10-Q, us-gaap:LiabilitiesCurrent, as reported in the 10-Q filed 2026-10-30
Liabilities and stockholders’ equity
Long-term lease liabilities$98.82BSource10-Q, amzn:LeaseLiabilityNoncurrent, as reported in the 10-Q filed 2026-10-30
Long-term debt$173.13BSource10-Q, us-gaap:LongTermDebtNoncurrent, as reported in the 10-Q filed 2026-10-30
Other long-term liabilities$99.86BSource10-Q, us-gaap:OtherLiabilitiesNoncurrent, as reported in the 10-Q filed 2026-10-30
Stockholders’ equity:
Preferred stock ($0.01 par value; 500 shares authorized; no shares issued or outstanding)$0Source10-Q, us-gaap:PreferredStockValue, as reported in the 10-Q filed 2026-10-30
Common stock ($0.01 par value; 100,000 shares authorized; 11,246 and 11,326 shares issued; 10,731 and 10,811 shares outstanding)$113.0MSource10-Q, us-gaap:CommonStockValue, as reported in the 10-Q filed 2026-10-30
Treasury stock, at cost (shown as a deduction)($7.84B)Source10-Q, us-gaap:TreasuryStockCommonValue, as reported in the 10-Q filed 2026-10-30
Additional paid-in capital$154.92BSource10-Q, us-gaap:AdditionalPaidInCapital, as reported in the 10-Q filed 2026-10-30
Accumulated other comprehensive income (loss)$102.28BSource10-Q, us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax, as reported in the 10-Q filed 2026-10-30
Retained earnings$364.12BSource10-Q, us-gaap:RetainedEarningsAccumulatedDeficit, as reported in the 10-Q filed 2026-10-30
Total stockholders’ equity$613.60B$369.63B+66%Source10-Q, us-gaap:StockholdersEquity, as reported in the 10-Q filed 2026-10-30
Liabilities and stockholders’ equity
Total liabilities and stockholders’ equity$1.24TSource10-Q, us-gaap:LiabilitiesAndStockholdersEquity, as reported in the 10-Q filed 2026-10-30

About this data

Source
Amazon 10-Q, accession 0001018724-26-000040, filed Oct 30, 2026, read on Nov 1, 2026.
History
From the SEC's XBRL company facts, the value from the latest filing that stated each period.
Reading
Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
Version
methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-01
Edge and risks

What holds Amazon's model up, and what could bend it

Competitive edge

  • One infrastructure base serves the stores and AWS customers

    Technology and infrastructure cost grew 20.2%, about half the 39.3% pace of AWS sales, on a base the filing says serves Amazon and outside customers alike.

    The detail

    AWS costs sit mainly in technology and infrastructure because, in the filing's words, "we leverage a shared infrastructure that supports both our internal technology requirements and external sales to AWS customers." That line was $34.8B, 17.2% of net sales, while AWS earned 38.7% of its $46.0B of sales as operating income.1

    AnalysisWhy it holds: the stores give AWS a large, demanding internal customer, and outside customers pay for capacity the company would partly need anyway. The advantage narrows if new capacity outruns usage, since that cost lands in the same shared line.

  • $578B of contracted commitments not yet booked as revenue

    Customer commitments not yet recognized total about $578B, mainly AWS, with a 6.1-year average remaining life, so much of the build-out has signed demand behind it.

    The detail

    The filing estimates commitments in contracts longer than one year not yet recognized at "approximately $578 billion", primarily AWS, with a weighted-average remaining life of 6.1 years, against AWS sales of $46.0B this quarter. During the year AWS announced expanded multi-year commitments with OpenAI and with Anthropic.1

    AnalysisThe backlog is not cash in hand. The filing says "The amount and timing of revenue recognition will be driven by customer usage and our performance in accordance with contractual obligations". Some of the largest commitments come from AI developers in which Amazon also holds stakes, so customer and investment exposure overlap.

  • Advertising grows on traffic the store already pays for

    Advertising services reached $19.6B, up 10.9%, while sales and marketing spending fell 0.3%, so ad revenue grew without a matching rise in traffic cost.

    The detail

    Advertising services were $19.6B, 9.7% of net sales. Sales and marketing expense was $11.6B, down 0.72 points to 5.8% of net sales. The filing explains higher North America operating income as "primarily due to increased unit sales and increased advertising sales", with the same wording for International.1

    Advertising revenue equals 69.9% of total operating income. That is a comparison of scale, not a profit figure: the filing does not report advertising costs separately. Prime and shipping offers, which bring shoppers back, are booked outside sales and marketing, though the company calls them "effective worldwide marketing tools."1

    AnalysisWhy it holds: shoppers arrive ready to buy, so brands pay to appear at that moment, and the traffic is already funded by retail. The same auctions are now the subject of a regulatory complaint, covered under the risks.

What to watch

  • Capacity bought now becomes fixed cost later

    This quarter's $77.3B of capital spending is recovered through depreciation in technology and infrastructure, a cost that stays fixed whether or not usage grows into it.

    The detail

    The company warns that misjudging demand can leave it with "excess or insufficient fulfillment or data center capacity, service interruptions, increased costs, and impairment charges", and that "A significant portion of our expenses and investments is fixed, and we are not always able to adjust our spending quickly enough if our sales are less than expected."1

    The cost is already arriving. Technology and infrastructure rose 20.2% to $34.8B, up 1.16 points to 17.2% of net sales, which the filing attributes to "an increase in spending on infrastructure, including depreciation and amortization."1

    AnalysisA slowdown in AWS while depreciation is still climbing would show first in that line and in AWS's segment margin.

  • Regulators target the lines that lift retail margins

    Seller fees of $46.5B and advertising of $19.6B drive the retail profit gains, and both sit inside open antitrust suits and a new advertising complaint.

    The detail

    The Federal Trade Commission and state attorneys general filed a complaint alleging that reserve prices in Amazon's sponsored ad auctions harmed advertisers. Separate antitrust suits seeking "billions of dollars of alleged damages" cover pricing policies, use of seller data, advertising practices and the structure of Prime. Amazon disputes all of them.1

    The filing also lists open competition investigations covering its stores, fulfillment network, Prime and "certain aspects of AWS's offering of cloud services." Remedies could include changes to business practices, not only fines.1

  • Chip supply and China-based sellers are concentrated dependencies

    The AI build relies on a limited group of chip suppliers, and China-based sellers account for significant portions of seller-services and advertising revenue.

    The detail

    Amazon says it relies on "a limited group of suppliers for semiconductor products, including products related to artificial intelligence infrastructure such as graphics processing units", and that constraints could limit its ability to develop and operate AI services. The guidance names supply volatility "including for memory chips".1

    It also says "China-based sellers account for significant portions of our third-party seller services and advertising revenues", leaving those lines, $46.5B and $19.6B this quarter, exposed to tariffs and trade disputes.1

Sources

  1. 1.Amazon 10-Q for the period to 2026-09-30 (the filing), Oct 30, 2026, read Nov 1, 2026
Go deeper

Amazon, further in

Member research, then your own questions on ChatGPT.

What could change the outlook

What Amazon's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.

  • What has to go right for the build-out to pay back

    How the contracted AWS backlog, the pace of new capacity and rising depreciation fit together, and which lines in each filing show first whether usage is catching up with spending.

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  • What would slower AWS growth do to Amazon's operating income, given AWS earned 63.3% of it this quarter?
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  • Why did Amazon's net income fall while operating income rose 61.2%, and how do its AI stakes move reported earnings?

Business Lens describes Amazon from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.