Amazon shares fell 7.3% in extended trade after the company posted Q3 revenue of $201.94 bn, missing the $202.31 bn estimate, and EPS of $1.89 against the $1.96 consensus. Advertising turned in at $19.64 bn, down $1.18 bn from the $20.82 bn forecast. AWS revenue hit $45.98 bn, up 39% YoY and beating its $45.29 bn estimate, but the overall picture was weighed down by the core retail and ad segments, which grew 2% and 11% respectively, both below expectations.
Free cash flow slid into the negative, registering $-42.4 bn in the quarter, a sharp reversal from the $7.6 bn positive flow in Q3 2025. Capex rose to $77.3 bn, eclipsing the $58.7 bn forecast, and is set to remain at $220 bn for the full year as disclosed in the BSE filing. The red cash flow aligns Amazon with peers Alphabet and Meta, both of which posted negative cash flows and saw their stocks tumble after their own earnings.
CEO Andy Jassy touted AWS as the only bright spot, projecting 40%+ growth next year and a $1 trillion revenue milestone within five to ten years. Nonetheless, Amazon’s guidance for Q4 revenue now ranges between $240 bn and $247 bn, a mid‑point below the $244.5 bn consensus, reflecting a cautious outlook amid slowing core sales.
Investors reacted by dumping the stock, which was already down 4.5% in regular trading before the results. Analysts on the floor are now recalibrating target prices, citing the negative free cash flow and subdued retail performance. The next earnings call, scheduled for December 15, will be closely watched for any shift in cash flow guidance or capital allocation plans.