Amazon’s $42.4B Free Cash Outflow Overshadows Faster AWS Growth

Amazon reported a $42.4 billion free cash outflow for the year ended 30th September after a steep rise in spending on property and equipment. The same earnings release showed faster sales growth at Amazon Web Services, its cloud computing business. Amazon attributed most of the annual increase in those purchases to artificial intelligence investment.

The company’s 29th October earnings release put AWS sales at $46 billion for the quarter, up 39.3% from a year earlier. Amazon described that as its fastest cloud growth in nearly five years. Group sales rose 12% to $201.9 billion.

Amazon reported quarterly net income of $20.7 billion and operating income of $28.1 billion. Net income was lower than the $21.2 billion it reported a year earlier.

Operating cash flow, measured across the trailing twelve months, rose 29% to $168.3 billion. The company said the deterioration in free cash flow primarily reflected a $94.8 billion annual increase in property and equipment purchases after sales proceeds and incentives, largely for AI.

Those figures cover different periods. The earnings and AWS revenue describe Q3, the cash flow totals cover twelve months. Amazon had generated $14.8 billion of free cash flow in the comparable year-earlier period.

Reuters reported that Amazon shares fell as much as 7% in extended trading after the results on Thursday. The report said chief executive Andy Jassy expected capital expenditure to rise meaningfully next year, without giving an amount.

Amazon retained its forecast for roughly $220 billion of cash capital expenditure in 2026, including investment in infrastructure and equipment. For the holiday quarter, it projected sales of $240 billion to $247 billion. The range brackets the $244.51 billion analyst estimate cited by Reuters, although its midpoint is lower.

AP reported that Prime Day moved into the second quarter in most large markets this year, while it fell entirely in the third quarter in 2025. Amazon said that shift weighed on reported sales growth. Amazon said sales growth would have been about four percentage points higher without that shift.