Amazon reported a third-quarter operating income of $17.4 billion, impacted by special charges. AWS revenue reached $33 billion, with a backlog of $200 billion. North America revenue was $106.3 billion, and international revenue was $40.9 billion. Paid units grew by 11% year-over-year, and third-party seller unit mix rose to 62%.
AWS delivered its highest growth in nearly three years, with revenue growing 20.2% year-over-year. The company highlighted AI-driven commerce enhancements like Rufus, which has seen significant customer engagement. Amazon also expanded same-day perishable delivery to over 1,000 US cities, with plans to reach 2,300 by year-end. The Prime Day event was the largest ever, with customers saving “billions of dollars” across 35 categories.
CEO Jassy mentioned that Trainium3 is set to preview at the end of the year, with expected broad customer adoption in early 2026. CFO Olsavsky highlighted a reduction in US inbound lead time and a growth of paid units by 11% year-over-year. Project Rainier, an AI cluster with Trainium2 chips, is being used by Anthropic, and AWS continues to invest in robotics for fulfillment operations. Amazon reported Q3 revenue of $180.2 billion, up 12% year-over-year, with operating income of $17.4 billion. AWS grew at a rate of 20.2% year-over-year, reaching a backlog of $200 billion. They are investing heavily in AI, launching services like SageMaker and AgentCore to meet customer demands and drive future growth.
AgentCore has seen over 1 million downloads, enabling companies to deploy secure, scalable AI agents. AWS also offers Kiro for coding, Transform for migration and QuickSight for business insights. Amazon Connect, their contact center solution, has reached a $1 billion annualized revenue run rate and is used by major companies like Capital One and Toyota. AWS continues to attract big enterprise and government transformations to the cloud with its advanced capabilities and customer focus. The company has rapidly expanded capacity, adding 3.8 gigawatts of power in the past year and is on track to double it by 2027. Trainium2 chips are seeing strong growth and adoption, with Trainium3 on the horizon.
Amazon continues to innovate and expand its offerings for customers, with a focus on selection, low prices, and convenience. The company has added 14% more selection since last quarter, with popular brands like The North Face and Charlotte Tilbury. Everyday Essentials is growing quickly, while fresh groceries can now be ordered alongside other products for free same-day delivery in over 1,000 cities.
Amazon is committed to staying competitive on prices, offering customers savings across more than 35 categories during Prime Day. The company is on track to deliver at its fastest speeds ever for Prime members, with 3-hour delivery rolling out in select U.S. cities. Amazon is also investing over $4 billion to expand its rural delivery network across the U.S., reaching more communities with fast delivery service.
Amazon is rapidly expanding its services in rural communities, increasing access to same-day and next-day delivery by 60%. The stores team is leveraging AI to enhance the customer shopping experience, with features like Rufus, an AI-powered shopping assistant, generating over $10 billion in incremental annualized sales. Amazon Lens, an AI-powered visual search tool, is also seeing high usage among customers. Amazon announced new integrations with Spotify and SiriusXM for advertising opportunities. They exceeded expectations for upfront commitments with significant growth and are innovating with AI tools. Alexa+ customers are engaging more with longer interactions, and there is strong momentum in Prime Video live sports. Zoox robotaxis are now available in Las Vegas.
Amazon reported Q3 revenue of $180.2 billion, a 12% increase from last year. Worldwide operating income was $17.4 billion, with special charges reducing this by $4.3 billion. Revenue in North America was $106.3 billion, up 11%, while International revenue was $40.9 billion, up 10%. Worldwide paid units grew by 11%.
North America segment operating income was $4.8 billion with an operating margin of 4.5%. Excluding charges, this would have been $7.3 billion with a margin of 6.9%. International segment operating income was $1.2 billion with an operating margin of 2.9%, showing expansion year-over-year. Amazon continues to focus on improving customer experience and efficiency in their operations. Amazon is now offering U.S. customers same-day delivery of perishable groceries in as little as 5 hours, leading to increased customer engagement. The company sees potential for further improvement in its global fulfillment network. Advertising revenue reached $17.7 billion, showing strong growth. AWS revenue hit $33 billion, up 20.2% year-over-year, with plans to expand data center footprint for Gen AI. Cash CapEx was $34.2 billion in Q3, primarily for AI investments and tech infrastructure.
AWS operating margins may fluctuate due to ongoing investments in capacity. Amazon expects to invest approximately $125 billion in cash CapEx by 2025, with further increases in 2026. The company remains committed to enhancing the customer experience and driving sustainable value for shareholders. AWS has brought in significant capacity to meet demand and is seeing strong interest in Trainium3 from a broadening customer base. Trainium2 is fully subscribed and growing rapidly, with projects like Project Rainier driving adoption of the technology. Amazon’s Andy Jassy addresses the key hurdles for Trainium3 adoption, emphasizing multiple chip options for customers. With a deep relationship with NVIDIA, Amazon plans to continue buying NVIDIA chips while highlighting the advantages of their own chip team and Trainium’s price performance benefits compared to other options.
Project Rainier’s architecture revolves around the Trainium2 chip, offering performance and price advantages for customers. While currently specific to Anthropic, AWS aims to expand large clusters of Trainium chips to other customers with Trainium3 in the future. The infrastructure capabilities and chip performance are key factors in the success of Project Rainier.
Amazon’s grocery business sees significant growth, surpassing $100 billion in gross merchandising sales in the last 12 months. With a focus on consumables and organic foods, including Whole Foods Market, Amazon positions itself as a top 3 grocery in the U.S. and plans to expand its Whole Foods physical presence in the future. Amazon CEO Jeff Bezos announced the launch of smaller Whole Foods stores in urban areas, offering same-day delivery of perishable groceries to over 1,000 cities in the U.S., with plans to expand to 2,300 cities by the end of the year. This move is changing the traditional weekly grocery stock-up routine for customers.
Amazon is focused on reducing layers within the company to operate more like a startup, emphasizing ownership and quick decision-making. This cultural shift is not financially or AI-driven but aims to maintain a lean, flat structure to keep up with the rapid technology transformation happening in the business world.
Amazon continues to invest significantly in robotics, with over 1 million robots in their fulfillment network. This technology improves safety, productivity, and speed, allowing human teammates to focus on problem-solving. The company envisions a future where robots and humans work together in their fulfillment network. Amazon is utilizing AI and agentic commerce to enhance online shopping experiences through features like Rufus and Buy for Me. They plan to partner with third-party agents to improve personalization and delivery accuracy. AI and agentic commerce solutions will expand online shopping opportunities, benefiting both customers and Amazon.
AWS is experiencing accelerated growth, driven by AI infrastructure and AgentCore services for building agents. Companies are realizing the value of AI through agents, but building them is still challenging. AWS offers tools like Strands and AgentCore to simplify agent development, resonating well with customers and driving growth in the enterprise sector.
Amazon’s advertising business is thriving, with all offerings showing significant growth. They offer a unique full-funnel advertising solution, from top-of-the-funnel awareness building to bottom-of-the-funnel point of sale ads. Amazon’s diverse advertising options, including Prime Video and sponsored products, contribute to their success in the advertising sector. Amazon’s advertising business is booming, with opportunities for growth in stores, video, and demand-side platforms. Partnerships with Roku, Netflix, Spotify, and SiriusXM are driving rapid expansion. Investors can access stock tips from Stock Advisor for market-crushing returns. The Motley Fool discloses positions in and recommends Amazon, with a disclaimer on the views expressed.
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