Amazon posts strong Q3 as AWS drives growth, but charges weigh profit

Amazon reported stronger-than-expected results for the third quarter on Thursday, driven by gains in its cloud and advertising businesses, but the company booked large charges that weighed on operating profit. For the July through September period, revenue rose 13 percent to about $180.2 billion and adjusted earnings per share were $1.95, both above analyst expectations. Shares rose roughly 11 percent in after-hours trading.

The company said Amazon Web Services revenue climbed about 20 percent year over year to roughly $33 billion, its fastest pace since 2022, and cited strong demand for AI and core infrastructure. North American retail sales increased to about $106.3 billion, while international sales reached roughly $40.9 billion. Advertising revenue grew 24 percent to $17.7 billion and subscription services revenue rose 11 percent to $12.6 billion. Net income for the quarter was about $21.1 billion, up from $15.3 billion a year earlier.

Operating income was $17.4 billion, below analyst estimates, after the company recorded a $2.5 billion charge to settle Federal Trade Commission allegations related to Prime enrollment and estimated $1.8 billion in severance costs tied to...