This week Amazon turned in a third quarter well ahead of expectations, with net sales surging 13% to $180.2 billion (vs. $158.9B YoY), driven by strong North American growth of 11%. Net income more than doubled to $21.2 billion from $9.9 billion a year ago. Defying widespread fears of a consumer spending slowdown, Amazon issued aggressive Q4 guidance of $206–$213 billion in sales—implying 10%–13% growth.
Advertising Dominance Accelerates
Ad services revenue jumped 24% to $17.7 billion, with CEO Andy Jassy telling investors that “every single” ad product grew. Gartner senior director analyst Brad Jashinsky described the results as “incredibly impressive,” noting Amazon’s rapid evolution from a low-funnel conversion channel to a full-funnel media powerhouse just a few years ago. Momentum is expected to build further from new partnerships with Netflix and Roku, plus upcoming live sports integrations—including the NBA, Masters Golf, and NFL—many of which are not yet reflected in current numbers.
Ad services revenue jumped 24% to $17.7 billion, with CEO Andy Jassy telling investors that “every single” ad product grew. Gartner senior director analyst Brad Jashinsky described the results as “incredibly impressive,” noting Amazon’s rapid evolution from a low-funnel conversion channel to a full-funnel media powerhouse just a few years ago. Momentum is expected to build further from new partnerships with Netflix and Roku, plus upcoming live sports integrations—including the NBA, Masters Golf, and NFL—many of which are not yet reflected in current numbers.
Amazon Web Services revenue rose 20% to $33 billion—its fastest pace since 2022—signaling sustained AI leadership and aggressive capacity expansion. Wedbush analyst Scott Devitt wrote that investors have “regained comfort in management’s ability to retain a leading position in the AI space,” forecasting a “positive narrative shift” ahead. The strong performance stands in contrast to mounting investor criticism of AI spending at rivals Meta and Microsoft.Operational Efficiency and Strategic
During the earnings call, Jassy addressed recent layoffs, confirming 14,000 corporate roles—roughly 4% of 350,000—were eliminated not for financial savings but to “remove layers” and accelerate decision-making.
In grocery, Whole Foods Market is growing faster than the overall category, with profitability improving due to expanded same-day delivery of perishables. Jashinsky noted that success in fresh foods has shifted Amazon’s strategic thinking on physical grocery expansion. “Competition with Walmart in grocery is going to intensify next quarter and into 2026,” he added.