Amazon Reports $2.78 EPS, AWS Grows 28% but Capex Soars 77%
Amazon posted Q1 EPS of $2.78, topping the $1.63 consensus, and generated $181.5 billion in revenue against a $177.13 billion estimate. AWS net sales surged 28%, but free cash flow plunged to $1.2 billion after first-quarter capex jumped 77% to $44.2 billion.
1. Q1 Earnings Overview
Amazon delivered record Q1 results with EPS of $2.78 versus a $1.63 consensus and revenue of $181.5 billion ahead of the $177.13 billion forecast, underscoring top-line strength across its businesses.
2. AWS Growth Acceleration
Amazon Web Services posted 28% year-over-year net sales growth—the fastest rate in 15 quarters—while its silicon division surpassed a $20 billion revenue run rate and Advertising exceeded $70 billion in trailing-twelve-month revenue.
3. Capex Surge and Cash Flow Impact
First-quarter capital expenditures rose to $44.2 billion, a 77% increase from $25.0 billion a year ago, driving a $59.3 billion rise in annual capex and causing free cash flow to fall to $1.2 billion.
4. AI Infrastructure Commitments
Management reaffirmed a $200 billion capex framework for FY26 to support AI workload demand, including a 2 GW OpenAI Trainium commitment in 2027 and up to 5 GW with Anthropic, highlighting long-term infrastructure investments.