Amazon Q3 EPS Tops Estimates by $0.38 as Company Cuts 10% Corporate Staff
AMZN•In Q3, Amazon delivered $1.95 EPS on $180.17B revenue, topping consensus by $0.38 and $2.64B respectively, driving net margin to 11.06% and 13.4% Y/Y revenue growth. The company cut ~10% of its corporate workforce and shifted operations toward AI agents and capacity additions to boost margins.
1. Amazon’s Cloud and Cost-Cutting Set Stage for 2026 Upside
As Amazon prepares to report fourth-quarter results, investors are focused on its high-margin cloud business and aggressive cost reductions. AWS now carries a backlog of roughly $200 billion, up from $155 billion a year ago, reflecting continued enterprise demand for AI infrastructure. In Q4, capacity additions exceeded one gigawatt of new data-center power, and analysts anticipate revenue growth above 20%. On the expense side, management has already trimmed approximately 10% of corporate headcount, shifting from labor-intensive support roles to AI-driven agents and machine-learning platforms. Advertising revenue, which now represents more than 6% of total sales, is also expanding rapidly as the company integrates AI tools for precision targeting. With operating leverage set to improve, Wall Street models project margin expansion in the back half of 2026 and full-year adjusted operating income above $70 billion.
