With strong showings in both its retail and cloud computing divisions, Amazon’s financial results for the third quarter soared past Wall Street expectations Thursday, two days after it announced historic layoffs.
Heading into Thursday’s earnings report, Amazon was fresh off announcing those sweeping layoffs that hit 14,000 employees, 2,303 of whom are based in the Seattle area. Amazon said cuts could continue into 2026.
During an earnings call with analysts on Thursday, Amazon CEO Andy Jassy addressed the layoffs for the first time since they were announced two days prior. He said the workforce reduction wasn’t financially driven or “even really AI-driven, not right now at least.”
“Really, it’s culture,” Jassy said. “If you grow as fast as we did for several years … you end up with a lot more people than what you had before, and you end up with a lot more layers.”
The Seattle-based tech giant reported $180.2 billion in revenue between July and September against analysts’ estimates of $177.8 billion. Amazon’s cloud division, Amazon Web Services, also posted $33 billion in sales, beating estimates.
The company pulled in $21.2 billion in profit for the quarter as well, $9.5 billion of which came from an increase in the value of its investments in the artificial intelligence startup Anthropic.
“We continue to see strong momentum and growth across Amazon as AI drives meaningful improvements in every corner of our business,” Jassy said in a news release. “AWS is growing at a pace we haven’t seen since 2022.”
The company’s stock jumped by as much as 14% in after-hours trading.
Speaking to analysts, Jassy said with the rapidly changing landscape tech is in right now, the company is committed to operating like the world’s largest startup. That means removing organizational layers Amazon accumulated over the years.
“It’s important to be flat and it’s important to move fast,” Jassy said. “And that’s what we’re going to do.”
The company took an estimated $1.8 billion hit in severance costs from the layoffs.
Amazon is also continuing its spending spree in the AI race. Chief Financial Officer Brian Olsavsky told analysts that the company’s capital expenditures — investments the company makes to grow the business — for the third quarter rose to over $34 billion. It’s the most Amazon’s spent in a single quarter and rivals the figure Microsoft reported the day before.
But while increased spending from Microsoft gave investors pause on Wednesday, Wall Street was undeterred by Amazon’s results.
Amazon’s cloud growth, the best in three years, helped ease concerns from three months ago that the company was falling behind in the AI race.
Jassy fielded multiple questions during an earnings call in late July about the company’s then-underwhelming cloud sales growth. One analyst with Morgan Stanley even asked about concerns on Wall Street that Amazon could lose some of its market share.
Jassy defended the company’s position as a market leader in cloud computing, saying that it’s harder to show growth when starting from a much larger number.
Amazon expects revenue in the fourth quarter, the holiday shopping season, to be between $206 billion and $213 billion, in line with analysts’ estimates.
