Amazon shares surged over 13% on Thursday as the tech and e-commerce giant smashed Wall Street expectations for its third-quarter results.
Advertising services revenue, which includes sales to sellers, vendors, publishers, authors and others through programs such as sponsored ads, display and video advertising, grew 24% to $17.7 billion.
Meanwhile, net sales for its subscription services segment grew 11% to $12.6 billion during the quarter. The segment includes annual and monthly fees associated with Amazon Prime memberships, as well as digital video, audiobook, digital music, e-book and other non-Amazon Web Services subscription services.
Here are the quarter’s overall results:
Net income: $2.12 billion, compared to $15.3 billion a year ago.
Net sales: $180.2 billion, up 13% year over year, compared to $177.76 billion expected by analysts surveyed by Yahoo Finance.
Earnings per share: $1.95 per share, compared to $1.56 per share expected by analysts surveyed by Yahoo Finance.
Operating income: $17.4 billion, flat year over year. The figure included a $2.5 billion charge for its recent FTC settlement to resolve allegations of deceptive Prime enrollment practices and $1.8 billion in severance costs related to job cuts.
Entertainment highlights during the quarter included advertising partnerships with Netflix, Spotify and SiriusXM; the launch of the NBA on Prime; and the addition of Peacock Premium Plus and Fox One as add-on Prime Video subscriptions.
Prime Video’s “The Summer I Turned Pretty” Season 3 viewership also exceeded Season 2 by 65% after hitting 70 million viewers in its first seven days post-finale, which also included the announcement of a feature film. The service also kicked off Season 4 of “Thursday Night Football,” averaging 15.3 million viewers, a 16% increase over last season’s seven-game average.
In May, Amazon said that Prime Video had an ad-supported audience of more than 130 million in the U.S. alone, up from 115 million previously, with a 37% increase in monthly viewing hours. When combining the streamer with Amazon’s other owned and operated entertainment properties such as Twitch, MGM Studios, Wondery and Amazon Music, the tech giant’s entertainment portfolio reaches an average monthly ad-supported audience of more than 300 million globally.
In September, Amazon unveiled a new agentic AI tool and creative studio in that plans and executes the entire creative process for advertisers in a matter of hours instead of weeks.
Executives also said the company remains excited about the advertising opportunity around Prime Video’s live sports offering, which received strong interest during its 2025 upfront, where the company exceeded its internal expectations for ad commitments.
The latest quarter’s results come as Amazon revealed it would lay off roughly 14,000 people across the company as it grapples with “this generation of AI,” with some executives within Amazon MGM Studios among those impacted. But Amazon CEO Andy Jassy appeared to downplay the technology on the company’s earnings call, saying it was less about AI or finances and more about “culture.”
“As a leadership team, we are committed to operating like the world’s largest startup, and that means removing layers, it means increasing the amount of ownership that people have and it means inventing and moving quickly,” he explained. “I don’t know if there’s ever been a time in the history of Amazon, or maybe business in general, with the technology transformation happening right now where it’s important to be lean, important to be flat, it’s important to move fast, and that’s what we’re going to do.”
Jassy also touted a 20% year-over-year increase in Amazon Web Services revenue to $33 billion — a pace the company hasn’t seen since 2022 — and said the company continues to see strong demand in AI and core infrastructure.
Looking ahead, Amazon expects net sales between $206 billion and $213 billion, or year over year growth between 10% and 13%, also above Wall Street expectations. It also expects operating income in to come in between $21 billion and $26 billion, compared to $21.2 billion a year ago. The guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded.
