Amazon delivered a strong start to 2026, reporting solid growth across its core segments, driven by continued momentum in cloud computing, advertising, and AI-led investments.
Revenue Growth Reflects Global Demand Strength
Amazon recorded net sales of $181.5 billion in Q1 2026, representing a 17% increase compared to $155.7 billion in the same period last year. Excluding a $2.9 billion favorable impact from foreign exchange, net sales grew 15% year-over-year, indicating consistent underlying demand across markets.
Regionally, North America generated $104.1 billion in revenue, up 12%, while international sales reached $39.8 billion, growing 19% year-over-year, or 11% on a currency-adjusted basis. The performance highlights Amazon’s continued strength in global e-commerce and cross-border operations.
Operating Income Expansion Driven by AWS
Operating income rose to $23.9 billion, up from $18.4 billion in Q1 2025, reflecting improved efficiency and higher-margin contributions.
Segment performance showed:
- North America operating income: $8.3 billion (up from $5.8 billion)
- International operating income: $1.4 billion (up from $1.0 billion)
- AWS operating income: $14.2 billion (up from $11.5 billion)
AWS remained the primary profit driver, accounting for a significant share of total operating income, supported by sustained enterprise demand and AI-related workloads.
Net Income Accelerates with Investment Gains
Amazon reported net income of $30.3 billion, compared to $17.1 billion in Q1 2025. Earnings per share increased to $2.78, up from $1.59.
The quarter included a $16.8 billion pre-tax valuation gain related to Amazon’s investment in Anthropic, reflecting the growing strategic importance of AI partnerships. Excluding this impact, profitability still showed meaningful year-over-year improvement, driven by operational performance.
AWS Continues to Scale at High Margins
Amazon Web Services generated $37.6 billion in revenue, marking a 28% year-over-year increase and its fastest growth rate in over a year.
AWS delivered $14.2 billion in operating income, with an operating margin of approximately 37.7%, reinforcing its role as Amazon’s most profitable business segment. The division continues to benefit from rising enterprise adoption of cloud infrastructure and generative AI capabilities.
Cash Flow Impacted by Elevated Capital Expenditure
Amazon’s operating cash flow over the trailing twelve months reached $148.5 billion, up from $113.9 billion in the prior year period, representing a 30% increase.
However, free cash flow declined to $1.2 billion, compared to $25.9 billion a year earlier. This decrease reflects a sharp rise in capital expenditures, which increased by $59.3 billion, as Amazon accelerates investments in AI infrastructure, data centers, and logistics capabilities.
Advertising and AI Investments Gain Momentum
Amazon’s advertising revenue reached $17.2 billion, growing 24% year-over-year, as brands continue to shift budgets toward performance-driven digital channels.
The company also highlighted rapid progress in its AI ecosystem, including a custom chip business that has surpassed a $20 billion annualized run rate. Capital expenditures totaled $43.2 billion in Q1, with full-year investments expected to reach approximately $200 billion, underscoring the scale of Amazon’s long-term technology strategy.
Outlook Signals Continued Growth
For the second quarter of 2026, Amazon expects net sales between $194 billion and $199 billion, indicating sustained momentum across its core businesses.
While increased investment continues to weigh on free cash flow, the company’s strong operating performance, combined with accelerating demand for cloud and AI services, positions it for continued growth.
Key Takeaway
Amazon’s first-quarter results highlight a company balancing strong profitability with aggressive long-term investment.
With $181.5 billion in revenue, $30.3 billion in net income, and AWS growing 28%, Amazon continues to strengthen its position at the intersection of e-commerce, cloud computing, and artificial intelligence.