Introduction#
Amazon.com, Inc. has released its earnings report for the first quarter of 2026, showcasing a strong performance that exceeded analyst expectations. The company reported an earnings per share (EPS) of $2.78, significantly higher than the forecasted $1.63, which is a 70.55% surprise. Revenue also surpassed predictions, reaching $181.5 billion compared to the anticipated $177.13 billion, marking a 2.47% surprise.
Company Performance#
In Q1 2026, Amazon demonstrated robust growth across its key business segments. The company's worldwide revenue increased by 15% year-over-year when adjusted for currency fluctuations. It reported an operating income of $23.9 billion, resulting in a record operating margin of 13.1%. Over the past twelve months, Amazon generated $716.92 billion in revenue, achieving a gross profit margin of 50.29% and a return on assets of 10.77%. The company received a "GREAT" financial health score of 3.19 out of 5 from InvestingPro, indicating strong profitability and growth momentum. Notably, Amazon Web Services (AWS), its cloud computing division, experienced a revenue increase of 28% year-over-year, marking its fastest growth rate in 15 quarters.
Financial Highlights#
- Revenue: $181.5 billion, up 15% year-over-year
- Earnings per share: $2.78, significantly above expectations
- Operating income: $23.9 billion, with a 13.1% operating margin
- Capital expenditures: $43.2 billion, mainly for AWS and AI infrastructure
Market Reaction#
Despite these positive earnings results, Amazon's stock saw a slight decline of 0.78% in aftermarket trading, closing at $257.67. This drop may reflect investor concerns regarding high capital expenditures and future cash flow. However, the stock has since recovered to $263.04, trading just 1% below its 52-week high of $265.91. With a market capitalization of $2.82 trillion and a price-to-earnings (P/E) ratio of 36.72, some valuation concerns may be tempering enthusiasm despite the strong results.