Amazon.com Inc. (NASDAQ:AMZN) CEO Andy Jassy confirmed during the e-commerce giant’s Q3 2026 earnings call that the Leo (formerly Project Kuiper) satellite internet service will begin its initial rollout this year.
Amazon to Factor in Leo Costs in Q4
During Thursday’s earnings call, Jassy said, “Amazon Leo remains on track to begin initial service this year.” The CEO then said that the e-commerce giant was “heading into one of our most exciting stretches of the year,” citing the upcoming re:Invent developer conference hosted by Amazon Web Services (AWS), the company’s cloud computing division.
Brian Olsavsky, the company’s Chief Financial Officer, also weighed in on the Leo internet service, saying that the company expects to “begin capitalizing certain costs in Q1 of next year,” which will include “satellite and launch costs.”
This will impact Amazon’s Q4 guidance. He said that Leo’s cost capitalization was later than anticipated. “As a result, we will continue to expense the majority of Leo-related costs in Q4,” he said.
AMZN Earnings Draws Reactions
The company posted revenue of $201.94 billion during Q3, which missed the market’s consensus estimate of $202.31 billion. The e-commerce giant’s earnings also missed Wall Street’s estimates, coming in at $1.89 per share; analysts put earnings at $1.97 per share.
However, analysts like Deepwater Asset Management‘s Gene Munster believe that the earnings may indicate that the company was positioning itself as an AI and Semiconductor company rather than solely an online marketplace.
Elon Musk vs Delta Airlines Over Leo
Leo has attracted attention from Space Exploration Technologies Corp. (NASDAQ:SPCX) CEO Elon Musk after Delta Air Lines Inc. (NYSE:DAL) announced it would be opting for the Leo service over SpaceX’s Starlink satellite internet on its flights, with the rollout expected to be in 2028.
The billionaire warned that Delta airlines could lose customers over its Starlink snub, also warning that CEO Ed Bastian may lose his job. Starlink, on the other hand, has become the go-to in-flight Wi-Fi connectivity provider for multiple airlines, including United Airlines Holdings Inc. (NASDAQ:UAL).
SpaceX President Gwynne Shotwell also said that Starlink was contracted to be on 12,000 aircraft during SpaceX’s Q3 earnings call earlier this month, saying that the figure also represents “almost a quarter” of all the available aircraft in the world.
Amazon’s planned Leo constellation consists of more than 3,000 satellites, with nearly 400 launched so far. On the other hand, Starlink’s over 11,000-strong satellite constellation dwarfs the Amazon Leo by a significant margin, as things stand.
Price Action: AMZN dropped 7.22% to $226.18 during overnight trading on Thursday.
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Photo courtesy: Markus Mainka via Shutterstock
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