Microsoft will report fiscal first-quarter earnings after the market closes on Wednesday, with analysts expecting adjusted earnings of $4.73 per share on revenue of $90.69 billion, according to LSEG. It will be the company's first report under a two-segment operating structure since 1998, and the first to disclose Azure cloud revenue in dollars.
The fiscal first quarter ended on Sept. 30. For the past 11 years Microsoft reported under three segments that divided its Azure, Office and Windows businesses. The company will now report under two segments and will begin disclosing Azure cloud revenue in dollars. Analysts polled by StreetAccount expect Azure revenue of $32.32 billion, which would represent growth of more than 44%.
Microsoft has been expanding its artificial intelligence infrastructure and enhancing products while continuing to produce free cash flow, a contrast with cloud rivals. Alphabet and Amazon, which report results on Wednesday and Thursday respectively, both showed negative free cash flow in the June quarter, and Meta said last week that it went free cash flow negative in the third quarter.
As of Tuesday's close, Microsoft shares were up almost 10% year to date, trailing the S&P 500 index, which has gained about 13% over the same period.
During the quarter, Microsoft said it would cut 4,800 jobs and announced on Monday that it is offering buyouts to up to 60,000 employees, as it seeks to balance a costly AI build-out with capital efficiency. Analysts surveyed by StreetAccount projected $50.67 billion in capital expenditures and finance leases for the quarter. Microsoft also established an AI implementation unit during the quarter and revealed a Copilot AI "super app" with coding abilities.
Executives will discuss the results with analysts and issue guidance on a conference call starting at 5:30 p.m. ET.
Analysis
Why This Matters
- Microsoft's results will give a fresh read on cloud demand and the payoff of heavy AI spending, especially with Azure growth now reported in dollars.
- The earnings report comes as Microsoft announces job cuts and buyouts for up to 60,000 employees, signalling pressure to balance AI investment with capital efficiency.
- Guidance on the call will set expectations for the rest of the fiscal year and could move markets, given Microsoft's size.
Background
Microsoft, like its hyperscaler rivals, is investing heavily in artificial intelligence infrastructure while trying to preserve free cash flow. During the September quarter it said it would cut 4,800 jobs, and this week it offered buyouts to up to 60,000 employees. The shift to a two-segment structure marks the first such change since 1998, after 11 years of reporting in three segments. The company also launched an AI implementation unit and unveiled a Copilot AI "super app" with coding abilities.
Key Perspectives
- Analysts polled by LSEG: expect adjusted earnings of $4.73 per share and revenue of $90.69 billion for the quarter.
- Analysts polled by StreetAccount: expect Azure revenue of $32.32 billion, representing growth of more than 44%.
What to Watch
- The conference call at 5:30 p.m. ET, where executives will discuss results and issue guidance.
- Whether Azure growth meets, beats or misses the $32.32 billion StreetAccount forecast.
- Capital expenditure and finance lease spending versus the projected $50.67 billion, and any further cost actions.
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12 claims in this story checked against 1 source: 12 supported.
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- SupportedMicrosoft is set to report fiscal first-quarter results after the market closes on Wednesday.US Top News and Analysis: “Microsoft is set to report quarterly results after the market close on Wednesday.”
- SupportedThis is Microsoft’s first report under a two-segment operating structure since 1998.US Top News and Analysis: “For the fiscal first quarter, which ended on Sept. 30, Microsoft will be reporting under two operating segments for the first time since 1998.”
- SupportedMicrosoft will begin disclosing Azure cloud revenue in dollars.US Top News and Analysis: “Microsoft will also begin disclosing Azure cloud revenue in dollars.”
- SupportedLSEG analysts expect adjusted earnings of $4.73 per share.US Top News and Analysis: “Here's what analysts are expecting, according to LSEG: Earnings: $4.73 per share, adjusted”
- SupportedLSEG analysts expect revenue of $90.69 billion.US Top News and Analysis: “Here's what analysts are expecting, according to LSEG: Earnings: $4.73 per share, adjusted Revenue: $90.69 billion”
- SupportedMicrosoft’s fiscal first quarter ended on Sept. 30.US Top News and Analysis: “For the fiscal first quarter, which ended on Sept. 30”
- SupportedFor the past 11 years, Microsoft reported under three segments dividing its Azure, Office and Windows businesses.US Top News and Analysis: “For the past 11 years it had three segments that divided up its Azure, Office and Windows businesses.”
- SupportedStreetAccount analysts expect Azure revenue of $32.32 billion.US Top News and Analysis: “Analysts polled by StreetAccount are expecting $32.32 billion”
- SupportedStreetAccount analysts expect Azure revenue growth of more than 44%.US Top News and Analysis: “Analysts polled by StreetAccount are expecting $32.32 billion, which would represent growth of more than 44%.”
- SupportedMicrosoft has been expanding AI infrastructure and enhancing products while producing free cash flow, unlike fellow hyperscalers.US Top News and Analysis: “The software giant has been working to become a bigger force in artificial intelligence through infrastructure expansion and product enhancements, while continuing to produce free cash flow, unlike its fellow hyperscalers.”
- SupportedMicrosoft said it would cut 4,800 jobs during the fiscal first quarter.US Top News and Analysis: “During the fiscal first quarter, Microsoft said it would cut 4,800 jobs”
- SupportedMicrosoft announced on Monday that it was offering buyouts to up to 60,000 employees.US Top News and Analysis: “and followed up by announcing on Monday that it's offering buyouts to up to 60,000 employees”