Microsoft Cloud Revenue Beats Estimates, Shares Climb
Microsoft reported $92.3 billion in revenue for its fiscal first quarter, up 19% and above Wall Street forecasts. Cloud sales drove the gain.
- $36.6 billion in net income, up 32% from a year earlier.
- $33.2 billion from Azure, up 48%, in its first standalone disclosure.
- $63.9 billion in Microsoft Cloud revenue, up 30% year over year.
- 22% drop in Windows OEM and devices revenue.
Why it matters: Investors want proof that AI spending pays off. Microsoft's capital spending reached a record $45.2 billion this quarter.
- $677 billion in contracted future revenue, up 73% from a year ago.
- 12% decline in commercial bookings; backlog flat from June.
How 7 sources split on this story
Where they split: Coverage differs on whether record cloud growth outweighs falling bookings, a flat backlog and a 27% drop in free cash flow.
Center coverage, 4 sources: The center sees accelerating cloud growth matched by heavy AI infrastructure spending and cost-cutting elsewhere.
Left coverage, 2 sources: The left sees a tenth straight record quarter, powered by cloud demand, with weakness confined to devices and Xbox.
Right coverage, 1 sources: The right sees an Azure beat that masks shrinking bookings, a stalled backlog and falling free cash flow.
What’s next: Hood was set to issue December-quarter Azure guidance on the 5:30 p.m. ET call.
- About 60,000 employees offered buyouts must decide by early December.
- Amazon reports results Thursday, continuing a run of big tech earnings.
- Will new contracts refill Microsoft's backlog as fast as it converts to revenue?
- How much of Azure's growth comes from AI rather than traditional workloads?
- Will workforce cuts across companies slow Microsoft 365 seat growth?
