Microsoft reports earnings beat as Azure revenue climbs 40%

Microsoft reports earnings beat as Azure revenue climbs 40%

 

"Microsoft reported better-than-expected results for its fiscal first quarter as revenue in the company’s Azure cloud business jumped 40%. The stock slipped in extended trading.

• Earnings per share: $4.13 adjusted vs. $3.67 per share expected
• Revenue: $77.67 billion vs. $75.33 billion expected

Revenue increased 18% in the fiscal first quarter from $65.6 billion a year ago, according to a release. Net income rose to $27.7 billion, or $3.72 per share, from $24.67 billion, or $3.30 per share, during the same period last year.

 

Microsoft said its investment in OpenAI resulted in a $3.1 billion hit to net income in the quarter, equivalent to 41 cents per share.

Microsoft’s Intelligent Cloud unit, which includes Azure, reported $30.9 billion in revenue, up 28% from a year ago and above the StreetAccount consensus of $30.25 billion. Growth in Azure, which competes with Amazon Web Services and GoogleCloud, also beat estimates, as analysts polled by StreetAccount had anticipated 38.2% expansion.

Cloud continues to be the big driver of growth at Microsoft, as the business has proven to be a major beneficiary of the AIboom. Last quarter, Microsoft disclosed the scale of its Azure cloud infrastructure business in dollars for the first time. The company said revenue in fiscal 2025 from Azure and other cloud services jumped 34% from the prior year to more than $75 billion.

Microsoft’s Productivity and Business Processes segment, which is home to Office productivity software and LinkedIn, delivered $33 billion in revenue for the first quarter, above the $32.33 billion consensus among analysts polled by StreetAccount.

The More Personal Computing unit, which includes Windows, search advertising, devices and video games, reported 4% growth to $13.8 billion in revenue. That was above StreetAccount’s $12.83 billion consensus.

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