Microsoft reported results for the first quarter of its 2027 fiscal year on 28 October and beat expectations. Revenue was $92.3 billion, up 19% and above the roughly $90.7 billion analysts had looked for, and the shares rose about 3 to 4 percent in after-hours trading.
Azure grew 48% to about $33.2 billion, ahead of the roughly 45% management had guided to. Microsoft Cloud revenue reached $63.9 billion, up 30%, and diluted earnings per share were $4.92, up 32%, against a Street range near $4.71 to $4.72.
Capital spending was about $39.4 billion, roughly double a year earlier but under the $50 billion the market expected. Part of the gap comes from an accounting change: Microsoft extended the estimated life of its data centers and buildings from 15 to 25 years and moved part of future agreements to operating leases, which lowers reported capex without lowering investment. Guidance for calendar 2026 capex is now about $175 billion.
About Microsoft
Microsoft is a software and cloud company headquartered in Redmond, Washington. Bill Gates and Paul Allen founded it on 4 April 1975 in Albuquerque, New Mexico, and it now provides the Azure cloud platform among much else.
Satya Nadella became CEO in 2014, and the company has since shifted its focus toward cloud computing. In April 2019 it became the third US public company valued above $1 trillion. On 23 January 2023 it announced a new multi-year, multi-billion-dollar investment deal with ChatGPT developer OpenAI.
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Free cash flow was $18.63 billion, down on a year earlier as spending rose, while operating margin edged up from about 48.9% to 49.8%. XTB's analysts see Azure as the main reason for the positive reaction but warn that falling returns for shareholders may bring questions at the next call. Days before the results, Microsoft reportedly offered voluntary buyouts to 60,000 staff.
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