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 almost 4% in extended trading after finance chief Amy Hood said growth in capital expenditures will accelerate this fiscal year.
Earnings per share: $4.13 adjusted vs. $3.67 per share expected
$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 Google Cloud, 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 AI boom. 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.
For the fiscal second quarter, Microsoft said on the earnings call that expects revenue in the range of $79.5 billion to $80.6 billion. The middle of the range is $80.05 billion, while analysts were expecting $79.95 billion, according to LSEG.
The company said it expects Azure growth at constant currency will be 37% in the fiscal second quarter, inline with estimates.
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