Microsoft reported fiscal first-quarter income and income forward of analysts’ expectations on Wednesday, with Azure income progress climbing to 40%.
The earnings report got here as the corporate continued to take care of the lingering results of a widespread cloud outage that began earlier within the day.
The corporate’s capital expenditures reached a document $34.9 billion — reflecting its long-term buildout of cloud infrastructure to satisfy demand for synthetic intelligence. That was up from $24.2 billion in This fall. Microsoft had projected capital spending of greater than $30 billion for Q1.
Together with that unprecedented buildout, Microsoft sought to deal with investor considerations a couple of potential AI bubble, by highlighting its industrial remaining efficiency obligation (RPO), a measure of future contracted income. That backlog grew 51% year-over-year to $392 billion.
The corporate additionally disclosed for the primary time that this RPO has a weighted common length of roughly two years, a transfer supposed to point out traders that its document capital spending is supported by sturdy, long-term buyer demand.
Income was $77.7 billion for the quarter ended Sept. 30, Microsoft’s first quarter of fiscal 2026. That was up 18%, and in contrast with common analyst expectations of $75.39 billion. The corporate mentioned the consequence was pushed by sturdy demand for cloud and AI providers.
Earnings had been $27.7 billion, or $3.72 per share, beating expectations of $3.66 per share.
Earlier Wednesday, an Azure cloud providers outage disrupted operations for patrons worldwide together with Alaska Airways, Xbox customers and Microsoft 365 subscribers. Microsoft reported as of early afternoon that it was rolling again the defective configuration and that prospects ought to see enhancements.
Microsoft inventory was down by about 3% in after-hours buying and selling. The corporate’s market worth reached $4 trillion after the announcement of its new OpenAI deal on Tuesday morning.
