Microsoft is preparing to release its quarterly earnings after the market close on Wednesday. Analysts expect the company to report adjusted earnings of $4.73 per share and revenue of $90.69 billion for the fiscal first quarter, which ended on September 30. This marks the first time since 1998 that Microsoft will report under two operating segments, consolidating its Azure, Office, and Windows businesses.
The tech giant will also begin disclosing Azure cloud revenue in dollars, with analysts projecting $32.32 billion, representing over 44% growth. Microsoft has been focusing on expanding its artificial intelligence capabilities while maintaining positive free cash flow, unlike its competitors Alphabet and Amazon, which reported negative free cash flow in the June quarter. Meta also went free cash flow negative in the third quarter.
As of Tuesday's close, Microsoft shares are up nearly 10% year to date, slightly trailing the S&P 500 index, which has gained about 13% over the same period. During the fiscal first quarter, Microsoft announced plans to cut 4,800 jobs and recently offered buyouts to up to 60,000 employees as part of its efforts to balance AI investments with capital efficiency. Analysts anticipate $50.67 billion in capital expenditures and finance leases for the quarter.
Microsoft also established an AI implementation unit and unveiled a Copilot AI 'super app' with coding capabilities during the quarter. Executives will discuss the results and provide guidance on a conference call starting at 5:30 p.m. ET.