Microsoft reported its first-quarter earnings for fiscal year 2025, delivering earnings per share of $3.72 on revenue of $77.7 billion, surpassing analyst expectations of $3.68 per share and $75.5 billion in revenue. This compares to $3.30 per share and $65.6 billion in revenue for the same quarter last year.
Despite the beat, Microsoft's stock fell more than 2% in after-hours trading, with some reports indicating drops over 5%, as investors focused on a 74% year-over-year increase in capital expenditures to $34.9 billion. Roughly half of this spending was allocated to GPUs and CPUs to meet demand for Azure infrastructure.
Commercial cloud revenue hit $49.1 billion, up 26% year over year and above the $48.6 billion estimate, while Azure revenue grew 40%. The Intelligent Cloud segment, which includes Azure, generated $30.9 billion in revenue, exceeding the $30.2 billion Wall Street forecast.
Microsoft's net income took a $3.1 billion hit from its equity investment in OpenAI, resulting in a 41-cent decline in earnings per share. Total investment in OpenAI now stands at $13 billion, with $11.6 billion funded through September. Under a new agreement, Microsoft holds a 27% stake in OpenAI's public benefit corporation, valued at $135 billion, but lost its first right of refusal for compute services. In exchange, OpenAI committed to $250 billion in Azure services over time.
CEO Satya Nadella praised the partnership as "one of the most successful partnerships and investments our industry has ever seen," noting that the collaboration dates back to 2019. The results were disclosed hours after Azure services recovered from a global outage, following a similar incident at Amazon's AWS the previous week.
BTC
JUP
SOL
BNB