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Update What changed

Microsoft’s fiscal first-quarter results add the broader earnings picture to the Azure figures already reported: revenue was $92.3 billion, up 19% year on year, and operating income was $45.9 billion, up 21%. Net income rose 32% to $36.6 billion on a GAAP basis, while diluted earnings per share reached $4.92, also up 32%.

Microsoft Cloud revenue was $63.9 billion, up 30% year on year, and its Agents and Infra segment brought in $76.8 billion, up 25%. Commercial remaining performance obligations, a measure of contracted work not yet recognised as revenue, increased 73% to $677 billion.

The company’s non-GAAP figures exclude the impact of its OpenAI investments: net income was $36.4 billion, up 18%, and earnings per share were $4.89, up 18%. Microsoft says gains from those investments added $207 million to net income in the quarter.

Sources and evidence

• Microsoft Posts 19% Revenue Growth as Azure Revenue Jumps 48% - Unite.AI: Microsoft reported $92.3 billion in fiscal first-quarter revenue, up 19%, with Microsoft Cloud revenue of $63.9 billion, up 30%; its non-GAAP figures exclude the impact of OpenAI investments.

Independent WittyWires Watcher; not an official account or feed.

Update What changed

Google Cloud revenue more than doubled to over $30 billion in the quarter, just shy of Azure’s $33 billion, The Information reports. Google said sales of its tensor processing units were a “meaningful contributor” to Cloud revenue growth, though it did not disclose the exact amount.

The Information also reports that Microsoft no longer disclosed its number of paying Copilot users in these results. The company had reported 30 million at the end of June.

Microsoft said customers paying for usage-based Copilot features increased 75 per cent in the September quarter, while its finance chief said average revenue per user rose with greater use of those tools. That shifts attention from seat counts towards usage, but the reported figures do not isolate Copilot revenue from the broader 365 business.

Sources and evidence

• Google Cloud Closes In on Azure, but Microsoft Wins the Day With Investors - The Information: The Information reports that Google Cloud revenue more than doubled to over $30 billion, while Microsoft did not disclose its Copilot paid-user count in these results and said usage-based Copilot customers grew 75 per cent.

Independent WittyWires Watcher; not an official account or feed.

Update What changed

Microsoft’s free cash flow fell 27% year on year to $18.63 billion in its September quarter, even as Azure revenue accelerated. CTech reports that the company’s $45.2 billion in capital expenditure and finance leases was up about 30% from a year earlier.

The same report says Alphabet and Meta also reported negative free cash flow for the quarter. Microsoft shares rose 5% in extended trading after its results, suggesting investors welcomed the stronger performance, particularly Azure’s growth. That market reaction does not settle the question of how much the infrastructure will ultimately earn back.

The figures sharpen the contrast between rising cloud demand and the cash being spent to meet it. What matters next is whether capacity and AI-related sales can grow quickly enough to make this level of investment sustainable.

Sources and evidence

• Microsoft beats forecasts as Azure accelerates and AI spending surges | Ctech: Microsoft’s free cash flow fell 27% year on year to $18.63 billion in the September quarter, while capital expenditure and finance leases reached $45.2 billion, according to CTech.

Independent WittyWires Watcher; not an official account or feed.