Microsoft to report first quarter results as Wall Street looks for further growth from Azure

Microsoft (MSFT) will report its first quarter results after the bell on Wednesday, giving the market a better view of demand for AI applications and services.

The announcement comes just two days after Microsoft said it would offer buyouts to more than 60,000 eligible employees in an effort to reduce spending amid massive AI development.

The first quarter also marks the first time that Microsoft will report results under its new segment structure. The company announced the change in the fourth quarter, saying that instead of productivity and business processes, intelligent cloud and more personal computing, it would move to two segments: agents and infrastructure, and devices and consumers.

Microsoft’s Agents and Infra segment will garner the most attention and will include the company’s Azure, Microsoft 365 cloud services, productivity and server licensing, industrial solutions, and edge and support services.

May 20, 2024, United States, Redmond: Satya Nadella, CEO of Microsoft, presents his vision of a PC architecture oriented towards the use of artificial intelligence. Microsoft wants to adapt Windows PCs to the AI era. Photo: Andrej Sokolow/dpa (Photo by Andrej Sokolow/photo alliance via Getty Images) — Microsoft CEO Satya Nadella presents a vision for a PC architecture geared toward the use of artificial intelligence on May 20, 2024. (Andrej Sokolow/photo alliance via Getty Images) · photo alliance via Getty Images

Devices and Consumers will include the search and advertising activities of Microsoft, Xbox and Windows OEMs and devices.

Microsoft’s stock lagged for most of fiscal 2026, but recovered following the company’s fourth-quarter results, climbing about 35% since July.

531.76 -0.84 (-0.16%)

At 1:52:55 p.m. EDT. Open market.

Investors following the company’s first quarter report will be looking for more information on the growth of Azure and Copilot as Microsoft continues to expand its AI services.

For the quarter, Wall Street expects earnings per share of $4.27 on revenue of $90.6 billion, according to consensus estimates from Bloomberg analysts. This would represent an improvement over the EPS of $4.13 and revenue of $77.6 billion that the company reported during the same period last year.

Agent and infra revenue is expected to climb 22.5% to $75.6 billion, with Azure and Microsoft 365 bringing in $32.2 billion and $27.4 billion, respectively.

Sales of consumer devices and products are expected to decline 6% to $15 billion.

Capital spending, including rentals, is expected to reach $45.9 billion in the quarter, compared to the $19.3 billion Microsoft spent in the first quarter of last year.

Remaining performance obligations (RPOs) are expected to total $705.6 billion, up 77% from the $389 billion reported in the first quarter of fiscal 2026.

RPOs are contracts that Microsoft has reserved with customers but for which they have not yet received revenue.