Microsoft reported quarterly income and earnings forward of analysts’ expectations, with Azure income progress climbing to 40% as the corporate continued to take care of the results of a widespread cloud outage.
The corporate’s capital expenditures reached a report excessive of $34.9 billion — reflecting the corporate’s long-term buildout of cloud infrastructure to fulfill demand for synthetic intelligence. The corporate had projected capital spending of greater than $30 billion for the quarter.
Together with that unprecedented buildout, Microsoft sought to handle investor issues 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 period of roughly two years, a transfer meant to point out traders that its report 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 end result was pushed by sturdy demand for cloud and AI companies.
Income have been $27.7 billion, or $3.72 per share, beating expectations of $3.66 per share.
Earlier Wednesday, an Azure cloud companies outage disrupted operations for purchasers 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.
