Microsoft Set to Report Earnings After the Bell With New Segment Structure and Azure Disclosure

Microsoft is scheduled to release its quarterly financial results after the market closes on Wednesday. Executives will walk analysts through the numbers and offer guidance on a conference call beginning at 5:30 p.m. ET.

According to LSEG, analysts expect adjusted earnings of $4.73 per share on revenue of $90.69 billion for the fiscal first quarter, which ended on Sept. 30.

The report carries some structural changes. Microsoft will present its results under two operating segments for the first time since 1998. For the past 11 years, the company split its business into three segments covering Azure, Office and Windows.

Microsoft will also start disclosing Azure cloud revenue in dollar terms. Analysts polled by StreetAccount are projecting $32.32 billion, which would amount to growth of more than 44%.

The software company has been trying to expand its influence in artificial intelligence through infrastructure investment and product upgrades. Unlike other hyperscalers, it has continued to generate free cash flow. Cloud competitors Alphabet and Amazon, which report on Wednesday and Thursday respectively, both posted negative free cash flow in the June quarter. Meta said last week that it turned free cash flow negative in the third quarter.

Microsoft's stock has lagged the broader market this year. As of Tuesday's close, shares were up almost 10% year to date, while the S&P 500 index had gained about 13% over the same period.

The company has also been working to balance the high cost of its AI build-out with capital efficiency. During the fiscal first quarter, Microsoft said it would cut 4,800 jobs. On Monday, it followed that with an announcement that it is offering buyouts to as many as 60,000 employees. StreetAccount analysts forecast $50.67 billion in capital expenditures and finance leases for the quarter.

During the same period, Microsoft created an AI implementation unit and unveiled a Copilot AI "super app" that includes coding capabilities.