Companies /Technology

Microsoft Corporation

NASDAQ: MSFT Software - Infrastructure
$510.12
▲ $13.30 (+2.68%) today
Markets closed · 7:07pm ET

Q1 2026 Earnings

Reported Oct 29, 2025, 4:07pm ET · SEC source
$4.13
Beat +12.84%
EPS · est. $3.66
$77.7B
Beat +3.03%
Revenue · est. $75.4B
−7.1%
Trailing market
MSFT vs S&P since report
6 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−2%0+2%Oct 29Oct 30report 4:07pm ETearnings−0.2%−0.1%
−2%0+2%Oct 29Oct 30earnings−0.2%−0.1%
MSFT −0.1%S&P 500 −0.2%
0+2%Oct 29Oct 30report 4:07pm ETearnings−0.1%−0.1%
0+2%Oct 29Oct 30earnings−0.1%−0.1%
MSFT −0.1%NASDAQ −0.1%
−6%−3%0+3%Oct 28Nov 6report 4:07pm ETearnings−2.1%−5.4%
−6%−3%0+3%Oct 28Nov 6earnings−2.1%−5.4%
MSFT −5.4%S&P 500 −2.1%
−6%−3%0+3%Oct 28Nov 6report 4:07pm ETearnings−3.4%−5.4%
−6%−3%0+3%Oct 28Nov 6earnings−3.4%−5.4%
MSFT −5.4%NASDAQ −3.4%
−2.92%
Day of report
−1.51%
Next session
−5.45%
One week
−6.80%
30 days

S&P 500 over the same 30 days: +0.25%.

Did MSFT Beat Earnings? Q1 2026 Results

Microsoft delivered a convincing fiscal first quarter for 2026, posting non-GAAP diluted EPS of $4.13 against a consensus estimate of $3.66 — a 12.78% beat — while revenue climbed 18.4% year-over-year to $77.67 billion, ahead of the $75.39 billion Wall Street had expected. The standout driver was cloud and AI momentum: Azure grew 40% in the quarter, lifting Intelligent Cloud segment revenue to $30.90 billion, while total Microsoft Cloud revenue reached $49.10 billion, up 26%. Perhaps the most forward-looking signal was commercial remaining performance obligations surging 51% to $392.00 billion, underscoring the depth of contracted demand still to be recognized. The quarter also brought significant structural news — <a href="https://247wallst.com/investing/2025/10/29/live-microsoft-msft-announces-earnings-tonight-will-shares-soar/">widely anticipated by investors</a> — as Microsoft restructured its OpenAI partnership, securing extended IP rights through 2032 and an incremental $250 billion Azure services commitment from OpenAI, even as capital expenditures rose sharply to $19.39 billion to support the AI infrastructure buildout underpinning that growth.

Key Takeaways
  • Azure and other cloud services revenue grew 40% (39% constant currency)
  • Microsoft Cloud revenue grew 26% to $49.1 billion
  • Microsoft 365 Consumer cloud revenue grew 26%
  • Microsoft 365 Commercial cloud revenue grew 17%
  • Commercial remaining performance obligation increased 51% to $392 billion
  • Search and news advertising revenue ex-TAC grew 16%
  • Dynamics 365 revenue grew 18%

“Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact. It's why we continue to increase our investments in AI across both capital and talent to meet the massive opportunity ahead.”

Microsoft CEO, on the earnings call

Forward Guidance & Outlook

Microsoft indicated it would provide forward-looking guidance during its earnings conference call and webcast. The company emphasized continued investment in AI across both capital and talent to meet the massive opportunity ahead, and OpenAI has contracted to purchase an incremental $250 billion of Azure services under the restructured partnership.

MSFT YoY Financials

Q1 2026 vs Q1 2025 · SEC filings Q1 2025 Q1 2026
$0$30.0B$60.0B$65.6B$77.7BRevenue$45.5B$53.6BGross Profit$30.6B$38.0BOperating Income$24.7B$27.7BNet Income
$0$30.0B$60.0BRevenueGross ProfitOperating IncomeNet Income

MSFT Revenue by Segment

Microsoft Cloud$49.1B+26.0%
Intelligent Cloud$30.9B+28.0%
Productivity and Business Processes$33.0B+17.0%
More Personal Computing$13.8B+4.0%

Figures from SEC filings and company reports. Not investment advice.