Microsoft reported quarterly results that exceeded analysts' expectations, prompting a historic market reaction. The company's share price jumped 15.5 percent in a single day after the earnings release, marking the largest one-day gain in Microsoft’s history.
Cloud growth and Copilot subscriptions drive results
Azure, Microsoft’s cloud business, grew 43 percent in the quarter; management expects growth to accelerate to 45 percent in the current quarter. With that performance, Azure’s annual revenue surpassed $100 billion for the first time. At the same time, Copilot subscriptions tied to Microsoft’s office software have exceeded 30 million.
Financials — revenue, EPS and business segments
Microsoft reported earnings of $4.74 per share on $90 billion in revenue for the quarter. Wall Street had been modeling $4.25 EPS and $87.7 billion in revenue. A year earlier the company posted $3.65 EPS and $76.4 billion in revenue.
By segment, Intelligent Cloud (cloud services) generated $39.3 billion in revenue, outperforming expectations. The Business Productivity and Business Processes segment (enterprise software) produced $37.8 billion, while the More Personal Computing division (including Windows) reported $12.9 billion. Both of these segments also topped consensus estimates.
Investments and backlog
Microsoft invested $41 billion in capital expenditures and leases during the quarter, slightly below analysts' $42 billion forecast but still at historically high levels. The backlog of contracted, yet-to-be-recognized revenue rose to $678 billion, above the $647.6 billion analysts had anticipated, indicating material revenue under contract for future periods.
Why this matters
The results underscore the continued strength of Microsoft’s AI-driven and cloud-focused businesses. Accelerating Azure growth, expanding Copilot adoption, and a rising backlog together help explain investor enthusiasm and the unusually large one-day gain in the company’s stock.
This article does not constitute investment advice or a recommendation.
