Microsoft reports 48% Azure growth as quarterly profit rises

Revenue rises with wider voluntary buyouts and a lowered capital-spending forecast

Microsoft reported fiscal first-quarter revenue of $92.28 billion and profit of $36.63 billion on Wednesday as Azure grew 48%. Revenue rose 19% and beat the $90.62 billion estimate from analysts polled by FactSet.

The Azure increase marked accelerating growth in Microsoft’s cloud business. The company’s new Agent and Infra segment, which includes Azure and Microsoft 365 products among other sources, contributed $76.8 billion to total revenue. Microsoft revamped its reporting segments in September.

Microsoft’s profit rose from $27.75 billion, or $3.72 a share, a year earlier to $36.63 billion, or $4.92 a share. On an adjusted basis, earnings were $4.89 a share, ahead of the $4.71 analysts were expecting.

Microsoft shares closed roughly flat at $531.01 and had gained 9.8% through the close. The stock then jumped 4% to $552.33 in after-hours trading Wednesday.

Azure’s growth contributed to Microsoft’s higher profit and eased investor jitters over potential returns from the AI infrastructure build-out, according to the report. The central question for investors is whether the hundreds of billions big tech companies are spending on AI will pay off.

Last quarter, Microsoft lowered its calendar-year 2026 capital-expenditure forecast to about $175 billion from roughly $190 billion. It made the revision after extending the estimated useful life of its data centers and office buildings to 25 years from 15.

Microsoft said Monday that it was extending buyout offers to a swath of its workforce as large technology companies faced pressure to shrink their workforces while investing in AI. A person familiar with the matter said around 60,000 employees were eligible for the program. Microsoft employed 223,000 employees as of the end of June.

In April, Microsoft announced a voluntary retirement program that offered buyouts to around 8,600 employees, the person familiar said. More than 30% accepted the offer. Microsoft expects a far lower percentage to accept the latest buyouts.

Data centers, which the report said are broadly unpopular among Americans, have emerged as a major political issue in the midterm elections. In July, New York Gov. Kathy Hochul ordered a temporary ban on large data-center construction. Earlier in the year, Pennsylvania Gov. Josh Shapiro signed an executive order placing strict guardrails on new data centers.

Microsoft Vice Chair and President Brad Smith told The Wall Street Journal earlier this year that “The politics of data centers have become more prominent and unambiguous across the country.” The report said politicians who had once championed AI were changing their messages as the backlash to data centers mounted.

In July, Microsoft’s stock surged 16% after earnings assuaged concerns that investments in data centers and chips would outpace its ability to generate cash. The report said Microsoft’s $450 billion one-day gain in market capitalization was the largest by any U.S. business ever.

Microsoft’s latest results showed accelerating cloud growth and higher profit. They also came with wider voluntary buyout offers and political scrutiny of data-center construction. The report left the central investor question in place: whether the hundreds of billions big tech companies are spending on AI will pay off.