Microsoft to report $90.7B revenue after AI job cuts

Microsoft expects to generate $90.69 billion in revenue for its fiscal first quarter, which ended Sept. 30.

The tech giant will release these figures after the market close on Wednesday. LSEG data shows analysts anticipate adjusted earnings of $4.73 per share.

This report marks a structural shift for the company. Microsoft will divide its operations into two segments for the first time since 1998. For the previous 11 years, the firm used three segments to separate its Azure, Office, and Windows businesses. The company will also reveal Azure cloud revenue in dollar terms for the first time. StreetAccount analysts predict this figure will reach $32.32 billion, signaling growth of more than 44%.

The quarter was defined by major workforce changes. Microsoft announced a reduction of 4,800 jobs during the period. On Monday, the company followed up by offering buyouts to up to 60,000 employees. These moves aim to balance the costs of an artificial intelligence buildout with capital efficiency. Analysts forecast that capital expenditures and finance leases will total $50.67 billion for the quarter.

Microsoft is expanding its AI capabilities through infrastructure and product updates. The company established a new AI implementation unit and introduced a Copilot AI super app with coding features. This strategy allows Microsoft to maintain positive free cash flow. In contrast, cloud rivals Alphabet and Amazon reported negative free cash flow in June. Meta also disclosed negative free cash flow for the third quarter last week.

As of Tuesday's close, Microsoft shares were up nearly 10% year to date. This performance trails the S&P 500 index, which gained about 13% over the same period. Executives will discuss these results and provide guidance on a conference call at 5:30 p.m. ET.