Microsoft reports earnings after market close

Microsoft will release its quarterly financial results after the stock market closes on Wednesday. The company is set to report under two operating segments for the first time since 1998, a change from the three-segment structure it used for the past 11 years.

LSEG data shows analysts expect adjusted earnings of $4.73 per share. Revenue is projected at $90.69 billion for the fiscal first quarter, which ended on Sept. 30. Microsoft will also disclose Azure cloud revenue in dollars for the first time. StreetAccount analysts predict Azure revenue of $32.32 billion, marking growth of more than 44%.

The tech giant has expanded its artificial intelligence infrastructure while maintaining positive free cash flow. This stands in contrast to rivals Alphabet and Amazon, which both reported negative free cash flow in the June quarter. Meta stated last week that it also turned free cash flow negative in the third quarter.

During the recent quarter, Microsoft cut 4,800 jobs. On Monday, the company announced it is offering buyouts to up to 60,000 employees. Management aims to balance expensive AI development with capital efficiency. StreetAccount analysts project capital expenditures and finance leases will total $50.67 billion for the period.

Microsoft established an AI implementation unit and revealed a Copilot AI super app with coding abilities during the quarter. As of Tuesday's close, Microsoft shares were up nearly 10% year to date. This performance trails the S&P 500 index, which has gained about 13% over the same timeframe.

Company executives will discuss the results and provide guidance on a conference call beginning at 5:30 p.m. ET.