Microsoft beats earnings forecast as revenue falls short of expectations

Microsoft returned $10.2 billion to shareholders in the quarter through dividends and share repurchases.

Microsoft reported earnings of $4.89 per share for the first quarter of fiscal 2027, excluding the effect of its OpenAI investments. That was $0.07 above expectations. Revenue was $92.28 billion, against $92.49 billion expected.

Amy Hood, Microsoft's chief financial officer, said results exceeded expectations across revenue, operating income and earnings per share. Microsoft Cloud revenue growth accelerated to 30 per cent year on year. The company returned $10.2 billion to shareholders through dividends and share repurchases in the quarter.

The results come against a broader cost push. Microsoft has directed leaders to cut cloud costs and offered buyouts to 60,000 workers earlier this month. The push to cut costs while still funding AI infrastructure was read as a risk when it first surfaced. Cloud growth accelerating this quarter sits against that earlier reading.

Microsoft also faces non-financial headwinds: a suspended labor certification program and visa restrictions tied to its hiring practices. None of these show up in the quarter's results. The earnings beat and faster Cloud growth came in the same weeks that these regulatory and labor issues drew attention.