Microsoft Surpasses Q1 Earnings Expectations Driven by Cloud and AI Growth

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Microsoft Corporation reported first-quarter fiscal 2026 earnings of $4.13 per share on October 26, 2025, surpassing expectations by 13.15% and showing a 25.2% year-over-year increase. Revenues reached $77.6 billion, an 18.4% year-over-year growth, exceeding estimates by 3.62%.

Commercial bookings surged by 112%, driven by Azure commitments, with a commercial remaining performance obligation of $392 billion, a 51% increase from the previous year. Microsoft Cloud revenues stood at $49.1 billion, marking a 26% rise from the prior year.

For the second quarter of fiscal 2026, Microsoft anticipates total revenues between $79.5 billion and $80.6 billion, projecting growth of 14% to 16%. The company is experiencing increased demand for cloud and AI services, but has indicated that it will remain capacity-constrained through at least the end of fiscal 2026.

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