Microsoft to report Q1 earnings with Wall Street looking for further Azure growth

Microsoft ( MSFT ) will report its first quarter earnings after the bell on Wednesday, providing the market with a better view of demand for AI apps and services.

The announcement comes just two days after Microsoft said it is offering buyouts to upward of 60,000 eligible employees as it seeks to reduce expenses amid its massive AI build-out.

Q1 also marks the first time Microsoft will report earnings under its new segment structure . The company announced the change in Q4, saying that rather than Productivity and Business Processes, Intelligent Cloud, and More Personal Computing, it will switch to two segments: Agents and Infra, and Devices and Consumer.

Microsoft's Agents and Infra segment will garner the most attention and include the company's Azure, Microsoft 365 cloud services, productivity and server licensing, industry solutions, and frontier and support services.

Devices and Consumer will include Microsoft's search and advertising businesses, Xbox, and Windows OEM and devices.

Microsoft's stock was a laggard for most of fiscal 2026 but picked up following the company's Q4 earnings, climbing about 35% since July.

Investors following the company's Q1 report will be on the lookout for more information about Azure and Copilot growth as Microsoft continues to push its AI services.

For the quarter, Wall Street is anticipating earnings per share of $4.27 on revenue of $90.6 billion, according to Bloomberg analyst consensus estimates. That would be an improvement from the EPS of $4.13 and revenue of $77.6 billion the company saw in the same period last year.

Agents and Infra revenue is expected to climb 22.5% to $75.6 billion, with Azure and Microsoft 365 bringing in $32.2 billion and $27.4 billion, respectively.

Devices and Consumer sales are projected to decline 6% to $15 billion.

Capital expenditures, including leases, are anticipated to top $45.9 billion in the quarter, up from the $19.3 billion Microsoft spent in Q1 last year.

Remaining performance obligations (RPO) are expected to come in at $705.6 billion, up 77% from the $389 billion reported in fiscal Q1 2026.

RPOs are contracts that Microsoft has booked with customers but hasn't yet received revenue for.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley .