The cloud software provider’s shares rose as much as 5% in after-hours trading after it posted revenue of $92.3B for its first fiscal quarter, surpassing analyst expectations of $90.7B. Growth was primarily driven by the Azure business, which saw revenue climb 48% year-on-year to $33.2B, topping forecasts of $32.3B. Adjusted earnings per share for the period also beat estimates, coming in at $4.89 compared with the projected $4.73.
Despite the top-line growth, Microsoft’s contracted future revenue, or commercial remaining performance obligations, reached $677B, missing the $706B expected by analysts. The company also announced it is offering buyouts to up to 60,000 workers across India, the U.K., Canada and the U.S. to manage expenses as AI spending increases. Capital expenditures for the quarter totaled $45.2B, an increase from $34.9B a year earlier, but fell short of the company’s own $50B projection due to construction delays.