#股票财报季 $MSFT
Microsoft will report its FY2027 Q1 results after the U.S. market closes on October 28. The market expects revenue of around $90.6 billion and EPS of approximately $4.71.
My view: both revenue and EPS have a chance of modestly beating expectations, with revenue around $90.8 billion to $91.5 billion and EPS around $4.75 to $4.90.
First, Azure is key to an upside revenue surprise.
Last quarter, Microsoft Cloud revenue was $59.3 billion, up 27% year over year, while Azure and other cloud services grew 43%. For Q1, the company expects Azure growth of around 45% on a constant-currency basis.
If Azure can reach 46% or higher, it should not be difficult for revenue to exceed the top end of the company's guidance range of $90.95 billion. Commercial remaining performance obligations have already reached $678 billion, up 84% year over year, showing that orders and the pipeline of future revenue remain very strong.
Second, Copilot and Microsoft 365 will improve revenue quality.
Microsoft 365 commercial cloud grew around 16% last quarter, and the number of paid Copilot users has exceeded 30 million. Even if AI has not yet fully translated into high margins, subscription contracts and enterprise customer stickiness can already support growth. Microsoft is not reliant solely on advertising or consumer electronics.
On the profit side, don't focus only on last quarter's EPS of $4.81.
Last quarter included approximately $3.2 billion in investment gains from Anthropic, providing a one-time boost of about $0.27 to EPS.
On the other hand, Microsoft's Q4 capital expenditures had already reached $35.8 billion, while Microsoft Cloud's gross margin fell from 68% a year ago to 65%. Data center depreciation and AI computing costs are putting pressure on profits.
The good news is that Q1 market expectations are already based on normalized earnings, so there is no need to count last quarter's investment gains again. Beating EPS of $4.71 is still a challenge, but not an insurmountable one.
Microsoft will report its FY2027 Q1 results after the U.S. market closes on October 28. The market expects revenue of around $90.6 billion and EPS of approximately $4.71.
My view: both revenue and EPS have a chance of modestly beating expectations, with revenue around $90.8 billion to $91.5 billion and EPS around $4.75 to $4.90.
First, Azure is key to an upside revenue surprise.
Last quarter, Microsoft Cloud revenue was $59.3 billion, up 27% year over year, while Azure and other cloud services grew 43%. For Q1, the company expects Azure growth of around 45% on a constant-currency basis.
If Azure can reach 46% or higher, it should not be difficult for revenue to exceed the top end of the company's guidance range of $90.95 billion. Commercial remaining performance obligations have already reached $678 billion, up 84% year over year, showing that orders and the pipeline of future revenue remain very strong.
Second, Copilot and Microsoft 365 will improve revenue quality.
Microsoft 365 commercial cloud grew around 16% last quarter, and the number of paid Copilot users has exceeded 30 million. Even if AI has not yet fully translated into high margins, subscription contracts and enterprise customer stickiness can already support growth. Microsoft is not reliant solely on advertising or consumer electronics.
On the profit side, don't focus only on last quarter's EPS of $4.81.
Last quarter included approximately $3.2 billion in investment gains from Anthropic, providing a one-time boost of about $0.27 to EPS.
On the other hand, Microsoft's Q4 capital expenditures had already reached $35.8 billion, while Microsoft Cloud's gross margin fell from 68% a year ago to 65%. Data center depreciation and AI computing costs are putting pressure on profits.
The good news is that Q1 market expectations are already based on normalized earnings, so there is no need to count last quarter's investment gains again. Beating EPS of $4.71 is still a challenge, but not an insurmountable one.