Microsoft Second-Quarter Earnings Live Blog

Among analysts polled by FactSet, the consensus is for Microsoft to report December quarter (fiscal second quarter) revenue of $52.99 billion (up 2.4% annually) and EPS of $2.29 (down 7.5%).

Microsoft shares quarterly sales guidance for its reporting segments on its earnings call. For the March quarter, the company’s revenue consensus stands at $52.42 billion (up 6.2%).

Eric Jhonsa, Real Money’s tech columnist, will be live-blogging Microsoft’s earnings report, along with a conference call scheduled for 5:30 P.M. Eastern Time.

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4:39 PM ET: Free cash flow was down 43% Y/Y to $4.9B, with Microsoft noting it would've been down 16% if not for a one-time tax payment. The company ended FQ2 with $99.5B in cash/equivalents and $48.1B in debt.

4:35 PM ET: $4.6B was spent on stock buybacks in FQ2, even with FQ1.

4:31 PM ET: As a reminder, Microsoft's quarterly sales guide, which tends to have a big impact on how its stock trades the next day, isn't in the earnings report. It'll be shared on the call.

4:29 PM ET: The segment breakdown helps explain why Microsoft is higher post-earnings in spite of a slight revenue miss: The miss was caused by More Personal Computing, which is dominated by PC and consumer-centric businesses that were known to be weak. The two segments dominated by sales of software and cloud services to businesses beat estimates.

4:26 PM ET: FQ2 revenue by business segment:

Productivity & Business Processes (Office, Dynamics, LinkedIn) - $17B, +7% Y/Y and above a $16.79B consensus

Intelligent Cloud (Azure, server software) - $21.51B, +18% and above a $21.43B consensus

More Personal Computing (Windows, Xbox, Surface, ads) - $14.24B, -19% and below a $14.76B consensus.

4:23 PM ET: $6.8B was spent on capex in FQ2, compared with $6.6B in FQ1 and $7.4B a year earlier.

4:21 PM ET: Weighing on EPS some: While revenue grew 2%, Microsoft's operating expenses were up 19% Y/Y on a GAAP basis to $14.9B, and 11% excluding one-time charges.

With Microsoft having slowed down hiring and just announced layoffs, opex growth will likely slow in the coming quarters.

4:16 PM ET: Dollar-based and CC revenue growth for various Microsoft businesses. As the numbers show, forex was a big headwind across the board, and big declines in Windows OEM, Devices (Surface, Xbox, etc.) and to a lesser extent Xbox content/services revenue also weighed on the top line.

On the other hand, Azure, Dynamics, LinkedIn,  search/news ads, and server products and cloud services recorded double-digit growth, and Office Commercial grew 7%.

4:09 PM ET: Shares are holding onto their gains: They're now up 4.9% AH to $254.00. Here's the FQ2 report, for those wanting to take a look.

4:08 PM ET: Commercial bookings were up 7% Y/Y in dollars and 4% in constant currency. With bookings up 32% in dollars and 37% in CC a year ago, Microsoft was facing a tough annual comp.

Notably, Microsoft's commercial RPO (contract backlog) was up 29% in dollars and 26% in CC to $189B.

4:05 PM ET: Revenue rose 2% Y/Y in dollars and 7% in constant currency.

Azure revenue rose 31% in dollars and 38% in CC, slightly topping CC guidance of 37%. 

4:04 PM ET: GAAP EPS, which bakes in $0.12/share of "severance, hardware-related impairment, and lease consolidation costs," was $2.20.

4:02 PM ET: Results are out. FQ2 revenue of $52.75B slightly misses a $52.99B consensus. Adjusted EPS of $2.32 beats a $2.29 consensus.

Shares are up 4.1% after-hours.

4:00 PM ET: Microsoft's stock closed down 0.2% to $242.04. The FQ2 report should be out shortly.

3:57 PM ET: As usual, Microsoft's Azure revenue growth will be closely watched. In October, Microsoft guided for constant-currency Azure growth (42% in FQ1) to drop about 5 points sequentially.

3:51 PM ET: The FactSet consensus is for FQ2 revenue of $52.99B and EPS of $2.29.

With 2023 IT budgets getting set right now, a lot of attention will probably be given to Microsoft's revenue guide (the FQ3 revenue consensus is at $52.42B), along with its commercial bookings growth and general commentary about corporate spending trends.

3:47 PM ET: Hi, this is Eric Jhonsa. I'll be live-blogging Microsoft's earnings report and call.