Microsoft Posts Record Revenue Despite Employee Buyout Offers

Artificial Intelligence Microsoft Posts Record Revenue Despite Employee Buyout Offers It may be the only hyperscaler left with positive free cash flow. 28, 2026, pm ET Reading time 3 minutes Microsoft CEO Satya Nadella © DIMITAR DILKOFF / Contributor via Getty Read Later Read Later Comments (4) Microsoft just reported record-breaking quarterly revenue of $92.3 billion in its first-quarter earnings report on Wednesday, marking its tenth record-breaking quarter in a row. The revenue figure was up 19% from a year earlier. With the new fiscal year, Microsoft recently announced that it will be changing how it reports its financial metrics, choosing to divide the results into two segments: the AI-heavy Agents and Infra segment, which includes Azure, and the Devices and Consumer segment, which includes Xbox. Agents and Infra accounted for $76.8 billion in revenue, and in turn was driven by “strong demand across the Microsoft Cloud,” Microsoft chief financial officer Amy Hood said in the company’s earnings call on Wednesday. Just days before the rosy results and market delight, Microsoft offered buyouts, or “voluntary exit offers,” to approximately 60,000 people, equaling roughly 27% of its total workforce. The report came just months after Microsoft offered a similar buyout plan to retirement-age employees, which ended up cutting the company’s headcount by about 2,600 people. Despite that buyout, a layoff of about 4,800 people followed, aka roughly 2% of its workforce. The company’s cost guidance for the next year includes an estimate for how much money they expect to save from the buyout, Microsoft CFO Hood said on the call. Microsoft’s capital expenditures are gradually increasing quarter by quarter. Earlier this year, Microsoft reported that it spent $37.5 billion, mostly on AI, and the number spooked investors, who were desperate to huge spending commitments offset by revenue. This past quarter, the tech giant said that its capital expenditures came in even higher at $45.2 billion, with roughly three quarters of that money spent on CPUs and GPUs, according to Hood. Next quarter, Microsoft expects the figure to breach $50 billion. But investor reaction was different this time around, thanks to the revenue records, strong cloud growth and resilience in its free cash flow while its peers struggle. Much like the rest of its tech giant peers, Microsoft is suffering from a free cash flow decline. The company’s free cash flow came in at $18.6 billion, a drop from the same quarter last year when free cash flow was $25.7 billion and from last quarter, when it came in at $19.6 billion.