Microsoft's Backlog Surges 51% To $392 Billion: Commercial Bookings 'Significantly Ahead of Expectations,' Says CFO Amy Hood - Microsoft (NASDAQ:MSFT)

Core Insights - Microsoft Corp. reported a strong fiscal first-quarter performance, driven by increased demand for its cloud and AI services, with record highs in commercial bookings and backlog [1][4]. Group 1: Financial Performance - The company achieved $77.7 billion in revenue, representing an 18% year-over-year increase, surpassing consensus estimates of $75.3 billion [4]. - Microsoft posted a profit of $4.13 per share, exceeding analyst expectations of $3.67 [4]. Group 2: Backlog and Bookings - Commercial remaining performance obligations reached a record $392 billion, up 51% year-over-year, fueled by strong demand for AI and cloud products [2]. - CFO Amy Hood noted that commercial bookings were significantly ahead of expectations at 111%, driven by Azure commitments from OpenAI and growth in contracts exceeding $100 million for Azure and Microsoft 365 [2][4]. Group 3: Future Revenue Expectations - The RPO balance has nearly doubled over the past two years, with a stable weighted average duration of approximately two years, indicating that the backlog is expected to convert into revenue within this timeframe [3]. - Hood addressed customer concentration concerns, stating that contracts are signed with the intention of being utilized in the near term [4]. Group 4: Stock Performance - Despite the strong earnings report, Microsoft shares experienced a slight decline of 0.09% on the announcement day and a further drop of 3.01% in pre-market trading [5]. - The stock maintains high scores in Momentum, Growth, and Quality according to Benzinga's Edge Stock Rankings, indicating a favorable price trend [5].