SharpLink reported a $394.3 million net loss for the second quarter of 2026, with the result driven largely by non-cash Ethereum revaluation losses and liquid staking token impairment charges.

The company’s filing shows $321.0 million in unrealized ETH losses and $76.1 million in impairment charges tied to liquid staking tokens. At the same time, staking operations generated $11.2 million of the company’s $11.5 million in revenue.

That creates a very particular kind of earnings story.

SharpLink’s operating activity is not the main reason for the headline loss. The loss is mainly an accounting effect from the changing value of its Ethereum-related holdings.

That distinction matters because crypto treasury earnings can look brutal on paper even when the underlying asset position is still intact.

For more details, visit the official Sec platform.

TL;DR

• SharpLink reported a $394.3 million Q2 net loss.
• The loss was driven largely by unrealized ETH losses and staking-token impairments.
• Staking generated $11.2 million of the company’s $11.5 million in revenue.

Ethereum Treasury Accounting Can Be Harsh

Crypto accounting is often difficult for public companies.

When a company holds large amounts of ETH, quarterly results can swing sharply based on market prices. If accounting rules require revaluation or impairment recognition, a falling ETH price can produce a large net loss even without a major cash outflow.

That appears to be the core issue in SharpLink’s Q2 result.

The company’s Ethereum-related holdings created a major accounting drag, but those losses should not automatically be read as realized cash losses. Unrealized losses reflect mark-to-market movement. Impairments reflect accounting treatment. They are not the same as selling ETH at a loss.

For investors, that nuance is essential.

Staking Revenue Tells A Different Story

The revenue line looks very different from the net-loss line.

SharpLink generated $11.2 million from staking operations, out of $11.5 million in total revenue. That shows the company’s operating model is heavily tied to Ethereum staking yield.

The question is whether that revenue can scale enough to offset balance-sheet volatility.

Staking income can provide recurring revenue, but it is unlikely to fully neutralize large valuation swings when a company holds a huge ETH position. If ETH falls sharply, accounting losses can dwarf staking revenue in a single quarter.

That does not mean staking is useless. It means staking revenue and treasury revaluation operate on very different scales.

The ETH Position Still Grew

The company’s ETH holdings reportedly increased despite the headline loss.

That is important because it changes how the market should read the result. A company can report a large accounting loss while still increasing its token count. For a treasury-focused investor, token accumulation may matter more than short-term GAAP volatility.

For a traditional equity investor, the net loss may matter more.

This is one of the tensions in crypto treasury stocks.

Are investors buying earnings, asset exposure, staking yield, or a leveraged ETH strategy? The answer may differ from shareholder to shareholder.

Liquid Staking Adds Another Layer

Liquid staking tokens make the picture more complicated.

They can generate yield and improve liquidity compared with native staking, but they also introduce extra risks: smart contract risk, liquidity risk, depeg risk, custody risk, and accounting complexity.

An impairment charge tied to liquid staking tokens does not necessarily mean the staking strategy failed, but it does show that these instruments are not simple cash equivalents.

Public companies using liquid staking need to explain those risks clearly.

Investors should not treat “staked ETH” and “liquid staking token exposure” as interchangeable without understanding the mechanics.

What Investors Should Watch Next

The next useful questions are straightforward.

Did SharpLink continue increasing ETH holdings after the quarter? Are staking yields stable? How much of the asset base is in native ETH versus liquid staking tokens? How much liquidity does the company have outside its crypto holdings? How will management communicate accounting volatility to investors?

For crypto-native investors, the Q2 result may look like a volatile but expected part of running an ETH treasury. For traditional investors, a $394.3 million net loss may be harder to look through.

Both reactions are understandable.

SharpLink’s earnings show how difficult it can be to translate an Ethereum treasury strategy into public-company financial statements.

The ETH may still be there. The accounting pain is real too.

This article is based on SharpLink’s Q2 2026 Form 10-Q filing.

This article was written by the News Desk and edited by Samuel Rae.

This report is based on information released by Sec. at Sec

Empery Digital has disclosed the sale of 1,635 BTC for $102.2 million, using the proceeds to support debt repayment and share buybacks as its unrestricted Bitcoin buffer narrows.

The company’s Form 10-Q filed on August 7 shows total holdings fell to 1,279 BTC. Of that, 954 BTC was pledged as collateral, leaving 325 BTC unrestricted.

That is the important number for investors.

Headline Bitcoin holdings can sound large, but unrestricted holdings matter more when a company needs balance-sheet flexibility. If most of the remaining BTC is pledged, the practical treasury cushion is much smaller than the headline total suggests.

This is a specific company story, not proof that corporate Bitcoin treasuries as a category are failing.

For more details, visit the official Sec platform.

TL;DR

• Empery Digital sold 1,635 BTC for $102.2 million.
• Total holdings fell to 1,279 BTC.
• Only 325 BTC remained unrestricted after collateral pledges.

Corporate Bitcoin Treasuries Are Getting More Complicated

The first corporate Bitcoin treasury narrative was easy: companies bought BTC and held it.

That simplicity is fading.

Public companies now use Bitcoin inside broader capital structures involving debt, collateral, buybacks, preferred shares, financing programs, and cash management. That makes the raw BTC count less useful on its own.

Empery Digital’s filing shows why.

A company can still hold more than 1,000 BTC, but if most of it is pledged against obligations, the amount available for tactical use is much smaller. Investors need to know not only how much Bitcoin a company owns, but how encumbered that Bitcoin is.

Restricted BTC is not the same as free treasury BTC.

Why The Sale Matters

The 1,635 BTC sale matters because it shows Bitcoin being used as an active balance-sheet asset rather than a permanent reserve.

Selling $102.2 million of BTC to repay debt and fund share buybacks is a capital-management decision. It may reduce leverage, support equity value, or improve financial flexibility. It also reduces Bitcoin exposure.

That trade-off is now central to corporate BTC strategies.

Shareholders may like balance-sheet discipline. Bitcoin-focused investors may prefer accumulation. Creditors may want more liquidity. Management has to balance those interests.

For companies that built BTC-heavy balance sheets, the “never sell” narrative can collide with real-world capital needs.

Do Not Generalize Too Far

It would be a mistake to frame Empery Digital’s sale as evidence that all corporate Bitcoin treasuries are dumping.

Different companies have different financing structures, cash needs, debt obligations, and conviction levels. Some continue accumulating. Some pledge BTC. Some sell tactically. Some raise equity. Some issue preferred stock. Some hold without movement.

The corporate treasury category is becoming less uniform.

That is the real takeaway.

Bitcoin on a balance sheet can be a long-term reserve, collateral, liquidity source, investor signal, or financing tool. It can also be several of those things at once.

Unrestricted BTC Is The Key Metric

For Empery Digital, the unrestricted BTC number deserves attention.

A remaining balance of 1,279 BTC sounds substantial. A free balance of 325 BTC tells a more cautious story. If future obligations rise or market conditions weaken, the company has less unencumbered BTC to draw on.

That does not automatically mean distress.

It does mean the treasury buffer is thinner.

Investors following Bitcoin treasury companies should start separating total holdings from pledged, restricted, and freely deployable holdings. The difference can be material.

A More Mature Bitcoin Treasury Market

This is what a maturing corporate Bitcoin market looks like.

Not every company will simply buy and hold forever. Some will use BTC as collateral. Some will monetize holdings. Some will rotate between cash and Bitcoin depending on market conditions. Some will try to preserve net exposure while managing obligations.

That may disappoint Bitcoin purists, but it is how public-company finance works.

Empery Digital’s BTC sale shows Bitcoin moving from ideology into corporate treasury mechanics.

The question for investors is no longer only “how much BTC does the company hold?”

It is “how much BTC is free, what is it pledged against, and why is management moving it?”

This article is based on Empery Digital’s August 2026 Form 10-Q filing.

This article was written by the News Desk and edited by Samuel Rae.

This report is based on information released by Sec. at Sec

Zillow Group’s revenue rose 18% to $772 million in the second quarter, beating its own forecast, but a $36 million restructuring charge from severance and other costs stemming from this week’s layoffs pushed it to a $4 million net loss.

The Seattle-based online real estate company, which on Tuesday laid off more than 500 people, or 7% of its workforce, expects the restructuring to cost $59 million to $64 million in total, with the rest recorded in the third quarter, according to the company’s 10-Q regulatory filing.

Zillow also announced a series of executive changes, including expanding CFO Jeremy Hofmann‘s role to include chief operating officer. Jun Choo, who became COO in 2024, is stepping down to focus on his health, serving as an advisor through the end of the year.

The company created a chief legal and policy officer role and hired Cassandra “Sandi” Knight, a Google vice president of litigation and discovery, who was previously PayPal chief litigation counsel. Knight starts next week.

Zillow and Redfin are set to go to trial Aug. 24 as defendants in an antitrust case brought by the FTC and five state attorneys general over the $100 million rental listings deal between the two companies. Zillow has spent $26 million on the case so far this year, including $10 million in the second quarter.

In addition, Zillow promoted Kathleen Berroth to senior vice president of strategy and operations, and Eric Wilson to senior vice president and GM of mortgages.

For the second quarter, Zillow said the residential real estate industry grew 6%, while industry-wide lending for home purchases was roughly flat compared with a year ago. The number of people visiting real estate sites and apps declined overall as mortgage rates rose, the company said, citing Comscore. Zillow’s own traffic fell 2%, to an average of 239 million monthly users.

Most of the revenue growth came from Zillow’s newer businesses. Mortgage revenue rose 75% to $84 million as Zillow directed buyers on its site to its own lending arm, and rentals revenue rose 31% to $209 million. Residential revenue, from advertising sold to real estate agents, grew 7% to $465 million.

The satellites rolling off the line in Redmond, Wash., are paying for Elon Musk’s AI ambitions — and he says the company’s satellite internet business is only getting started.

SpaceX’s Starlink connectivity division posted $1.7 billion in operating income for the second quarter, maintaining its status as the company’s only profitable business, according to numbers released Tuesday afternoon as part of its inaugural earnings report as a public company.

The AI division, built around the Grok model and the X social media and technology platform, lost $1.3 billion while spending $15.8 billion on capital projects. That capital spending amounted to more than three times Starlink’s quarterly revenue of $4.3 billion (up 66%).

Musk, the company’s founder and CEO, used the first SpaceX earnings call to make the case that investors are badly underestimating Starlink.

He said a new generation of satellites could increase Starlink revenue tenfold, and the network could deliver “a majority of the world’s internet” in less than 10 years. Musk said AI and robots will drive demand for bandwidth far beyond anything people generate on their own.

“I think Starlink is the only thing that can actually service that bandwidth,” he said.

Amazon is getting in the race, building its own satellite internet network at a factory in nearby Kirkland, Wash. Its Leo constellation has “close to 400 satellites in orbit, enough to begin initial satellite internet service this year,” CEO Andy Jassy told analysts last week.

Overall, SpaceX topped Wall Street expectations with revenue of $7.8 billion for the quarter, up 92% from $4.1 billion a year earlier. It also narrowed its net loss to $541 million from $1 billion.

SpaceX shares closed at $125.33, up 9.4% on the day, then fell nearly 5% in after-hours trading following the report, apparently on concerns about the company’s capital spending.

SpaceX builds its Starlink satellites at a Seattle-area factory that produced about 70 a week from December 2025 to April 2026, according to the company’s IPO filing. The output has put roughly 9,600 Starlink satellites in orbit, about 75% of all active maneuverable satellites circling the planet.

For the second quarter, SpaceX reported 12 million Starlink subscribers, double the number a year earlier and an increase of 1.7 million from the first quarter. The revenue increase in the Starlink division (officially known as “Connectivity”) was driven by a 108% jump in enterprise and government business, which now accounts for more than 40% of the segment’s sales.

The subscriber total was just under the 12.19 million Wall Street had projected, but the segment’s revenue exceeded expectations by about $460 million, more than any other part of the company.

Starlink now brings in $66 a month per subscriber, down from $85 a year ago as it expands overseas and adds cheaper plans. The good news for SpaceX: the figure stopped falling, holding flat from the first quarter, despite the company’s warning to IPO investors that it would keep sliding.

Microsoft and Amazon both saw their stocks surge again Monday, riding a post-earnings tech wave across the stock market that pushed Amazon past $3 trillion in value for the first time.

The gains follow earnings reports last week in which both companies’ cloud platforms exceeded expectations. Microsoft said Azure grew 43%, passing $100 billion in annual revenue for the first time. Amazon said AWS grew 37%, its fastest pace in 18 quarters.

Microsoft and Amazon are now the world’s fourth and fifth most valuable companies, respectively. The three ahead of them (Nvidia, Alphabet and Apple) are all headquartered in the Bay Area, although each has sizeable engineering centers in the Seattle region.

Amazon rose 4.6% in intraday trading to $284.15 as of publication time, after touching an all-time high of $287.20 earlier in the session, giving it a market value of $3.06 trillion.

Microsoft climbed 5.2% to $488.97, worth $3.63 trillion. Its rally began Thursday, when it added nearly $450 billion in market value, the largest one-day gain by any company on record.

The rallies came despite AI spending plans that have unsettled investors for much of the year. Microsoft went into earnings near a one-year low, after a $357 billion wipeout to start the year.

It’s all still coming at a huge cost. Microsoft spent a record $41 billion on capital projects last quarter and told investors to expect more than $50 billion in the current quarter. Amazon raised its 2026 forecast to about $220 billion from $200 billion, citing rising memory chip prices.

In one sign of the impact of the spending, Microsoft’s free cash flow fell 23% last quarter. Amazon’s free cash flow turned negative for the first time since 2023.

But cloud growth and other signs of demand for AI seem to have appeased investors for now.

Amazon CEO Andy Jassy told investors the spending reflects unmet demand: “Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027 too. In fact, the demand we already have for 2028 is striking.”

The gains come as both companies operate with fewer people. Amazon confirmed 16,000 more corporate job cuts in January, bringing the total to 30,000 since October, along with more recent reductions in its robotics and artificial general intelligence groups.

Microsoft cut 4,800 jobs in July, revamping its salesforce and overhauling Xbox.

This week on the GeekWire podcast: Microsoft and Amazon both reported quarterly numbers, and both stocks rose on cloud results that beat expectations. Is all that AI spending paying off? And in related news, Microsoft sees a rare annual headcount decline, hitting product R&D hardest. 

Plus: Satya Nadella builds a Power BI dashboard out of an analyst’s research report, and touts it on the earnings call to make a bigger point. Jeff Bezos names Amazon’s chips business as the long-awaited fourth pillar. And AI House managing director Jacob Colker delivers a much-needed pep talk for Seattle tech, calling on the region to recognize and build on its strengths. 

Related stories and links

Microsoft and Amazon earnings

• Microsoft Azure tops $100B in annual revenue as record AI spending cuts into cash flow
• AWS is ‘booming,’ but Amazon’s free cash flow turns negative on record AI spending
• Microsoft R&D jobs drop for second straight year as total headcount falls for first time in a decade
• Which Microsoft businesses are growing and shrinking, according to obscure table in regulatory filing

Amazon’s fourth pillar

• Jeff Bezos says this business is becoming Amazon’s next ‘pillar’

A rallying cry for Seattle tech

• Watch: A venture capitalist’s passionate speech, a rallying cry, really, about Seattle
• Seattle’s AI2 Incubator rebrands as AI House, and adds key investor as managing director
• ‘I’m tired of that narrative’: Seattle VC pushes back on tech exodus talk

The Washington tech ecosystem

• New map traces Washington state’s tech ‘universe’ to a few key hubs, and shows what’s at risk
• After hiring AWS exec and raising $107M seed round, Virginia startup plants flag in Seattle area
• GeekWire’s Seattle engineering centers list

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

The number of product research and development roles at Microsoft declined for the second straight year, according to the company’s annual regulatory filing, offering a new indication of how the tech giant is reshaping its workforce in the AI era.

Microsoft’s total headcount declined by 5,000 people to 223,000 as of June 30, according to its Form 10-K, filed with the SEC this week. It’s the first annual employment decline for Microsoft since 2016, when the company was writing off and winding down its Nokia smartphone business.

The trend is notable in part because, over the same time period, Microsoft’s revenue rose 18%, or $50.1 billion, to $331.8 billion — the largest one-year increase in the company’s history.

Here’s how the employment trends break down:

• Product R&D roles represented the majority of the net decline, falling by 3,000, to 77,000 — down from a peak of 81,000 in 2024.
• Operations roles, now Microsoft’s largest employment category, held steady at 89,000 after growing by 3,000 the year before. It includes datacenter operations, product support, consulting, and manufacturing and distribution.
• Sales and marketing roles declined by 1,000, to 43,000, and general and administration by 1,000, to 14,000.
• The reductions fell disproportionately on Microsoft’s U.S. workforce, which declined by 4,000, to 121,000. International employment declined by 1,000, to 102,000.

The numbers reflect the roughly 9,000 jobs Microsoft cut on July 2, 2025, two days into its fiscal year. They do not reflect the 4,800 cuts announced July 6 of this year — spanning sales, consulting and Xbox — or the thousands of U.S. employees who left in early July under the company’s first voluntary retirement program.

On the earnings call Wednesday, CFO Amy Hood confirmed that “total company headcount declined 2% year over year.” She linked a 10% increase in operating expenses to “continued investment in R&D compute capacity, talent, and data to support product development across the portfolio.”

AI coding tools — including Microsoft’s own GitHub Copilot — have become a standard part of how software is built at Microsoft and across the industry, reducing the number of people and the amount of time it takes to ship products, while often expanding the total scope of the work.

Microsoft has repeatedly declined to link its job cuts to AI. Chief People Officer Amy Coleman said in a memo earlier this month that the roles being eliminated were not being directly replaced by AI, while acknowledging that “AI is changing how work gets done.”

Tech companies have been keeping a tighter rein on operating expenses, primarily through job cuts, in part to offset soaring capital expenses to support their AI infrastructure buildouts. Microsoft’s capex reached $41 billion in the June quarter alone.

Microsoft is also moving engineers out of product development and into customer-facing roles. The Microsoft Frontier Company, a $2.5 billion initiative announced July 2, brings together more than 6,000 people to embed engineers inside customers building AI systems — a group drawn “primarily from Microsoft’s existing engineering and forward-deployed teams,” according to the company.

Amazon Web Services revenue grew 37% last quarter, its fastest pace since the end of 2021, but the company is spending so much on data centers and infrastructure to fuel that growth that its free cash flow for the past 12 months turned negative for the first time since 2023.

Overall, the tech giant reported $200.6 billion in revenue for the second quarter, up 20%, with operating income of $27.5 billion, up 43%. That beat Wall Street’s expectations of about $196.4 billion in revenue, and topped the high end of Amazon’s own guidance.

Profits were $62.6 billion, or $5.75 per share. However, that included $53.4 billion in pre-tax gains, primarily on Amazon’s investment in Anthropic, which inflated the bottom line. Excluding those gains, EPS would have been about $1.95, above analyst expectations of $1.82.

Amazon shares rose more than 8% in after-hours trading following the report.

AWS revenue reached $42.2 billion in the quarter, a $169 billion annualized run rate. Operating income in the cloud division rose 64% to $16.6 billion, lifting AWS operating margin to 39.4% from 32.9% a year ago — evidence that the AI buildout is starting to convert into profit, not just revenue.

“AWS is booming,” CEO Andy Jassy said in the release, adding that the company’s AI and chips businesses “each eclipsed run rates of more than $25 billion.” The chips business, which Jeff Bezos called the next pillar of the company this week, was at a $20 billion run rate three months ago.

Amazon’s operations generated $161.4 billion over the past 12 months, but the company spent a net $169 billion on property and equipment — up $66.1 billion from a year earlier, an increase Amazon attributed primarily to AI investments — leaving a shortfall of $7.6 billion in free cash flow.

A year earlier, it had $18.2 billion left over for the prior 12 months, by comparison.

Free cash flow is what’s left after a company covers its operating costs and pays for things like data centers and warehouses. It’s an important measure of financial health, which investors watch closely because it shows how much cash a business actually creates after paying for its own growth.

Update: Amazon raised its capital spending forecast on its earnings call. Jassy said the company now expects to spend about $220 billion in cash capex this year, up from the roughly $200 billion it projected earlier, attributing the increase to the higher cost of memory chips.

He addressed the cash flow squeeze directly, framing it as a matter of timing. Data centers require capital about two years before servers can be installed and start generating revenue, he said, but once open, they can be monetized for more than 30 years without repeating that upfront cost.

Servers and networking equipment run on a shorter cycle, purchased a few months before going into service. Those take a little under three years to break even, Jassy said, against a useful life of at least five to six years.

He said most of Amazon’s AI capacity is now contracted for terms of five years or longer.

“We’ll spend a lot of capex and encounter free cash flow headwinds until these data centers come online, can be monetized, and we get a few years into these servers being utilized,” Jassy said.

Other notes from Amazon’s earnings release:

Online store sales rose 15% to $70.4 billion, up from 10% growth in the same quarter a year ago. It remains Amazon’s largest single revenue line at about 35% of total revenue, and it is the line most directly affected by the decision to move Prime Day into June, into the second quarter. Last year, the annual online sales event took place in the third quarter.

Advertising revenue rose 26% to $19.8 billion, up from 22% growth in the same quarter a year ago. It has generated about $76 billion over the past 12 months, making it one of Amazon’s fastest-growing businesses. Prime Day lifted this line as well, because the event drives a surge in spending by sellers and brands competing for placement.

Third-party seller services revenue, which includes commissions and fulfillment and shipping fees Amazon charges independent merchants, rose 16% to $46.8 billion, up from 10% growth in the same quarter a year ago. Independent sellers accounted for 61% of units sold in Amazon’s stores, roughly flat with recent quarters. Prime Day boosted this line as well.

Subscription services, which includes Prime memberships, grew 12% to $13.7 billion. The line has grown between 10% and 12% every quarter for the past year and a half. Analysts have been expecting a Prime price increase, which has not yet materialized.

The first thing I do when Microsoft’s 10-K or 10-Q comes out is hit Ctrl-F and go waaaay down to the section called “Revenue, classified by significant product and service offerings.” It’s on Page 85 of the 10-K that came out Wednesday with its quarterly and annual results.

From my perspective, this gives the clearest view of what’s actually happening in Microsoft’s business. It groups things into categories and product names that match a real-world understanding of the company, as opposed to the mumbo jumbo you have to decode otherwise.

Microsoft reports its results in three broad segments: Productivity and Business Processes, Intelligent Cloud, More Personal Computing. Businesses like Azure, Xbox, Windows and LinkedIn all basically disappear inside them, until you dig into the filing.

Overall, for the fiscal year ended June 30, Microsoft’s revenue increased 18%, or $50.1 billion, to $331.8 billion. Here is what the 10-K table shows about the real drivers of the business.

Two business lines are driving nearly all of Microsoft’s growth.

Of the $50.1 billion in revenue that Microsoft added for the fiscal year, $31 billion came from Server products and cloud services, accounting for 62% of the company’s growth.

This category includes Azure, along with SQL Server, Windows Server, Visual Studio, GitHub and Nuance. Microsoft doesn’t detail Azure revenue in its financial statements, but CEO Satya Nadella said on the earnings call that Azure passed $100 billion in annual revenue for the first time this year.

At total revenue of $129.4 billion, this is by far Microsoft’s biggest business, accounting for nearly 40% of its annual revenue.

The second biggest growth came from Microsoft 365 Commercial, which added $14.2 billion in revenue, up 16% to $102 billion. Microsoft 365 Commercial covers the business subscriptions: Office, Teams, SharePoint, Exchange, security and compliance, and Microsoft 365 Copilot.

Taken together these two business lines produced 90% of Microsoft’s growth for the year.

They’re also where the company is monetizing AI most successfully: Azure, AI infrastructure and GitHub Copilot in server and cloud; and Microsoft 365 Copilot in Microsoft 365 Commercial.

Two of Microsoft’s longtime businesses got smaller.

• Windows and Devices revenue fell $230 million, to $17.1 billion. Once the biggest growth engine for the company as a whole, the PC operating system business has been flat for the past four years, using the categories as Microsoft now defines them.
• Xbox revenue fell $1.7 billion, to $21.8 billion. That’s the first annual decline since Microsoft completed its $69 billion Activision Blizzard acquisition. It comes as Microsoft overhauls the business, cuts jobs and takes a write-down on unspecified Xbox assets.

Other notes and observations from the table:

• LinkedIn, at $19.8 billion, now generates more revenue than Windows and Devices. It passed Windows in fiscal 2025 and extended the lead this year, growing 11% while Windows declined.
• Microsoft 365 Consumer was the fastest-growing category after server products, up 24% to $9.2 billion.
• Search advertising grew 9% to $15.2 billion, and is closing in on Windows and Devices.
• Dynamics grew 15% to $9 billion. Enterprise and partner services, the consulting business, grew 6% to $8.3 billion.

Thoughts? Let me know on LinkedIn. Here’s our coverage of the earnings.

Microsoft’s Azure cloud business grew 43% last quarter, blowing past the company’s own forecast and surpassing $100 billion in annual revenue for the first time, providing fresh evidence of the potential for artificial intelligence to fuel new growth for the tech giant.

The company’s results for its fiscal fourth quarter also showed the price of that growth: capital spending hit a record $41 billion, largely to support the company’s AI buildout, and free cash flow sank 23% even as operating profits jumped 18%.

And in a new twist, Microsoft shares rose more than 5% in after-hours trading, in contrast with the recent pattern in which the company’s strong results were met with selloffs that pushed its stock near a one-year low.

Companywide results: Overall, Microsoft reported revenue of $90 billion for the quarter, up 18% from a year ago, and net income of $35.8 billion, up 31%. Analysts had expected $87.7 billion in revenue, a figure that was already at the top of Microsoft’s own guidance range.

Microsoft’s adjusted earnings of $4.74 per share topped the $4.24 that analysts expected, according to Yahoo Finance. That included a $3.2 billion gain on Microsoft’s investment in Anthropic, part of a 27-cent benefit from one-time items. Even excluding those items, the company said, it exceeded expectations across revenue, operating income and earnings per share.

Microsoft 365 Copilot surpassed 30 million paid seats, up from 20 million last quarter. That’s still less than 7% of the roughly 450 million commercial Microsoft 365 seats, a gap that has drawn investor skepticism all year.

Microsoft’s backlog grew 84% to $678 billion. Known as remaining performance obligation, or RPO, it’s the value of contracts that customers have signed but that Microsoft hasn’t delivered on yet, basically the business Microsoft has already locked in but has yet to record as revenue.

Investors have been worried for a year that too much of it came from a single customer, OpenAI. Microsoft said all of the $51 billion increase over the prior quarter came from customers other than the big AI model companies. Setting OpenAI aside, the backlog still grew 25%.

Windows OEM and Devices revenue declined 7%, hurt by slower PC demand and a tough comparison with last year’s Windows 10 upgrade wave. The decline would have been steeper, but PC makers built more machines to get ahead of rising memory prices, and Microsoft collects its Windows fee when a PC is built rather than when it’s sold.

Xbox content and services revenue fell 10% and Xbox hardware fell 13%. Microsoft also wrote down the value of unspecified Xbox assets. The company grouped that charge with severance costs and lower-than-expected costs from its retirement program — a net $500 million hit to operating income — and declined to say how much of it was Xbox or what was written down.

Amazon reports quarterly earnings Thursday afternoon, facing the same test as every other big tech company right now: whether it’s generating enough business to justify its massive AI spending.

Wall Street expects revenue of about $196.4 billion, up 17% from a year ago, and earnings of $1.82 per share. That’s essentially the midpoint of Amazon’s own forecast for the second quarter.

Part of that growth is due to the calendar. Prime Day ran June 23-26 this year, during the second quarter in the U.S. and most large markets. Last year it ran July 8-11, in the third quarter. That gives Amazon’s retail numbers a boost this time that the year-ago quarter didn’t have.

Another factor is the cloud. AWS grew revenue 28% last quarter, its fastest rate in nearly four years, and analysts expect the acceleration to continue with revenue of roughly $40.5 billion for the second quarter, up 31%, according to Zacks Consensus Estimates.

The company plans a record $200 billion in capital expenditures this year, nearly all of it for data centers, servers and chips to support increased capacity for training and running AI models.

Amazon is making those investments based in part on demand from big AI companies including OpenAI and Anthropic, which have signed commitments to AWS worth $138 billion and more than $100 billion, respectively, for the coming years.

“We’re not investing approximately $200 billion in capex in 2026 on a hunch,” CEO Andy Jassy wrote in his April shareholder letter.

In the meantime, the spending is absorbing nearly all of the cash from Amazon’s operations. Free cash flow fell to $1.2 billion over the past 12 months, from $25.9 billion a year earlier.

Investors seem to be losing patience with that tradeoff overall. Google parent Alphabet beat expectations last week and its stock fell anyway, after raising its own capital spending forecast to as much as $205 billion for the year. Microsoft reports earnings Wednesday afternoon.

One difference for Amazon is its custom chip business — Graviton, Trainium and Nitro — which passed a $20 billion annual revenue run rate last quarter. Jeff Bezos said this week that it’s becoming a fourth pillar of the company, alongside Marketplace, Prime and AWS.

The company is overhauling its approach to AI model development. Business Insider reported this week that Amazon is winding down most of its in-house Nova models and concentrating engineers on a new frontier model effort, with a new flagship model expected at re:Invent this fall.

Amazon cut jobs in its AGI organization last week and confirmed that it’s closing its San Francisco AI site, while saying its frontier model research would continue.

At the same time, AWS is spending to help other companies deploy AI, committing $1 billion at the end of June to embed its own engineers with enterprise customers building agentic systems, following similar moves by OpenAI and Anthropic.

Check back with GeekWire for coverage on Thursday afternoon.

Handling fewer packages for Amazon is boosting the financial outlook for UPS, as CEO Carol Tomé said Tuesday that the delivery giant has successfully completed its planned volume pullback and is pivoting toward higher-margin shipments.

“I want to thank all UPSers for their extraordinary work over the past 18 months as we successfully completed our Amazon glide-down and related network reconfiguration initiatives as designed,” Tomé said in the company’s second quarter earnings release.

The “glide-down” caps an 18-month UPS strategy initiated in early 2025 to scale back low-margin e-commerce shipments for Amazon. During the pandemic peak, Amazon generated over 13% of UPS’s total revenue, but executives repeatedly pointed to that low-yielding volume as “extraordinarily dilutive” to profit margins.

Last year, Tomé addressed UPS’s 30-year relationship with Amazon, saying, “They are our largest customer, but they’re not our most profitable customer.”

Speaking on CNBC on Tuesday, Tomé confirmed that Amazon now accounts for roughly 9% of UPS’s business, marking the completion of the planned pullback.

Asked about Amazon’s growing footprint as a direct logistics rival through Amazon Shipping, Tomé dismissed concerns that the e-commerce giant was poaching core customers, drawing a sharp distinction between network strengths.

While Amazon thrives in lightweight, short-distance urban deliveries, Tomé emphasized that UPS maintains an edge across “every other place” — from complex B2B routes to time-sensitive cold chain logistics. By shedding roughly 2 million lower-margin Amazon packages per day, UPS says it freed up critical capacity across its ground and air networks.

UPS posted second-quarter revenue of $22.8 billion — a 7.6% increase year-over-year that topped Wall Street estimates. The courier raised its full-year 2026 revenue forecast to approximately $91.2 billion (up from $89.7 billion).

Despite the earnings beat and raised guidance, UPS shares dropped nearly 5% in early trading as investors weighed transformation costs and broader consumer spending concerns.

Amazon reports its second-quarter earnings on Thursday.

Microsoft has topped earnings expectations consistently in recent years, yet its stock is near a one-year low. So while it’s worth paying attention to revenue and profits when the company reports its fiscal year-end results Wednesday, there are clearly other forces at play on Wall Street.

Here are the key stats and trendlines to watch going into the earnings report for the fourth quarter of the company’s 2026 fiscal year, ended June 30.

Core numbers: Analysts expect revenue of about $87.7 billion for the quarter, up 14.7% from a year ago, and earnings of $4.24 per share, up 16%, according to Yahoo Finance. Microsoft’s own revenue guidance was $86.7 billion to $87.8 billion — meaning Wall Street is looking for a result at the very top of the company’s range.

For the full fiscal year, that works out to roughly $329 billion in revenue, up 17% from $281.7 billion in fiscal 2025.

Capital expense: This is the big one. Microsoft told investors to expect more than $40 billion in capital spending for the quarter, which would be a record — up from $31.9 billion in the March quarter and $37.5 billion in the one before that. About two-thirds goes to GPUs and other short-lived hardware.

For the calendar year, the company expects to spend roughly $190 billion. Chief Financial Officer Amy Hood said about $25 billion of that total is the result of higher component prices.

One big question this week will be the company’s guidance for capex going forward. Because this is the fiscal year-end, Wednesday brings the company’s first capital spending guidance for fiscal 2027, which began July 1.

Capex concerns: Google parent Alphabet last week foreshadowed what may happen to Microsoft. It reported revenue up 24% and cloud revenue up 82%, then raised its own capital spending forecast to as much as $205 billion — well above the roughly $188 billion analysts expected. The stock fell 7% the next day and Alphabet fell below its prior $4 trillion market valuation.

Big picture, investors seem to have decided the capital spending is getting ahead of the payoff. Data centers and chips cost money now, while the AI revenue meant to justify them arrives over years — if it ever reaches the scale these companies are promising.

Moody’s Ratings raised its own red flags about this last week, saying the six largest cloud and AI platforms will spend about $785 billion this year and close to $1 trillion in 2027. Demand is real and accelerating, the ratings agency said, but “the ultimate return on investment is unclear.”

Cloud margins: This is where the capital spending starts to become evident in the company’s core quarterly results. Microsoft Cloud gross margin — the share of cloud revenue left after the cost of delivering the service — has slipped from 72% three years ago to 66% last quarter.

For the quarter it reports Wednesday, Microsoft told investors to expect about 64%. On the prior earnings call, Hood attributed the decline to AI infrastructure costs and growing use of GitHub Copilot, partly offset by efficiency gains in Azure.

Microsoft doesn’t absorb the cost of a data center all at once. It spreads the expense across the years the equipment is expected to last. That cost shows up here, in the expense of running the cloud — making this one of the first places where the capital spending hits earnings.

Microsoft Azure: On its prior conference call, Microsoft said it expected the Azure cloud business to grow 39% to 40% in constant currency in Q4, a slight acceleration from the 39% posted in Q3. Analysts expect roughly the same, with some outliers such as BNP Paribas looking for 41%.

But the published expectations aren’t the real bar. In January, Azure grew 38% — ahead of Microsoft’s guidance — and the stock fell 10%, because Wall Street had privately been expecting 39.4%.

Azure’s growth rate also reflects a choice as much as it does demand. Microsoft has been routing scarce computing capacity to its own products first — Copilot, GitHub Copilot, internal research — and selling what remains to Azure customers. Hood has said the growth rate would have been higher had that capacity gone to customers instead. Demand continues to outrun supply, and the company expects to stay “constrained at least through 2026.”

Business Insider reported Sunday that the shortage of supply has pushed Microsoft to shop for additional computing capacity outside its own data centers, evaluating capacity from Amazon and Google, and that Amazon stepped in following a series of GitHub outages.

Copilot and AI revenue: Microsoft said in April that its AI business had reached a $37 billion annual revenue run rate, up 123% from a year earlier. It was the first update to that number since January 2025, when the company put it at $13 billion. Whether Microsoft discloses it a third time Wednesday is a signal in itself.

Microsoft 365 Copilot passed 20 million paid seats last quarter, up from 15 million in January. That’s about 4.4% of the 450 million commercial seats across Microsoft 365 — the gap that has drawn skepticism from investors all year. Microsoft said it expects the number of new paid seats to grow again this quarter.

Meanwhile, the company is launching new initiatives to drive adoption of AI among its customers. Earlier this month it launched the Microsoft Frontier Company, a $2.5 billion effort to put 6,000 engineers inside customer organizations to help them deploy AI.

Wednesday is also the first report since Microsoft changed how it charges for GitHub Copilot. As of June 1, customers pay based on usage rather than a flat fee per user.

The OpenAI backlog: Microsoft’s remaining performance obligations — RPO, a measure of contracts customers have signed but the company has not yet fulfilled — reached $627 billion last quarter, up 99% from a year earlier. About a quarter of that is expected to become revenue in the next 12 months. It’s the strongest evidence that there’s real demand supporting the AI buildout.

But the RPO is also highly concentrated. In January, when it stood at $625 billion, 45% was tied to OpenAI — roughly $281 billion committed by a single customer that is still losing money. Take OpenAI out of last quarter’s figure and the growth drops from 99% to 26%.

Then in April, Microsoft and OpenAI revamped their partnership, and OpenAI ended its exclusive commitment to run on Azure.

Reliability: On July 23, a bug in Microsoft’s automated network maintenance tooling cut a West US Azure data center off from the company’s global network, knocking out Teams, SharePoint, OneDrive and Copilot Chat for about five hours. Microsoft has published a preliminary post-incident report, and a final one is due within two weeks.

The outage falls in the quarter that began July 1, so it won’t appear in Wednesday’s numbers. But it comes as Microsoft is asking businesses to hand AI agents real control of their operations.

Retirement charge: Wednesday’s results will include about $900 million in one-time costs from Microsoft’s voluntary retirement program, the first in the company’s 51-year history. Hood said roughly $350 million falls in the cost of revenue and $550 million in operating expenses.

About 8,750 U.S. employees were eligible — 7% of Microsoft’s U.S. workforce — and about 30% accepted, Chief People Officer Amy Coleman confirmed in an interview with GeekWire, in line with what the company expected. Those departures reduced the size of the 4,800-job cut Microsoft announced July 6, which happened after this quarter ended.

Even with the retirement costs, Microsoft told investors it expects operating margins for the full fiscal year to be about a point higher than last year. Hood also said on last quarter’s call that headcount declined year over year and will keep declining in fiscal 2027.

Windows: Microsoft expects Windows OEM revenue — what PC makers pay to put Windows on their machines — to decline close to 20% this quarter.

A few factors are driving this:

• Last year’s wave of PC upgrades, when support for Windows 10 ended, makes for a tough comparison.
• PC makers stocked up on parts and machines ahead of rising memory prices and are now working through them.
• The PC market itself is slower, because memory prices have made computers more expensive.

The memory shortage is hitting Microsoft a few different ways. In addition to adding about $25 billion to the company’s capital spending this calendar year, as noted above, it lowers what Microsoft earns from Windows. Also, in late June, Microsoft raised Xbox console prices by $100 to $150, saying storage and memory costs had risen more than 2.5 times.

This week: Facebook parent Meta reports the same afternoon as Microsoft, with Apple and Amazon on Thursday and Alphabet already out. Check back Wednesday afternoon for coverage.