TMTB: MSFT CVNA NOW EBAY RBLX Earnings Takeaways

Will have the usual Morning Wrap in a few, but for now earnings recaps…

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MSFT -2% put up another broad‑based beat with Azure +39% cc, record bookings/RPO, and a bigger capex ramp—but Q2 Azure guide stays at ~+37% cc as supply remains the governor, not demand.

Ok yes, let’s get it out of the way that Azure slightly missed the 40% buyside bogey and guide was maybe a touch light. But us the key takeaways is: bull case remains very much intact, Azure wasn’t higher because they’re very capacity constrained and mgmt said DC capacity will double in the next 2 years, commercial bookings grew 111% without including the $250B from OAI, RPO 50%+, while Satya and Amy both sounded really good on the call.

So while not much upside over next couple of quarters bc of capacity constraints, we can get close to $22 in CY27, which at 30x is $675+, close to 30% upside and that’s before the $35-40 of OAI stake if they IPO in early 2027 at 1T. While Azure comps get tougher beginning in the March Q (likely see Azure decel to mid 30s), we think the back half is likely to “comp the comp” as capacity begins to come online (and potential customers outside of OAI come online). So not super exciting NT, but we stay long and strong.

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#s Details

FQ1’26:
Revenue $77.673B, +18.4% y/y (last q +18.1% y/y) vs Street $75.534B.
EPS (GAAP) $3.72 vs Street $3.68; EPS (ex‑OpenAI OI&E) $4.13.
Operating Margin (GAAP) 48.9% vs Street 46.3%.
Microsoft Cloud GM 68% (down ~3ppt y/y) vs guide ~67%.
Azure (cc) +39% vs Street ~+37.5%.
Intelligent Cloud revenue $30.9B vs Street $30.174B.
P&BP revenue $33.0B vs Street $32.288B.
More Personal Computing revenue $13.8B vs Street $12.878B.
Commercial bookings (cc) +111% (ex‑OpenAI tranche).
Commercial RPO $392B, +51% y/y (≈2‑yr duration).
Capex (incl. leases) $34.9B vs Street ≈$30B.

FQ2’26 Guidance:
Revenue $79.5–$80.6B (+14–16% y/y) vs Street ~$80.2B.
Azure (cc) ~+37% vs Street ~+36.1–36.5%.
Intelligent Cloud revenue $32.25–$32.55B vs Street ~$32.03B.
P&BP revenue $33.3–$33.6B vs Street ~$33.10B.
MPC revenue $13.95–$14.45B vs Street ~$14.95B.H…
Microsoft Cloud GM ~66% (down y/y).
COGS $26.35–$26.55B; Opex $17.3–$17.4B; FX +2pts to revenue.
Capex: up sequentially in Q2; FY26 capex growth > FY25.

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Bull vs. Bear Debate:

Bulls argue MSFT sits at the center of the AI stack (infrastructure + models + apps) with a capacity‑constrained Azure growing high‑30s, record bookings/RPO that should translate to accelerating revenue as new capacity lands, and Copilot/E5‑led ARPU steadily compounding in P&BP. Q1 evidence: Azure +39% cc, bookings +111% cc, RPO +51% to $392B (≈2‑yr); CEO also disclosed $250B of incremental OpenAI Azure commitments, plus continuing rev‑share/IP/API exclusivity—all of which expand the LT revenue pool. Even with AI mix pressure, company OM 48.9% and Cloud GM 68% beat—suggesting scale efficiencies can offset AI cost headwinds over time. On this view, investors can underwrite mid‑teens revenue CAGR and high‑teens EPS CAGR through FY27 as capacity catches up

Bears focus on the heavier capex (including leases) and uncertain AI unit economics, warning that increased AI mix could depress Cloud GM longer than hoped while Q2 Azure +37% signals no acceleration despite the capex surge. They also worry about OpenAI‑related OI&E volatility, competitive intensity from other hyperscalers, and the possibility that capacity, not demand, continues to govern growth—risking multiple compression if revenue fails to bend higher in FY26.

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CVNA -8% delivered a clean top‑line/units/EBITDA beat, but management’s 4Q setup (units >150k; FY25 adj. EBITDA ≥ the high end of $2.0–$2.2B) points to normal seasonal GPU headwinds and slightly higher ad spend—tempering upside expectations into year‑end

Details:

3Q25:
Revenue $5.647B, +55% y/y (last q +42% y/y) vs Street $5.024B, +~37% y/y;
GAAP Diluted EPS $1.03 vs Street $1.23;
Adjusted EBITDA $637M vs Street $609M;
Adjusted EBITDA Margin 11.3% vs Street 12.1%; Q…
Retail Units 155.9k vs Street 150.0k;
Non‑GAAP GPPRU (Total GPU) $7,503 vs Street $7,410;
Retail GPU $3,540 vs Street $3,558;
Other GPU $3,008 vs Street $2,966;
Wholesale GPU $545 vs Street $501;
Free Cash Flow $432M vs Street $230M.

4Q25 Guidance / FY25 Update:
Retail Units (4Q25) >150k vs Street ~151k;
Adj. EBITDA (FY25) ≥$2.2B (implies ≥$474M in 4Q) vs Street 4Q ~$526M;
GPU (4Q25) “Sequential changes … similar to last year” (directional guide); Street models imply Retail GPU ~ $3,250 vs ~$3,390 consensus; Other GPU ~ $2,790 vs ~$2,760.
Advertising (4Q25) Similar to/slightly higher $ q/q

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Bulls argue CVNA is now the most profitable and fastest‑growing scaled auto retailer, taking share as peers tread water. They point to compounding operating leverage (SG&A per unit −$319 y/y), durable funding (new/expanded $14B in flow agreements), improving unit economics (record Other GPU), and a differentiated CX from same‑/next‑day delivery and deeper automation. Momentum in Phoenix (40% same/next‑day) and broad inventory/ADESA integration (faster delivery, broader selection) support higher conversion and lower last‑mile costs over time. On credit, bulls see stability and cost‑of‑funds improvements flowing through F&I, while the tariff narrative supports used‑car price resilience versus new. On valuation, bulls lean to premium multiples given share gains + profitability: e.g., ~32x CY26E EBITDA on ~$2.8–$3.0B implies ~$380–$420 per share, while a “dream scenario” of 40x on $3.5B pushes into the $600+ range

Bears focus on the 4Q deceleration embedded in guidance (units down q/q at the low end; EBITDA below Street), visibility into seasonal GPU pressure (wholesale depreciation, auction volumes, pass‑through of rate cuts), and the step‑up in advertising dollars. They worry that as growth normalizes, GPU could moderate faster than expected (mix/competition/inventory costs), ABS/funding markets could re‑tighten, and macro (including tariff/consumer strain) could crimp affordability. Execution risk surrounds scaling same‑day nationally without diluting GPU, and traditional dealers may narrow CVNA’s digital lead. On valuation, bears argue for normalization toward mid‑teens EV/EBITDA as growth slows and competition rises;applying ~18x to ~$2.5B 2026 EBITDA = ~$260 per share

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NOW +4% posted a clean beat on revenue, cRPO and margins, raised FY25 subs/OM/FCF guidance, and highlighted accelerating AI traction—while keeping Q4 prudent given U.S. federal timing.