Market Notes: What Alphabet's, Microsoft's, Eli Lilly's and Visa's Earnings Told Long-Term Investors

Four widely followed companies reported last week: two technology platforms, a drugmaker and a payments network. Their reports show how to read quarterly results, including the parts that complicate a tidy story. None of this is a recommendation (see the disclosures below).

What did Alphabet report?

Alphabet (Nasdaq: GOOGL) reported on Wednesday, October 28. Revenue was $127.6 billion, up 25%. Google Cloud revenue rose to $30.7 billion from $15.2 billion, and Cloud operating income was $11.1 billion versus $3.6 billion. Net income available to common stockholders fell to $26.2 billion from $35.0 billion, and diluted EPS was $2.12 versus $2.87, with other income (expense), net, swinging to an expense of $8.2 billion from income of $12.8 billion a year earlier. Capital expenditures were $51.4 billion versus $24.0 billion (Alphabet Form 8-K, Exhibit 99.1).

On the call, CFO Anat Ashkenazi attributed the other-income swing mainly to an unrealized loss on the company's investment in SpaceX. Free cash flow was negative $9.1 billion, which management said was affected by capital spending, an inventory build for TPU system sales and a $5.2 billion payment of a European Commission fine. Management said it expects to recognize just over 55% of its $561 billion Cloud backlog over the next 24 months, expects near-term Cloud margin headwinds as it uses third-party compute capacity, left 2026 capital-expenditure guidance at $195 billion to $205 billion, and said it expects capital expenditures to increase significantly in 2027.

What did Microsoft report?

Microsoft (Nasdaq: MSFT) reported its fiscal first quarter on October 28. Revenue was $92.3 billion, up 19%; operating income was $45.9 billion, up 21%; and Microsoft Cloud revenue was $63.9 billion, up 30%, with Azure up 48%. Commercial remaining performance obligation rose 73% to $677 billion. Windows OEM and Devices revenue fell 22% (Microsoft Form 8-K, Exhibit 99.1).

On the call, CFO Amy Hood said capital expenditures were $45.2 billion, including $7.4 billion of finance leases, with cash paid for property and equipment of $39.4 billion. Hood guided to second-quarter spending above $50 billion and roughly $170 billion for the calendar year, and said "Customer demand continues to exceed available supply." Commercial bookings fell 12%, and management guided to a Windows OEM and Devices decline in the mid-30s percent range next quarter.

What did Eli Lilly report?

Eli Lilly (NYSE: LLY) reported on Thursday, October 29. Revenue rose 39% to $24.4 billion, driven by a 53% increase in volume partly offset by a 15% decline in realized prices. About $900 million of revenue came from items the company flagged, including a $410 million milestone and rebate adjustments. Reported EPS was $7.22 and non-GAAP EPS was $7.48, both including $4.57 per share of acquired in-process R&D charges versus $0.71 a year earlier. Lilly raised its 2026 revenue guidance to $91.0 billion to $92.0 billion and set non-GAAP EPS guidance at $35.00 to $36.00 (Lilly Form 8-K, Exhibit 99.1).

On the call, management said 2026 revenue benefited from roughly $2 billion of one-time items it does not expect to recur, and that, as in previous years, it expects net realized price to be a headwind in 2027 that volume growth more than offsets.

What did Visa report?

Visa (NYSE: V) reported its fiscal fourth quarter on Tuesday, October 27. Net revenue was $12.1 billion, up 13%; GAAP EPS was $3.19 and non-GAAP EPS was $3.48. The quarter included a $469 million litigation provision tied to the interchange multidistrict litigation case (Visa Form 8-K, Exhibit 99.1).

On the call, CFO Chris Suh said management expects fiscal 2027 adjusted net revenue growth in the low double digits, with the second quarter the low point, and assumes a stable economy and resilient consumer spending. Suh cited continued uncertainty from the Middle East conflict for cross-border travel and said about 25% of payments volume is up for renewal in 2027, which management said implies a step-up in the growth rate of client incentives. CEO Ryan McInerney said, "Trust is the next growth vector for Visa."

What can long-term investors take from these reports?

First, growth and cash generation can diverge: Alphabet's capital expenditures roughly doubled and its free cash flow was negative, while Microsoft guided to over $50 billion of spending next quarter. Second, reported and adjusted figures differ, so it helps to read what is included, such as Lilly's one-time items and in-process R&D charges, Visa's litigation provision, or Alphabet's investment loss. Third, guidance is a statement of expectations, not a result: each company paired its strong lines with a stated risk, from capacity constraints to price declines to a weaker PC market. A diversified portfolio, sensible costs and a plan matched to your own goals are what carry investors through quarters like these, good and bad.

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