Microsoft revenue jumps to $92.279 billion as Azure grows 48%
Key Facts
Microsoft reported results on October 28 for the first quarter of its fiscal 2027, posting revenue of $92.279 billion for the three months ended September 30, up 19% from $77.673 billion in the corresponding period of 2025. The quarter’s key figures centered on continued cloud business growth alongside substantial infrastructure investment. Chief Financial Officer Amy Hood said the company exceeded its expectations for revenue, operating income and earnings per share. Net income was $36.629 billion, while diluted earnings per share were $4.92 under GAAP. Adjusted earnings per share were $4.89 after excluding the impact of OpenAI investments, according to the company’s statement.
Microsoft Cloud revenue reached $63.9 billion, up 30% year over year, or 31% in constant currency, according to the company’s statement. Azure revenue rose 48% to $33.165 billion, compared with $22.384 billion a year earlier. That put Azure growth at the forefront of the reported cloud results, as the company combined revenue expansion with increased spending on assets in the same quarter. The Agents and Infra segment also posted revenue of $76.8 billion, up 25% year over year. By contrast, Devices and Consumer revenue was about $15.5 billion, down 3% from the comparable period.
On remaining orders, Microsoft’s commercial remaining performance obligations rose 73% to $677 billion, according to its results statement. The figure accompanies growth in Azure and cloud and reflects the scale of the commercial commitments disclosed by the company. Additions to property and equipment totaled $39.367 billion during the quarter, compared with $19.394 billion a year earlier. But this item is not the same as the all-in capital spending reported by Reuters; the latter was $45.2 billion, compared with $34.9 billion in the same period a year earlier. The results therefore showed increases in both additions to property and equipment and broader capital spending, with the figures differing because they measure different items.
All-in capital spending of $45.2 billion came in below prior quarterly guidance of more than $50 billion. Reuters quoted Jonathan Neilson, Microsoft’s head of investor relations, as saying some third-party capacity deliveries expected in the first quarter were delayed. Neilson attributed the gap to the timing of deliveries, while Azure growth and cloud revenue remained strong in the same period. Amy Hood said on a July call that 2026 capital spending would be about $175 billion after the forecast was revised in light of more data center leases being reclassified. She explained at the time that finance leases are included in capital spending, while operating leases are not, affecting comparisons between the figures.
The previous quarter’s figures help clarify how the mix of assets and lease classifications affect reported spending. In the fourth quarter of fiscal 2026, capital expenditures were $41 billion, with about two-thirds directed to short-lived assets, particularly CPUs and GPUs, according to Microsoft’s disclosure. Finance leases totaled $5.6 billion that quarter. The company separates finance and operating leases in its capital spending calculation: the former are included, while the latter are not. Comparing additions to property and equipment alone with capex guidance is therefore insufficient to understand the gap between the two figures in the current quarter. Microsoft had revised its estimate for 2026 capital spending to about $175 billion after the reclassification of data center leases.
On cash flow, free cash flow was $18.6 billion for the quarter, exceeding Visible Alpha’s estimate of $8.54 billion, according to Reuters. Microsoft also returned $10.2 billion to shareholders through dividends and share repurchases during the quarter, according to its statement. These figures put cash flow and shareholder distributions alongside infrastructure spending of $45.2 billion. Before the results were announced, CoreWeave shares closed at $59.57, IREN at $27.44, Microsoft at $531.33 and Nebius at $170.47 on October 27, according to EL7 data. Microsoft closed at $527.35999 a share on October 28, according to the same data; these are dated prices, not a description of the stock’s movement in response to the results.
On Microsoft’s first-quarter results call, held on October 28 at 5:30 p.m. Eastern time, management presented the figures after results for the quarter ended September 30 were released. Company data show year-over-year growth in revenue, cloud and Azure, alongside an increase in additions to property and equipment. All-in capital spending came in below prior guidance, with the company citing delayed third-party capacity deliveries. Remaining commercial performance obligations of $677 billion remain a separate measure from revenue recorded in the quarter. Distinguishing finance leases from operating leases is also necessary to interpret the capital spending guidance presented by management.