Azure Revenue Jumps 48% to $33.165 Billion, Beating Estimates in First Quarter
Key Facts
Microsoft reported results on October 28 for its fiscal first quarter ended September 30, 2026, posting revenue of $92.3 billion, up 19% year over year. Growth was supported by Azure, which generated revenue of $33.165 billion, up 48% from the same period a year earlier. Azure revenue exceeded Visible Alpha’s estimate of $32.84 billion and rose from $29.4 billion in the previous quarter. The company’s net income was $36.6 billion under U.S. accounting standards, up 32%, while diluted earnings per share rose to $4.92. The figures put cloud computing at the forefront of the company’s results, with its revenue base and related orders expanding.
Microsoft Cloud revenue reached $63.9 billion for the quarter, up 30% year over year, or 31% excluding the impact of foreign exchange movements. This reflects broader growth than Azure alone, as cloud revenue includes multiple services the company provides to customers. As an indicator of future demand, commercial remaining performance obligations rose 73% to $677 billion as of September 30. This balance represents contracted amounts not yet recognized as revenue, extending the view of demand into coming periods. Microsoft said in an earlier announcement in July that Azure’s annual revenue had exceeded $100 billion, placing current-quarter growth within the service’s continued expansion.
Revenue growth was accompanied by a significant increase in spending on operating infrastructure. Net cash from operations totaled $58 billion in the three months ended September 30, compared with $45.057 billion in the same period a year earlier. In the same period, additions to property and equipment totaled $39.367 billion, versus $19.394 billion a year earlier. The figures highlight the balance between cash generation and funding the expansion of computing capacity, as actual capital spending rises from last year.
The company linked this spending to expanding the capacity needed to meet demand for its services, as it cited capacity constraints and delays in delivering some external capacity. Microsoft forecast faster Azure growth in the second fiscal quarter, making the company’s ability to add computing resources a key factor in converting demand into revenue. This follows an increase in Azure revenue from $22.384 billion in the same period a year earlier to $33.165 billion in the latest quarter. The quarter’s picture therefore combines strong sales growth, a rising balance of contracted obligations and a growing need for investment to keep pace with demand.
Microsoft shares closed at $531.01 on October 28, 2026, according to EL7 data. The close came on the day results were announced, but the available data do not specify the share move relative to the previous day’s close or the market reaction after the results were released. The figure therefore remains a closing price for that session, with no confirmed percentage change in the facts provided. Attention turns to the second fiscal quarter, where the company expects Azure growth to accelerate, alongside the disclosed spending levels and capacity constraints it cited. Cloud services revenue and spending on property and equipment will also remain among the key figures showing how the company responds to demand.