Microsoft posts $92.3 billion in revenue and raises Azure growth outlook to 50%
Key Facts
Microsoft reported revenue of $92.3 billion for the quarter ended September 30, 2026, up 19% year over year, on October 28, while its shares rose about 6% in extended trading after the results, according to Reuters. The company said operating income was $45.9 billion, up 21%, and GAAP net income reached $36.6 billion, up 32%. Diluted earnings per share were $4.92 on a GAAP basis, up 32%, and $4.89 on a non-GAAP basis, up 18%. Chief Financial Officer Amy Hood said results exceeded expectations for revenue, operating income and earnings per share. On October 29, Investing.com reported that the stock rose 4.0% in premarket trading, a later observation of its move before the session began.
Cloud growth led the results: Microsoft Cloud revenue was about $63.9 billion, up 30% year over year, or 31% excluding the impact of currency, the company said. Azure revenue rose 48%, with the service generating $33.17 billion in sales, according to Reuters. That topped Visible Alpha’s estimate of $32.84 billion, compared with Azure revenue of $29.4 billion in the previous quarter. Before the results, analysts expected Azure growth of 47.7% in the September quarter, following growth of 42% three months earlier, according to a Reuters report on October 27. Actual growth therefore came in above earlier expectations, while quarterly revenue also exceeded analysts’ estimate.
Company tables showed that revenue in the Agents and Infra segment was $76.795 billion in the three months ended September 30, 2026, compared with $61.672 billion in the same period of 2025. Microsoft began reporting under two new segments in fiscal 2027: Agents and Infra, and Devices and Consumer. The company said it recast some prior-period figures to align with how it manages and monitors the business internally following the segment change. Current and comparative segment figures therefore fall under the company’s new reporting structure.
Growth also extended to commercial remaining performance obligations, which rose 73% to $677 billion, according to Microsoft, reflecting the value of future contracted revenue. The company also returned $10.2 billion to shareholders through dividends and share repurchases during the quarter. On spending, free cash flow was $18.6 billion, about $10 billion above analyst expectations, according to Reuters. Capital expenditures were $45.2 billion, compared with $34.9 billion in the same period a year earlier. Spending came in below the company’s previous forecast of $50 billion, according to Reuters, despite higher investment in expanding computing infrastructure.
On the earnings call, Chief Executive Satya Nadella said Microsoft gives customers multiple AI options, some less expensive than advanced models such as Anthropic’s, with the aim of expanding enterprise use. He added that "the shiny-object conversation is starting to recede as more companies move from trying the latest or most powerful models to committing to long-term contracts." The remarks came as markets track cloud revenue growth alongside the scale of computing investment. Reuters reported that Microsoft shares rose about 9% from the start of the year through the October 28 close. Axios also described reactions to Microsoft and Alphabet’s results as mixed, noting that Microsoft shares rose after the close after sales and earnings per share topped analyst expectations.
Microsoft issued quarterly guidance above analyst estimates, according to Reuters, forecasting total revenue of between $96 billion and $97.1 billion in the second fiscal quarter, compared with LSEG’s estimate of $95.6 billion. It also forecast Azure growth of between 49% and 50%, above Visible Alpha’s estimate of 47.6%. The company had announced that its first-quarter earnings call would be held on October 28, 2026, at 2:30 p.m. Pacific time, or 5:30 p.m. Eastern time. The quarterly outlook puts Azure growth and total revenue among the key indicators markets will watch in the next quarter’s results.