Microsoft discloses Azure revenue in dollars for the first time: 33.17 billion in one quarter, with a tenth of its revenue from OpenAI

Executive summary

On the evening of 28 October, Microsoft reported results for the first quarter of its fiscal year 2027, the annual period it uses to prepare its accounts. The quarter ended on 30 September 2026, as the company's fiscal year begins in July. Results followed a new format: the company divided its business into two reportable segments, the units whose profits are disclosed separately in its financial statements, rather than three. For the first time, it published quarterly revenue in dollars for its Azure cloud platform, having previously disclosed only its growth rate.

Azure revenue reached $33.17 billion in the quarter, up 48%, the fastest pace across the five quarters the company restated. Total revenue was $92.28 billion, up 19%, while adjusted earnings per share (Non-GAAP Earnings Per Share), the profit attributable to each share excluding the impact of the investment in OpenAI, were $4.89. According to EL7 data, earnings per share (Earnings Per Share, EPS) exceeded analysts' estimates by 3.6%, marking the twelfth consecutive beat.

But the quarterly report revealed three figures absent from the headlines. First, revenue from commercial arrangements with OpenAI reached $10.0 billion in a single quarter, or about 10.8% of company revenue by our calculation, compared with $24.1 billion for the full fiscal year 2026. Second, gross margin for Microsoft Cloud, the share of revenue remaining after deducting its direct costs, fell to 66% from 68% a year earlier, and the company expects roughly 65% next quarter. Third, capital expenditure (Capital Expenditure (Capex)), spending on assets such as data centres and equipment, totalled $45.2 billion, below the company's expectations. This reflected the delayed delivery of computing capacity from external suppliers into the following quarter.

In after-hours trading, which follows the regular session and has lower liquidity, the shares swung between a 2.51% decline and a 6.97% gain over roughly 70 minutes, then ended the extended session up 2.90%. They were up 2.88% in pre-market trading, which precedes the regular session, as of 10:09 GMT. EL7 scores rank the stock first among 177 companies in its industry, with valuation the only weak dimension.