Microsoft Earnings: Azure Grows 48% as Fiscal Q1 Revenue Reaches $92.3 Billion

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October 28, 2026 — Microsoft reported fiscal first-quarter revenue of $92.3 billion, up 19% year over year, as its Azure cloud business grew 48%. The results for the quarter ended September 30 show continued demand for enterprise cloud computing and AI services, even as some consumer-facing product lines declined.

What were Microsoft's fiscal Q1 2027 earnings?

Microsoft's official investor-relations release reported $92.279 billion in revenue compared with $77.673 billion a year earlier. Operating income increased 21% to $45.915 billion. GAAP net income was $36.629 billion, up 32%, and GAAP diluted earnings per share were $4.92.

Microsoft also presented non-GAAP results excluding specified investment effects: adjusted net income of $36.422 billion and adjusted diluted EPS of $4.89. These measures should not be treated as interchangeable with GAAP results; they answer different questions about earnings performance.

How fast did Azure and Microsoft Cloud grow?

Azure revenue rose 48% from the comparable quarter, according to Microsoft. The company's broader Microsoft Cloud measure reached $63.9 billion, up 30% year over year. The figures reflect enterprise demand for hosted computing, applications and AI-related infrastructure, but they do not establish that every dollar of cloud growth came from generative AI.

Microsoft reported commercial remaining performance obligations of $677 billion, up 73%. That measure reflects contracted future revenue subject to delivery and recognition rules; it should not be confused with cash already received or revenue earned in this quarter.

Which Microsoft businesses were weaker?

Revenue in the Devices and Consumer segment fell 3% to $15.5 billion. Windows OEM and devices revenue decreased 22%, while Xbox content and services revenue declined 2%. Search and advertising revenue excluding traffic-acquisition costs rose 12%.

The contrast illustrates why the headline revenue number alone is insufficient: different product lines experienced markedly different demand conditions. The company also reorganized its reporting segments for fiscal 2027, and its release says certain comparative figures were recast to reflect the change.

What was the effect of Microsoft's OpenAI investment?

Microsoft said its investment in OpenAI contributed a $207 million net gain to GAAP net income, or about three cents per diluted share, in this quarter. In the year-earlier quarter, the comparable investment effect was a net loss of about $3.1 billion, or 41 cents per diluted share.

That accounting difference helps explain why GAAP and non-GAAP earnings growth diverge. It does not mean that Microsoft's cloud operations generated those investment gains, nor does it reveal a standalone valuation for OpenAI.

What matters after the October 28 Microsoft earnings report?

For investors and business customers, the questions ahead include whether Azure's 48% growth can continue, how rapidly data-center capacity can expand, and whether AI-related spending ultimately produces attractive margins. Reuters independently reported that Microsoft's cloud revenue exceeded market expectations, while also highlighting investor scrutiny of Big Tech's heavy infrastructure investments.

Microsoft said it returned $10.2 billion to shareholders through dividends and share repurchases in the quarter. Its outlook and management commentary should be read alongside the detailed earnings tables rather than substituted for them. This article reports published results, not a forecast of MSFT share prices.

Sources and verification

NewsTrendus independently wrote this report using the dated, attributable sources below. The representative photograph does not depict the reported event or the exact subject. Reporting reflects information available October 28, 2026.

• Microsoft Investor Relations, FY2027 Q1 earnings release (October 28, 2026)
• Reuters, October 28 reporting on Microsoft cloud results

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