Microsoft earnings: revenue $92.3 billion, Azure up 48% as profit beats forecasts
Microsoft's July–September revenue rose 19% to $92.3 billion and adjusted EPS of $4.89 beat estimates, with Azure growing 48% — days after it offered buyouts to 60,000 staff.
At a glance
- Microsoft's revenue rose 19% to $92.3 billion in its fiscal first quarter (July–September 2026), above the roughly $90.6 billion analysts expected.
- Adjusted earnings were $4.89 a share (up 18%), beating forecasts of about $4.73; GAAP net income rose 32% to $36.6 billion.
- Azure revenue grew 48% and the Microsoft Cloud brought in $63.9 billion, up 30%.
- Capital spending including leases was about $39.4 billion, lower than analysts had expected; the shares rose about 4% in early after-hours trading.
- The results come two days after Microsoft offered voluntary buyouts to up to 60,000 employees.
Microsoft reported on Wednesday, October 28, 2026, that revenue rose 19% to $92.3 billion in the July–September quarter, the first of its 2027 financial year, beating Wall Street forecasts as its Azure cloud business grew 48%. Adjusted earnings of $4.89 per share were also above expectations, and the shares rose about 4% in early after-hours trading — a contrast with Alphabet, which reported at the same time and fell.
The results in numbers
Microsoft now reports in two segments: "Agents and Infra", which includes Azure, Microsoft 365 cloud services and related businesses, and "Devices and Consumer", which includes Windows, Xbox, search advertising and Surface. Its non-GAAP (adjusted) figures exclude the effect of its investment in OpenAI.
| Item | Q1 FY2027 (Jul–Sep 2026) | Change vs year earlier |
|---|---|---|
| Revenue | $92.3 bn | +19% |
| Operating income | $45.9 bn | +21% |
| Net income (GAAP) | $36.6 bn | +32% |
| Net income (adjusted) | $36.4 bn | +18% |
| EPS (GAAP) | $4.92 | +32% |
| EPS (adjusted) | $4.89 | +18% |
| Agents and Infra revenue | $76.8 bn | +25% |
| Devices and Consumer revenue | $15.5 bn | −3% |
| Microsoft Cloud revenue | $63.9 bn | +30% |
| Azure revenue | about $33.2 bn | +48% |
Against forecasts
| Measure | Reported | Analysts expected |
|---|---|---|
| Revenue | $92.3 bn | about $90.6 bn |
| Adjusted EPS | $4.89 | about $4.73 |
| Agents and Infra | $76.8 bn | about $75.6 bn |
| Devices and Consumer | $15.5 bn | about $15.0 bn |
| Capital spending (incl. leases) | about $39.4 bn | about $45.9 bn |
This is also the first quarter in which Microsoft has begun to disclose Azure revenue in dollars rather than only as a growth rate, a change investors had long asked for.
What the company said
Chairman and chief executive Satya Nadella said Microsoft is "delivering greater capability, choice, control, and cost efficiency for customers across our entire stack". Chief financial officer Amy Hood said results exceeded expectations across revenue, operating income and earnings per share.
Background: buyouts and AI spending
The results came two days after Microsoft offered voluntary buyouts to as many as 60,000 eligible employees in the United States, Canada, India and the United Kingdom — roughly a quarter of its workforce — as it reshapes the company around AI. Chief people officer Amy Coleman described the offer as giving employees more ways to shape their next chapter. Investors had been watching whether the company would cut costs to offset heavy spending on data centres.
Like Alphabet, Amazon and Meta, Microsoft is spending tens of billions of dollars a quarter on AI computing. Its capital spending this quarter was lower than analysts feared, which helped the shares, while Azure's 48% growth shows strong customer demand for AI services built on models from OpenAI and others.
Market reaction
Before the results, Wall Street closed higher after the Federal Reserve held interest rates at 3.75%–4.00% in a 10–2 vote. The S&P 500 rose 0.28% to 7,743.98, the Nasdaq Composite 0.27% to 26,549.85 and the Dow about 98 points to 52,475.10. After the bell Microsoft shares rose about 4%, while Alphabet fell about 7% on an earnings miss.
Why it matters
Microsoft is one of the largest companies in the world by market value and a major part of global stock indexes, so its results affect retirement and savings funds far beyond the United States. Strong Azure growth signals continued business investment in AI, which supports chipmakers and cloud suppliers across Asia. For Pakistan and South Asia, Microsoft is a major employer and partner through its India operations, outsourcing firms and cloud services used by banks, telecoms and government bodies, so its spending and staffing decisions are closely watched.
What happens next
Microsoft's management was due to discuss the quarter and its outlook for the October–December period on an investor call after the release. Investors will watch Thursday's trading for the full market reaction and for how many employees accept the voluntary buyouts. The company's next quarterly results are due in late January 2027.
Questions people are asking
How much revenue did Microsoft make in the September 2026 quarter?
Microsoft reported revenue of $92.3 billion for the quarter ended September 30, 2026 (its fiscal Q1 2027), up 19% from a year earlier. Operating income rose 21% to $45.9 billion.
How fast is Microsoft Azure growing?
Azure revenue grew 48% year on year in the quarter, and total Microsoft Cloud revenue rose 30% to $63.9 billion, driven by demand for AI computing and services.
Did Microsoft beat earnings expectations?
Yes. Adjusted EPS of $4.89 beat the roughly $4.73 analysts expected, and revenue of $92.3 billion beat forecasts of about $90.6 billion. The shares rose about 4% in early after-hours trading.
