Microsoft revenue rises 19% to $92.3 billion on strong cloud growth

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Cloud revenue hits $63.9 billion with 30% growth; Azure up 48% as company starts FY27 on higher earnings

By ANI

Updated - October 29, 2026 at 09:47 AM. | Washington

Microsoft reported a 19 per cent year-on-year (y-o-y) increase in revenue to $92.3 billion in the July-September quarter, supported by strong growth in its cloud business, as the technology major began fiscal year 2027 with higher income and earnings.

The company’s revenue for the first quarter ended September 30, 2026, rose from $77.7 billion in the corresponding quarter last year. Operating income increased 21 per cent to $45.9 billion, while net income rose 32 per cent to $36.6 billion on a reported basis.

Microsoft CEO Satya Nadella highlighted the performance of the company’s cloud business in a post on X. “Just wrapped our earnings call. It was a fast start to our fiscal year. Microsoft Cloud revenue surpassed $63B, with growth accelerating to 30% YoY,” he said.

Microsoft Cloud revenue reached $63.9 billion during the quarter, marking a 30 per cent y-o-y increase, or 31 per cent in constant currency. Azure revenue grew 48 per cent, making cloud and infrastructure-related services a key contributor to the company’s performance.

Revenue from Microsoft’s Agents and Infra segment increased 25 per cent to $76.8 billion. The company’s commercial remaining performance obligation, representing contracted revenue yet to be recognised, rose 73 per cent to $677 billion.

“We delivered a strong start to the fiscal year with Microsoft Cloud revenue of $63.9 billion, with growth accelerating to 30% (up 31% in constant currency) year-over-year,” said Amy Hood, Microsoft’s Executive Vice President and Chief Financial Officer. She added that results exceeded expectations across revenue, operating income and earnings per share.

Microsoft further expects revenue of $96 billion to $97.1 billion in the December quarter, representing growth of 18-19 per cent. Azure revenue growth is projected at 49-50 per cent in constant currency.

Hood said customer demand continues to exceed available supply, while efficiency improvements across its computing infrastructure are helping the company serve more demand.

Microsoft’s capital expenditure stood at $45.2 billion in the September quarter. Hood said spending is expected to exceed $50 billion in the December quarter, with capital expenditure for calendar year 2026 projected at approximately $170 billion, partly reflecting capacity deliveries delayed from earlier periods.

Diluted earnings per share rose 32 per cent to $4.92 on a reported basis. Excluding the impact of investments in OpenAI, adjusted net income increased 18 per cent to $36.4 billion, while adjusted earnings per share rose 18 per cent to $4.89.

However, Microsoft’s Devices and Consumer segment recorded a 3 per cent decline in revenue to $15.5 billion. Windows OEM and devices revenue fell 22 per cent, while Xbox content and services revenue declined 2 per cent. Search and advertising revenue, excluding traffic acquisition costs, grew 12 per cent.

Published on October 29, 2026

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