Microsoft Tops Revenue Estimates at $92.3 Billion as Azure Growth Hits 48%

Microsoft (Nasdaq: MSFT) reported fiscal first-quarter revenue of $92.3 billion, above the $90.7 billion analysts expected, and adjusted EPS of $4.89 against the $4.72 consensus estimate, in an 8-K filed Wednesday, Oct. 28. The quarter ended Sept. 30, 2026. Revenue rose 19% from a year earlier.

GAAP diluted EPS was $4.92, up 32%. The gap reflects Microsoft's investments in OpenAI. GAAP net income included a $207 million net gain from those investments, compared with a $3.1 billion net loss a year earlier. The company excludes these effects from its non-GAAP results. On a non-GAAP basis, net income was $36.4 billion, up 18%. Operating income was $45.9 billion, up 21%.

Cloud and Azure growth

Microsoft Cloud revenue was $63.9 billion, up 30% (31% in constant currency). Azure revenue rose 48% to $33.2 billion. Commercial remaining performance obligation increased 73% to $677 billion. Microsoft 365 commercial cloud revenue increased 17% on a reported basis.

Segment results

Agents and Infra revenue was $76.8 billion, up 25%, and its operating income rose to $40.6 billion from $32.7 billion. Devices and Consumer revenue was $15.5 billion, down 3%. Windows OEM and devices revenue fell 22%, while search and advertising revenue excluding traffic acquisition costs rose 12%. The company recast prior-period segment amounts to reflect its fiscal 2027 segment changes.

Capital returns and outlook

Microsoft returned $10.2 billion to shareholders through dividends and share repurchases in the quarter. The release does not include quarterly guidance; the company said it would provide forward-looking guidance on its earnings call. For the December quarter, analysts expected EPS of $4.82 on revenue of $95.66 billion. For fiscal 2027, the average analyst estimate was EPS of $19.76 on revenue of $391.60 billion.