Microsoft's cloud business grew faster in the July through September quarter, and the company more than doubled its spending on property and equipment. Revenue for its fiscal first quarter reached $92.3 billion, up 19% from a year earlier, according to the earnings release Microsoft filed with the SEC on Wednesday, October 28, after the stock market closed.
The quarter in numbers
| Measure | July to Sept. 2026 | Change from a year earlier |
|---|---|---|
| Revenue | $92.3 billion | Up 19% |
| Operating income | $45.9 billion | Up 21% |
| Net income (GAAP) | $36.6 billion | Up 32% |
| Microsoft Cloud revenue | $63.9 billion | Up 30% |
| Azure revenue | Not disclosed in dollars | Up 48% |
| Spending on property and equipment | $39.4 billion | Up from $19.4 billion |
Net income jumped partly because of Microsoft's stake in OpenAI. A year ago, losses tied to that investment cut profit by $3.1 billion; this quarter it added $207 million. Excluding OpenAI in both years, net income rose 18%, to $36.4 billion.
Cloud growth picked up. In its July release for the April through June quarter, Microsoft reported Microsoft Cloud revenue of $59.3 billion, up 27%, and 43% growth for Azure and other cloud services. Chief Financial Officer Amy Hood said in Wednesday's release that results "exceeded expectations across revenue, operating income, and earnings per share."
Microsoft also says commercial customers have signed $677 billion in contracts it has not yet booked as revenue, up 73%.
Where the revenue came from
Microsoft now reports two business segments, a change it announced in September. Agents and Infra, which holds Azure and business software, brought in $76.8 billion, up 25%. Devices and Consumer took in $15.5 billion, down 3%.
Inside that consumer group, Windows OEM and Devices revenue fell 22%. Xbox content and services slipped 2%. Microsoft 365 consumer cloud revenue rose 17%, and search and advertising revenue excluding traffic acquisition costs rose 12%.
What comes next
Microsoft gives its forecast for the current quarter on its earnings call, which starts at 2:30 p.m. Pacific time (5:30 p.m. Eastern) on Wednesday and streams on its investor relations site. The company returned $10.2 billion to shareholders in the quarter through dividends and buybacks.
