Microsoft's Azure grows 48% as revenue reaches $92.3 billion in fiscal Q1 2027

The results

Microsoft reported results for the first quarter of its 2027 fiscal year, the quarter ended September 30, 2026, on October 28. Revenue was about $92.3 billion, up 19%. Microsoft Cloud revenue was $63.9 billion, up 30%. GAAP net income rose 32% to $36.6 billion, while non-GAAP net income rose 18% to $36.4 billion. Coverage says the gap comes from the results of Microsoft's OpenAI investment, which produced a $207 million gain in the quarter.

Azure

• Azure grew 48%, an acceleration from 43% in the previous quarter.
• Azure revenue was about $33.2 billion. Coverage says this was the first time Microsoft disclosed Azure revenue in dollars and not only as a growth rate.
• For the next quarter, Microsoft expects Azure growth of 49% to 50%.

Backlog and spending

• Commercial remaining performance obligation, the value of signed contracts not yet recognized as revenue, rose 73% to $677 billion. One source noted it was roughly flat versus the previous quarter, another said about 30% should be recognized within 12 months, and another reported that commercial bookings fell 12%. The release did not explain what drove the backlog change.
• Microsoft expects capital spending above $50 billion in the second quarter of fiscal 2027.

New reporting structure

Microsoft now reports two segments. One of them, Agents and Infra, brought in $76.8 billion, up 25% on a recast basis.

How to read it

Azure's growth is high for a business of this size, and the dollar disclosure makes comparison with AWS and Google Cloud easier. Even so, scopes differ: Azure excludes Microsoft 365, while the other cloud segments include different products. Our report on Q3 2026 cloud earnings compared explains these differences. Some outlets rounded figures slightly differently, such as $92.28 billion revenue and $33.17 billion for Azure, so check Microsoft's release for exact numbers.

What to watch

• Whether Azure reaches the guided 49% to 50% growth.
• How much capital spending is needed to support that growth.
• What the backlog turns into, since a large share depends on AI demand.

For the Amazon side, see AWS's third-quarter results.