Microsoft posts strong earnings as Azure cloud revenue hits $33.2bn

Summarised from 4 outlets · 5 reports · Updated 28 Oct, 21:41 · Archive

Microsoft reported quarterly revenue of $92.3 billion, up 19%, driven by 48% growth in its Azure cloud business.

Microsoft reported quarterly revenue of $92.3 billion for the quarter ended 30 September, a 19% increase year on year. Net income reached $36.6 billion, up 32% from the same quarter last year. The company's shares rose 5% in extended trading following the announcement.

Azure cloud infrastructure drove much of the growth, expanding 48% year on year to $33.17 billion in revenue. This exceeded analyst expectations of $32.32 billion. Microsoft disclosed Azure revenue in dollars for the first time in an earnings statement, having previously reported only growth rates. The company has been heavily investing in data centre infrastructure to support artificial intelligence demand, with capital expenditures and finance leases reaching $45.2 billion during the quarter, a rise of about 30%.

Microsoft also reported that it generated $10 billion in revenue from commercial arrangements with OpenAI, including revenue-sharing payments, during the quarter. That represents nearly 11% of Microsoft's total quarterly revenue and highlights the financial ties between the two companies.

The company reorganised its financial reporting into two operating segments for the first time since 1998, moving away from the three segments it has used for the past 11 years. The new structure divides the business into 'Agents and Infra', which includes Azure, Microsoft 365 and server products and accounts for $76.8 billion of revenue (up 25%), and 'Devices and Consumer', which includes Windows, Xbox and Surface, generating $15.5 billion (down 3%).

Free cash flow declined 27% to $18.63 billion during the quarter. Microsoft has now reported record-breaking revenue for ten consecutive quarters.

How it is being reported

• Microsoft recorded $10 billion in revenue from OpenAIMicrosoft said it made $10 billion in revenue from commercial arrangements with OpenAI, including revenue-sharing payments, in the quarter ending September 30. It underscores the still-enormous financial dependency of the partnership.TechCrunch · 28 Oct, 21:34
• Microsoft hits 10 quarters of record- breaking revenue in a rowWhatever the future of AI might be, the current situation is still very good for Microsoft. The tech giant reported yet another record for quarterly revenue on Wednesday: $92.3 billion, a 19% increase over the year-ago quarter.TechCrunch · 28 Oct, 21:25
• Microsoft reveals strong cloud growth amid financial reporting overhaulMicrosoft just posted the first quarter of its 2027 fiscal financial results. The software maker made $92.3 billion in revenue and a net income of $33.6 billion during Q1. Revenue is up 19 percent, and net income has increased by 32 percent. It's a new financial year for Microsoft, so the company is changing up […]The Verge · 28 Oct, 20:20
• Microsoft shares climb 5% after cloud revenue beats expectationsSoftware group reports overall revenue rose 19% to $92.3bn in quarter to end of SeptemberFinancial Times · 28 Oct, 20:11
• Microsoft earnings will land after the closeMicrosoft will report Azure revenue in dollars for the first time as it spends heavily to expand artificial intelligence infrastructure capacity.CNBC · 28 Oct, 16:00

In this story: Microsoft · Azure · OpenAI · Alphabet · Meta

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