Microsoft Fiscal Q1 2027: Azure Revenue Disclosed at $33.2 Billion for the First Time

What happened

This is the first report under Microsoft's new financial structure: the company now splits its business into two segments, Agents and Infra plus Devices and Consumer, and Azure revenue is no longer given only as a growth rate — the dollar figure is $33.2 billion, up 48% year over year, an increase of $10.8 billion from a year earlier, above both the company's own forecast and Wall Street expectations; in after-hours trading, Microsoft shares rose nearly 4%.

Segment figures show growth concentrated in Agents and Infra: that segment's revenue was $76.8 billion, up 25%, above the company's forecast range of $75.15 billion to $75.75 billion, with operating income of $40.6 billion, up 24%; the Devices and Consumer segment's revenue was $15.5 billion, down 3%, with operating income of $5.4 billion, up 2%; company-wide operating income was $45.9 billion, up 21%, net income was $36.6 billion, up 32%, and GAAP earnings per share were $4.92.

Spending and guidance came with the results: quarterly capital expenditure including finance leases totaled $45.2 billion, below the company's earlier expectation of more than $50 billion, and Microsoft said some data center capacity due from third parties arrived late; the company lowered its calendar-2026 capital expenditure outlook from about $175 billion to about $170 billion, with spending of more than $50 billion expected this quarter; next-quarter revenue guidance is $96 billion to $97.1 billion, above the $95.7 billion market expectation, and Azure growth guidance for next quarter is 49% to 50% excluding currency effects.

Key facts

1. Revenue: $92.3 billion, up 19% year over year, above the roughly $90.7 billion market expectation; the quarter ended Sept 30, the first quarter of fiscal 2027.
2. Azure: revenue of $33.2 billion, up 48% year over year, an increase of $10.8 billion from a year earlier, disclosed in dollar terms for the first time, above the company's forecast and Wall Street expectations.
3. Microsoft Cloud: revenue of $63.9 billion, up 30% year over year.
4. Agents and Infra segment: revenue of $76.8 billion, up 25%, above the company's forecast range of $75.15 billion to $75.75 billion; operating income of $40.6 billion, up 24%.
5. Devices and Consumer segment: revenue of $15.5 billion, down 3% year over year; operating income of $5.4 billion, up 2%.
6. Profit: company-wide operating income of $45.9 billion, up 21% year over year; net income of $36.6 billion, up 32%; GAAP earnings per share of $4.92 and adjusted earnings per share of $4.89, above the $4.72 expectation, with the adjusted figure excluding the impact of the OpenAI investment.
7. Capital expenditure: quarterly capital expenditure including finance leases totaled $45.2 billion, below the company's earlier expectation of more than $50 billion; some data center capacity due from third parties arrived late.
8. Spending and revenue guidance: the calendar-2026 capital expenditure outlook was lowered from about $175 billion to about $170 billion, with more than $50 billion expected this quarter; next-quarter revenue guidance is $96 billion to $97.1 billion, above the $95.7 billion market expectation; Azure growth guidance for next quarter is 49% to 50% excluding currency effects.
9. After-hours shares: Microsoft shares rose nearly 4% in after-hours trading, according to reports.