Microsoft Azure revenue jumps 48 percent to 33.2 billion dollars

Latest, October 28: Microsoft’s quarterly filing puts a figure on its OpenAI relationship. For the three months ended September 30, 2026, Microsoft recorded revenue from commercial arrangements with OpenAI, inclusive of revenue sharing payments, of 10.0 billion dollars, nearly 11 percent of the quarter’s total revenue, and OpenAI owed it 7.2 billion dollars in accounts receivable at quarter end, up from 6.0 billion dollars at June 30. Microsoft holds an approximate 24 percent interest in OpenAI on an as converted basis under the equity method, and said it has made total funding commitments of 13.0 billion dollars, of which 12.0 billion dollars had been funded by September 30.

Microsoft’s first quarter of fiscal 2027, reported after the close on Wednesday, was the first under its new financial structure, and the new structure produced the number investors have wanted for years: Azure revenue on its own line. Azure brought in 33.2 billion dollars in the September quarter, up 48 percent from a year earlier and 10.8 billion dollars more in absolute terms, beating the company’s own forecast and Wall Street’s expectations, GeekWire reported. The cloud platform now sits in a segment called Agents and Infra, alongside Microsoft 365, Dynamics and LinkedIn’s business tools, which took in 76.8 billion dollars, up 25 percent, with operating income up 24 percent to 40.6 billion dollars.

Total revenue rose 19 percent to 92.3 billion dollars, above the 90.75 billion analysts expected, and earnings were 4.89 dollars a share excluding the impact of the OpenAI investment, against expectations of 4.72 dollars. Net income rose 32 percent to 36.6 billion dollars, Microsoft Cloud revenue rose 30 percent to 63.9 billion, and commercial remaining performance obligations rose 73 percent to 677 billion dollars. The consumer side shrank: Devices and Consumer revenue fell 3 percent to 15.5 billion dollars, though that was still above the company’s forecast. The shares rose nearly 4 percent in after-hours trading.

The spending side came in lighter than promised, for an operational reason. Capital spending was 45.2 billion dollars in the quarter including finance leases, short of the more than 50 billion the company had expected, because some data centre capacity that third parties were due to deliver in the quarter arrived late, Microsoft said; spending on property and equipment alone was 39.4 billion dollars. Azure growing 48 percent while capacity deliveries slip is the same constraint the whole sector reports: demand is not the binding limit, installed capacity is.