In brief
Microsoft's first quarter of fiscal seven reached $92.28 billion in revenue, up 19% from a year earlier, while net income climbed 32% to $36.63 billion. Growth in Microsoft Cloud and Azure was a major driver, and the company returned $10.2 billion to shareholders. The report highlighted gains from its OpenAI investment and an adjusted net income that grew 18% on the same basis.
Microsoft released its financial results for the quarter that ended September 30, announcing a 19‑percent rise in revenue to $92.28 billion and a 32‑percent increase in net income to $36.63 billion for the first quarter of fiscal 2027. The gains were largely attributed to robust performance in its cloud computing businesses.
Financial Highlights
Operating income climbed 21 percent year over year to $45.92 billion from $37.96 billion, while diluted earnings per share rose to $4.92 from $3.72. Adjusted net income—excluding the effects of investment gains and losses—up 18 percent to $36.42 billion and adjusted diluted earnings per share rose 18 percent to $4.89.
Microsoft noted that its investments in OpenAI contributed a net gain of $207 million in the quarter compared with a net loss of $3.09 billion a year earlier. The company stated that this gain affected the reported net income figure.
Cloud computing remained the main growth driver. Microsoft Cloud revenue increased 30 percent to $63.9 billion, while Azure’s revenue surged 48 percent to $33.17 billion. Revenues from the Agents and Infra segment rose 25 percent to $76.8 billion, whereas Devices and Consumer revenue fell 3 percent to $15.48 billion.
Microsoft 365 commercial and consumer cloud revenues grew 17 percent each. Search and advertising revenue excluding traffic acquisition costs rose 12 percent. In contrast, Xbox content and services revenue declined 2 percent, and Windows OEM and devices revenue fell 22 percent.
During the quarter Microsoft returned $10.2 billion to shareholders through a combination of dividends and share repurchases.
Microsoft Chief Financial Officer Amy Hood said the company "made a strong start to its new fiscal year" and that revenue, operating income and earnings per share all exceeded expectations. She added that Microsoft Cloud revenue growth accelerated to 30 percent.
"We made a strong start to its new fiscal year, with Microsoft Cloud revenue growth accelerating to 30 percent," said Amy Hood.
Sources recognize that the reported net income is influenced by the variable performance of the company's investments in artificial intelligence, and the report distinguishes between the adjusted and reported figures. The decline in Windows OEM and devices revenue and the modest drop in Xbox content and services revenue highlight areas of uncertainty in the company's overall performance balance. The impact of OpenAI investment gains or losses remains a notable point of fluctuation for future reporting intervals.
