Microsoft Reports $92.3 Billion Quarterly Revenue as Azure Grows 48% and AI Spending Rises

Microsoft reported first-quarter revenue of $92.3 billion, a 19% increase from the same period last year, according to results released on Wednesday, October 28. Net income reached $36.6 billion, up 32% year-over-year, while operating profit totaled $45.9 billion, a 21% annual rise. Diluted earnings per share came in at $4.92, exceeding the market estimate of approximately $4.72.

The company's cloud business was a primary driver of growth. Microsoft Cloud revenue reached $63.9 billion, up 30% annually, and Azure cloud services grew by 48%, surpassing the company's own forecast of 44% to 45% growth in constant currency. Chief Financial Officer Amy Hood stated that the results delivered a strong start to the fiscal year.

“We delivered a strong start to the fiscal year, with Microsoft Cloud revenue of $63.9 billion and acceleration of growth to 30% year-over-year.”

Demand for artificial intelligence services remained robust as Microsoft races to expand computing capacity. However, spending to build out AI infrastructure continued to be high. Quarterly capital expenditures were $45.2 billion, higher than the previous quarter but below analyst predictions. The company had previously guided for calendar 2026 capital expenditures of roughly $175 billion.

Microsoft is among several hyperscalers investing heavily in AI compute demand. Amazon, Microsoft, Google-parent Alphabet, and Meta Platforms are collectively expected to devote more than $700 billion to capital expenditures in 2026, mostly for data centers. Other parts of Microsoft's business, such as legacy software and gaming, lagged behind cloud growth.

The earnings report arrived during a busy period for major tech results. Meta announced last week that its capital expenditures for this year would surge to as much as $145 billion, while Alphabet reported cloud gains but weaker advertising performance on Wednesday. Amazon is scheduled to post its results on Thursday.

Microsoft's remaining commercial performance obligations, representing contracted revenues to be recognized later, reached $677 billion. The company's shares initially traded up more than 4% in after-hours trading following the announcement.