Microsoft reports record revenue of $92.3 billion and profit of $36.6 billion for the quarter

Record quarter amid rising AI spending

Microsoft reported results for the first quarter of fiscal 2027 (July–September): revenue grew 19% year over year to $92.3 billion, and net income rose 32% to $36.6 billion, up from $27.7 billion a year earlier. According to Anadolu, operating income increased 21% to $45.9 billion, and diluted earnings per share rose 32% to $4.92. As TechCrunchnotes, this is the tenth consecutive quarter with record revenue. The company's shares rose nearly 2.9% in after-hours trading in New York, reports BBC News.

Cloud is the main driver, while the consumer segment weakens

Microsoft Cloud brought in $63.9 billion (+30%, or +31% in constant currency), and Azure platform revenue grew 48% to $33.2 billion, according to TechCrunch calculations. The Agents and Infra segment increased 25% to $76.8 billion, while commercial remaining performance obligations jumped 73% to $677 billion — future revenue from already signed contracts. At the same time, the consumer business is weakening: the Devices and Consumer segment declined 3% to $15.5 billion, Windows OEM and devices revenue fell 22%, and Xbox content and services dropped 2%. Microsoft 365 commercial and consumer cloud revenue grew 17%.

OpenAI, capital expenditures, and layoffs

Microsoft disclosed for the first time $10 billion in revenue from OpenAI, which, despite diversifying toward AWS and Oracle, still hosts a significant portion of its services on Microsoft's cloud; Anthropic also runs on Azure. Revenue growth is being countered by record spending: capital expenditures reached $45.2 billion — an all-time high for a quarter. The contrast with the financial results is also underscored by personnel policy: a few days before the report, on Monday, the company announced voluntary buyouts for roughly 60,000 employees — more than a quarter of its workforce — as part of cost cuts amid multibillion-dollar AI investments, BBC News reports. Excluding the impact of OpenAI investments, adjusted net income was $36.4 billion (+18%). During the quarter, the company returned $10.2 billion to shareholders through dividends and share buybacks.

Context for investors

Tech companies' financial results are currently being closely scrutinized by investors as an indicator of the sustainability of enormous AI spending — against the backdrop of lingering questions about whether such investments will pay off. Microsoft CEO Satya Nadella said the company is