Microsoft disclosed $33.2 billion in Azure revenue for the July–September quarter, up 48% from a year earlier, in its 28 October earnings report, TechCrunch reported. It was the first time Microsoft had reported Azure’s quarterly revenue in dollars rather than only its growth rate. The disclosure gives investors a direct dollar comparison with other cloud businesses whose parents report their revenue separately.
Key points
- Azure’s $33.2 billion in revenue exceeded analysts’ $32.3 billion expectation.
- Alphabet reported $30.7 billion in Google Cloud revenue for the same quarter, up 103% from a year earlier.
- Microsoft’s new Agents and Infra segment generated $76.8 billion, up 25%.
- Quarterly capital spending was $45.2 billion, below Microsoft’s forecast of more than $50 billion.
Azure beats the $32.3 billion forecast
Azure’s revenue exceeded the $32.3 billion analysts had expected. Its 48% annual growth also surpassed the 44% to 45% forecast that Microsoft chief financial officer Amy Hood gave on the company’s July earnings call, TechCrunch reported. The cloud business accounted for roughly 36% of Microsoft’s $92.3 billion in total quarterly revenue.
Azure supplies computing capacity that businesses use for applications, software services and AI models. Microsoft previously disclosed its growth percentage without giving a quarterly revenue figure in dollars. The new figure allows its sales to be placed alongside those of Google Cloud, although Google Cloud’s reported revenue also includes Workspace subscriptions.
Alphabet reported $30.7 billion in Google Cloud revenue for the same quarter, up 103% from a year earlier, GeekWire reported. Alphabet issued its results on 28 October, the same day as Microsoft. Amazon, whose cloud business is Amazon Web Services, was due to report earnings on 29 October.
Agents and Infra brings in $76.8 billion
Microsoft introduced a two-segment financial reporting structure for the quarter. Agents and Infra includes Azure, Microsoft 365, Dynamics, LinkedIn’s recruiting and sales products, and server and productivity licensing. The segment’s revenue rose 25% to $76.8 billion, above Microsoft’s forecast range of $75.15 billion to $75.75 billion. Its operating income rose 24% to $40.6 billion.
The other segment, Devices and Consumer, groups Windows, Xbox, search and advertising. Revenue there fell 3% to $15.5 billion, while operating income rose 2% to $5.4 billion. Before this quarter, Microsoft reported three divisions: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
Microsoft’s total revenue rose 19% to $92.3 billion for the first quarter of its 2027 fiscal year. Excluding the impact of its OpenAI investment, earnings were $4.89 a share, against expectations of $4.72, GeekWire reported. AI Affairs previously reported $10 billion in Microsoft quarterly revenue from OpenAI.
Microsoft spends $45.2 billion on capacity
Microsoft spent $45.2 billion on capital expenditure, including finance leases, against its forecast of more than $50 billion. Some data centre capacity scheduled for delivery by third parties arrived late, the company said, according to GeekWire. Microsoft attributed Azure’s $10.8 billion year-on-year revenue increase to demand for services across the platform in its quarterly filing, as reported by the publication.
Hood said Azure benefited from Foundry, Microsoft’s service for building AI applications and agents, and from engineering changes that allowed it to sell unused capacity on existing servers. She said customer demand continued to exceed available supply. Microsoft expects Azure growth of 49% to 50% in the December quarter, excluding currency changes.
The delivery delays also shifted some spending later into the fiscal year. Microsoft now expects about $170 billion in capital expenditure during calendar 2026, down from about $175 billion, and more than $50 billion in the December quarter. Hood said spending would accelerate in the first half of calendar 2027 and that Microsoft still expected to generate more cash than it spent this fiscal year.
Microsoft forecasts $96 billion to $97.1 billion in December-quarter revenue, compared with analysts’ $95.7 billion projection.
