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# Microsoft Cloud Revenue Hits $63.9 Billion As Azure Grows 48% And Equipment Spending Doubles
- URL: https://www.bullished.co/microsoft-cloud-revenue-hits-63-9-billion-as-azure-grows-48-and-equipment-spending-doubles-8d00eaab/
- Published: 2026-10-28T20:12:26.000Z
- Updated: 2026-10-28T20:12:26.000Z
- Description: Net income rose 32% to $36.6 billion, while additions to property and equipment reached $39,367 million, against $19,394 million a year earlier.
- Author: Matteo Parrino
- Tags: Earnings, MSFT, Industry: Technology

Microsoft Cloud revenue reached [$63.9 billion](https://www.sec.gov/Archives/edgar/data/0000789019/000119312526436122/msft-ex99%5F1.htm?ref=bullished.co) in the September quarter, up 30%, and Azure grew 48%, the company said Wednesday in its fiscal first-quarter results. Spending on property and equipment roughly doubled from a year earlier.

## Cloud growth speeds up

Microsoft Cloud growth accelerated to 30%, or 31% in constant currency, CFO Amy Hood said. Azure revenue was $33,165 million, against $22,384 million a year earlier, according to the release's income tables.

Total revenue was $92.3 billion, up 19%. Operating income was $45.9 billion, up 21%. Net income was $36.6 billion, up 32% on a standard accounting basis, and diluted earnings per share were $4.92.

On an adjusted basis, which strips out the effect of [Microsoft](https://www.bullished.co/tag/msft/)'s investments in OpenAI, net income was $36.4 billion, up 18%. A year earlier, OpenAI-related losses cut net income by $3.1 billion; this quarter they added $207 million.

Commercial remaining performance obligation, which tracks contracted revenue not yet recognized, rose 73% to $677 billion. Hood said results "exceeded expectations across revenue, operating income, and earnings per share."

## Spending on equipment doubles

Additions to property and equipment came to $39,367 million, against $19,394 million a year before. Net cash from operations rose to $58,000 million from $45,057 million.

The company returned $10.2 billion to shareholders through dividends and buybacks. CEO Satya Nadella said Microsoft is "translating our innovation into growing adoption and real-world impact across every industry."

Ahead of the report, Morningstar's Dan Romanoff wrote that management had guided to first-quarter capital spending [above $50 billion](https://www.morningstar.com/stocks/microsoft-stock-is-up-10-this-year-is-it-still-buy-ahead-earnings?ref=bullished.co). He noted Azure growth was 43% in the prior quarter, with guidance for roughly 44% to 45% in constant currency this quarter.

## Weakness in devices

Microsoft, which makes Windows, Microsoft 365, Azure, Xbox and Surface, reports in two segments after a September change. Agents and Infra revenue was $76.8 billion, up 25%. Devices and Consumer revenue was $15.5 billion, down 3%.

Windows OEM and devices revenue fell 22%, and Xbox content and services slipped 2%. Search and advertising excluding traffic acquisition costs rose 12%. Microsoft 365 commercial cloud revenue rose 17% as reported.

Management gives its forward guidance, including its outlook, on a call at 5:30 p.m. Eastern on Wednesday.

Learn

- [Item 2.02: results of operations →](https://www.bullished.co/learn/8-k-items-explained/#item-202-results-of-operations)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — MICROSOFT CORP (MSFT)](https://www.sec.gov/Archives/edgar/data/0000789019/000119312526436122/msft-20261028.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit msft-ex99\_1.htm — MICROSOFT CORP 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0000789019/000119312526436122/msft-ex99%5F1.htm?ref=bullished.co) — SEC EDGAR
- [Microsoft Stock Is Up 10% This Year. Is It Still a Buy Ahead of Earnings? | Morningstar](https://www.morningstar.com/stocks/microsoft-stock-is-up-10-this-year-is-it-still-buy-ahead-earnings?ref=bullished.co) — morningstar.com

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- [Faith-Based Investors Now Hold Over $300 Million In Microsoft Stock Behind Human Rights Audit Push](https://www.bullished.co/faith-based-investors-now-hold-over-300-million-in-microsoft-stock-behind-human-rights-d54677d9/)
- [Microsoft Proxy Puts Nadella's Pay At $90.6 Million And Nominates Stripe's John Collison To Board](https://www.bullished.co/microsoft-proxy-puts-nadellas-pay-at-90-6-million-and-nominates-stripes-john-collison-to-3337b57d/)

[All Microsoft (MSFT) coverage →](https://www.bullished.co/tag/msft/)