Microsoft posts $92.3 billion quarter, up 19 percent, with Azure up 48 percent

Microsoft reported $92.3 billion in revenue for the quarter ended September 30, up 19 percent, and net income of $36.6 billion, up 32 percent on a GAAP basis. Operating income came to $45.9 billion, up 21 percent.¹

Adjusted earnings per share were $4.89, against $4.73 expected by analysts polled by LSEG. Revenue also cleared the $90.69 billion consensus.² Shares rose about 4 percent in extended trading.²

The quarter is also the first under a new reporting structure. After 11 years with three segments, Microsoft now reports two: Agents and Infra, and Devices and Consumer.² The change was announced in early September, along with two years of recast results.³

Agents and Infra took in $76.8 billion, up 25 percent. It holds Azure, Microsoft 365 cloud products and server licensing.¹² Devices and Consumer brought in $15.5 billion, down 3 percent. It holds Windows, Xbox, Surface, and search and advertising.⁴¹

The larger change for investors is that Azure now has a dollar figure. Revenue was $33.17 billion, up 48 percent; analysts had expected $32.32 billion.² In the June quarter, on the new basis, Azure revenue was $29.42 billion, up 42 percent.³ Azure now excludes GitHub cloud services, developer cloud services and a few other products.³

Microsoft Cloud revenue was $63.9 billion, up 30 percent. Commercial remaining performance obligation rose 73 percent to $677 billion.¹

The weak spots are on the consumer side. Windows OEM and devices revenue fell 22 percent, which Microsoft attributes to the prior-year boost from Windows 10 end of support, OEM inventory drawdowns and a softer PC market.⁴ Xbox content and services revenue fell 2 percent. The Verge reports Xbox hardware revenue fell 14 percent and that Microsoft has still not updated its Game Pass subscriber count, last given as 34 million more than two years ago.⁴⁵

Spending and cash flow are where the questions sit. Capital expenditures and finance leases totaled $45.2 billion, up about 30 percent, below the $50.67 billion analysts projected. Free cash flow fell 27 percent to $18.63 billion.² Microsoft returned $10.2 billion to shareholders through dividends and buybacks.¹

The quarter also carried workforce news. Microsoft said it would cut 4,800 jobs, then announced a buyout offer to as many as 60,000 employees.²

On Xbox, the same Verge report cites a company reset with thousands of layoffs and spun-off studios, and rumors of more cuts in November and January. Xbox CEO Asha Sharma wrote in an earlier memo that Xbox would return to player and revenue growth by the end of fiscal 2027, which runs through next June.⁴ The rumored cuts are unconfirmed.

CEO Satya Nadella and CFO Amy Hood took questions on a call at 5:30 p.m. Eastern.¹

Our read: The new segments show Agents and Infra at $76.8 billion and Devices and Consumer at $15.5 billion. A 22 percent drop in Windows OEM revenue and a 14 percent drop in Xbox hardware are reported in the consumer segment, and Microsoft’s own memo promises Xbox growth by June. The next filing covers the quarter ending December 31.

Footnotes

1. Microsoft (SEC filing), “Microsoft Announces First Quarter Results”. Retrieved October 28, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

2. CNBC, “Microsoft stock jumps 4% as cloud growth drives earnings and revenue beat”. Retrieved October 28, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

3. CNBC, “Microsoft to start disclosing Azure quarterly revenue as company consolidates business units”. Retrieved October 28, 2026. ↩ ↩² ↩³

4. The Verge, “Microsoft reveals strong cloud growth amid financial reporting overhaul”. Retrieved October 28, 2026. ↩ ↩² ↩³ ↩⁴

5. X, “Posts on X from @tomwarren, @IdleSloth84_”. Retrieved October 28, 2026. ↩