Microsoft earnings for the first quarter of fiscal 2027 beat the company’s own expectations on every headline number. Revenue was $92.3 billion, up 19%. Net income was $36.6 billion, up 32% on a GAAP basis. Those figures come from Microsoft’s results release for the quarter ended Sept. 30, published Oct. 28. The full release is also posted on the company’s investor relations site.
The numbers in the Microsoft earnings release
Operating income was $45.9 billion, up 21%, or 22% in constant currency. Diluted earnings per share were $4.92 on a GAAP basis, up 32%. Non-GAAP figures leave out certain items. On that basis, net income was $36.4 billion and earnings per share were $4.89. Both rose 18%. The gap between 32% and 18% deserves a look in the full financial statements. The release headline does not explain it. The non-GAAP figure is the more cautious read of underlying growth.
Microsoft Cloud revenue was $63.9 billion, up 30%, or 31% in constant currency. Azure grew 48%. CEO Satya Nadella said in the release, “We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack.” CFO Amy Hood said results “exceeded expectations across revenue, operating income, and earnings per share.”
A new way of reporting segments
The old segments are gone. Microsoft used to report Intelligent Cloud, Productivity and Business Processes, and More Personal Computing. For fiscal 2027 it recast the business into two groups. Agents and Infra brought in $76.8 billion, up 25%. Devices and Consumer brought in $15.5 billion, down 3%. The new setup puts cloud and AI up front. It also shows the consumer side for what it is: a slower-growing remainder.
The change makes year-over-year comparisons harder. Outside the company’s own recast figures, individual lines are tough to compare. Analysts will rebuild their models around the new categories. Estimate changes in the coming weeks may look larger than the quarter itself would suggest. Readers comparing this quarter with last year’s should use the company’s recast tables. The same advice applies to any model built on the old segment names, which no longer match what the company reports.
How the market reacted
Microsoft shares rose about 3% in after-hours trading on Wednesday, according to market summaries. Alphabet fell sharply the same night. Those moves came after the close. They can fade by the open. Check Thursday’s regular session before reading much into them. Our Big Tech earnings preview called AI spending the central test for both companies. The two reports gave different answers.
What to watch after the Microsoft earnings report
Three questions matter now. First: how much is Microsoft spending to support 48% Azure growth? The headline numbers show income, not capital spending. Investors will want the cash flow statement. Second: will the new Agents and Infra segment give enough detail to track AI on its own? Third: how will Microsoft handle its partnerships and capacity deals? Our earlier report on the Nscale data center deal showed how fast those can change.
For customers, the practical point is steady growth in cloud and agent products alongside a shrinking consumer device business. Pricing and bundling tend to follow the money. More emphasis on subscriptions that include AI features would fit the pattern. Microsoft has not announced anything new on that front in this release. Our look at Microsoft’s agent risk scores shows how the company pitches agents to enterprise buyers.
Editor’s take
Watch the segment disclosure, not just the beat. Microsoft earnings were strong. But the new reporting structure decides how easily outsiders can see where growth comes from. The 48% Azure rate supports the stock. The $15.5 billion Devices and Consumer line, down 3%, is the reminder that the company’s future rests on cloud and agents. That is where to look next quarter.
