Microsoft (MSFT): verified earnings note

Microsoft Cloud revenue was $63.9 billion and increased 30% (up 31% in constant currency)

Azure revenue increased 48%

"We delivered a strong start to the fiscal year with Microsoft Cloud revenue of $63.9 billion, with growth accelerating to 30% (up 31% in constant currency) year-over-year," said Amy Hood, executive vice president and chief financial officer of Microsoft. "Results exceeded expectations across revenue, operating income, and earnings per share."

"We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack," said Satya Nadella, chairman and chief executive officer of Microsoft. "By helping organizations build and own their own intelligence, and earning trust through agent safety and security, we are translating our innovation into growing adoption and real-world impact across every industry."

Impact from investments in OpenAI. In the first quarter of fiscal year 2027, net income and diluted earnings per share were impacted by net gains from investments in OpenAI, which resulted in an increase in net income and diluted earnings per share of $207 million and $0.03, respectively. In the first quarter of fiscal year 2026, net income and diluted earnings per share were impacted by net losses from investments in OpenAI, which resulted in a decrease in net income and diluted earnings per share of $3.1 billion and $0.41, respectively.

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Commercial remaining performance obligation increased 73% to $677 billion

Windows OEM and Devices revenue decreased 22%

"We delivered a strong start to the fiscal year with Microsoft Cloud revenue of $63.9 billion, with growth accelerating to 30% (up 31% in constant currency) year-over-year," said Amy Hood, executive vice president and chief financial officer of Microsoft. "Results exceeded expectations across revenue, operating income, and earnings per share."

Diluted earnings per share was $4.81 and increased 32% on a GAAP basis, and was $4.74 and increased 23% on a non-GAAP basis

Microsoft Cloud revenue was $59.3 billion and increased 27%, and commercial remaining performance obligation increased 84% to $678 billion.

Several discrete items impacted our financial results in the quarter when compared to our forward-looking guidance provided on April 29, 2026, resulting in a benefit of $0.27 on diluted earnings per share. These include a $3.2 billion gain from our investment in Anthropic and lower-than-expected expenses related to the Voluntary Retirement Program which were partially offset by severance expense and impairment charges in XBOX. When adjusting for these items, we exceeded expectations across revenue, operating income, and diluted earnings per share.

Several discrete items impacted our financial results in the quarter when compared to our forward-looking guidance provided on April 29, 2026, resulting in a benefit of $0.27 on diluted earnings per share. These include a $3.2 billion gain from our investment in Anthropic and lower-than-expected expenses related to the Voluntary Retirement Program which were partially offset by severance expense and impairment charges in XBOX. When adjusting for these items, we exceeded expectations across revenue, operating income, and diluted earnings per share.

"We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results," said Satya Nadella, chairman and chief executive officer of Microsoft. "This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation."

Azure and other cloud services revenue increased 43%

"We delivered a strong quarter to close out the fiscal year, highlighted by Microsoft Cloud revenue of $59.3 billion, up 27% year-over-year," said Amy Hood, executive vice president and chief financial officer of Microsoft.

Microsoft Cloud revenue was $59.3 billion and increased 27%, and commercial remaining performance obligation increased 84% to $678 billion.

Revenue in More Personal Computing was $12.9 billion and decreased 4% (down 5% in constant currency), with the following business highlights:

Several discrete items impacted our financial results in the quarter when compared to our forward-looking guidance provided on April 29, 2026, resulting in a benefit of $0.27 on diluted earnings per share. These include a $3.2 billion gain from our investment in Anthropic and lower-than-expected expenses related to the Voluntary Retirement Program which were partially offset by severance expense and impairment charges in XBOX. When adjusting for these items, we exceeded expectations across revenue, operating income, and diluted earnings per share.

Azure and other cloud services revenue increased 40% (up 39% in constant currency)

"We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era," said Satya Nadella, chairman and chief executive officer of Microsoft. "Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year."

"We delivered results that exceeded expectations across revenue, operating income, and earnings per share, reflecting strong execution and growing demand for the Microsoft Cloud," said Amy Hood, executive vice president and chief financial officer of Microsoft.

Microsoft Cloud revenue was $54.5 billion and increased 29% (up 25% in constant currency), and commercial remaining performance obligation increased 99% to $627 billion.

Three Months Ended March 31, 2026 | 2025 | Percentage Change Y/Y | Percentage Change Y/Y ($ in millions) | As Reported (GAAP) | As Reported (GAAP) | GAAP | Constant Currency Impact | Constant Currency Productivity and Business Processes | $35,013 | $29,944 | 17% | $1,325 | 13% Intelligent Cloud | $34,681 | $26,751 | 30% | $506 | 28% More Personal Computing | $13,192 | $13,371 | (1)% | $235 | (3)%

Microsoft Cloud revenue was $54.5 billion and increased 29% (up 25% in constant currency), and commercial remaining performance obligation increased 99% to $627 billion.

Xbox content and services revenue decreased 5% (down 7% in constant currency)

Diluted earnings per share on a GAAP basis was $5.16 and increased 60%, and on a non-GAAP basis was $4.14 and increased 24% (up 21% in constant currency)

Microsoft Cloud revenue was $51.5 billion and increased 26% (up 24% in constant currency), and commercial remaining performance obligation increased 110% to $625 billion.

Azure and other cloud services revenue increased 39% (up 38% in constant currency)

Revenue in More Personal Computing was $14.3 billion and decreased 3%, with the following business highlights:

"We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises," said Satya Nadella, chairman and chief executive officer of Microsoft. "We are pushing the frontier across our entire AI stack to drive new value for our customers and partners."

"Microsoft Cloud revenue crossed $50 billion this quarter, reflecting the strong demand for our portfolio of services," said Amy Hood, executive vice president and chief financial officer of Microsoft. "We exceeded expectations across revenue, operating income, and earnings per share."

Microsoft Cloud revenue was $51.5 billion and increased 26% (up 24% in constant currency), and commercial remaining performance obligation increased 110% to $625 billion.

Three Months Ended December 31, ($ in millions, except per share amounts) | Net Income | DilutedEarningsper Share 2024 As Reported (GAAP) | $24,108 | $3.23 Impact from investments in OpenAI | 939 | 0.12 2024 As Adjusted (non-GAAP) | $25,047 | $3.35 2025 As Reported (GAAP) | $38,458 | $5.16 Impact from investments in OpenAI | (7,583) | (1.02) 2025 As Adjusted (non-GAAP) | $30,875 | $4.14 Percentage Change Y/Y (GAAP) | 60% | 60% Percentage Change Y/Y Constant Currency | 57% | 58% Percentage Change Y/Y (non-GAAP) | 23% | 24% Percentage Change Y/Y (non-GAAP) Constant Currency | 21% | 21%

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Revenue in More Personal Computing was $14.3 billion and decreased 3%, with the following business highlights:

Azure and other cloud services revenue increased 40% (up 39% in constant currency)

"We delivered a strong start to the fiscal year, exceeding expectations across revenue, operating income, and earnings per share," said Amy Hood, executive vice president and chief financial officer of Microsoft. "Continued strength in the Microsoft Cloud reflects the growing customer demand for our differentiated platform."

"Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact," said Satya Nadella, chairman and chief executive officer of Microsoft. "It's why we continue to increase our investments in AI across both capital and talent to meet the massive opportunity ahead."

Microsoft Cloud revenue was $49.1 billion and increased 26% (up 25% in constant currency), and commercial remaining performance obligation increased 51% to $392 billion.

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

"Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact," said Satya Nadella, chairman and chief executive officer of Microsoft. "It's why we continue to increase our investments in AI across both capital and talent to meet the massive opportunity ahead."

"We delivered a strong start to the fiscal year, exceeding expectations across revenue, operating income, and earnings per share," said Amy Hood, executive vice president and chief financial officer of Microsoft. "Continued strength in the Microsoft Cloud reflects the growing customer demand for our differentiated platform."

Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below

Microsoft Cloud revenue was $49.1 billion and increased 26% (up 25% in constant currency), and commercial remaining performance obligation increased 51% to $392 billion.