Microsoft Azure revenue beats estimates as quarterly cloud growth reaches 48%

Microsoft reported fiscal first-quarter results from Redmond, Washington, on October 28, with Azure revenue rising 48% to $33.17 billion for the quarter ended September 30, above the $32.84 billion Visible Alpha estimate cited by Reuters. The result puts the scale of Microsoft's cloud growth alongside the cost of expanding its infrastructure.

Companywide revenue reached $92.3 billion, up 19% from a year earlier, Microsoft said. Its broader Microsoft Cloud business generated $63.9 billion, a 30% increase. The company also reported operating income of $45.9 billion, up 21%.

Azure growth and the earnings comparison

Microsoft reported net income of $36.6 billion and diluted earnings of $4.92 a share, both up 32% from a year earlier. CNBC reported adjusted earnings of $4.89 a share, above the $4.73 consensus estimate it cited from LSEG. The adjusted measure excludes the impact of investments in OpenAI, CNBC said.

Another measure of contracted business grew sharply: Microsoft said commercial remaining performance obligation increased 73% to $677 billion. Its Microsoft 365 commercial cloud revenue grew 17% on a reported basis, according to the company, while Windows OEM and Devices revenue fell 22%.

Infrastructure spending and cash flow

Microsoft recorded $45.2 billion in capital expenditures and finance leases during the quarter, about 30% more than a year earlier, CNBC reported. That was below the $50.67 billion projection it cited from analysts surveyed by StreetAccount. CNBC also reported free cash flow of $18.63 billion, down 27% year on year, as the company built data-center capacity for artificial intelligence demand.

Reuters reported that Microsoft had forecast $190 billion in capital expenditure for 2026. That forecast and the latest quarterly outlay show the scale of the investment investors are weighing against cloud growth; the results do not establish the eventual return on that spending. Microsoft said it returned $10.2 billion to shareholders through dividends and share repurchases during the quarter.

The shares rose in extended trading after the release. CNBC reported a 5% gain, while Reuters reported a rise of about 6%; those figures describe movements observed at different points after the announcement.