Microsoft Posts $92.3B Quarter as Azure Grows 48% and PC-Linked Revenue Falls
Microsoft reported $92.3 billion in revenue and $33.6 billion in net income for its first fiscal quarter of 2027, released on October 28, 2026. Revenue rose 19 percent year over year and net income rose 32 percent, according to The Verge. The company had scheduled its earnings call for 2:30 PM PT that day, per its Investor Relations listing.
This is the first quarter reported under a new segment structure. Microsoft has retired its three prior segments, Productivity and Business Processes, Intelligent Cloud, and More Personal Computing, and now reports two: Agents and Infra, and Devices and Consumer.
Agents and Infra includes Azure, Microsoft 365 commercial and consumer, and server products. The segment generated $76.8 billion, 83 percent of total revenue and up 25 percent. Azure, Microsoft's cloud platform that rents out computing, storage, and AI capacity from its data centers, contributed $33.17 billion, up 48 percent. Microsoft said it will disclose Azure revenue quarterly from now on. CNBC reported that the company planned to start giving that figure in dollars with this report.
Devices and Consumer covers Windows, Xbox, Surface, and the search and advertising businesses. It generated $15.5 billion, 17 percent of revenue, down 3 percent. Its components moved in different directions. Windows OEM and devices revenue, which comes largely from licensing Windows to PC manufacturers, fell 22 percent. Xbox hardware fell 14 percent, and Xbox content and services fell 2 percent.
The top line beat the consensus CNBC cited before the release, which was $90.69 billion in revenue and $4.73 in adjusted earnings per share (EPS, profit divided by shares outstanding). Reuters had reported in July that Microsoft's own forecast for this quarter had a midpoint of $90.4 billion, above a consensus of $89.66 billion at that time. The reported $92.3 billion sits above both.
The broader context here is that the reorganization places Azure alongside Microsoft 365 and server products in one reporting line, and separates Windows, Xbox, and advertising into another. Analysts who previously had to infer cloud growth from the larger Intelligent Cloud total now get a dedicated Azure figure each quarter. The trade-off is comparability. Old three-segment figures will not map cleanly onto the new two, so year-over-year comparisons will rely on the restated numbers the company provides.
In my view, the most useful way to read the Devices and Consumer numbers is to look at which lines are falling. The segment fell only 3 percent overall, but the 22 percent drop in Windows OEM revenue is the figure that will draw the most attention from PC supply-chain watchers, since it sits closest to unit demand. Dollar figures alone cannot separate price, volume, and product mix effects, so the segment's direction will be easier to judge once management's commentary on those drivers is available.
For developers and enterprise buyers, the practical effect is a clearer view of where Microsoft's infrastructure revenue comes from. A quarterly Azure figure in dollars gives a consistent growth series to track against capacity announcements and customer commitments. That is a real gain in visibility, and it tends to matter more across several reporting cycles than in any single quarter.
