Microsoft reported revenue of US$92.3 billion for the three months to 30 September, up 19% and ahead of forecasts, two days after it offered voluntary buyouts to about 60,000 staff, the company and the Guardian reported.
The results cover the first quarter of Microsoft’s 2027 financial year and were released in Redmond on Wednesday 28 October, US time.
Analysts had expected about US$90.6 billion in revenue and US$35.1 billion in profit, according to FactSet figures cited by the Guardian. Net income came in at US$36.6 billion, up 32%, and operating income at US$45.9 billion, up 21%, the company said. Diluted earnings per share were US$4.92, also up 32%.
Chief financial officer Amy Hood summed up the quarter in the results release. “Results exceeded expectations across revenue, operating income, and earnings per share.”
Shares rose almost 2.9% in after-hours trading in New York on Wednesday 28 October, US time, BBC News reported, and the Guardian said Microsoft gained billions of dollars in stock market value that afternoon.
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The Buyout Offer
The offer was announced on Monday 26 October, US time. It went to about 60,000 employees, roughly a quarter of the workforce, according to the Guardian, in teams across Canada, India, the UK and the US, the BBC reported.
The offer is voluntary. Microsoft said it creates “greater flexibility” and lets staff leave with financial support and career planning resources, according to the BBC.
It is the second voluntary offer of 2026, after 7% of the company’s US workforce was offered early retirement in April, the Guardian reported. Headcount stood at 223,000 at the end of June, down from 228,000 at the end of 2025.
Cloud Leads the Quarter
The strongest growth came from cloud. Microsoft Cloud revenue reached US$63.9 billion, up 30%, and Azure revenue rose 48%, the company said.
“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,” Hood said.
The Agents and Infra segment brought in US$76.8 billion, up 25%. Commercial remaining performance obligation rose 73% to US$677 billion, and the company returned US$10.2 billion to shareholders. Microsoft 365 commercial cloud revenue grew 17%, as did Microsoft 365 consumer cloud, and search and advertising excluding traffic acquisition costs rose 12%.
A Softer Consumer Side
Not every line grew. Devices and Consumer revenue fell 3% to US$15.5 billion, Windows OEM and Devices dropped 22%, and Xbox content and services slipped 2%, Microsoft reported.
The Windows fall came in the same quarter that global PC shipments fell 21% as memory costs bit, as reported here on 25 October.
Part of the profit growth came from OpenAI. Net gains on Microsoft’s OpenAI investment added US$207 million to net income in the quarter, while a year earlier net losses had cut it by US$3.1 billion. Excluding OpenAI, net income was US$36.4 billion, up 18%, which is why the reported profit grew faster, at 32%.
The AI Bill Behind the Numbers
Chairman and chief executive Satya Nadella tied the results to AI adoption.
“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.”
Microsoft listed “substantial investments” in AI among its risks, the BBC reported. Big tech companies such as Amazon, Meta and Alphabet are expected to spend more than US$700 billion in 2026 on AI chips and infrastructure, according to the BBC.
Microsoft’s call with analysts was set for 2.30pm Pacific time on 28 October. The results landed as about 60,000 staff weigh whether to take the buyout offer made two days earlier.
More technology news is in our Technology archive.
Sources: Microsoft, “Microsoft Announces First Quarter Results”, 28 October 2026 (https://www.microsoft.com/en-us/investor/earnings/fy-2027-q1/press-release-webcast); The Guardian, “Microsoft posts $92.3bn quarterly revenue after offering buyouts to 60,000 employees”, 29 October 2026 (https://www.theguardian.com/technology/2026/oct/28/microsoft-earnings); BBC News, “Microsoft profits soar days after announcing thousands of layoffs”, 29 October 2026 (https://www.bbc.co.uk/news/articles/c6m24klyjr8no)
Photo: Coolcaesar, CC BY-SA 4.0, via Wikimedia Commons.
Building 92 at Microsoft’s headquarters in Redmond, Washington, photographed in May 2016.
