Microsoft's Azure grows 48%, but the accounting boundaries matter
· BehindLines newsroom
Microsoft announced quarterly revenue of $92.3 billion on October 28, up 19% from a year earlier. The figures cover the three months ended September 30, 2026. The company calls this the first quarter of fiscal 2027: that accounting label does not mean sales made next year.
Azure and cloud are not separate amounts to add together
The statement reports 48% growth for Azure, its cloud computing platform. Microsoft Cloud, a broader grouping, reaches $63.9 billion, with growth of 30%.
Reuters puts Azure revenue at $33.17 billion, compared with a $32.84 billion expectation compiled by Visible Alpha. The platform's sales are included in the cloud business: adding the two amounts would count some revenue twice.
This distinction helps in reading announcements about artificial intelligence. Azure growth alone does not measure revenue from all of the group's AI products.
Profit also depends on the measure chosen
Microsoft reports net income of $36.6 billion under US accounting standards, an increase of 32%. Excluding the effect of investments in OpenAI, its adjusted measure reaches $36.4 billion, up 18%.
The gap between those growth rates is a reminder that an annual comparison also depends on its starting point. The adjusted measure accompanies the reported accounts; it does not replace them.
Investment remains costly
Reuters reports $45.2 billion in capital expenditure for the quarter and $18.6 billion in free cash flow. That cash flow is not a bank account balance. Jonathan Neilson, who heads investor relations, tells the agency that some capacity deliveries were delayed, with no change to the underlying spending plan.
A delivery delay in one quarter therefore does not, on its own, demonstrate that infrastructure is being abandoned. The results document an expanding business; they do not guarantee the future return on every AI project.