Wall Street has been nervous about Big Tech’s AI spending. Microsoft just handed investors a reason to relax, at least for one quarter.
For the quarter ended September 30, the first of its fiscal 2027, Microsoft reported revenue of $92.3 billion, up 19% from a year earlier. Operating income rose 21% to $45.9 billion, and the company said results beat expectations on revenue, operating income and earnings per share.
Azure, now in dollars
Azure revenue grew 48%. Microsoft recently started disclosing Azure revenue in dollars, and Reuters put the figure at $33.17 billion, ahead of Visible Alpha’s $32.84 billion estimate and up from $29.4 billion the prior quarter. Microsoft Cloud revenue reached $63.9 billion, with growth accelerating to 30%.
The backlog is the eye-popping number: commercial remaining performance obligation jumped 73% to $677 billion. Microsoft 365 commercial cloud revenue grew 17% as reported. On the consumer side, Windows OEM and devices revenue fell 22%.
Shares rose about 6% in extended trading, according to Reuters.
The OpenAI factor
In a regulatory filing, Microsoft said it generated $10 billion in revenue from commercial arrangements with OpenAI, including revenue-sharing payments. TechCrunch notes that’s nearly 11% of total quarterly revenue. For all of fiscal 2026, Microsoft’s OpenAI-related revenue was $24.1 billion, so the latest quarter alone is a big step up. Microsoft also reported $7.2 billion in outstanding receivables from OpenAI, and its ownership stake slipped to about 24%.
CEO Satya Nadella framed the quarter around helping organizations “build and own their own intelligence” and “earning trust through agent safety and security.”
Why it matters
Cloud and AI budgets aren’t shrinking. A $677 billion commercial backlog means enterprises have signed long-term commitments, and that money has to be implemented, migrated, secured and optimized by someone.
For Microsoft partners, MSPs and ISVs in the Azure ecosystem, that’s a strong signal to step up outbound now. Accounts expanding Azure and Copilot spend are prime targets for services around migration, governance, FinOps and security, and timing outreach to those buying cycles is where good lead generation pays off.
Sources: Microsoft, Reuters via Investing.com, TechCrunch. Written by the xRapid Media LLP team.
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