MICROSOFT · NASDAQ: MSFT
Microsoft (MSFT) Stock Research
Microsoft’s September quarter starts FY2027 with faster Azure growth and a new reporting structure. Revenue reached $92.279 billion and Azure grew 48%, while large cash infrastructure investment remained central to returns. Read the two recast segments, GAAP earnings and cash generation together.
- Latest financial period
- Q1 FY2027
- Latest filing
- Oct 28, 2026
- Research updated
- Oct 29, 2026
01
Reported evidence
Latest MSFT financial snapshot
Q1 FY2027 · filed Oct 28, 202602
Latest filing analysis
What changed in the latest reported period
Microsoft’s Q1 FY2027 revenue rose 19% to $92.279 billion. GAAP operating income increased 21% to $45.915 billion, a calculated 49.8% operating margin.
FY2027 reporting now uses two segments: Agents and Infra, with $76.795 billion of revenue, and Devices and Consumer, with $15.484 billion. Prior-year comparisons were recast; the old three-segment presentation is not the current reporting structure.
Azure revenue was $33.165 billion, up 48%; Microsoft Cloud revenue was $63.9 billion, up 30%. These are product and cross-business views that overlap the segment totals and must not be added to them.
GAAP net income was $36.629 billion and diluted EPS was $4.92. Excluding OpenAI investment effects, non-GAAP net income was $36.422 billion and EPS $4.89. The current $207 million gain and the prior-year investment loss affect the GAAP growth comparison.
Quarterly operating cash flow was $58.000 billion and cash PP&E additions were $39.367 billion, leaving $18.633 billion on a simplified cash-OCF-minus-capex basis. Commercial RPO was $677 billion, up 73%; it is contracted future revenue rather than current sales or cash.
03
BasisPilot
MSFT: growth, reporting changes and AI investment returns
A new two-segment base
Agents and Infra revenue was $76.795 billion and Devices and Consumer $15.484 billion. The release recasts prior-year figures to the FY2027 structure. Old Intelligent Cloud, Productivity and Business Processes, and More Personal Computing figures remain historical and are not current segment comparatives.
Azure and Cloud overlap
Azure generated $33.165 billion; the broader Microsoft Cloud measure reached $63.9 billion. Neither is an extra reportable segment. Track consumption and capacity alongside growth without adding overlapping revenue categories.
RPO needs time and delivery
Commercial RPO reached $677 billion, up 73%. Contract duration, consumption and delivery capacity govern recognition. The headline amount is not current-quarter revenue or an immediately collectible cash balance.
GAAP growth has an investment bridge
The current OpenAI investment gain added $207 million and $0.03 per share. The prior-year investment loss reduced net income by $3.086 billion. GAAP net income grew 32%, while the release’s adjusted comparison grew 18%; the two growth rates answer different questions.
04
Revenue mix
How Microsoft makes money
The two bars use the current reportable segments and reconcile to $92.279 billion. Microsoft recast prior-year segment figures for the September 2026 reorganization. The earlier Q4 history row keeps its original period and accounting evidence; it does not restate the old reporting structure. Azure and Microsoft Cloud are overlapping supplemental views, not additional revenue to add here.
05
Cash flow and capital allocation
Cash generation after infrastructure investment
Keep cash and financing definitions separate
Quarterly operating cash of $58.000 billion minus $39.367 billion of cash PP&E additions equals $18.633 billion. This analyst-defined simplified cash measure is not total investment including noncash finance-lease additions, acquisitions or other investing flows.
Capacity must earn a return
Infrastructure spending precedes the utilization and revenue needed to justify it. Operating profit, cash capital expenditure and lease commitments follow different accounting clocks. Strong sales growth alone does not establish the return on each new datacenter.
06
Historical filings
MSFT earnings history
| Period | Revenue | YoY | EPS | Filed |
|---|---|---|---|---|
| Q1 FY2027 | $92.3B | 18.8% | 4.92 | Oct 28, 2026 |
| Q4 FY2026 | $90B | 18% | 4.81 | Jul 30, 2026 |
The new Q1 FY2027 row is sourced to the October 28 10-Q. Prior Q4 FY2026 history is preserved as originally disclosed. Current segment comparisons use recast prior-year figures; historical periods are not silently relabeled.
07
Valuation context
What should an MSFT earnings multiple reflect?
No live price or target value is supplied. Evaluate a dated market price against consistent earnings, cash investment and delivery assumptions.
Comparable earnings
Use the $4.92 GAAP or $4.89 adjusted EPS definition consistently and recognize the change in prior-year OpenAI effects. One quarter multiplied by four is not a company forecast.
Capital intensity
Assess whether cloud consumption and cash conversion justify infrastructure funding. RPO is evidence of contracted work, with timing and execution conditions; it is not a substitute for future free cash flow.
08
SEC 13F
Institutional ownership
09
BasisPilot Insights
Latest Microsoft research
Peer comparisons: which businesses are comparable?
Oct 29, 2026
Microsoft Fiscal Q1 2027: Azure Grows 48% as Investors Test the Cash Returns on AI Spending
Microsoft's October 28 earnings show $92.3B revenue, 48% Azure growth and $18.6B free cash flow. Understand capex, guidance, margins and risks.
Oct 25, 2026Microsoft, Alphabet and Amazon Face an AI Earnings Test After the Tech Selloff
A historical earnings preview of Microsoft, Alphabet and Amazon, with links to the published results and analysis of cloud demand, AI investment and cash flow.
Oct 13, 2026Microsoft’s Maia 300 Changes the AI Chip Debate: Tokens per Megawatt, Not GPU Replacement
Microsoft's October 12 Maia 300 announcement promises 40% more inference tokens per megawatt and a 2027 multigigawatt deployment plan. What it changes for MSFT, Nvidia, memory and cloud margins.
Oct 12, 2026OpenAI’s $50 Billion vs. $70 Billion Revenue Run Rate: A Measurement Gap, Not Proof of a $20 Billion Sales Collapse
OpenAI's September annualized revenue was reported near $50 billion, versus an earlier roughly $70 billion figure. The difference appears to involve reporting scope, not necessarily lost sales. Here is the read-through for NVDA, ORCL, MSFT and AI infrastructure.
Sep 26, 2026Microsoft’s New Copilot Explained: Home, Code and Autopilot Turn AI From Assistant Into Work Platform
Microsoft redesigned Copilot around Home, Code and Autopilot, including an always-on agent and natural-language app building. Here is what changes for users, enterprise AI economics and MSFT.
10
Decision support
MSFT: what could weaken the investment case?
AI and datacenter investment may earn less than expected if consumption, utilization or monetization disappoints.
Reporting reorganization and investment gains can obscure like-for-like comparisons.
Contract duration, delivery constraints and customer concentration can affect RPO conversion.
Competition, cybersecurity, service outages and regulation can affect adoption, costs and returns.
11
FAQ
MSFT investor questions
What are Microsoft’s latest earnings?
Q1 FY2027 ended September 30, 2026 and was reported October 28: revenue $92.279 billion, operating income $45.915 billion, GAAP net income $36.629 billion and diluted EPS $4.92.
What changed in Microsoft’s segments?
FY2027 uses Agents and Infra and Devices and Consumer. Prior-year comparisons were recast. The historical three-segment structure should not be presented as the current structure.
How fast did Azure grow?
Azure revenue rose 48% to $33.165 billion. The broader, overlapping Microsoft Cloud measure rose 30% to $63.9 billion. Neither should be added again to segment revenue.
How did OpenAI affect Microsoft EPS?
The current investment gain added $207 million and $0.03 per share. Removing its effect gives non-GAAP EPS $4.89 versus GAAP $4.92; the prior-year investment loss also affects the growth comparison.
Is $677 billion of RPO current revenue?
No. Commercial RPO is contracted revenue not yet recognized. Delivery capacity, consumption and contract duration affect when it becomes revenue and cash.
How much cash remained after cash capex?
Quarterly operating cash $58.000 billion minus cash PP&E additions $39.367 billion equals $18.633 billion. This simplified analyst measure excludes noncash finance-lease additions, acquisitions and other investing flows.
Are MSFT institutional holdings real-time?
No. Form 13F contains delayed quarter-end positions from qualifying managers. BasisPilot’s coverage is partial; values are not purchase costs or evidence of current trades.
Is this a Q3 calendar-year report or a fiscal Q1 report?
The quarter ended September 30, 2026 is Microsoft’s Q1 FY2027. Alphabet’s same calendar quarter is Q3 2026; comparing them requires matching periods and accounting definitions rather than quarter labels alone.
12
Provenance
Sources and methodology
Primary SEC filings and issuer releases take precedence. Financial, market, ownership and page-update dates are shown separately, while historical values retain their original reporting period.