Ten record quarters in a row is the kind of streak that gives a finance chief a quiet headache about the eleventh. Microsoft reported number ten on Wednesday: $92.3 billion in revenue for the quarter ended September 30, up 19% from a year earlier. It also did something it had never done before, which was tell investors in plain dollars how much Azure earns.
The quarter is the first of Microsoft's fiscal 2027, since its financial year begins in July. The profit side kept pace with the revenue side, and the backlog and the spending bill both reached sizes that are hard to picture.
The quarter in numbers
| Measure | Quarter figure | Change from a year earlier |
|---|---|---|
| Total revenue | $92.3 billion | up 19% |
| Net income (GAAP) | $36.6 billion | up 32% |
| Microsoft Cloud | $63.9 billion | up 30% |
| Azure | $33.2 billion | up 48% |
| Microsoft 365 | nearly $28 billion | not given |
| Agents and Infra segment | $76.8 billion | up 25% |
| Devices and Consumer segment | $15.5 billion | down 3% |
| Capital expenditures | $45.2 billion | all-time quarterly record |
The profit figure matters because record revenue is easier to produce than record income. Net income of $36.6 billion, up 32% on a GAAP basis, says the growth did not come at the expense of the margin.
Microsoft Cloud did most of the lifting. Its $63.9 billion, up 30%, dwarfs the Devices and Consumer segment, which shrank. Inside that segment, Windows OEM and devices revenue fell 22% from the year-ago quarter. The product people once meant when they said "Microsoft" is now the part of the company that is getting smaller.
A new way of slicing the company
Microsoft also changed how it reports. It used to run three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. This quarter it introduced two, Agents and Infra, and Devices and Consumer.
Agents and Infra groups Azure with the cloud side of Microsoft 365, and it brought in $76.8 billion. Add the $15.5 billion from Devices and Consumer and you get the $92.3 billion total. The name of the first segment tells you where the company would like your attention to go.
Azure gets a price tag
Until now Microsoft shared Azure only as a growth percentage, or described dollar milestones in vague terms. On Wednesday it said Azure earned $33.2 billion for the July to September quarter, up 48%. That is roughly 36% of total revenue, and by the company's own figures it makes Azure both the largest and the fastest-growing product line.
The number cleared the bar comfortably. Analysts had expected $32.3 billion, so Azure beat by about $850 million. The 48% growth rate also topped the 44% to 45% that CFO Amy Hood forecast on the July earnings call.
The disclosure has a practical effect. Amazon and Alphabet already report cloud revenue in dollars every quarter, so investors can now line the three up directly. Alphabet reported the same day, and Google Cloud brought in $30.7 billion, which puts Azure slightly ahead in absolute terms. Google Cloud also includes Workspace subscriptions, so the comparison is a little less tidy than it looks. And Google Cloud roughly doubled its revenue from a year earlier, growing about twice as fast as Azure by a rough calculation.
Amazon reports on Thursday. Amazon Web Services has been the biggest cloud for about as long as the category has existed, and nobody expects Microsoft to overtake it right now. But with all three publishing actual dollars, the race at least has a scoreboard. Whatever the reason for the timing, $33.2 billion is not an embarrassing number to put on one.
One caution applies. Not all of Azure is AI. Enterprises run plenty of traditional software and SaaS applications on it, and Microsoft 365's nearly $28 billion is a separate slice of the cloud total altogether.
A tenth of the company is OpenAI
If you want the AI share of the quarter, the cleanest number sits in Microsoft's regulatory filing. It says the company generated $10 billion in revenue from commercial arrangements with OpenAI, including revenue-sharing payments. That is nearly 11% of the quarter's total.
The longer view is just as large. OpenAI-related revenue for the full 2026 fiscal year was $24.1 billion. At the latest quarterly pace, Microsoft would collect $40 billion a year from these arrangements.
There is also a bill outstanding. Receivables from OpenAI stood at $7.2 billion at the end of September, up from $6 billion at the end of June. That is money OpenAI owes for earlier transactions and does not count as extra revenue.
What the figure does not tell you is the mix. It is not clear how much of the $10 billion came from revenue-sharing payments and how much from Azure computing services, and the reporting does not say how it maps onto the segments above. For scale, a November 2025 report citing leaked documents said Microsoft received $865.8 million in net revenue-sharing payments from OpenAI during the first nine months of 2025.
OpenAI reportedly shares 20% of its revenue with Microsoft under an earlier deal, in which Microsoft invested more than $13 billion in the startup. Neither company has publicly confirmed that percentage.
OpenAI is not the only AI lab on the platform. Anthropic runs on Azure too, and OpenAI still runs a lot of its services on Microsoft's cloud despite having branched out to AWS, Oracle and others.
A partnership with the knots loosened
The relationship is still lucrative, but it is no longer exclusive, and both sides now chase some of the same customers. The unwinding happened in steps:
- October 2025. Microsoft gave up its hold on OpenAI so the startup could partner with other cloud providers. In return, OpenAI committed to buying an additional $250 billion in Azure services.
- April 2026. A new agreement has OpenAI continuing to share revenue with Microsoft through 2030, subject to a cap, even though OpenAI may now work with competing clouds.
- Ownership. Microsoft's stake in OpenAI was roughly 27% after the October 2025 recapitalization, about 25% in June, and 24% in September. Microsoft did not say what caused the dilution.
A slow slide from 27% to 24% is the sort of thing that does not make a headline in any single quarter. Over a year, it adds up to a different relationship.
The backlog and the bill
Microsoft said its "commercial remaining performance obligation increased 73% to $677 billion." The reporting frames that as future revenue committed under existing contracts with the AI labs, though the quoted line itself says only "commercial."
A backlog of that size is a promise from customers. The matching promise from Microsoft is to build enough capacity to deliver on it, and that is expensive. Capital expenditures reached $45.2 billion in the quarter, another all-time quarterly record. Microsoft is not alone in this. Like all the big cloud providers, it is spending heavily ahead of the revenue it has already signed.
So the ledger has two long columns. One lists what customers have agreed to pay, and the other lists what Microsoft has to pour into data centers to earn it. For now, both are written largely in the future tense.