Microsoft posted $92.3 billion in revenue and a net income of $33.6 billion during the first quarter of its 2027 fiscal year, according to The Verge. The software maker split its business reporting into two new segments called Agents and Infra, and Devices and Consumer, revealing a 19 percent jump in overall revenue.
Key takeaways
- Microsoft generated $92.3 billion in revenue during the first quarter of fiscal 2027.
- The company introduced a new reporting structure featuring Agents and Infra, and Devices and Consumer segments.
- Azure contributed $33.17 billion in revenue with a 48 percent year-over-year increase.
- Xbox hardware revenue declined by 14 percent amid ongoing division resets and layoffs.
How did microsoft cloud revenue perform in the latest quarter?
The Verge reports that microsoft cloud revenue hit $63.9 billion, making up nearly 70 percent of the company's overall quarterly income. This division jumped 30 percent year-over-year. The Agents and Infra segment, which includes Azure and Microsoft 365, brought in $76.8 billion, representing 83 percent of the company's total revenue.
Azure alone contributed $33.17 billion this quarter, marking a 48 percent increase year-over-year. Microsoft CFO Amy Hood noted that azure revenue will now be disclosed on a quarterly basis under the new financial reporting system. Meanwhile, Microsoft 365 commercial cloud revenue grew 18 percent thanks to higher revenue per user and premium options like Microsoft 365 Copilot.
What happened with devices and the xbox business?
The Devices and Consumer segment brought in $15.5 billion, which is a three percent decrease. Windows OEM and devices revenue dropped 22 percent amid a PC market decline and a RAMageddon crisis. CEO Satya Nadella discussed a new hybrid AI push for Windows during the earnings call, aiming to bring local intelligence to every device.
Over in the gaming division, Xbox hardware revenue dropped 14 percent, while Xbox content and services fell two percent. Xbox CEO Asha Sharma stated that the team experienced a reset involving thousands of layoffs, though the division aims to return to player and revenue growth by the end of fiscal year 2027.
What it means for the company's financial future
The latest results show that cloud services and AI infrastructure are carrying the company's financial growth while traditional hardware markets face hurdles. CFO Amy Hood expects Windows OEM revenue to drop again next quarter in the mid 30s. At the same time, CEO Satya Nadella emphasized that progress on first-party models will help lower training costs and pass savings to customers.
Frequently asked questions
Microsoft reported a total revenue of $92.3 billion and a net income of $33.6 billion during the first quarter of its 2027 fiscal year.
Azure contributed $33.17 billion in revenue this quarter, which represents a 48 percent increase year-over-year.
Microsoft has replaced its previous segments with two new reporting categories: Agents and Infra, and Devices and Consumer.
Microsoft attributed the 22 percent drop in Windows OEM revenue to OEM inventory drawdowns, a weaker PC market, a RAMageddon crisis, and the prior year benefits of Windows 10 end of support.
Xbox hardware revenue declined by 14 percent year-over-year during the first quarter of the 2027 financial year, which has been marked by thousands of layoffs and a division reset.
Based on reporting by The Verge. Read the original article
