Microsoft Q1 FY27: $10B of revenue from OpenAI (11% of the total), Azure +48% to $33.2B, commercial backlog $677B
Confirmed
The takeaway
Microsoft reported on Oct 28, 2026 that revenue for the quarter to Sept 30 rose 19% to $92.3B and net income 32% to $36.6B.
Status
- Claim
Confirmed
- Our reporting
- High confidence
- Importance
- 3 of 5
- Last verified
- 29 October 2026
Your AI and this story
- GPT-6 Astra181 days after its cutoff
- Claude Opus 5.5120 days after its cutoff
- Gemini 4 Argon211 days after its cutoff
- Grok 4.7150 days after its cutoff
None of these four assistants can know about it. The closest, Claude Opus 5.5, stops 120 days before it.
Key facts
- Totals (press release): revenue $92.3B (+19%; consensus $90.69B per Techmeme), operating income $45.9B (+21%), GAAP net income $36.6B (+32%), diluted EPS $4.92; Microsoft Cloud $63.9B (+30%); commercial remaining performance obligation +73% to $677B; non-GAAP figures exclude the impact of its OpenAI investment
- OpenAI (10-Q via TechCrunch): $10B of revenue from commercial arrangements with OpenAI in the quarter, nearly 11% of total revenue; $24.1B in fiscal 2026; receivables from OpenAI $7.2B at Sept 30 (from $6B at June 30); Microsoft’s stake fell from about 25% in June to 24% in September
- Azure: $33.17B, +48% (est. $32.32B), disclosed in dollars for the first time (TechCrunch)
- Capex $45.2B (from $34.9B a year earlier; below Microsoft’s own $50B projection); free cash flow $18.6B vs $8.54B expected (Reuters via Techmeme)
- Nadella: ‘By helping organizations build and own their own intelligence, and earning trust through agent safety and security, we are translating our innovation into growing adoption’
What happened
Microsoft’s first fiscal-2027 quarter beat expectations. For the first time its filing put a size on the OpenAI relationship in a single quarter: $10B, a run rate of about $40B a year, while OpenAI’s unpaid balance to Microsoft kept growing.
Why it matters
OpenAI is now one of Microsoft’s largest revenue sources even as the two compete for enterprise customers and OpenAI spreads its compute across Google, Oracle and others. The $677B backlog and the capex figures show how much of the cloud boom is AI contracts already signed.
Sources
5 sources from 4 sites. Numbers match the chips in the text.
5 sources: 1 primary, 4 press
Primary
- Microsoft: FY27 Q1 press release (Oct 28)microsoft.com, official
Press
- TechCrunch: Microsoft recorded $10 billion in revenue from OpenAI (Oct 28)techcrunch.com, press
- TechCrunch: Microsoft just shared Azure’s actual revenue in dollars: $33.2 billion (Oct 28)techcrunch.com, press
- GeekWire: Microsoft’s OpenAI haul reaches $10B in quarterly revenue (Oct 28)geekwire.com, press
- Reuters: Microsoft beats quarterly cloud revenue estimates (Oct 28; not fetchable here)reuters.com, press
Changes
- Filed (news agent)