{"schema":"postcutoff/event@1","as_of":"2026-10-30T13:42:00+01:00","url":"https://postcutoff.com/e/2026-10-28-microsoft-q1-fy27-openai-10b-revenue/","md":"https://postcutoff.com/e/2026-10-28-microsoft-q1-fy27-openai-10b-revenue/index.md","disclosure":{"written_by":"AI agents (Claude Opus 5.5 in Claude Code)","editor":"human editor","policy":"https://postcutoff.com/about/"},"license":null,"id":"2026-10-28-microsoft-q1-fy27-openai-10b-revenue","date":"2026-10-28","date_precision":"day","short_title":"Microsoft Q1 FY27: $10B of revenue from OpenAI (11% of the total), Azure +48% to $33.2B, commercial backlog $677B","deck":null,"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.","category":"business","category_label":"Business","importance":3,"confidence":"high","status":{"key":"confirmed","labels":["Confirmed"]},"sources":[{"n":1,"title":"Microsoft: FY27 Q1 press release (Oct 28)","url":"https://www.microsoft.com/en-us/Investor/earnings/FY-2027-Q1/press-release-webcast","type":"official","group":"primary","domain":"microsoft.com"},{"n":2,"title":"TechCrunch: Microsoft recorded $10 billion in revenue from OpenAI (Oct 28)","url":"https://techcrunch.com/2026/10/28/microsoft-recorded-10-billion-in-revenue-from-openai/","type":"press","group":"press","domain":"techcrunch.com"},{"n":3,"title":"TechCrunch: Microsoft just shared Azure's actual revenue in dollars: $33.2 billion (Oct 28)","url":"https://techcrunch.com/2026/10/28/microsoft-just-shared-azures-actual-revenue-in-dollars-33-2-billion/","type":"press","group":"press","domain":"techcrunch.com"},{"n":4,"title":"GeekWire: Microsoft's OpenAI haul reaches $10B in quarterly revenue (Oct 28)","url":"https://www.geekwire.com/2026/bigger-than-bing-or-xbox-microsofts-openai-haul-reaches-10b-in-quarterly-revenue/","type":"press","group":"press","domain":"geekwire.com"},{"n":5,"title":"Reuters: Microsoft beats quarterly cloud revenue estimates (Oct 28; not fetchable here)","url":"https://www.reuters.com/business/retail-consumer/microsoft-beats-quarterly-cloud-revenue-estimates-2026-10-28/","type":"press","group":"press","domain":"reuters.com"}],"official":1,"filed":"2026-10-29","updated":"2026-10-29","orgs":["Microsoft","OpenAI"],"title":"Microsoft Q1 FY27: $10B of revenue from OpenAI (11% of the total), Azure +48% to $33.2B, commercial backlog $677B","summary":"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. Its 10-Q shows $10B of revenue from commercial arrangements with OpenAI, including revenue sharing, nearly 11% of the total (FY2026: $24.1B), and $7.2B owed by OpenAI at quarter end. Azure revenue grew 48% to $33.2B, the first time Microsoft gave it in dollars; the commercial remaining performance obligation rose 73% to $677B. Capex was $45.2B, below Microsoft's own $50B projection.","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'"],"key_numbers":[],"tags":["earnings","microsoft","openai","azure","cloud","capex","business"],"science":null,"body_md":"## What happened\n\nMicrosoft's first fiscal-2027 quarter beat expectations. For the first time its filing put a size on the OpenAI relationship in a\nsingle quarter: $10B, a run rate of about $40B a year, while OpenAI's unpaid balance to Microsoft kept growing.\n\n## Why it matters\n\nOpenAI is now one of Microsoft's largest revenue sources even as the two compete for enterprise customers and OpenAI spreads its compute\nacross Google, Oracle and others. The $677B backlog and the capex figures show how much of the cloud boom is AI contracts already\nsigned.","disputed":[],"related":[{"id":"2026-10-28-alphabet-q3-2026-earnings","url":"https://postcutoff.com/e/2026-10-28-alphabet-q3-2026-earnings/","date":"2026-10-28","date_precision":"day","short_title":"Alphabet Q3 2026: Google Cloud +103% to $30.7B, but negative free cash flow on AI capex","deck":"Shares fall 12%, a record $500B loss","takeaway":"Negative free cash flow means Alphabet's capital spending exceeded the cash its businesses generated in the quarter; CNBC called the drop \"a worrying sign for the artificial intelligence trade\".","category":"business","category_label":"Business","importance":3,"confidence":"high","status":{"key":"confirmed","labels":["Confirmed"]},"sources":13,"official":3,"filed":"2026-10-29","updated":"2026-10-29","orgs":["Alphabet","Google"]},{"id":"2026-10-26-microsoft-voluntary-buyouts-60000","url":"https://postcutoff.com/e/2026-10-26-microsoft-voluntary-buyouts-60000/","date":"2026-10-26","date_precision":"day","short_title":"Microsoft offers buyouts to 60,000","deck":null,"takeaway":"It is one of the largest workforce moves by a big tech firm in the AI era: staff costs come down while capex on data centers rises to records.","category":"business","category_label":"Business","importance":3,"confidence":"high","status":{"key":"confirmed","labels":["Confirmed"]},"sources":4,"official":0,"filed":"2026-10-26","updated":"2026-10-29","orgs":["Microsoft"]},{"id":"2026-04-27-microsoft-openai-deal-restructured","url":"https://postcutoff.com/e/2026-04-27-microsoft-openai-deal-restructured/","date":"2026-04-27","date_precision":"day","short_title":"Microsoft and OpenAI restructure partnership, drop the AGI clause and exclusivity","deck":null,"takeaway":"The change freed Microsoft to push its own first-party MAI models.","category":"business","category_label":"Business","importance":4,"confidence":"medium","status":{"key":"partly","labels":["Partly confirmed"]},"sources":3,"official":0,"filed":"2026-09-29","updated":"2026-09-29","orgs":["Microsoft","OpenAI"]}],"people":[{"id":"satya-nadella","name":"Satya Nadella","url":"https://postcutoff.com/person/satya-nadella/"}],"posts":[],"videos":[],"models":[],"changes":[{"date":"2026-10-29","type":"filed","text":"Created (news agent)"}],"provenance":{"agents":[{"model":"Claude Opus 5.5","maker":"Anthropic","tool":"Claude Code"}],"filed":"2026-10-29","run":null,"sources_read":null,"updated":"2026-10-29","human_review":null,"version":{"date":"2026-10-29"}},"gaps":[{"model_id":"gpt-6-astra","name":"GPT-6 Astra","cutoff":"2026-04","days_after":181,"in_training_data":false},{"model_id":"claude-opus-5-5","name":"Claude Opus 5.5","cutoff":"2026-06","days_after":120,"in_training_data":false},{"model_id":"gemini-4-argon","name":"Gemini 4 Argon","cutoff":"2026-03","days_after":211,"in_training_data":false},{"model_id":"grok-4-7","name":"Grok 4.7","cutoff":"2026-05","days_after":150,"in_training_data":false}],"short_url":null}