Microsoft reports 48% Azure growth as quarterly cloud revenue rises

Microsoft reported fiscal first-quarter revenue of $92.3 billion as Azure revenue rose 48% to $33.17 billion. But the company did not disclose how much of its cloud revenue or profit came from AI services. Microsoft Cloud revenue reached $63.9 billion, up 30%, for the quarter ended Sept. 30.

Microsoft defines Azure revenue as including cloud and AI consumption-based services as well as virtual desktop offerings. That means the reported Azure total is broader than AI alone. The results do not break out AI revenue, AI operating income or an AI-specific return on invested capital.

Cash additions to property and equipment were $39.37 billion, more than double the $19.39 billion recorded a year earlier. Microsoft did not say how much of that spending was specifically for AI infrastructure. Microsoft Cloud gross margin was 66%, down from 68% in the year-earlier quarter.

Microsoft’s Agents and Infra segment generated $76.8 billion in revenue, up 25%. Operating income increased to $40.56 billion from $32.72 billion. The segment is broader than AI, and the company did not allocate its revenue or profit between AI and other products.

Commercial remaining performance obligations — contracted revenue that has not yet been recognized — rose 73% to $677 billion. Microsoft also said its OpenAI investment increased first-quarter GAAP net income by $207 million and diluted earnings per share by $0.03. Those investment effects were excluded from its non-GAAP results.