Microsoft's bet on AI infrastructure is paying, at least for now. The company reported revenue of $92.3 billion for the three months to September, up 19%, against analyst expectations of about $90.6 billion, and profit of $36.6 billion, up 32%, TechXplore reported on 28 October. Its shares rose more than 5% that afternoon.
Azure, its cloud platform, grew 48% to $33.2 billion. It is the first quarter Microsoft has disclosed Azure revenue in dollars, Techloy noted. The wider Microsoft Cloud business brought in $63.9 billion, almost 70% of total revenue, and finance chief Amy Hood said demand still exceeds supply.
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About three-quarters of the $45.2 billion went on short-lived assets such as GPUs, CPUs, memory and storage, up from about two-thirds the quarter before, according to Techloy. Microsoft added 24 data centres in the quarter, TechXplore reported. Some capacity from third-party GPU providers arrived late, pushing spending into later months, and Hood expects capital spending above $50 billion next quarter. Free cash flow fell 27%.
- Microsoft 365 Copilot users rose 50% from the previous quarter, Satya Nadella said; Microsoft did not say how many pay.
- Devices and Consumer revenue fell 3% to $15.5 billion, with Windows revenue from PC makers down 22%.
- Days before the results, Microsoft offered voluntary buyouts to about 60,000 employees.
"We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack," chief executive Satya Nadella said, according to TechXplore. Hood said Microsoft will raise additional funding when the terms are attractive, to "preserve financial flexibility". Rivals are growing too: Google Cloud's revenue doubled to $30.7 billion in the same quarter, while Amazon Web Services remains the largest cloud provider by revenue, with Microsoft second and Google third, according to Synergy Research Group figures cited by TechXplore. Microsoft had about 223,000 staff at the end of June, down from 228,000 at the end of 2025.
The market treated Microsoft very differently from Alphabet, which reported the same day: Alphabet spent $51.3 billion and lost about $460 billion of market value the next day, Techweez reported, while Microsoft's spending came in below the $51 billion analysts had expected, according to TechXplore.
