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Microsoft Q1: Azure Soars as PC & Gaming Lag
29 Oct
Summary
- Microsoft's Q1 revenue rose 19% to $92.3 billion.
- Azure revenue grew 48%, reaching $33.17 billion.
- Windows and Xbox revenues experienced declines.
Microsoft reported its first fiscal quarter results for 2027, with overall revenue reaching $92.3 billion, a 19% increase year-over-year. Net income also saw a significant rise of 32%. The company has adopted a new financial reporting structure, dividing its businesses into two primary segments: Agents and Infra, and Devices and Consumer.
The Agents and Infra segment, encompassing Azure and Microsoft 365, generated $76.8 billion in revenue, marking a 25% increase. Azure alone contributed $33.17 billion, boasting a 48% year-over-year growth. This segment now represents 83% of Microsoft's total revenue.
Conversely, the Devices and Consumer segment, which includes Windows, Xbox, and Surface, accounted for the remaining 17% of revenue ($15.5 billion), representing a 3% decrease. Windows OEM and device revenues fell 22%, attributed to the end of Windows 10 support in the prior year and a 20% drop in the overall PC market.
Xbox hardware revenue declined 14%, with content and services down 2%. These figures follow a period of restructuring for Xbox, including layoffs. Xbox leadership aims for renewed player and revenue growth by the end of fiscal year 2027, targeting sustained double-digit growth by 2030.
