Filing Flows › Microsoft (MSFT) › Q1 FY27 › vs Q1 FY26
Microsoft (MSFT) Q1 FY27 vs Q1 FY26 (year over year)
Microsoft's revenue rose $14.6B (+19%) from $77.7B in Q1 FY26 to $92.3B in Q1 FY27. The biggest changes: Azure +$10.8B (+48%); Microsoft 365 Cloud +$4.1B (+17%); Windows OEM and Devices −$1.0B (-22%). Gross margin 67.8% against 69.0% (-1.3 pts).
Microsoft, Q1 FY27: revenue $92.3B (+19% year over year), operating margin 49.8%, net earnings $36.6B, operating cash flow $58.0B. The chart draws each line against Q1 FY26, the increases inside each band.
Margins
| Q1 FY27 | Q1 FY26 | Change | |
|---|---|---|---|
| Gross margin | 67.8% | 69.0% | -1.3 pts |
| Operating margin | 49.8% | 48.9% | +0.9 pts |
| Net margin | 39.7% | 35.7% | +4.0 pts |
| Free cash flow margin | 20.2% | 33.0% | -12.8 pts |
Every line
| Line | Q1 FY27 | Q1 FY26 | Change | % |
|---|---|---|---|---|
| Azure | $33.2B | $22.4B | $10.8B | +48% |
| Microsoft 365 Cloud | $27.8B | $23.7B | $4.1B | +17% |
| Productivity and Server Licensing | $8.4B | $8.7B | −$271M | -3% |
| Search and Advertising | $6.6B | $5.9B | $612M | +10% |
| XBOX | $5.4B | $5.5B | −$129M | -2% |
| Industry Solutions | $5.3B | $4.9B | $443M | +9% |
| Windows OEM and Devices | $3.6B | $4.6B | −$1.0B | -22% |
| Frontier and Support Services | $2.1B | $2.0B | $86.0M | +4% |
| Revenue | $92.3B | $77.7B | $14.6B | +19% |
| Gross profit | $62.6B | $53.6B | $8.9B | +17% |
| Cost of revenue | $29.7B | $24.0B | $5.7B | +24% |
| Operating profit | $45.9B | $38.0B | $8.0B | +21% |
| Operating expenses | $16.6B | $15.7B | $975M | +6% |
| Pre-tax earnings | $46.0B | $34.3B | $11.7B | +34% |
| Research & development | $9.0B | $8.1B | $901M | +11% |
| Sales & marketing | $5.7B | $5.7B | −$1.0M | 0% |
| General & admin | $1.9B | $1.8B | $75.0M | +4% |
| Net earnings | $36.6B | $27.7B | $8.9B | +32% |
| Income tax | $9.3B | $6.6B | $2.8B | +42% |
| Depreciation & amortization | $12.1B | $8.6B | $3.5B | +41% |
| Share-based compensation | $3.1B | $3.0B | $151M | +5% |
| Working capital & other | $6.1B | $5.7B | $410M | +7% |
| Operating cash flow | $58.0B | $45.1B | $12.9B | +29% |
| Free cash flow (OCF − capex) | $18.6B | $25.7B | −$7.0B | -27% |
| Capital expenditures | $39.4B | $19.4B | $20.0B | +103% |
Questions
How much did Microsoft's revenue grow year over year in Q1 FY27?
Microsoft's revenue rose $14.6B (+19%) from $77.7B in Q1 FY26 to $92.3B in Q1 FY27.
What drove Microsoft's revenue change in Q1 FY27?
Azure +$10.8B (+48%); Microsoft 365 Cloud +$4.1B (+17%); Windows OEM and Devices −$1.0B (-22%).