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Microsoft (MSFT) Q1 FY27 earnings results (first quarter fiscal 2027)
10-Q filed Oct 28, 2026
Microsoft (MSFT) reported revenue of $92.3B for the first quarter fiscal 2027 (Q1 FY27), +19% from a year earlier and +3% from the quarter before. Operating margin was 49.8%, net earnings $36.6B (39.7% of revenue).
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 follows the revenue to costs, profit and cash.
| Q1 FY27 | Amount | Q/Q | Y/Y |
|---|---|---|---|
| Revenue | $92.3B | +3% | +19% |
| Gross profit | $62.6B | +3% | +17% |
| Operating profit | $45.9B | +13% | +21% |
| Net earnings | $36.6B | +2% | +32% |
| Operating cash flow | $58.0B | +5% | +29% |
| Free cash flow | $18.6B | -5% | -27% |
What changed
Revenue was $92.3B in Q1 FY27, up 19% year over year and up 3% from the previous quarter. Azure was the largest line at 36% of revenue. Azure added $10.8B year over year (up 48%), 74% of the total change. Windows OEM and Devices declined 22%.
Gross margin was 67.8%, down 1.3 points from Q1 FY26. Operating profit was $45.9B, a 49.8% margin (up 0.9 points year over year). Of the extra revenue versus Q1 FY26, 54% reached operating profit, above the 49% margin then. Operating expenses grew 6% against revenue growth of 19%. The fastest-growing cost line was Research & development (+11%). Net earnings were $36.6B, up 32% year over year. The effective tax rate was 20.3%.
Operating cash flow was $58.0B (up 29% year over year), 158% of net earnings. Non-cash charges added back $12.1B of depreciation and amortization and $3.1B of share-based compensation. Working capital and other items added $6.1B. Capital expenditures of $39.4B left free cash flow of $18.6B.
Questions
What was Microsoft's revenue in the first quarter fiscal 2027?
Microsoft (MSFT) reported revenue of $92.3B for the first quarter fiscal 2027 (Q1 FY27), +19% from a year earlier and +3% from the quarter before.
Was Microsoft profitable in the first quarter fiscal 2027?
Operating profit was $45.9B (49.8% of revenue) and net earnings $36.6B.
Source: Microsoft 10-Q on SEC EDGAR.