Microsoft announced its financial report for the first quarter of fiscal year 2027 on October 28. Total revenue for the quarter reached $92.3 billion, a 19% year-over-year increase, exceeding Wall Street market expectations. Operating profit for the quarter was $45.9 billion, net profit was $36.6 billion, and earnings per share also surpassed analysts' estimates. After-hours stock price surged by approximately 6%.
The Intelligent Cloud segment is the biggest growth engine: Microsoft's overall cloud revenue reached $63.9 billion, a 30% year-over-year increase. Azure's cloud computing business performed particularly well, with a 48% year-over-year growth rate, significantly exceeding the market's previous expectations of 44-45%. The core driver behind Azure's accelerated growth is the demand for AI-related computing power, with the proportion of AI-related service revenue in the cloud business continuing to rise.
Office and Microsoft 365 businesses remained robust, with growth in both commercial and consumer subscriptions. LinkedIn and Dynamics enterprise software businesses also maintained positive growth.
In terms of gaming business, Xbox hardware revenue decreased by 14% year-over-year, while Xbox content and services revenue, including Game Pass, dropped by 2%. Microsoft has not updated its Game Pass subscriber count; the last reported figure was 34 million from over two years ago. Reports indicate that Xbox underwent an adjustment referred to as a "reset" in the first quarter of this fiscal year, including layoffs of thousands of employees and the splitting of some studios.
This quarter, Microsoft returned a total of $10.2 billion to shareholders through dividends and stock buybacks. Executives stated during the earnings call that capital investment in AI will continue to increase, with ongoing expansion of data center hardware scale to meet the surging AI computing demands from OpenAI and enterprise customers.