Microsoft earnings: guidance and results
Microsoft’s next results are expected on October 28, 2026. Watch Azure growth against guidance and the conversion of new contracts into revenue and operating cash flow.
What has Microsoft guided for the next quarter and year?
Azure is Microsoft’s service for renting computing power, storage and AI tools over the internet. For the quarter ending in September 2026, management guides total revenue to $89.85–$90.95 billion. It expects Azure revenue to grow 44%–45% at constant currency, which removes exchange-rate effects. Microsoft 365 commercial cloud, including workplace subscriptions and AI applications, is expected to grow 17% on that basis.
For the year ending in June 2027, Microsoft expects double-digit revenue and operating-income growth. It expects operating expenses to rise in the mid-to-high single digits, capital spending to increase again, operating margin to fall by less than one percentage point and free cash flow to remain positive.
| the period guided | low | high | the date it was given | |
|---|---|---|---|---|
| Capital expenditures | Calendar year 2026 | 175 | 175 | Jul 29, 2026 |
| Free cash flow | Year to Jun 2027 | Jul 29, 2026 | ||
| Total revenue | Quarter to Sep 2026 | 89.85 | 90.95 | Sep 2, 2026 |
| Total revenue growth | Quarter to Sep 2026 | 16.0% | 17.0% | Sep 2, 2026 |
| Azure revenue growth, constant currency | Quarter to Sep 2026 | 44.0% | 45.0% | Sep 2, 2026 |
| Microsoft 365 commercial cloud revenue growth, constant currency | Quarter to Sep 2026 | 17.0% | 17.0% | Sep 2, 2026 |
Has Microsoft kept its past promises?
Management also promised double-digit revenue and operating-income growth for FY2026. Microsoft delivered 18% revenue growth and 21% operating-income growth, supporting its execution record without proving that every AI investment will earn an adequate return.
What has Microsoft’s eight-quarter trend shown?
The last eight quarters show revenue rising while company gross margin fell from 69.4% to 67.2%. Operating profit continued to advance despite that pressure. Microsoft is gaining scale, but the direct cost of serving each sales dollar has increased.
| Quarter to Jun 2026 | Quarter to Mar 2026 | Quarter to Dec 2025 | Quarter to Sep 2025 | Quarter to Jun 2025 | Quarter to Mar 2025 | Quarter to Dec 2024 | Quarter to Sep 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 90,007 | 82,886 | 81,273 | 77,673 | 76,441 | 70,066 | 69,632 | 65,585 |
| Gross margin | 67.2% | 67.6% | 68.0% | 69.0% | 68.6% | 68.7% | 68.7% | 69.4% |
| Operating income | 40,603 | 38,398 | 38,275 | 37,961 | 34,323 | 32,000 | 31,653 | 30,552 |
| Net income | 35,766 | 31,778 | 38,458 | 27,747 | 27,233 | 25,824 | 24,108 | 24,667 |
| EPS, diluted | 4.81 | 4.27 | 5.16 | 3.72 | 3.65 | 3.46 | 3.23 | 3.30 |
| Cash from operations | 55,441 | 46,679 | 35,758 | 45,057 | 42,647 | 37,044 | 22,291 | 34,180 |
What should Microsoft watchers look for in the next release?
Microsoft reports the September quarter on October 28, 2026. The key checks are Azure growth against guidance, conversion of new contracts into revenue and operating cash flow after higher investment. The new reporting structure also makes restated comparisons important: moving a business between categories can change a growth rate without changing customer spending.