Microsoft FY26 Q1 revenue rises 18% to USD 77.7 billion, driven by cloud and AI growth

Operating income rose 24 per cent to USD 38 billion, while net income reached USD 27.7 billion, marking a 12 per cent rise on a GAAP basis. On a non-GAAP basis, net income stood at USD 30.8 billion, up 22 per cent. Diluted earnings per share were USD 3.72 on a GAAP basis, up 13 per cent, and USD 4.13 on a non-GAAP basis, up 23 per cent. The company said non-GAAP results excluded the impact of its investments in OpenAI.

Satya Nadella, chairman and chief executive officer of Microsoft, said the company's cloud and AI capabilities are reshaping industries.

"Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact," Nadella said. "It's why we continue to increase our investments in AI across both capital and talent to meet the massive opportunity ahead."

Amy Hood, executive vice president and chief financial officer, said the company began the fiscal year on a strong note.

"We delivered a strong start to the fiscal year, exceeding expectations across revenue, operating income, and earnings per share," Hood said. "Continued strength in the Microsoft Cloud reflects the growing customer demand for our differentiated platform."

In a post on X, Nadella highlighted that Microsoft plans to increase its AI capacity by 80 per cent this year and nearly double its data center footprint within two years. He pointed to the upcoming Fairwater facility in Wisconsin, which he said will be the world's most powerful AI data center, capable of scaling to two gigawatts.

"We're building a fungible fleet that spans every stage of the AI lifecycle and is constantly optimized to deliver the best ROI and TCO for us and our customers," Nadella said.

He added that the company's AI ecosystem continues to expand, with its family of Copilots surpassing 150 million monthly active users across various domains. GitHub Copilot now has more than 26 million users, while Microsoft 365 Copilot is used by 90 per cent of Fortune 500 companies.

"90 percent of the F500 now use M365 Copilot - and we're shipping updates very fast. GitHub Copilot now has 26 million-plus users," he said. The company also recorded growth in healthcare, documenting over 17 million patient encounters, a fivefold increase year over year.

Nadella further noted Microsoft's renewed agreement with OpenAI, stating, "This week, we signed a new agreement with OpenAI, a milestone for both companies."(ANI)