OpenAI business brings Microsoft $10 billion in quarterly revenue
Microsoft also reported $7.2 billion owed by OpenAI for past transactions, while its ownership stake in the AI company declined to 24%.
Microsoft's Azure revenue tops forecasts as shares rise about 4%
Quarterly capital expenditure was below Microsoft's projection, while free cash flow exceeded analyst expectations.
Microsoft reported Azure revenue of $33.17 billion for its first quarter ended September, exceeding the $32.84 billion estimate from Visible Alpha. Shares gained about 4% in extended trading on October 28 following the cloud computing results.
Azure's revenue grew 48%, with the latest quarterly figure also above the prior quarter's $29.4 billion. Through the close of regular trading on October 28, Microsoft's stock had gained about 9% for the year.
The company spent $45.2 billion on capital expenditure during the quarter, compared with $34.9 billion a year earlier. That was below its own projection of $50 billion for the first quarter.
Microsoft also reported $18.6 billion in free cash flow, surpassing the $8.54 billion analysts had expected, according to Visible Alpha.
Microsoft decided to disclose dollar figures for Azure revenue rather than growth rates alone, providing more detail for comparisons with Amazon Web Services and Google Cloud.
The company had forecast $190 billion in capital expenditure for 2026. Its results come amid investor concerns about the financing costs of technology companies' AI investments. Truist said Microsoft's five-year credit default swaps, which reflect perceived default risk, remained the tightest among technology giants.