Microsoft has given investors a number it had never shared before: how much money its Azure cloud business makes. In results for the quarter ended September 30, reported on October 28, the company said Azure brought in $33.2 billion, up 48% from a year earlier, according to GeekWire. Until now, Microsoft had reported only Azure’s growth rate.
The headline numbers. Total revenue was $92.3 billion, up 19%, and net income under US accounting rules was $36.6 billion, according to a report summarized by Unite.AI. On a basis that excludes the impact of Microsoft’s investments in OpenAI, net income was $36.4 billion, up 18%. TechCrunch notes that this is the tenth straight quarter of record revenue.
Azure beat the forecast. Azure’s 48% growth was above the 44% to 45% range that CFO Amy Hood had guided to on the July earnings call, and above what analysts expected, according to GeekWire. CNBC reported that the stock rose about 4% on the results as cloud growth drove the beat.
The OpenAI figure. Microsoft also disclosed that it recorded about $10 billion in revenue from OpenAI in the quarter, roughly 11% of its total, according to GeekWire’s separate report. That figure includes revenue-sharing payments and OpenAI’s use of Azure to train and run its models. Microsoft did not break down how much came from each, or say how much of Azure’s growth came from OpenAI, so the numbers do not show how much of the cloud business depends on one customer.
Why the disclosure matters. Cloud growth rates are easy to compare with rivals, but dollar figures let investors judge scale. At $33.2 billion in a single quarter, Azure is now large enough to be measured against Amazon’s and Google’s cloud businesses, and the fact that Microsoft chose to publish it suggests confidence that the number tells a good story. It also arrives while investors are asking how much of the demand for AI computing is real and lasting. The OpenAI line helps answer part of that question, while raising a new one about concentration.
What this means for businesses. Companies buying cloud services in the US and UK have seen Microsoft bundle AI features, such as its Copilot assistants, into its subscriptions. Strong Azure growth suggests that enterprises are still moving workloads, including AI projects, to the cloud. It does not say whether those projects are profitable for the customers.
What to watch. Look for more detail on how much of Azure’s growth comes from AI services, for any change in how Microsoft reports OpenAI-related revenue, and for how much the company spends on data centers, which was not part of the reports reviewed. Different outlets round the Azure figure slightly differently, with CNBC reporting $33.17 billion, which rounds to the $33.2 billion used here.
Sources: GeekWire, TechCrunch, CNBC and Unite.AI. Financial figures are as reported by Microsoft and those outlets.
Microsoft Redmond campus (file image), Wikimedia Commons, CC BY-SA 4.0
