MSFT · Microsoft · Q1 FY2027
Microsoft Widens Margins as Revenue Growth Holds Steady
Revenue growth held near 18.8% (17.8% a quarter earlier), and operating margin widened 88 basis points to 49.8%.
- Published
- Nov 5, 2026
- Event
- Oct 28, 2026
- Quarter ended
- Sep 30, 2026
- Data as of
- Nov 5, 2026
Published becauseBlockhaven's first note on Q1 FY2027, whose results were filed Oct 28, 2026: the latest reported quarter showed a stronger trajectory.
The Blockhaven read
Microsoft's quarter moved in one direction: operating margin widened 88 basis points to 49.8% and revenue growth was roughly steady. GAAP operating income rose 20.9% against 18.8% revenue growth, so profit grew faster than sales, with the wider margin accounting for the gap. A single quarter shows a direction, not yet a trend.
Latest reported quarter
Earnings release filed Oct 28, 2026
RevenueGAAP
- Latest
- $92.3 billion
- Year ago
- $77.7 billion
- Change
- +18.8% (Up year over year)
Operating incomeGAAP
- Latest
- $45.9 billion
- Year ago
- $38 billion
- Change
- +20.9% (Up year over year)
Net incomeGAAP
- Latest
- $36.6 billion
- Year ago
- $27.7 billion
- Change
- +32.0% (Up year over year)
Diluted EPSGAAP
- Latest
- $4.92
- Year ago
- $3.72
- Change
- +32.3% (Up year over year)
Operating margin (GAAP)Derived
- Latest
- 49.8%
- Year ago
- 48.9%
- Change
- +88 bp (Up year over year)
Gross margin (GAAP)Derived
- Latest
- 67.8%
- Year ago
- 69.0%
- Change
- −125 bp (Down year over year)
| Measure | Basis | Latest quarter | Year ago | Change |
|---|---|---|---|---|
| Revenue | GAAP | $92.3 billion | $77.7 billion | +18.8% (Up year over year) |
| Operating income | GAAP | $45.9 billion | $38 billion | +20.9% (Up year over year) |
| Net income | GAAP | $36.6 billion | $27.7 billion | +32.0% (Up year over year) |
| Diluted EPS | GAAP | $4.92 | $3.72 | +32.3% (Up year over year) |
| Operating margin (GAAP) | Derived | 49.8% | 48.9% | +88 bp (Up year over year) |
| Gross margin (GAAP) | Derived | 67.8% | 69.0% | −125 bp (Down year over year) |
Revenue growth +18.8% against +17.8% in the prior quarter (year over year, GAAP).
Trend: Improving. Operating margin widened and GAAP operating income improved; revenue growth was roughly steady.
GAAP unless labelled. Non-GAAP and company-defined measures are labelled.
What changed
- Revenue growth held near 18.8% (17.8% a quarter earlier).
- Operating margin widened 88 basis points year over year, to 49.8% from 48.9% (GAAP).
- GAAP operating income rose 20.9% year over year, with net income 32.0% and diluted EPS 32.3% moving the same way.
Why it matters
Operating income grew 20.9% on 18.8% revenue growth: the margin change accounts for the difference between the two rates.
Net income grew faster than operating income: the difference sits below the operating line.
What to watch
- Operating margin at the next report against 49.8% this quarter: a further move in the same direction would confirm this reading, and a reversal would weaken it.
- Year-over-year revenue growth against 18.8% now and 17.8% before: staying within about a point and a half would confirm the steady picture, and a larger move would change it.
Data and sources
Figures come from the company's SEC filings and its own 8-K earnings release, filed Oct 28, 2026. GAAP figures are labelled as such. Blockhaven used no outside forecasts, so no figure here is measured against market expectations.
Descriptive company facts. Not investment advice, a rating or a recommendation.