Ddos 
Microsoft recently released its Q1 FY2026 financial results, revealing that surging demand for cloud and AI services propelled total revenue to $77.7 billion, an 18% year-over-year increase, while operating income reached $38 billion, up 24% from the same period last year. Despite incurring a $3.1 billion loss related to its OpenAI investment, net income still rose by 12% overall.
Using the equity accounting method, Microsoft disclosed that OpenAI may have posted losses of up to $11.5 billion for the quarter ending September 30, based on Microsoft’s 27% ownership stake and its recognized proportional loss. OpenAI has not commented on these figures, but Microsoft reaffirmed its long-term commitment to the partnership, citing strong confidence in OpenAI’s growth potential.
Following OpenAI’s recent corporate restructuring into a Public Benefit Corporation (PBC), Microsoft confirmed that it holds 27% ownership in the new entity—an investment valued at approximately $135 billion—implying a market valuation of roughly $500 billion for OpenAI’s for-profit division.
Microsoft CEO Satya Nadella remarked:
“Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact. It’s why we continue to increase our investments in AI across both capital and talent to meet the massive opportunity ahead. ”
Chief Financial Officer Amy Hood added that the strong start to the fiscal year reflects sustained customer demand for Microsoft’s differentiated platforms. She also noted that during the quarter, Microsoft returned $10.7 billion to shareholders through dividends and share repurchases.
From a business segment perspective, cloud services remain the central engine of Microsoft’s growth:
- Microsoft Cloud:
Revenue reached $49.1 billion, up 26% year-over-year (25% in constant currency).
Commercial remaining performance obligations grew 51%, reaching $392 billion. - Intelligent Cloud:
Revenue totaled $30.9 billion, up 28%.
Azure and other cloud services revenue surged 40% (39% in constant currency), sustaining high growth momentum. - Productivity and Business Processes:
Revenue was $33.0 billion, an increase of 17%.
Microsoft 365 Commercial Cloud revenue rose 17%, while Consumer Cloud grew 26%.
LinkedIn revenue climbed 10%, and Dynamics 365 increased 18%. - More Personal Computing:
Revenue reached $13.8 billion, up 4%, signaling stabilization in the PC market.
Windows OEM and Devices revenue increased 6%, while Xbox content and services rose 1% (flat in constant currency).
Search and News Advertising revenue (excluding traffic acquisition costs) grew 16%.
Overall, Microsoft’s latest results underscore the company’s continued dominance in cloud computing and AI innovation, even as it navigates the complexities of strategic partnerships and a rapidly evolving digital economy.
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