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

Core Insights - Microsoft Corporation reported a revenue of $77.7 billion for the quarter ending September 30, 2025, representing an 18 percent increase year-over-year [1] - Operating income increased by 24 percent to $38 billion, while net income reached $27.7 billion, marking a 12 percent rise on a GAAP basis [1] - Non-GAAP net income stood at $30.8 billion, up 22 percent, with diluted earnings per share at $3.72 on a GAAP basis (up 13 percent) and $4.13 on a non-GAAP basis (up 23 percent) [2] AI and Cloud Strategy - The company is experiencing strong momentum in its AI platform and Copilot family, driving increased investments in capital and talent [3] - Microsoft plans to increase its AI capacity by 80 percent this year and nearly double its data center footprint within two years, with the upcoming Fairwater facility in Wisconsin expected to be the world's most powerful AI data center [3] - The AI ecosystem is expanding, with Copilots surpassing 150 million monthly active users across various domains, including over 26 million users for GitHub Copilot and 90 percent of Fortune 500 companies using Microsoft 365 Copilot [4][5] Financial Performance - The fiscal year started strong for the company, exceeding expectations in revenue, operating income, and earnings per share [3] - Growth in healthcare was notable, with over 17 million patient encounters documented, a fivefold increase year-over-year [5] - A renewed agreement with OpenAI was signed, marking a significant milestone for both companies [5]