Microsoft $92.3bn Revenue: Azure Soars 48% Amid 60K Buyouts

Microsoft reported quarterly revenue of $92.3 billion and profit of $36.6 billion for the September quarter, beating Wall Street estimates and reigniting debate over soaring Big Tech earnings alongside large-scale workforce cuts. The results, released on October 28, 2026, came just two days after the company offered voluntary buyouts to roughly 60,000 employees — about 27% of its global workforce.

Microsoft FY26 Q2 Earnings: Key Figures

The fiscal 2026 second quarter saw revenue climb 17% year over year to $92.3 billion, while net income reached $36.6 billion. Analysts had expected revenue of about $90.6 billion and profit of $35.1 billion, according to FactSet. Operating income grew 21%, or $6.6 billion, and diluted EPS benefited from a $1.02 gain related to OpenAI investments. The Big Tech quarterly earnings season has been marked by strong AI-driven cloud results.

Key Metrics at a Glance

• Revenue: $92.3 billion (+17% year over year)
• Net income: $36.6 billion (above $35.1 billion consensus)
• Azure growth: 48% year over year
• Operating income: up 21% (+$6.6 billion)
• Microsoft Cloud gross margin: 67%, down slightly on AI infrastructure costs

Azure Cloud Growth Powers Microsoft's Earnings

Azure's 48% year-over-year expansion anchored the quarter. The Intelligent Cloud segment, which includes Azure, drove the gains as enterprises accelerate migration to cloud computing infrastructure and adopt AI services. CEO Satya Nadella told investors that customers value greater capability, choice, control and cost-efficiency on Azure. For the first time, Microsoft disclosed Azure revenue in dollars, offering more transparency into its AI data center spending.

60,000-Worker Buyout Offer: The Other Side of the Coin

On October 26, 2026, Microsoft announced a voluntary exit offer for employees at internal level 70 or below in the U.S., Canada, India, and the U.K. Roughly 60,000 employees are eligible, about 27% of the 223,000-person workforce. The package includes standard severance based on tenure and level, fixed-period healthcare, and career transition services; eligible staff must decide by early December and depart by December 31. CFO Amy Hood said she expects very few acceptances — perhaps 5–6% of eligibles. The buyout follows April's voluntary retirement program and July layoffs of 4,800 employees, a pattern that mirrors broader Big Tech layoffs 2026.

Why Microsoft's Results and Buyouts Matter

The earnings highlight a central tension in the AI boom: Microsoft's capital expenditures were expected to exceed $50 billion in the September quarter, up from $34.9 billion a year earlier. Free cash flow fell 23% year over year to $19.64 billion last quarter, and analysts projected a further drop this quarter to around $8 billion. The buyout offer is one tool to balance costly AI infrastructure investment with capital efficiency. Workforce headcount declined from 228,000 at the end of 2025 to 223,000 in June 2026, and further reductions could follow.

Expert Perspectives

CEO Satya Nadella said customers increasingly choose Azure for greater capability, choice, control and cost-efficiency. CFO Amy Hood told analysts she expects very few employees to accept the buyout, estimating 5–6% of eligible staff. Analysts at Reuters described the cloud beat as a respite for investors concerned about heavy AI spending. Labor experts note that voluntary buyouts can preserve morale but risk losing high performers and creating uneven departures across teams, a tension seen in earlier tech industry restructuring.

Frequently Asked Questions

What were Microsoft's Q2 FY2026 earnings?

Microsoft reported $92.3 billion in revenue and $36.6 billion in profit, beating analyst estimates of $90.6 billion and $35.1 billion.

How much did Azure grow?

Azure grew 48% year over year, driving the Intelligent Cloud segment and overall results.

Why is Microsoft offering buyouts to 60,000 employees?

The voluntary buyouts target employees at level 70 or below in the U.S., Canada, India, and the U.K., aiming to balance AI infrastructure spending with workforce costs.

When do employees have to decide?

Eligible employees must decide by early December 2026 and depart by December 31, 2026.

Is Microsoft laying off workers?

Microsoft says the buyout is not a layoff, and CFO Amy Hood expects only 5–6% of eligible employees to accept.

Conclusion and Future Outlook

Microsoft's September quarter underscores how AI-driven cloud demand can generate record profits even as the company reshapes its workforce. With Azure revenue now disclosed in dollars and guidance of about 45% constant-currency growth for the next quarter, investors will watch whether heavy capex translates into sustained cash flow. The buyout results, due in December, will show how many of the 60,000 eligible workers choose to leave — and whether the contrast between profits and payroll cuts deepens.