Microsoft reported its first quarter 2027 earnings, showing that its search and advertising revenue was up 12%, indicating its ad growth was 2 points higher than the previous quarter. The previous quarter it was up 10%, before that was up 12%, before that up 10% before that, up 16% and the one before that was 21% and this quarter, it is only up 10%.
Microsoft wrote, "Search and advertising revenue excluding traffic acquisition costs increased 12%."
Search sits within the More Personal Computing division.
Microsoft reports Q1 revenue up 19% YoY to $92.3 billion, operating income up 22% to $45.9 billion, and net income up 32% to $36.6 billion. Microsoft's stock price is up over 7% in after-hours trading within minutes of the earnings report being released.
Here is the chart I made showing just the ad dollar change from quarter to quarter, so you can see just that:
Here are the highlights from the earnings release:
- Revenue was $92.3 billion and increased 19%
- Operating income was $45.9 billion and increased 21% (up 22% in constant currency)
- Net income was $36.6 billion and increased 32% on a GAAP basis, and was $36.4 billion and increased 18% (up 19% in constant currency) on a non-GAAP basis
- Diluted earnings per share was $4.92 and increased 32% on a GAAP basis, and was $4.89 and increased 18% (up 19% in constant currency) on a non-GAAP basis
- Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below
Satya Nadella, Microsoft's CEO, said:
“We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack," said Satya Nadella, chairman and chief executive officer of Microsoft. “By helping organizations build and own their own intelligence, and earning trust through agent safety and security, we are translating our innovation into growing adoption and real-world impact across every industry.”
Forum discussion at X.
